Document and Entity Information
Document and Entity Information - Jun. 30, 2015 - shares | Total |
Document and Entity Information | |
Entity Registrant Name | ECOLAB INC |
Entity Central Index Key | 31,462 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 295,092,229 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
CONSOLIDATED STATEMENT OF INCOME | ||||
Net sales | $ 3,389.1 | $ 3,568.2 | $ 6,686.7 | $ 6,904.8 |
Cost of sales (including special charges of $11.0 and $11.6 for three months and six months ended 2015 and $1.1 and $7.1 for three months and six months ended 2014) | 1,806.5 | 1,909.4 | 3,571.8 | 3,728.6 |
Selling, general and administrative expenses | 1,079.2 | 1,152.7 | 2,216 | 2,289.6 |
Special (gains) and charges | 65.6 | (6.1) | 73.4 | 23.5 |
Operating income | 437.8 | 512.2 | 825.5 | 863.1 |
Interest expense, net | 61.2 | 66.2 | 123.7 | 131.3 |
Income before income taxes | 376.6 | 446 | 701.8 | 731.8 |
Provision for income taxes | 67.8 | 131 | 157.6 | 222.3 |
Net income including noncontrolling interest | 308.8 | 315 | 544.2 | 509.5 |
Less: Net income attributable to noncontrolling interest | 6.8 | 3.6 | 8.8 | 7.1 |
Net income attributable to Ecolab | $ 302 | $ 311.4 | $ 535.4 | $ 502.4 |
Earnings attributable to Ecolab per common share | ||||
Basic (in dollars per share) | $ 1.02 | $ 1.04 | $ 1.80 | $ 1.67 |
Diluted (in dollars per share) | 1 | 1.02 | 1.77 | 1.64 |
Dividends declared per common share (in dollars per share) | $ 0.3300 | $ 0.2750 | $ 0.6600 | $ 0.5500 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 296.2 | 299.6 | 297.2 | 300.1 |
Diluted (in shares) | 301.1 | 305.2 | 302.2 | 305.9 |
CONSOLIDATED STATEMENT OF INCO3
CONSOLIDATED STATEMENT OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Special charges | $ 65.6 | $ (6.1) | $ 73.4 | $ 23.5 |
Cost of sales | ||||
Special charges | $ 11 | $ 1.1 | $ 11.6 | $ 7.1 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income including noncontrolling interest | $ 308.8 | $ 315 | $ 544.2 | $ 509.5 |
Foreign currency translation adjustments | ||||
Foreign currency translation | (35.4) | 22.2 | (344.8) | (44.8) |
Gain (loss) on net investment hedges | 21.8 | 1.9 | 78.8 | (1.8) |
Total foreign currency translation adjustments | (13.6) | 24.1 | (266) | (46.6) |
Derivatives and hedging instruments | (2.9) | (4.1) | 4.9 | (4.1) |
Pension and postretirement benefits | ||||
Amortization of net actuarial loss and prior service cost included in net periodic pension and postretirement costs | 8.1 | 2.5 | 16.1 | 5.1 |
Subtotal | (8.4) | 22.5 | (245) | (45.6) |
Total comprehensive income, including noncontrolling interest | 300.4 | 337.5 | 299.2 | 463.9 |
Less: Comprehensive income attributable to noncontrolling interest | 6 | 3.6 | 7 | 7.1 |
Comprehensive income attributable to Ecolab | $ 294.4 | $ 333.9 | $ 292.2 | $ 456.8 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | |
Current assets | |||
Cash and cash equivalents | $ 310.6 | $ 209.6 | |
Accounts receivable, net | 2,494.8 | 2,626.7 | |
Inventories | 1,462.7 | 1,466.9 | |
Deferred income taxes | 164.6 | 183.2 | |
Other current assets | 538.4 | 366.6 | |
Total current assets | 4,971.1 | 4,853 | |
Property, plant and equipment, net | 3,123.4 | 3,050.6 | |
Goodwill | 6,513.4 | 6,717 | |
Other intangible assets, net | 4,231 | 4,456.8 | |
Other assets | 378.4 | 371.2 | |
Total assets | 19,217.3 | 19,448.6 | |
Current liabilities | |||
Short-term debt | 2,185.3 | 1,705.4 | |
Accounts payable | 961 | 1,162.4 | |
Compensation and benefits | 425.1 | 560.4 | |
Income taxes | 45.8 | 88.6 | |
Other current liabilities | 828.9 | 851.7 | |
Total current liabilities | 4,446.1 | 4,368.5 | |
Long-term debt | 5,124.2 | 4,864 | |
Postretirement health care and pension benefits | 1,139.6 | 1,188.5 | |
Other liabilities | 1,627.9 | 1,645.5 | |
Total liabilities | 12,337.8 | 12,066.5 | |
Equity | |||
Common stock | [1] | 349.3 | 347.7 |
Additional paid-in capital | 5,001.6 | 4,874.5 | |
Retained earnings | 5,894.7 | 5,555.1 | |
Accumulated other comprehensive loss | (1,195.1) | (951.9) | |
Treasury stock | (3,238.9) | (2,509.5) | |
Total Ecolab shareholders' equity | 6,811.6 | 7,315.9 | |
Noncontrolling interest | 67.9 | 66.2 | |
Total equity | 6,879.5 | 7,382.1 | |
Total liabilities and equity | $ 19,217.3 | $ 19,448.6 | |
[1] | Common stock, 800 million shares authorized, $1.00 par value per share, 295.1 million shares outstanding at June 30, 2015, 299.9 million shares outstanding at December 31, 2014. Shares outstanding are net of treasury stock. |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEET | ||
Common stock, shares authorized | 800 | 800 |
Common stock, par value per share (in dollars per share) | $ 1 | $ 1 |
Common stock, shares outstanding | 295.1 | 299.9 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
OPERATING ACTIVITIES | ||
Net income including noncontrolling interest | $ 544.2 | $ 509.5 |
Adjustments to reconcile net income including noncontrolling interest to cash provided by operating activities: | ||
Depreciation | 285.8 | 276.1 |
Amortization | 149.9 | 159.3 |
Deferred income taxes | (34.9) | (50.6) |
Share-based compensation expense | 47.1 | 42.7 |
Excess tax benefits from share-based payment arrangements | (31.4) | (30.9) |
Pension and postretirement plan contributions | (38) | (45) |
Pension and postretirement plan expense | 58.1 | 43.5 |
Restructuring, net of cash paid | (4.6) | (9.3) |
Venezuela currency devaluation | 30.2 | |
Loss (gain) on sale of business | 13.7 | (1.6) |
Other, net | 7 | 8.7 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | 22.2 | (79.4) |
Inventories | (66) | (107.2) |
Other assets | (58.4) | (34.8) |
Accounts payable | (145.7) | (20) |
Other liabilities | (142.6) | (129.1) |
Cash provided by operating activities | 636.6 | 531.9 |
INVESTING ACTIVITIES | ||
Capital expenditures | (327.5) | (321.7) |
Capitalized software expenditures | (14.3) | (15.5) |
Property and other assets sold | 6.8 | 5.3 |
Acquisitions and investments in affiliates, net of cash acquired | (14.7) | (34.4) |
Divestiture of businesses | 0.3 | 5.6 |
Release from acquisition related escrow | 9.4 | 1.4 |
Cash used for investing activities | (340) | (359.3) |
FINANCING ACTIVITIES | ||
Net issuances (repayments) of commercial paper and notes payable | 449.6 | 477.6 |
Long-term debt borrowings | 599.7 | |
Long-term debt repayments | (380) | (256.5) |
Reacquired shares | (726.3) | (336.6) |
Dividends paid | (202.5) | (172.3) |
Exercise of employee stock options | 49 | 30.9 |
Excess tax benefits from share-based payment arrangements | 31.4 | 30.9 |
Acquisition related liabilities and contingent consideration | (0.8) | (86.6) |
Acquisition of noncontrolling interest | (7.3) | |
Other, net | (4.1) | |
Cash used for financing activities | (184) | (319.9) |
Effect of exchange rate changes on cash and cash equivalents | (11.6) | (4.9) |
Increase (decrease) in cash and cash equivalents | 101 | (152.2) |
Cash and cash equivalents, beginning of period | 209.6 | 339.2 |
Cash and cash equivalents, end of period | $ 310.6 | $ 187 |
Consolidated Financial Informat
Consolidated Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Consolidated Financial Information | |
Consolidated Financial Information | 1. Consolidated Financial Information The unaudited consolidated financial information for the second quarter and six months ended June 30, 2015 and 2014 reflect, in the opinion of company management, all adjustments necessary for a fair presentation of the financial position, results of operations, comprehensive income 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, 2014 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, 2014. With respect to the unaudited financial information of the company for the second quarter and six months ended June 30, 2015 and 2014 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. Their separate report dated August 6, 2015 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (the “Act”), for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act. |
Special (Gains) and Charges
Special (Gains) and Charges | 6 Months Ended |
Jun. 30, 2015 | |
Special (Gains) and Charges | |
Special (Gains) and Charges | 2. Special (Gains) and Charges Special (gains) and charges reported on the Consolidated Statement of Income include the following: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Cost of sales Restructuring charges $ $ $ $ Venezuela currency devaluation — — Subtotal Special (gains) and charges Restructuring charges Champion acquisition and integration costs Nalco merger and integration costs Venezuela currency devaluation — — Loss on sale of business, litigation related charges and other settlements ) ) Subtotal ) Total special (gains) and charges $ $ ) $ $ For segment reporting purposes, special (gains) and charges are included in the Corporate segment, which is consistent with the company’s internal management reporting. Restructuring Charges The company’s restructuring activities are associated with plans to enhance its efficiency and effectiveness and sharpen its competitiveness. Its 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 and related costs for severance, benefits and outplacement services. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract terminations. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Restructuring charges have been included as a component of both cost of sales and special (gains) and charges within the Consolidated Statement of Income. Amounts included within cost of sales include supply chain related severance and other asset write-downs associated with combining operations. Restructuring liabilities have been classified as a component of both other current and other non-current liabilities on the Consolidated Balance Sheet. Energy Restructuring Plan In April 2013, following the completion of the acquisition of privately held Champion Technologies and its related company Corsicana Technologies (collectively “Champion”), the company commenced plans to undertake restructuring and other cost-saving actions to realize its acquisition-related cost synergies as well as streamline and strengthen Ecolab’s position in the global energy market (the “Energy Restructuring Plan”). Actions associated with the acquisition to improve the effectiveness and efficiency of the business include a reduction of the combined business’s current global workforce. Actions also include leveraging and simplifying its global supply chain, including the reduction of plant, distribution center and redundant facility locations and product line optimization. The company expects to incur total pre-tax restructuring charges of approximately $80 million ($55 million after tax). The restructuring charges are expected to be substantially complete by the end of 2015, although certain actions will likely continue into 2016. Approximately $40 million ($25 million after tax) of charges are expected to be incurred in 2015. The company anticipates that approximately three-fouths of the remaining Energy Plan pre-tax charges will represent cash expenditures. No decisions have been made for any asset disposals and estimates could vary depending on the actual actions taken. The company recorded restructuring charges related to the Energy Restructuring Plan of $13.1 million ($9.1 million after tax) and $2.7 million ($2.2 million after tax) during the second quarter of 2015 and 2014, respectively. During the six months ended June 30, 2015 and 2014, the company incurred charges of $14.1 million ($9.9 million after tax) and $7.6 million ($5.2 million after tax), respectively. Restructuring charges and activity related to the Energy Restructuring Plan since inception of the underlying actions include the following: Energy Restructuring Plan Employee Termination Asset (millions) Costs Disposals Other Total 2013 - 2014 Activity: Recorded expense and accrual $ $ $ $ Cash payments ) — ) ) Non-cash charges — ) — ) Effect of foreign currency translation — — Restructuring liability, December 31, 2014 — 2015 Activity: Recorded expense and accrual Net cash payments ) ) ) Non-cash charges — ) — ) Effect of foreign currency translation ) — — ) Restructuring liability, June 30, 2015 $ $ — $ $ As shown in the previous table, net cash payments under the Energy Restructuring Plan were $1.4 million during the first six months of 2015 and $31.4 million from 2013 through 2014. The majority of cash payments under this plan are related to severance, with the current accrual expected to be paid over a period of a few months to several quarters. Combined Restructuring Plan In February 2011, the company commenced a comprehensive plan to substantially improve the efficiency and effectiveness of its European business, as well as undertake certain restructuring activities outside of Europe, historically referred to as the “2011 Restructuring Plan”. Additionally, in January 2012, following the merger with Nalco, the company formally commenced plans to undertake restructuring actions related to the reduction of its global workforce and optimization of its supply chain and office facilities, including planned reductions of plant and distribution center locations, historically referred to as the “Merger Restructuring Plan”. During the first quarter of 2013, the company determined that the objectives of the plans discussed above were aligned, and consequently, the previously separate restructuring plans were combined into one plan. The combined restructuring plan (the “Combined Plan”) combines opportunities and initiatives from both plans and continues to follow the original format of the Merger Restructuring Plan by focusing on global actions related to optimization of the supply chain and office facilities, including reductions of the global workforce, plant and distribution center locations. The total pre-tax restructuring charges under the Combined Plan are expected to be approximately $400 million ($300 million after tax). The restructuring charges are expected to be substantially complete by the end of 2015, although certain actions will likely continue into 2016. Approximately $50 million ($40 million after tax) of charges are expected to be incurred in 2015. The company anticipates that approximately two-thirds of the remaining Combined Plan pre-tax charges will represent net cash expenditures. No decisions have been made regarding any additional non-cash charges and estimates could vary depending on the actual actions taken. The company recorded restructuring charges related to the Combined Plan of $7.3 million ($5.5 million after tax) and $4.3 million ($3.9 million after tax) during the second quarter of 2015 and 2014, respectively. During the six months ended June 30, 2015 and 2014, the company incurred charges of $9.0 million ($6.3 million after tax) and $28.0 million ($23.7 million after tax), respectively. Restructuring charges and activity related to the Combined Plan since inception of the underlying actions include the following: Combined Plan Employee Termination Asset (millions) Costs Disposals Other Total 2011 - 2014 Activity: Recorded net expense and accrual $ $ ) $ $ Net cash payments ) ) ) Non-cash net charges — ) ) ) Effect of foreign currency translation ) — — ) Restructuring liability, December 31, 2014 — 2015 Activity: Recorded net expense and accrual Net cash payments ) ) ) Non-cash net charges — ) — ) Effect of foreign currency translation ) — — ) Restructuring liability, June 30, 2015 $ $ — $ $ As shown in the previous table, net cash payments under the Combined Plan were $22.3 million during the first six months of 2015 and $261.0 million from 2011 through 2014. The majority of cash payments under this plan are related to severance, with the current accrual expected to be paid over a period of a few months to several quarters. Non-restructuring Special (Gains) and Charges Champion acquisition and integration costs As a result of the Champion acquisition completed in 2013, the company incurred net charges of $4.3 million ($2.8 million after tax) and $5.2 million ($3.4 million after tax) during the second quarter of 2015 and 2014, respectively. During the six months ended June 30, 2015 and 2014, the company incurred charges of $9.5 million ($6.0 million after tax) and $11.7 million ($7.5 million after tax), respectively. Champion related special charges for 2015 and 2014 include integration costs and have been included as a component of special (gains) and charges on the Consolidated Statement of Income. Nalco merger and integration costs As a result of the Nalco merger completed in 2011, the company incurred net charges of $0.2 million ($0.1 million after tax) and $1.5 million ($1.1 million after tax) during the second quarter of 2015 and 2014, respectively. During the six months ended June 30, 2015 and 2014, the company incurred charges of $0.7 million ($0.6 million after tax) and $2.8 million ($2.0 million after tax), respectively. Nalco related special charges for 2015 and 2014 include integration costs and have been included as a component of special (gains) and charges on the Consolidated Statement of Income. Venezuelan currency devaluation Venezuela is a country experiencing a highly inflationary economy as defined under U.S. GAAP. As a result, the U.S. dollar is the functional currency for the company’s subsidiaries in Venezuela. Any currency remeasurement adjustments for non-dollar denominated monetary assets and liabilities held by the company’s subsidiaries and other transactional foreign exchange gains and losses are reflected in earnings. In 2013, the Venezuelan government established a new foreign exchange mechanism known as the Complementary System of Foreign Currency Acquirement (“SICAD 1”). It operates similar to an auction system and allows entities to exchange a limited number of Bolivares Fuertes (“bolivares”) for U.S. dollars at a bid rate established via weekly auctions. As of May 31, 2015, the fiscal quarter end for the company’s international operations, the SICAD 1 exchange rate closed at 12.0 bolivares to 1 U.S. dollar. The company does not use the SICAD 1 rate or expect to use the SICAD 1 currency exchange mechanism. In January 2014, the Venezuelan government announced the replacement of the Commission for the Administration of Foreign Exchange (“CADIVI”) with a new foreign currency administration, the National Center for Foreign Commerce (“CENCOEX”), which did not impact the fixed currency exchange rate of 6.3 bolivares to 1 U.S. dollar. In March 2014, the Venezuelan government introduced an additional currency exchange auction mechanism (“SICAD 2”), which operated similar to SICAD 1. In February 2015, SICAD 2 was replaced by a free-floating rate, the Marginal Currency System (“SIMADI”), with an exchange rate at May 31, 2015 of 199.0 bolivares to 1 U.S. dollar. The company closely monitors the complex economic and political conditions with respect to its operations in Venezuela, which are aligned to five of its ten operating units. During the second quarter of 2015, the company concluded that it was appropriate to apply the SIMADI exchange rate to its Venezuelan Water and Paper operating units, as the company believes that the SIMADI rate best represents the economics of those operating units, based on the underlying transactions within those operating units. As a result, the company recorded a devaluation charge of $30.2 million ($30.2 million after tax), including the remeasurement of its Water and Paper monetary assets and impairment of certain other net assets. During the first six months of 2015, within the Energy, Food & Beverage and Institutional operating units, the company continued to transact business at the CENCOEX fixed currency exchange rate of 6.3 bolivares to 1 U.S. dollar, including transactions with Petróleos de Venezuela (“PDVSA”), the Venezuelan state-owned oil and natural gas company, through its Energy operating unit. As the fixed currency exchange rate of 6.3 bolivares to 1 U.S. dollar remained legally available to the company, and it continued to transact at this rate, the company continued to remeasure the net monetary assets of its Energy, Food & Beverage and Institutional operating units at this rate throughout the first six months of 2015. As of May 31, 2015, the company had approximately $100 million of net monetary assets denominated in bolivares within its Energy, Food & Beverage and Institutional operating units that were required to be remeasured to U.S. dollars. Approximately 80% of the net monetary assets are aligned to the Energy business unit. As of May 31, 2015, the company had other net assets of approximately $120 million within the Energy, Food & Beverage and Institutional operating units, largely comprised of accounts receivable (denominated in U.S. dollars), inventory, property, plant and equipment and other intangible assets, excluding goodwill. Approximately 85% of the other net assets are aligned to the Energy business unit. Net sales within Venezuela are approximately 1% of the company’s consolidated net sales. Assets held in Venezuela at May 31, 2015 represented less than 2% of the company’s consolidated assets. Other special (gains) and charges The company recognized charges of $21.4 million ($13.4 million after tax) during both the second quarter and first six months of 2015, related to recognition of a loss on the sale of a portion of its Ecovation business, and other litigation related charges. The company recognized gains of $18.8 million ($15.9 million after tax) and $19.6 million ($16.4 million after tax) in the second quarter and the first six months of 2014, respectively, related to a favorable licensing settlement and other settlement gains. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2015 | |
Acquisitions and Dispositions | |
Acquisitions and Dispositions | 3. Acquisitions and Dispositions Acquisitions 2015 Activity During the first six months of 2015, the company completed three business combination transactions. In addition, one transaction was completed subsequent to the end of the second quarter. In December 2014, subsequent to the company’s fiscal year end for international operations, the company entered into a licensing agreement and business acquisition with Aseptix Health Sciences NV. With pre-acquisition annual sales of less than $1 million, the acquired business became part of the company’s Global Institutional reportable segment during the first quarter of 2015. Also in December 2014, subsequent to the company’s fiscal year end for international operations, the company acquired Commercial Pest Control Pty Ltd, an Australian commercial pest control company. With pre-acquisition annual sales of less than $1 million, the acquired business became part of the company’s Other segment during the first quarter of 2015. In April 2015, the company acquired certain assets from Clariant AG, based in Brazil and Argentina. With pre-acquisition annual sales of approximately $4 million, the acquired business became part of the company’s Global Industrial reportable segment during the second quarter of 2015. In June 2015, subsequent to the company’s quarter end for international operations, the company acquired Jianghai Environmental Protection Co. Ltd, an industrial water treatment company headquartered in Changzhou, China. The purchase price of the acquired business is approximately $190 million. Significant assets acquired include customer relationships, trademarks and other technology, with goodwill calculated as the excess of consideration transferred over the fair value of identifiable net assets acquired. With pre-acquisition annual sales of approximately $90 million, the acquired business will become part of the company’s Global Industrial reportable segment during the third quarter of 2015. 2014 Activity During the first six months of 2014, the company completed three business combination transactions. In December 2013, subsequent to the company’s year end for international operations, the company completed the acquisition of AkzoNobel’s Purate business, which specializes in global antimicrobial water treatment. Pre-acquisition annual sales of the business were approximately $23 million. The acquired business became part of the company’s Global Industrial reportable segment during the first quarter of 2014. In March 2014, the company acquired AK Kraus & Hiller Schädlingsbekämpfung, one of Germany’s leading commercial pest elimination service providers. Pre-acquisition annual sales of the business were approximately $4 million. The business became part of the company’s Other segment during the second quarter of 2014. In March 2014, the company purchased the remaining interest in a joint venture held in South Africa. The transaction was not significant to the company’s operations. Acquisition summary Acquisitions during the first six months of 2015 and all of 2014 were not material to the company’s consolidated financial statements. The aggregate purchase price of acquisitions has been reduced for any cash or cash equivalents acquired with the acquisitions. Based upon purchase price allocations, the components of the aggregate purchase prices of completed acquisitions during the second quarter and first six months of 2015 and 2014 are shown in the following table. Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Net tangible assets acquired $ $ $ $ Identifiable intangible assets Customer relationships Patents — — — Trademarks — — Other technology — — Non-compete — — Total intangible assets Goodwill Total aggregate purchase price Acquisition related liabilities and contingent consideration — ) ) Net cash paid for acquisitions, including contingent consideration $ $ $ $ The weighted average useful lives of identifiable intangible assets acquired during the first six months of 2015 and 2014, as shown in the previous table, were 9 and 10 years, respectively. Champion acquisition On April 10, 2013, the company completed its acquisition of Champion, a global energy specialty products and services company delivering its offerings to the oil and gas industry. During the first quarter of 2014 purchase price allocations were finalized, resulting in net adjustments of $16.9 million to the value of Champion assets acquired and liabilities assumed, with an offset to goodwill. The adjustments primarily related to estimated liabilities, updated property, plant and equipment values and deferred taxes. As the adjustments were not significant, they were recorded in 2014 upon identification. In accordance with the acquisition agreement, except under limited circumstances, the company was required to pay an additional amount in cash, up to $100 million in the aggregate, equal to 50% of the incremental tax on the merger consideration as a result of increases in applicable gains and investment taxes after December 31, 2012. In January 2014, in accordance with the above discussion, an additional payment of $86.4 million was made to the acquired entity’s former stockholders. The company deposited approximately $100 million of the original Champion purchase price consideration in an escrow account to fund post-closing adjustments to the consideration, and covenant and other indemnification obligations of the acquired entities’ former stockholders for a period of two years following the effective date of the acquisition. As of the end of the second quarter of 2015, the company is actively working to resolve indemnification obligations of the acquired entities’ former stockholders, with the potential future recovery of amounts from the escrow account by the company expected to be reflected within cost of sales, selling, general and administrative expenses, and/or special (gains) and charges within the Consolidated Statement of Income. Dispositions In June 2015, the company sold a portion of its Ecovation business, resulting in a loss of $13.7 million ($8.6 after tax), recorded in special (gains) and charges. The business was part of the company’s Global Industrial reportable segment. In April 2014, the company sold an immaterial business in Italy that was part of the company’s Global Institutional reportable segment. |
Balance Sheet Information
Balance Sheet Information | 6 Months Ended |
Jun. 30, 2015 | |
Balance Sheet Information | |
Balance Sheet Information | 4. Balance Sheet Information June 30 December 31 (millions) 2015 2014 Accounts receivable, net Accounts receivable $ $ Allowance for doubtful accounts ) ) Total $ $ Inventories Finished goods $ $ Raw materials and parts Inventories at FIFO cost Excess of FIFO cost over LIFO cost ) ) Total $ $ Other current assets Prepaid assets $ $ Taxes receivable Derivative assets Other Total $ $ Property, plant and equipment, net Land $ $ Buildings and improvements Leasehold improvements Machinery and equipment Merchandising and customer equipment Capitalized software Construction in progress Accumulated depreciation ) ) Total $ $ Other intangible assets, net Cost of intangible assets not subject to amortization Trade names $ $ Cost of intangible assets subject to amortization Customer relationships $ $ Trademarks Patents Other technology $ $ Accumulated amortization Customer relationships $ ) $ ) Trademarks ) ) Patents ) ) Other technology ) ) Total $ $ Other assets Deferred income taxes $ $ Deferred financing costs Pension Other Total $ $ June 30 December 31 (millions) 2015 2014 Other current liabilities Discounts and rebates $ $ Dividends payable Interest payable Taxes payable, other than income Derivative liabilities Restructuring Other Total $ $ Other liabilities Deferred income taxes $ $ Income taxes payable - non-current Restructuring Other Total $ $ Accumulated other comprehensive loss Unrealized gain (loss) on derivative financial instruments, net of tax $ $ ) Unrecognized pension and postretirement benefit expense, net of tax ) ) Cumulative translation, net of tax ) ) Total $ ) $ ) |
Debt and Interest
Debt and Interest | 6 Months Ended |
Jun. 30, 2015 | |
Debt and Interest | |
Debt and Interest | 5. Debt and Interest The following table provides the components of the company’s short-term debt obligations as of June 30, 2015 and December 31, 2014. June 30 December 31 (millions) 2015 2014 Short-term debt Commercial paper $ $ Notes payable Long-term debt, current maturities Total $ $ As of June 30, 2015, the company had in place a $2.0 billion multi-year credit facility which expires in December 2019. The credit facility has been established with a diverse syndicate of banks and supports the company’s $2.0 billion U.S. commercial paper program and the company’s $200 million European commercial paper program. The company’s U.S. commercial paper program, as shown in the previous table, had $1,332 million and $888 million outstanding as of June 30, 2015 and December 31, 2014, respectively. The following table provides the components of the company’s long-term debt obligations, including current maturities, as of June 30, 2015 and December 31, 2014. Maturity June 30 December 31 (millions) by year 2015 2014 Long-term debt Description / 2015 Principal Amount Seven year 2008 senior notes ($0 million) 2015 $ — $ Three year 2012 senior notes ($500 million) 2015 Term loan ($275 million) 2016 Series B private placement senior euro notes (€175 million) 2016 Five year 2011 senior notes ($1.25 billion) 2016 Five year 2012 senior notes ($500 million) 2017 Three year 2015 senior notes ($300 million) 2018 — Series A private placement senior notes ($250 million) 2018 Five year 2015 senior notes ($300 million) 2020 — Ten year 2011 senior notes ($1.25 billion) 2021 Series B private placement senior notes ($250 million) 2023 Thirty year 2011 senior notes ($750 million) 2041 Capital lease obligations Other Total debt Long-term debt, current maturities ) ) Total long-term debt $ $ In January 2015, the company issued $600 million of debt securities in a public offering consisting of a three-year 1.55% fixed rate note for a par amount of $300 million and a five-year 2.25% fixed rate note for a par amount of $300 million. The proceeds were used to repay a portion of the company’s outstanding commercial paper and for general corporate purposes. In July 2015, subsequent to the company’s second quarter end, the company issued a ten-year 2.63% fixed rate euro note for a par amount of €575 million. The proceeds were used to repay a portion of the company’s outstanding commercial paper. The notes issued by the company in January and July of 2015, pursuant to public debt offerings (the “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 will 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. During the first quarter of 2015, the company acquired the beneficial interest in the trust owning the leased Naperville facility resulting in debt assumption of $100.2 million and the addition of $135.2 million in property, plant and equipment. Certain administrative, divisional, and research and development personnel are based at the Naperville facility. Cash paid as a result of the transaction was $19.8 million. The assumed debt is reflected in the “Other” line the table above. The assumption of debt and the majority of the property, plant and equipment addition represent non-cash financing and investing activities, respectively. During the first quarter of 2015, the company repaid its $250 million 4.88% seven year senior notes at maturity and $125 million of its term loan borrowings. The company is in compliance with its debt covenants as of June 30, 2015. Interest expense and interest income recognized during the second quarter and the first six months of 2015 and 2014 were as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Interest expense $ $ $ $ Interest income ) ) ) ) Interest expense, net $ $ $ $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. The company’s reporting units are its operating segments. The company tests goodwill for impairment on an annual basis during the second quarter. During 2014, the company elected to perform a qualitative assessment for its annual impairment test. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the company would be required to perform a quantitative impairment test for goodwill. During 2015, in order to refresh the relative fair values of all ten of its reporting units, the company elected to bypass the qualitative assessment and perform a quantitative impairment test. The two-step process involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of impairment loss to be recorded, if any. In performing its quantitative impairment test, the company estimated the fair value of its reporting units using a market based approach. The company estimated fair value based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”) determined by current trading market multiples of earnings for companies operating in businesses similar to each of the company’s reporting units. The company’s goodwill impairment assessment for 2015 indicated the fair value of each of its reporting units exceeded its carrying amount by a significant margin. Based on the company’s qualitative assessment of goodwill in 2014, it concluded that it was more likely than not that the fair value of each of the company’s reporting units was greater than their carrying values, and therefore no further testing was required. If circumstances change significantly, the company would also test a reporting unit’s goodwill for impairment during interim periods between its annual tests. There has been no impairment of goodwill since the adoption of FASB guidance for goodwill and other intangibles on January 1, 2002. The changes in the carrying amount of goodwill for each of the company’s reportable segments during the six months ended June 30, 2015 were as follows: Global Global Global (millions) Industrial Institutional Energy Other Total Goodwill as of December 31, 2014 $ $ $ $ $ Current year business combinations(a) — — Prior year business combinations(b) ) — — — ) Dispositions ) — — — ) Reclassifications(c) ) — — Effect of foreign currency translation ) ) ) ) ) Goodwill as of June 30, 2015 $ $ $ $ $ (a) For 2015, $0.9 million of the goodwill related to businesses acquired is expected to be tax deductible. (b) Represents purchase price allocation adjustments for 2014 acquisitions deemed preliminary as of December 31, 2014. (c) Represents immaterial reclassifications of beginning balances to conform to the current year presentation. Other Intangible Assets As part of the Nalco merger, the company added the “Nalco” trade name as an indefinite life intangible asset. During the second quarter of 2015, using the qualitative assessment method, the company completed its annual test for indefinite life intangible asset impairment. Based on this testing, no adjustment to the $1.2 billion carrying value of this asset was necessary. There has been no impairment of the Nalco trade name intangible asset since it was acquired. The company’s intangible assets subject to amortization primarily include customer relationships, trademarks, patents and other technology. The fair value of identifiable intangible assets is estimated based upon discounted future cash flow projections and other acceptable valuation methods. Other intangible assets are amortized on a straight-line basis over their estimated economic lives. Total amortization expense related to other intangible assets during the second quarter ended June 30, 2015 and 2014 was $72.9 million and $76.7 million, respectively. Total amortization expense related to other intangible assets during the first six months of 2015 and 2014 was $146.0 million and $154.8 million, respectively. As of June 30, 2015, future estimated expense related to amortizable other identifiable intangible assets is expected to be: (millions) 2015 (Remainder: six-month period) $ 2016 2017 2018 2019 2020 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 7. Fair Value Measurements The company’s financial instruments include cash and cash equivalents, investments held in rabbi trusts, accounts receivable, accounts payable, contingent consideration obligations, commercial paper, notes payable, foreign currency forward contracts, interest rate swap contracts and long-term debt. Fair value is defined as the exit price, or 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: 2015 Carrying Fair Value Measurements June 30 (millions) Amount Level 1 Level 2 Level 3 Assets: Investments held in rabbi trusts $ $ $ — $ — Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — Liabilities: Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — 2014 Carrying Fair Value Measurements December 31 (millions) Amount Level 1 Level 2 Level 3 Assets: Investments held in rabbi trusts $ $ $ — $ — Foreign currency forward contracts — — Contingent consideration — — Liabilities: Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — The carrying value of investments held in rabbi trusts is at fair value, which is determined using quoted prices in active markets, and is classified within level 1. The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date, and is classified within level 2. The carrying value of interest rate swap contracts is at fair value, which is determined based on current interest rates and forward interest rates as of the balance sheet date and is classified within level 2. For purposes of fair value disclosure above, derivative values are presented gross. See further discussion of gross versus net presentation of the company’s derivatives within Note 8. Contingent consideration obligations are recognized and measured at fair value at the acquisition date. Contingent consideration is classified within level 3 as the underlying fair value is measured based on the probability-weighted present value of the consideration expected to be transferred. The consideration expected to be transferred is based on the company’s expectations of various financial measures. The ultimate payment of contingent consideration could deviate from current estimates based on the actual results of these financial measures. Changes in the net fair value of contingent consideration for the six months ended June 30, 2015 were as follows: (millions) Contingent consideration, December 31, 2014 $ Amount recognized at acquisition date — Loss (gain) recognized in earnings — Settlements ) Foreign currency translation — Contingent consideration, June 30, 2015 $ The carrying values of accounts receivable, accounts payable, cash and cash equivalents, 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. The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the company were: June 30, 2015 December 31, 2014 Carrying Fair Carrying Fair (millions) Amount Value Amount Value Long-term debt (including current maturities) $ $ $ $ |
Derivatives and Hedging Transac
Derivatives and Hedging Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Derivatives and Hedging Transactions | |
Derivatives and Hedging Transactions | 8. Derivatives and Hedging Transactions The company uses foreign currency forward contracts, interest rate swaps 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 all derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. 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 international 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. 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 and management fee payments. These forward contracts are designated as cash flow hedges. The effective portions of the changes in fair value of these contracts are recorded in accumulated other comprehensive income (“AOCI”) until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the Consolidated Statement of Income as the underlying exposure being hedged. All cash flow hedged transactions are forecasted to occur within the next twelve months. The company occasionally enters into forward starting interest rate swap agreements to manage interest rate exposure. During 2014, the company entered into a series of forward starting interest rate swap agreements in connection with both its U.S. public debt issuance completed in January 2015 and its euro public debt issuance completed in July 2015. The interest rate swap agreements were designated and effective as cash flow hedges of the expected interest payments related to the debt issuances. The swap agreements closed in January 2015 and July 2015, in conjunction with the respective U.S. and euro debt issuances discussed in Note 5. During 2011, the company entered into and subsequently closed a series of forward starting swap agreements in connection with the issuance of its private placement debt. During 2006, the company entered into and subsequently closed two forward starting swap contracts related to the issuance of its senior euro notes. The amounts recorded in AOCI for the 2015, 2011 and 2006 transactions are recognized as part of interest expense over the remaining life of the notes as the forecasted interest transactions occur. The impact on AOCI and earnings from derivative contracts that qualified as cash flow hedges was as follows: Second Quarter Ended June 30 Six Months Ended June 30 (millions) Location 2015 2014 2015 2014 Unrealized gain (loss) recognized into AOCI (effective portion) Foreign currency forward contracts AOCI (equity) $ ) $ ) $ $ ) Interest rate swap contracts AOCI (equity) $ $ — $ ) $ — Gain (loss) reclassified from AOCI into income (effective portion) Foreign currency forward contracts Cost of sales $ $ $ $ SG&A Interest rate swap contracts Interest expense, net ) ) ) ) $ $ $ $ Gains and losses recognized in income related to the ineffective portion of the company’s cash flow hedges were insignificant during first six months of 2015 and 2014. Fair Value Hedges The company manages interest expense using a mix of fixed and floating rate debt. To help manage exposure to interest rate movements and to reduce borrowing costs, the company may enter into interest rate swaps under which the company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which is also recorded in interest expense. These fair value hedges are highly effective and thus, there is no impact on earnings due to hedge ineffectiveness. 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. In January 2015, the company entered into interest rate swap agreements that converted its $300 million 1.55% debt, its $250 million 3.69% debt and a portion of its $1.25 billion 3.00% debt from fixed rates to floating interest rates. The interest rate swaps were designated as fair value hedges. The impact on earnings from derivative contracts that qualified as fair value hedges was as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) Location 2015 2014 2015 2014 Gain (loss) on derivative recognized in income Interest rate swap Interest expense, net $ $ ) $ $ ) Gain (loss) on hedged item recognized in income Interest rate swap Interest expense, net $ ) $ $ ) $ Net Investment Hedges The company designates its outstanding €175 million ($192 million as of June 30, 2015) senior notes (“euronotes”) and related accrued interest as a hedge of existing foreign currency exposures related to net investments the company has in certain euro denominated functional currency subsidiaries. The €575 million issued in July 2015, and related accrued interest, will also be designated as a net investment hedge. The company also enters into euro denominated forward contracts to hedge additional portions of its net investments in euro denominated functional currency subsidiaries. During the second half of 2014, the company entered into forward contracts with notional values of €495 million. In July 2015, subsequent to the company’s second quarter end, the company closed the €495 million net investment hedge. During the first quarter of 2015, the company entered into forward contracts with notional values of €360 million and €80 million. During the second quarter of 2015, the company de-designated the €360 million net investment hedges and initiated undesignated hedges for €360 million to offset the impact of the original €360 million forward contract. The revaluation gains and losses on the euronotes and of the forward 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. Total revaluation gains and losses related to the euronotes and forward contract charged to shareholders’ equity were as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Revaluation gains (losses), net of tax $ $ $ $ ) 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. The impact on earnings from derivative contracts that are not designated as hedging instruments was as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) Location 2015 2014 2015 2014 Gain (loss) recognized in income Foreign currency forward contracts SG&A $ ) $ $ ) $ Interest expense, net ) ) ) ) $ ) $ $ ) $ The amounts recognized in SG&A above offset the earnings impact of the related foreign currency denominated assets and liabilities. The amounts recognized in interest expense above represent the component of the hedging gains (losses) attributable to the difference between the spot and forward rates of the hedges as a result of interest rate differentials. Derivative 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 below, no cash collateral had been received or pledged related to the underlying derivatives. During 2015, the company made an accounting policy election regarding the presentation of derivatives subject to master netting arrangements with the same counterparties within its Consolidated Balance Sheet. The company previously presented all derivative positions on a gross basis and began presenting derivatives subject to master netting arrangements with the same counterparties on a net basis during the first quarter of 2015. The company reclassified the presentation of derivatives subject to master netting arrangements with the same counterparty as of December 31, 2014 to conform to the new accounting policy which resulted in a reduction in other current assets and other current liabilities of $18.1 million. The immaterial reclassification had no impact on previously reported earnings or cash flows. The respective net amounts are included in other current assets, other non-current assets and other current liabilities on the Consolidated Balance Sheet. Asset Derivatives Liability Derivatives June 30 December 31 June 30 December 31 (millions) 2015 2014 2015 2014 Gross value of derivatives $ $ $ $ Gross amounts offset in the Consolidated Balance Sheet ) ) ) ) Net value of derivatives presented in the Consolidated Balance Sheet $ $ $ $ The following table summarizes the gross fair value of the company’s outstanding derivatives. Asset Derivatives Liability Derivatives June 30 December 31 June 30 December 31 (millions) 2015 2014 2015 2014 Derivatives designated as hedging instruments Foreign currency forward contracts $ $ $ $ Interest rate swap contracts — Derivatives not designated as hedging instruments Foreign currency forward contracts Total $ $ $ $ The following table summarizes the notional values of the company’s outstanding derivatives. Notional Values June 30 December 31 (millions) 2015 2014 Foreign currency forward contracts $ $ Interest rate swap agreements $ $ € € Net investment hedge contracts(a) € € (a) The net investment hedge contracts exclude the euro denominated debt. |
Other Comprehensive Income Info
Other Comprehensive Income Information | 6 Months Ended |
Jun. 30, 2015 | |
Other Comprehensive Income Information | |
Other Comprehensive Income Information | 9. Other Comprehensive Income Information Comprehensive income (loss) includes net income, foreign currency translation adjustments, unrecognized gains and losses on securities, defined benefit pension and postretirement plan adjustments, gains and losses on derivative instruments designated and effective as cash flow hedges and non-derivative instruments designated and effective as foreign currency net investment hedges that are charged or credited to the accumulated other comprehensive loss account in shareholders’ equity. The following tables provide other comprehensive income information related to the company’s derivatives and hedging instruments and pension and postretirement benefits. See Note 8 for additional information related to the company’s derivatives and hedging transactions. See Note 13 for additional information related to the company’s recognition of net actuarial losses and amortization of prior service benefits. Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Derivative & Hedging Instruments Unrealized gains (losses) on derivative & hedging instruments Amount recognized into AOCI $ $ ) $ $ ) (Gains) losses reclassified from AOCI into income Cost of sales ) ) ) ) SG&A ) ) ) ) Interest expense, net ) ) ) Translation & other insignificant activity ) ) ) Tax impact ) ) Net of tax $ ) $ ) $ $ ) Pension & Postretirement Benefits Amounts reclassified from AOCI into income Actuarial losses $ $ $ $ Prior service costs ) ) ) ) Tax impact ) ) ) ) Net of tax $ $ $ $ The following table summarizes the derivative and pension and postretirement benefit amounts reclassified from AOCI into income. Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Derivative gains reclassified from AOCI into income, net of tax $ ) $ ) $ ) $ ) Pension and Postretirement Benefits net actuarial losses and prior services costs reclassified from AOCI into income, net of tax $ $ $ $ |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Shareholders' Equity | |
Shareholders' Equity | 10. Shareholders’ Equity Share repurchases In August 2011, the Finance Committee of the company’s Board of Directors, via delegation by the company’s Board of Directors, authorized the repurchase of 10 million common shares, including shares to be repurchased under Rule 10b5-1, which was contingent upon completion of the merger with Nalco. In February 2015, the company’s Board of Directors authorized the repurchase of up to 20 million additional shares of its common stock, including shares to be repurchased under Rule 10b5-1. As of June 30, 2015, 22,968,599 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. In February 2015, under the existing repurchase authorization discussed above, the company announced a $1.0 billion share repurchase program, of which $390 million remains to be repurchased as of June 30, 2015. The company expects the program to be completed by mid-2016. As part of this program, the company entered into an accelerated stock repurchase (“ASR”) agreement with a financial institution to repurchase $300 million of its common stock. Under the ASR, the company received 2,066,293 shares of its common stock in February 2015, which was approximately 80% 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. The final per share purchase price and the total number of shares to be repurchased under the ASR agreement generally were based on the volume-weighted average price of the company’s common stock during the term of the agreement. Upon final settlement of the ASR agreement, under certain circumstances, the financial institution was obligated to deliver additional shares to the company or the company was obligated to deliver additional shares of common stock or make a cash payment, at the company’s election, to the financial institution. In connection with the finalization of the ASR in April 2015, the company received an additional 555,511 shares of common stock. All shares acquired under the ASR agreement were recorded as treasury stock. From February 2015 through settlement in April 2015, the ASR was not dilutive to the company’s earnings per share calculation. Additionally, the ASR agreement did not trigger the two-class earnings per share methodology. From February 2015 through settlement in April 2015, the unsettled portion of the ASR met the criteria to be accounted for as a forward contract indexed to the company’s stock and qualified as an equity transaction. 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, the impact of which was not material. During the first six months of 2015, including the ASR discussed above, the company reacquired 6,421,757 shares of its common stock, of which 6,197,699 related to share repurchases through open market or private purchases and 224,058 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units. During all of 2014, the company reacquired 3,547,334 shares of its common stock through open market and private purchases and 489,854 of shares withheld for taxes related to the exercise of stock options and the vesting of stock awards and units. |
Earnings Attributable to Ecolab
Earnings Attributable to Ecolab Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Attributable to Ecolab Per Common Share | |
Earnings Attributable to Ecolab Per Common Share | 11. Earnings Attributable to Ecolab Per Common Share The difference in the weighted average common shares outstanding for calculating basic and diluted earnings attributable to Ecolab per common share is a result of the dilution associated with the company’s equity compensation plans. As noted in the table below, certain stock options, units and awards outstanding under these equity compensation plans were not included in the computation of diluted earnings attributable to Ecolab per common share because they would not have had a dilutive effect. The computations of the basic and diluted earnings attributable to Ecolab per common share amounts were as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions, except per share amounts) 2015 2014 2015 2014 Net income attributable to Ecolab $ $ $ $ Weighted-average common shares outstanding Basic Effect of dilutive stock options, units and awards Diluted Earnings attributable to Ecolab per common share Basic $ $ $ $ Diluted $ $ $ $ Anti-dilutive securities excluded from computation of earnings per share |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The company’s tax rate was 18.0% and 29.4% for the second quarter of 2015 and 2014, respectively, and 22.5% and 30.4% for the first six months of 2015 and 2014, respectively. The changes in the company’s tax rate for the second quarter and first six months of 2015 compared to the second quarter and first six months of 2014 were primarily driven by the tax rate impact of special gains and charges and discrete tax items, with lesser impacts from global tax planning actions and favorable geographic income mix. The company recognized discrete tax net benefits of $39.4 million during the second quarter of 2015 and $36.8 million during the first six months of 2015. Second quarter net benefits related to discrete items resulted primarily from the company’s ability to recognize a worthless stock deduction for the tax basis in a wholly-owned domestic subsidiary. First quarter 2015 net expense related to discrete items was driven primarily by the change to a deferred tax liability resulting from the Naperville facility transaction discussed further in Note 5. The company recognized discrete tax net expense of $8.3 million during the second quarter of 2014 and $18.2 million during the first six months of 2014. Second quarter 2014 net expense related to discrete items was driven primarily by an update to non-current tax liabilities for global tax audits and an adjustment related to the re-characterization of intercompany payments between the company’s U.S. and foreign affiliates which more than offset the change of valuation allowances based on the realizability of foreign deferred tax assets. First quarter 2014 net expense related to discrete items was driven primarily by the rate differential on certain prior year shared costs, the remeasurement of certain deferred tax assets and liabilities resulting from a change in the state tax rate for certain entities following the merger of Champion operations and the change of a valuation allowance related to the realizability of foreign deferred tax assets, which collectively more than offset benefits from a foreign country audit settlement. The company had valuation allowances on certain deferred tax assets of $67 million and $74 million at June 30, 2015 and December 31, 2014, respectively. The reduction in the June 30, 2015 balance as compared to year end 2014 is largely due to foreign currency translation. The company anticipates that approximately one-half of the June 30, 2015 balance may be released by the end of 2015 based on the income trends of the underlying foreign entities. |
Pension and Postretirement Plan
Pension and Postretirement Plans | 6 Months Ended |
Jun. 30, 2015 | |
Pension and Postretirement Plans | |
Pension and Postretirement Plans | 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 plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. On January 1, 2014, certain legacy Champion employees became eligible to participate in the U.S. qualified and non-qualified pension plans. Various international subsidiaries also have defined benefit pension plans. The company provides postretirement health care benefits to certain U.S. employees and retirees. The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows: U.S. International Postretirement U.S. Pension Pension Health Care (millions) 2015 2014 2015 2014 2015 2014 Service cost $ $ $ $ $ $ Interest cost on benefit obligation Expected return on plan assets ) ) ) ) ) ) Recognition of net actuarial (gain) loss ) ) Amortization of prior service cost (benefit) ) ) ) ) ) Settlements/curtailments — — — — — Total Expense $ $ $ $ $ $ The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows: U.S. International Postretirement U.S. Pension Pension Health Care (millions) 2015 2014 2015 2014 2015 2014 Service cost $ $ $ $ $ $ Interest cost on benefit obligation Expected return on plan assets ) ) ) ) ) ) Recognition of net actuarial (gain) loss ) ) Amortization of prior service cost (benefit) ) ) ) ) ) Settlements/curtailments — — — — — Total Expense $ $ $ $ $ $ As of June 30, 2015, the company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. During the first six months of 2015, the company made payments of $5 million to its U.S. non-contributory non-qualified defined benefit plans, and estimates that it will make payments of approximately an additional $3 million to such plans during the remainder of 2015. The company contributed $25 million to its international pension benefit plans during the first six months of 2015. The company currently estimates that it will contribute approximately an additional $20 million to the international pension benefit plans during the remainder of 2015. During the first six months of 2015, the company made payments of $8 million to its U.S. postretirement health care benefit plans, and estimates that it will make payments of approximately an additional $10 million to such plans during the remainder of 2015. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2015 | |
Operating Segments | |
Operating Segments | 14. Operating Segments The company’s organizational structure consists of global business unit and global regional leadership teams. The company’s ten operating units, which are also 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 unit level. Eight of the company’s ten operating units have been aggregated into three reportable segments based on similar economic characteristics and future prospects, nature of the products and production processes, end-use markets, channels of distribution and regulatory environment. The company’s reportable segments are Global Industrial, Global Institutional and Global Energy. The company’s two operating units that are primarily fee-for-service businesses have been combined into the Other segment and do not meet the quantitative criteria to be separately reported. The company provides similar information for the Other segment as compared to its three reportable segments as the company considers the information regarding its two underlying operating units as useful in understanding its consolidated results. The company evaluates the performance of its international operations based on fixed currency exchange rates which eliminate the impact of exchange rate fluctuations on its international operations. The international amounts included within each of the company’s reportable segments are based on translation into U.S. dollars at the fixed currency exchange rates used by management for 2015. 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. Financial information for each of the company’s reportable segments is as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Net Sales Global Industrial $ $ $ $ Global Institutional Global Energy Other Subtotal at fixed currency rates Effect of foreign currency translation ) ) Consolidated $ $ $ $ Operating Income Global Industrial $ $ $ $ Global Institutional Global Energy Other Corporate ) ) ) ) Subtotal at fixed currency rates Effect of foreign currency translation ) ) Consolidated $ $ $ $ The profitability of the company’s operating units is evaluated by management based on operating income. The company has no intersegment revenues. Consistent with the company’s internal management reporting, the Corporate segment includes amortization specifically from the Nalco merger. The Corporate segment also includes special (gains) and charges, as discussed in Note 2, reported within the Consolidated Statement of Income. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. 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 and has contractual obligations related to legal commitments. 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 high deductible insurance policies for property and casualty losses. The company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The company determines its liabilities for claims on an actuarial basis. Litigation and Environmental Matters The company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include from time to time antitrust, commercial, patent infringement, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The company has established accruals for certain lawsuits, claims and environmental matters. The company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the company’s results of operations or cash flows in the period in which they are recorded. The company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the company’s consolidated financial position. Environmental Matters The company is currently participating in environmental assessments and remediation at approximately 35 locations, most of which are in the U.S., and environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the company’s accruals for environmental liabilities. Matters Related to Wage Hour Claims The company is a defendant in six pending wage hour lawsuits claiming violations of the Fair Labor Standards Act (“FLSA”) or a similar state law. Of these six suits, two have been certified for class action status. Ross (formerly Icard) v. Ecolab, U.S. District Court — Northern District of California, case no. C 13-05097 PJH, an action under California state law, has been certified for class treatment of California Institutional employees. In Cancilla v. Ecolab, U.S. District Court - Northern District of California, case no. CV 12-03001, the Court conditionally certified a nationwide class of Pest Elimination Service Specialists for alleged FLSA violations. The suit also seeks a purported California sub-class for alleged California wage hour law violations and certifications of classes for state law violations in Washington, Colorado, Maryland, Illinois, Missouri, Wisconsin and North Carolina. The Cancilla lawsuit has been settled pending court approval. A third pending suit, Charlot v. Ecolab Inc., U.S. District Court-Eastern District of New York, case no. CV 12-04543, seeks nationwide class certification of Institutional employees for alleged FLSA violations as well as purported state sub-classes in New York, New Jersey, Washington and Pennsylvania alleging violations of state wage hour laws. A fourth pending suit, Schneider v. Ecolab, Circuit Court of Cook County, Illinois, case no. 2014 CH 193, seeks certification of a class of Institutional employees for alleged violations of Illinois wage and hour laws. A fifth pending suit, Martino v. Ecolab, Santa Clara County California Superior Court, seeks certification of a California state class of Institutional employees for alleged violations of California wage and hour laws. The Martino case has been removed to the United States District Court for the Northern District of California. A sixth pending suit, LaValley v. Ecolab, United States District Court for the District of Minnesota, seeks certification of a class of Territory Representatives for alleged violations of the FLSA and New York state wage and hour laws. The LaValley lawsuit has also been settled pending court approval. 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. After review and testing of a number of dispersants, on September 30, 2010, and on August 2, 2010, the EPA released toxicity data for eight oil dispersants. 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. Since the spill occurred, the EPA and other federal agencies have closely monitored conditions in areas where dispersant was applied. Nalco Company has encouraged ongoing monitoring and review of COREXIT and other dispersants and has cooperated fully with the governmental review and approval process. However, 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”). Putative Class Action Litigation Nalco Company was named, along with other unaffiliated defendants, in six putative class action complaints related to the Deepwater Horizon oil spill: Adams v. Louisiana, et al., Case No. 11-cv-01051 (E.D. La.); Elrod, et al. v. BP Exploration & Production Inc., et al., 12-cv-00981 (E.D. La.); Harris, et al. v. BP, plc, et al., Case No. 2:10-cv-02078-CJBSS (E.D. La.); Irelan v. BP Products, Inc., et al., Case No. 11-cv-00881 (E.D. La.); Petitjean, et al. v. BP, plc, et al., Case No. 3:10-cv-00316-RS-EMT (N.D. Fla.); and, Wright, et al. v. BP, plc, et al., Case No. 1:10-cv-00397-B (S.D. Ala.). The cases were filed on behalf of various potential classes of persons who live and work in or derive income from the effected Coastal region. Each of the actions contains substantially similar allegations, generally alleging, among other things, negligence relating to the use of the company’s COREXIT dispersant in connection with the Deepwater Horizon oil spill. The plaintiffs in these putative class action lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These cases have been consolidated in MDL 2179. Other Related Claims Pending in MDL 2179 Nalco Company was also named, along with other unaffiliated defendants, in 23 complaints filed by individuals: Alexander, et al. v. BP Exploration & Production, et al., Case No. 11-cv-00951 (E.D. La.); Best v. British Petroleum plc, et al., Case No. 11-cv-00772 (E.D. La.); Black v. BP Exploration & Production, Inc., et al. Case No. 2:11-cv- 867, (E.D. La.); Brooks v. Tidewater Marine LLC, et al., Case No. 11-cv- 00049 (S.D. Tex.); Capt Ander, Inc. v. BP, plc, et al., Case No. 4:10-cv-00364-RH-WCS (N.D. Fla.); Coco v. BP Products North America, Inc., et al. (E.D. La.); Danos, et al. v. BP Exploration et al., Case No. 00060449 (25th Judicial Court, Parish of Plaquemines, Louisiana); Doom v. BP Exploration & Production, et al. , Case No. 12-cv-2048 (E.D. La.); Duong, et al., v. BP America Production Company, et al., Case No. 13-cv-00605 (E.D. La.); Esponge v. BP, P.L.C., et al., Case No. 0166367 (32nd Judicial District Court, Parish of Terrebonne, Louisiana); Ezell v. BP, plc, et al., Case No. 2:10-cv-01920-KDE-JCW (E.D. La.); Fitzgerald v. BP Exploration, et al., Case No. 13-cv-00650 (E.D. La.); Hill v. BP, plc, et al., Case No. 1:10-cv-00471-CG-N (S.D. Ala.); Hogan v. British Petroleum Exploration & Production, Inc., et al., Case No. 2012-22995 (District Court, Harris County, Texas); Hudley v. BP, plc, et al., Case No. 10-cv-00532-N (S.D. Ala.); In re of Jambon Supplier II, L.L.C., et al., Case No. 12-426 (E.D. La.); Kolian v. BP Exploration & Production, et al. , Case No. 12-cv-2338 (E.D. La.); Monroe v. BP, plc, et al., Case No. 1:10-cv-00472-M (S.D. Ala.); Pearson v. BP Exploration & Production, Inc., Case No. 2:11-cv-863, (E.D. La.); Shimer v. BP Exploration and Production, et al, Case No. 2:13-cv-4755 (E.D. La.); Top Water Charters, LLC v. BP, P.L.C., et al., No. 0165708 (32nd Judicial District Court, Parish of Terrebonne, Louisiana); Toups, et al. v Nalco Company, et al., Case No. 59-121 (25th Judicial District Court, Parish of Plaquemines, Louisiana); and, Trehern v. BP, plc, et al., Case No. 1:10-cv-00432-HSO-JMR (S.D. Miss.). The cases were filed on behalf of individuals and entities that own property, live, and/or work in or derive income from the effected Coastal region. Each of the actions contains substantially similar allegations, generally alleging, among other things, negligence relating to the use of our COREXIT dispersant in connection with 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. 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 remain pending against other defendants, the Court’s decision is 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. 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 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 Energy Services, LP, Nalco Holding Company, Nalco Finance Holdings LLC, Nalco Finance Holdings Inc., Nalco Holdings LLC and Nalco Company. Other Related Actions In March 2011, Nalco Company was named, along with other unaffiliated defendants, in an amended complaint filed by an individual in the Circuit Court of Harrison County, Mississippi, Second Judicial District (Franks v. Sea Tow of South Miss, Inc., et al., Cause No. A2402-10-228 (Circuit Court of Harrison County, Mississippi)). The amended complaint generally asserts, among other things, negligence and strict product liability claims relating to the plaintiff’s alleged exposure to chemical dispersants manufactured by Nalco Company. The plaintiff seeks unspecified compensatory damages, medical expenses, and attorneys’ fees and costs. Plaintiff’s allegations place him within the scope of the MDL 2179 Medical Benefits Class. In approving the Medical Benefits Settlement, the MDL 2179 Court barred Medical Benefits Settlement class members from prosecuting claims of injury from exposure to oil and dispersants related to the Response. As a result of the MDL court’s order, on April 11, 2013, the Mississippi court stayed proceedings in the Franks case. The Franks case was dismissed in May 2014. The company believes the claims asserted against Nalco Company are without merit and intends to defend these lawsuits vigorously. The company also believes that it has rights to contribution and/ or indemnification (including legal expenses) from third parties. However, the company cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | 16. New Accounting Pronouncements Standard Date of Issuance Description Date of Adoption Effect on the Financial Statements Standards that are not yet adopted: ASU 2015-01 — Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items January 2015 Entities should no longer segregate extraordinary and unusual items from the results of ordinary operations on the Income Statement and should no longer disclose the applicable income taxes and earnings-per-share data for applicable extraordinary items. January 1, 2016 The company does not expect the updated guidance to have an impact on future financial statements. ASU 2015-02 — Consolidation (Topic 810): Amendments to the Consolidation Analysis February 2015 Certain factors that previously required reporting entities to consolidate a given legal entity have been eliminated, requiring fewer legal entities to be consolidated under the new guidance. January 1, 2016 The company does not expect the updated guidance to have a significant impact on future financial statements. ASU 2015-03 — Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs April 2015 Debt issuance costs should no longer be recognized as a deferred charge (asset) but rather should be recorded as a direct deduction from the carrying amount of the debt liability. January 1, 2016 Presentation impact related to the company’s deferred financing costs and debt. The company does not expect the updated guidance to have a significant impact on future financial statements. ASU 2015-05 — Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement April 2015 An entity that is the customer in a cloud computing arrangement that includes a software license should account for the software license element of the arrangement consistent with the acquisition of other software licenses. January 1, 2016 The company does not expect the updated guidance to have an impact on future financial statements. ASU 2015-07 — Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) (a consensus of the Emerging Issues Taskforce) May 2015 Investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient of ASC 820 should not be categorized in the fair value hierarchy. However, the reporting entity should continue to disclose information on such investments. January 1, 2016 Presentation impact related to pension plan asset disclosures. Standards that are not yet adopted (continued): ASU 2014-09 — Revenue from Contracts with Customers (Topic 606) May 2014 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 The company is currently evaluating the impact of adoption. ASU 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern August 2014 Management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and to provide related footnote disclosures. January 1, 2017 The company does not expect the guidance to have an impact on future financial statements. Standards that were adopted: ASU 2014-08 —Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity April 2014 Updated criteria for determining which disposals should be presented as discontinued operations as well as modifications to the related disclosure requirements. January 1, 2015 The adoption of the updated guidance had no impact on the company’s financial statements. ASU 2014-16 —Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity November 2014 For hybrid financial instruments issued in the form of a share, an entity (an issuer or an investor) should determine the nature of the host contract by considering all stated and implied substantive terms and features of the basis of relevant facts and circumstances. January 1, 2015 The adoption of the updated guidance had no impact on the company’s financial statements. |
Special (Gains) and Charges (Ta
Special (Gains) and Charges (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring Reserve: | |
Special (gains) and charges | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Cost of sales Restructuring charges $ $ $ $ Venezuela currency devaluation — — Subtotal Special (gains) and charges Restructuring charges Champion acquisition and integration costs Nalco merger and integration costs Venezuela currency devaluation — — Loss on sale of business, litigation related charges and other settlements ) ) Subtotal ) Total special (gains) and charges $ $ ) $ $ |
Energy Restructuring Plan | |
Restructuring Reserve: | |
Restructuring charges and subsequent activity | Energy Restructuring Plan Employee Termination Asset (millions) Costs Disposals Other Total 2013 - 2014 Activity: Recorded expense and accrual $ $ $ $ Cash payments ) — ) ) Non-cash charges — ) — ) Effect of foreign currency translation — — Restructuring liability, December 31, 2014 — 2015 Activity: Recorded expense and accrual Net cash payments ) ) ) Non-cash charges — ) — ) Effect of foreign currency translation ) — — ) Restructuring liability, June 30, 2015 $ $ — $ $ |
Combined Plan | |
Restructuring Reserve: | |
Restructuring charges and subsequent activity | Combined Plan Employee Termination Asset (millions) Costs Disposals Other Total 2011 - 2014 Activity: Recorded net expense and accrual $ $ ) $ $ Net cash payments ) ) ) Non-cash net charges — ) ) ) Effect of foreign currency translation ) — — ) Restructuring liability, December 31, 2014 — 2015 Activity: Recorded net expense and accrual Net cash payments ) ) ) Non-cash net charges — ) — ) Effect of foreign currency translation ) — — ) Restructuring liability, June 30, 2015 $ $ — $ $ |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Acquisitions and Dispositions | |
Schedule of assets acquired and liabilities assumed | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Net tangible assets acquired $ $ $ $ Identifiable intangible assets Customer relationships Patents — — — Trademarks — — Other technology — — Non-compete — — Total intangible assets Goodwill Total aggregate purchase price Acquisition related liabilities and contingent consideration — ) ) Net cash paid for acquisitions, including contingent consideration $ $ $ $ |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Balance Sheet Information | |
Balance Sheet Information | June 30 December 31 (millions) 2015 2014 Accounts receivable, net Accounts receivable $ $ Allowance for doubtful accounts ) ) Total $ $ Inventories Finished goods $ $ Raw materials and parts Inventories at FIFO cost Excess of FIFO cost over LIFO cost ) ) Total $ $ Other current assets Prepaid assets $ $ Taxes receivable Derivative assets Other Total $ $ Property, plant and equipment, net Land $ $ Buildings and improvements Leasehold improvements Machinery and equipment Merchandising and customer equipment Capitalized software Construction in progress Accumulated depreciation ) ) Total $ $ Other intangible assets, net Cost of intangible assets not subject to amortization Trade names $ $ Cost of intangible assets subject to amortization Customer relationships $ $ Trademarks Patents Other technology $ $ Accumulated amortization Customer relationships $ ) $ ) Trademarks ) ) Patents ) ) Other technology ) ) Total $ $ Other assets Deferred income taxes $ $ Deferred financing costs Pension Other Total $ $ June 30 December 31 (millions) 2015 2014 Other current liabilities Discounts and rebates $ $ Dividends payable Interest payable Taxes payable, other than income Derivative liabilities Restructuring Other Total $ $ Other liabilities Deferred income taxes $ $ Income taxes payable - non-current Restructuring Other Total $ $ Accumulated other comprehensive loss Unrealized gain (loss) on derivative financial instruments, net of tax $ $ ) Unrecognized pension and postretirement benefit expense, net of tax ) ) Cumulative translation, net of tax ) ) Total $ ) $ ) |
Debt and Interest (Tables)
Debt and Interest (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt and Interest | |
Schedule of short-term debt obligations | June 30 December 31 (millions) 2015 2014 Short-term debt Commercial paper $ $ Notes payable Long-term debt, current maturities Total $ $ |
Schedule of long-term debt obligations including current maturities | Maturity June 30 December 31 (millions) by year 2015 2014 Long-term debt Description / 2015 Principal Amount Seven year 2008 senior notes ($0 million) 2015 $ — $ Three year 2012 senior notes ($500 million) 2015 Term loan ($275 million) 2016 Series B private placement senior euro notes (€175 million) 2016 Five year 2011 senior notes ($1.25 billion) 2016 Five year 2012 senior notes ($500 million) 2017 Three year 2015 senior notes ($300 million) 2018 — Series A private placement senior notes ($250 million) 2018 Five year 2015 senior notes ($300 million) 2020 — Ten year 2011 senior notes ($1.25 billion) 2021 Series B private placement senior notes ($250 million) 2023 Thirty year 2011 senior notes ($750 million) 2041 Capital lease obligations Other Total debt Long-term debt, current maturities ) ) Total long-term debt $ $ |
Schedule of interest expense and interest income | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Interest expense $ $ $ $ Interest income ) ) ) ) Interest expense, net $ $ $ $ |
Goodwill and Other Intangible28
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Other Intangible Assets | |
Changes in the carrying amount of goodwill | Global Global Global (millions) Industrial Institutional Energy Other Total Goodwill as of December 31, 2014 $ $ $ $ $ Current year business combinations(a) — — Prior year business combinations(b) ) — — — ) Dispositions ) — — — ) Reclassifications(c) ) — — Effect of foreign currency translation ) ) ) ) ) Goodwill as of June 30, 2015 $ $ $ $ $ (a) For 2015, $0.9 million of the goodwill related to businesses acquired is expected to be tax deductible. (b) Represents purchase price allocation adjustments for 2014 acquisitions deemed preliminary as of December 31, 2014. (c) Represents immaterial reclassifications of beginning balances to conform to the current year presentation. |
Future estimated amortization expenses | As of June 30, 2015, future estimated expense related to amortizable other identifiable intangible assets is expected to be: (millions) 2015 (Remainder: six-month period) $ 2016 2017 2018 2019 2020 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Schedule of the carrying amount and estimated fair value of assets and liabilities measured on recurring basis | 2015 Carrying Fair Value Measurements June 30 (millions) Amount Level 1 Level 2 Level 3 Assets: Investments held in rabbi trusts $ $ $ — $ — Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — Liabilities: Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — 2014 Carrying Fair Value Measurements December 31 (millions) Amount Level 1 Level 2 Level 3 Assets: Investments held in rabbi trusts $ $ $ — $ — Foreign currency forward contracts — — Contingent consideration — — Liabilities: Foreign currency forward contracts — — Interest rate swap contracts — — Contingent consideration — — |
Schedule of changes in net fair value of contingent consideration | (millions) Contingent consideration, December 31, 2014 $ Amount recognized at acquisition date — Loss (gain) recognized in earnings — Settlements ) Foreign currency translation — Contingent consideration, June 30, 2015 $ |
Schedule of carrying amount and estimated fair value of long-term debt | June 30, 2015 December 31, 2014 Carrying Fair Carrying Fair (millions) Amount Value Amount Value Long-term debt (including current maturities) $ $ $ $ |
Derivatives and Hedging Trans30
Derivatives and Hedging Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivatives and Hedging Transactions | |
Impact on AOCI and earnings from derivative contracts qualified as cash flow hedges | Second Quarter Ended June 30 Six Months Ended June 30 (millions) Location 2015 2014 2015 2014 Unrealized gain (loss) recognized into AOCI (effective portion) Foreign currency forward contracts AOCI (equity) $ ) $ ) $ $ ) Interest rate swap contracts AOCI (equity) $ $ — $ ) $ — Gain (loss) reclassified from AOCI into income (effective portion) Foreign currency forward contracts Cost of sales $ $ $ $ SG&A Interest rate swap contracts Interest expense, net ) ) ) ) $ $ $ $ |
Impact on earnings from derivative contracts that qualified as fair value hedges | Second Quarter Ended Six Months Ended June 30 June 30 (millions) Location 2015 2014 2015 2014 Gain (loss) on derivative recognized in income Interest rate swap Interest expense, net $ $ ) $ $ ) Gain (loss) on hedged item recognized in income Interest rate swap Interest expense, net $ ) $ $ ) $ |
Revaluation gains and losses on euronotes and forward contracts | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Revaluation gains (losses), net of tax $ $ $ $ ) |
Impact on earnings from derivative contracts not designated as hedging instruments | Second Quarter Ended Six Months Ended June 30 June 30 (millions) Location 2015 2014 2015 2014 Gain (loss) recognized in income Foreign currency forward contracts SG&A $ ) $ $ ) $ Interest expense, net ) ) ) ) $ ) $ $ ) $ |
Net fair value of the company's outstanding derivative assets and liabilities | Asset Derivatives Liability Derivatives June 30 December 31 June 30 December 31 (millions) 2015 2014 2015 2014 Gross value of derivatives $ $ $ $ Gross amounts offset in the Consolidated Balance Sheet ) ) ) ) Net value of derivatives presented in the Consolidated Balance Sheet $ $ $ $ |
Gross fair value of the company's outstanding derivative assets and liabilities | Asset Derivatives Liability Derivatives June 30 December 31 June 30 December 31 (millions) 2015 2014 2015 2014 Derivatives designated as hedging instruments Foreign currency forward contracts $ $ $ $ Interest rate swap contracts — Derivatives not designated as hedging instruments Foreign currency forward contracts Total $ $ $ $ |
Summary of notional values of outstanding derivatives | Notional Values June 30 December 31 (millions) 2015 2014 Foreign currency forward contracts $ $ Interest rate swap agreements $ $ € € Net investment hedge contracts(a) € € (a) The net investment hedge contracts exclude the euro denominated debt. |
Other Comprehensive Income In31
Other Comprehensive Income Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Other Comprehensive Income Information | |
Schedule of other comprehensive income information related to the Company's derivatives and hedging instruments and pension and postretirement benefits | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Derivative & Hedging Instruments Unrealized gains (losses) on derivative & hedging instruments Amount recognized into AOCI $ $ ) $ $ ) (Gains) losses reclassified from AOCI into income Cost of sales ) ) ) ) SG&A ) ) ) ) Interest expense, net ) ) ) Translation & other insignificant activity ) ) ) Tax impact ) ) Net of tax $ ) $ ) $ $ ) Pension & Postretirement Benefits Amounts reclassified from AOCI into income Actuarial losses $ $ $ $ Prior service costs ) ) ) ) Tax impact ) ) ) ) Net of tax $ $ $ $ |
Summary of the net of tax derivative and pension and postretirement benefit amounts reclassified from AOCI into income | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Derivative gains reclassified from AOCI into income, net of tax $ ) $ ) $ ) $ ) Pension and Postretirement Benefits net actuarial losses and prior services costs reclassified from AOCI into income, net of tax $ $ $ $ |
Earnings Attributable to Ecol32
Earnings Attributable to Ecolab Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Attributable to Ecolab Per Common Share | |
Computations of the basic and diluted earnings attributable to Ecolab per share amounts | Second Quarter Ended Six Months Ended June 30 June 30 (millions, except per share amounts) 2015 2014 2015 2014 Net income attributable to Ecolab $ $ $ $ Weighted-average common shares outstanding Basic Effect of dilutive stock options, units and awards Diluted Earnings attributable to Ecolab per common share Basic $ $ $ $ Diluted $ $ $ $ Anti-dilutive securities excluded from computation of earnings per share |
Pension and Postretirement Pl33
Pension and Postretirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Pension and Postretirement Plans | |
Net periodic pension and postretirement health care benefit costs | The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows: U.S. International Postretirement U.S. Pension Pension Health Care (millions) 2015 2014 2015 2014 2015 2014 Service cost $ $ $ $ $ $ Interest cost on benefit obligation Expected return on plan assets ) ) ) ) ) ) Recognition of net actuarial (gain) loss ) ) Amortization of prior service cost (benefit) ) ) ) ) ) Settlements/curtailments — — — — — Total Expense $ $ $ $ $ $ The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows: U.S. International Postretirement U.S. Pension Pension Health Care (millions) 2015 2014 2015 2014 2015 2014 Service cost $ $ $ $ $ $ Interest cost on benefit obligation Expected return on plan assets ) ) ) ) ) ) Recognition of net actuarial (gain) loss ) ) Amortization of prior service cost (benefit) ) ) ) ) ) Settlements/curtailments — — — — — Total Expense $ $ $ $ $ $ |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Operating Segments | |
Schedule of financial information for each of the entity's reportable segments | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2015 2014 2015 2014 Net Sales Global Industrial $ $ $ $ Global Institutional Global Energy Other Subtotal at fixed currency rates Effect of foreign currency translation ) ) Consolidated $ $ $ $ Operating Income Global Industrial $ $ $ $ Global Institutional Global Energy Other Corporate ) ) ) ) Subtotal at fixed currency rates Effect of foreign currency translation ) ) Consolidated $ $ $ $ |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
New Accounting Pronouncements | |
Schedule of new accounting pronouncements | 16. New Accounting Pronouncements Standard Date of Issuance Description Date of Adoption Effect on the Financial Statements Standards that are not yet adopted: ASU 2015-01 — Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items January 2015 Entities should no longer segregate extraordinary and unusual items from the results of ordinary operations on the Income Statement and should no longer disclose the applicable income taxes and earnings-per-share data for applicable extraordinary items. January 1, 2016 The company does not expect the updated guidance to have an impact on future financial statements. ASU 2015-02 — Consolidation (Topic 810): Amendments to the Consolidation Analysis February 2015 Certain factors that previously required reporting entities to consolidate a given legal entity have been eliminated, requiring fewer legal entities to be consolidated under the new guidance. January 1, 2016 The company does not expect the updated guidance to have a significant impact on future financial statements. ASU 2015-03 — Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs April 2015 Debt issuance costs should no longer be recognized as a deferred charge (asset) but rather should be recorded as a direct deduction from the carrying amount of the debt liability. January 1, 2016 Presentation impact related to the company’s deferred financing costs and debt. The company does not expect the updated guidance to have a significant impact on future financial statements. ASU 2015-05 — Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement April 2015 An entity that is the customer in a cloud computing arrangement that includes a software license should account for the software license element of the arrangement consistent with the acquisition of other software licenses. January 1, 2016 The company does not expect the updated guidance to have an impact on future financial statements. ASU 2015-07 — Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) (a consensus of the Emerging Issues Taskforce) May 2015 Investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient of ASC 820 should not be categorized in the fair value hierarchy. However, the reporting entity should continue to disclose information on such investments. January 1, 2016 Presentation impact related to pension plan asset disclosures. Standards that are not yet adopted (continued): ASU 2014-09 — Revenue from Contracts with Customers (Topic 606) May 2014 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 The company is currently evaluating the impact of adoption. ASU 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern August 2014 Management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and to provide related footnote disclosures. January 1, 2017 The company does not expect the guidance to have an impact on future financial statements. Standards that were adopted: ASU 2014-08 —Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity April 2014 Updated criteria for determining which disposals should be presented as discontinued operations as well as modifications to the related disclosure requirements. January 1, 2015 The adoption of the updated guidance had no impact on the company’s financial statements. ASU 2014-16 —Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity November 2014 For hybrid financial instruments issued in the form of a share, an entity (an issuer or an investor) should determine the nature of the host contract by considering all stated and implied substantive terms and features of the basis of relevant facts and circumstances. January 1, 2015 The adoption of the updated guidance had no impact on the company’s financial statements. |
Special (Gains) and Charges (De
Special (Gains) and Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Special (gains) and charges | ||||
Venezuela currency devaluation | $ 30.2 | |||
Subtotal | $ 65.6 | $ (6.1) | 73.4 | $ 23.5 |
Total special (gains) and charges | 76.6 | (5) | 85 | 30.6 |
Cost of sales | ||||
Special (gains) and charges | ||||
Restructuring charges | 1.6 | 1.1 | 2.2 | 7.1 |
Venezuela currency devaluation | 9.4 | 9.4 | ||
Subtotal | 11 | 1.1 | 11.6 | 7.1 |
Special (gains) and charges | ||||
Special (gains) and charges | ||||
Restructuring charges | 18.9 | 6 | 21 | 28.6 |
Venezuela currency devaluation | 20.8 | 20.8 | ||
Loss on sale of business, litigation related charges and other settlements | 21.4 | (18.8) | 21.4 | (19.6) |
Subtotal | 65.6 | (6.1) | 73.4 | 23.5 |
Special (gains) and charges | Champion | ||||
Special (gains) and charges | ||||
Acquisition costs | 4.3 | 5.2 | 9.5 | 11.7 |
Special (gains) and charges | Nalco | ||||
Special (gains) and charges | ||||
Acquisition costs | $ 0.2 | $ 1.5 | $ 0.7 | $ 2.8 |
Special (Gains) and Charges (37
Special (Gains) and Charges (Details 2) VEF in Millions, $ in Millions | May. 31, 2015VEF | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014USD ($) | May. 31, 2015USD ($) | Jan. 31, 2014 |
Non-restructuring Special (Gains) and Charges | |||||||||
Number of operating segments | segment | 10 | 10 | |||||||
Venezuela currency devaluation | $ 30.2 | ||||||||
VENEZUELA | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Number of operating segments | segment | 5 | ||||||||
Venezuela currency devaluation | $ 30.2 | ||||||||
Venezuela currency devaluation after tax | $ 30.2 | ||||||||
Net monetary assets denominated in foreign currency | VEF | VEF 100 | ||||||||
Other net assets denominated in U.S. Dollars | $ 120 | ||||||||
Net sales within Venezuela as a percent of consolidated net sales | 1.00% | ||||||||
SICAD 1 | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Exchange rate | 12 | 12 | |||||||
CENCOEX | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Exchange rate | 6.3 | 6.3 | 6.3 | ||||||
SIMADI | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Exchange rate | 199 | 199 | |||||||
Maximum | VENEZUELA | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Assets held in Venezuela as a percentage of consolidated assets | 2.00% | 2.00% | |||||||
Licensing agreement | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Gain (loss) recognized on settlement, before tax | $ 18.8 | $ 19.6 | |||||||
Gain (loss) recognized on settlement, net of tax | 15.9 | 16.4 | |||||||
Other settlements and gains | Ecovation | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Loss on sale of business, litigation related charges and other settlements | $ 21.4 | $ 21.4 | |||||||
Loss on sale of business, litigation related charges and other settlements, net of tax | 13.4 | 13.4 | |||||||
Champion | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Business combination and integration related costs, pre tax | 4.3 | 5.2 | 9.5 | 11.7 | |||||
Business combination and integration related costs, after tax | 2.8 | 3.4 | 6 | 7.5 | |||||
Nalco | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Business combination and integration related costs, pre tax | 0.2 | 1.5 | 0.7 | 2.8 | |||||
Business combination and integration related costs, after tax | 0.1 | 1.1 | 0.6 | (2) | |||||
Energy Restructuring Plan | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 14.1 | $ 36.9 | |||||||
Cash payments | (31.4) | ||||||||
Net cash payments | (1.4) | ||||||||
Non-cash charges | (4) | (4.2) | |||||||
Effect of foreign currency translation | (0.1) | 0.8 | |||||||
Restructuring liability | 10.7 | 10.7 | 2.1 | $ 2.1 | |||||
Other restructuring information | |||||||||
Restructuring charge expected to be incurred, pre-tax | 80 | 80 | |||||||
Restructuring charge expected to be incurred, after tax | 55 | 55 | |||||||
Restructuring charge incurred, pretax | 13.1 | 2.7 | 14.1 | 7.6 | |||||
Restructuring charges, after tax | 9.1 | 2.2 | 9.9 | 5.2 | |||||
Expected restructuring charges for 2015 | 40 | ||||||||
Expected restructuring charges for 2015, after tax | $ 25 | ||||||||
Remaining restructuring charges expected to be settled with cash (as a percent) | 75.00% | ||||||||
Energy Restructuring Plan | Employee termination costs | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | $ 13.4 | 30.8 | |||||||
Cash payments | (29.6) | ||||||||
Net cash payments | (4.7) | ||||||||
Effect of foreign currency translation | (0.1) | 0.8 | |||||||
Restructuring liability | 10.6 | 10.6 | 2 | 2 | |||||
Energy Restructuring Plan | Asset disposals | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 0.1 | 4.2 | |||||||
Net cash payments | 3.9 | ||||||||
Non-cash charges | (4) | (4.2) | |||||||
Energy Restructuring Plan | Other | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 0.6 | 1.9 | |||||||
Cash payments | (1.8) | ||||||||
Net cash payments | (0.6) | ||||||||
Restructuring liability | 0.1 | 0.1 | 0.1 | 0.1 | |||||
Combined Plan | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 9 | 351.2 | |||||||
Net cash payments | (22.3) | (261) | |||||||
Non-cash charges | (0.4) | (14.8) | |||||||
Effect of foreign currency translation | (4.4) | (1.9) | |||||||
Restructuring liability | 55.4 | 55.4 | 73.5 | 73.5 | |||||
Other restructuring information | |||||||||
Restructuring charge expected to be incurred, pre-tax | 400 | 400 | |||||||
Restructuring charge expected to be incurred, after tax | 300 | 300 | |||||||
Restructuring charge incurred, pretax | 7.3 | 4.3 | 9 | 28 | |||||
Restructuring charge incurred, after tax | 5.5 | $ 3.9 | 6.3 | $ 23.7 | |||||
Expected restructuring charges for 2015 | 50 | ||||||||
Expected restructuring charges for 2015, after tax | $ 40 | ||||||||
Remaining restructuring charges expected to be settled with cash (as a percent) | 66.67% | ||||||||
Combined Plan | Employee termination costs | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | $ 8.3 | 308.8 | |||||||
Net cash payments | (16.7) | (242.4) | |||||||
Effect of foreign currency translation | (4.4) | (1.9) | |||||||
Restructuring liability | 51.7 | 51.7 | 64.5 | 64.5 | |||||
Combined Plan | Asset disposals | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 0.2 | (1.2) | |||||||
Net cash payments | 0.2 | 11.7 | |||||||
Non-cash charges | (0.4) | (10.5) | |||||||
Combined Plan | Other | |||||||||
Restructuring reserve | |||||||||
Recorded expense and accrual | 0.5 | 43.6 | |||||||
Net cash payments | (5.8) | (30.3) | |||||||
Non-cash charges | (4.3) | ||||||||
Restructuring liability | $ 3.7 | $ 3.7 | $ 9 | $ 9 | |||||
Global Energy | |||||||||
Non-restructuring Special (Gains) and Charges | |||||||||
Net monetary asset (as a percent) | 80.00% | ||||||||
Other net assets (as a percent) | 85.00% |
Acquisitions and Dispositions38
Acquisitions and Dispositions (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jul. 31, 2015item | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)item | Jun. 30, 2014USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Acquisitions and Dispositions | |||||||||
Number of business acquired | item | 3 | 3 | |||||||
Components of the aggregate purchase prices of the completed acquisitions | |||||||||
Net tangible assets acquired | $ 2.4 | $ 10.9 | $ 3.5 | $ 23.7 | |||||
Identifiable intangible assets | |||||||||
Customer relationships | 2 | 1 | 2.6 | 2.9 | |||||
Patents | 2.5 | ||||||||
Trademarks | 0.1 | 0.8 | |||||||
Other technology | 0.2 | 2.9 | |||||||
Non-compete | 0.1 | 0.1 | |||||||
Total intangible assets | 2 | 1.1 | 5.4 | 6.7 | |||||
Goodwill | 0.4 | 4.4 | 6.7 | 11.3 | |||||
Total aggregate purchase price | 4.8 | 16.4 | 15.6 | 41.7 | |||||
Acquisition related liabilities and contingent consideration | (1) | (0.1) | 0.2 | ||||||
Net cash paid for acquisitions, including contingent consideration | $ 4.8 | $ 15.4 | $ 15.5 | $ 41.9 | |||||
Weighted average useful lives of identifiable intangible assets acquired | 9 years | 10 years | |||||||
Subsequent event | |||||||||
Acquisitions and Dispositions | |||||||||
Number of business acquired | item | 1 | ||||||||
Aseptix Health Sciences NV | Maximum | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | $ 1 | ||||||||
Commercial Pest Control Pty Ltd | Maximum | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | 1 | ||||||||
Akzo Nobel N.V. | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | $ 23 | ||||||||
AK Kraus and Hiller Schadlingsbekampfung | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | $ 4 | ||||||||
Clariant AG | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | $ 4 | ||||||||
Jianghai Environmental Protection Co Ltd | |||||||||
Acquisitions and Dispositions | |||||||||
Pre-acquisition annual sales | $ 90 | ||||||||
Total consideration transferred | $ 190 |
Acquisitions and Dispositions39
Acquisitions and Dispositions (Details 2) - Champion - USD ($) $ in Millions | Apr. 10, 2013 | Jan. 31, 2014 | Mar. 31, 2014 |
Assets acquired and liabilities assumed | |||
Additional amount of cash required to be paid as a percentage of incremental tax on merger consideration | 50.00% | ||
Additional payment associated with acquisition | $ 86.4 | ||
Portion of purchase price transferred in an escrow fund for indemnification purchases related to general representations and warranties | $ 100 | ||
Period of escrow deposit | 2 years | ||
Maximum | |||
Assets acquired and liabilities assumed | |||
Future consideration payable to sellers | $ (100) | ||
Adjustment | |||
Acquisitions and Dispositions | |||
Net adjustment made to the preliminary purchase price allocation | $ 16.9 |
Acquisitions and Dispositions40
Acquisitions and Dispositions (Details 3) - Ecovation $ in Millions | 1 Months Ended |
Jun. 30, 2015USD ($) | |
Dispositions | |
Loss on sale of business, before tax | $ 13.7 |
Loss on sale of business, net of tax | $ 8.6 |
Balance Sheet Information (Deta
Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Accounts receivable, net | ||
Accounts receivable | $ 2,571.1 | $ 2,704.2 |
Allowance for doubtful accounts | (76.3) | (77.5) |
Total | 2,494.8 | 2,626.7 |
Inventories | ||
Finished goods | 1,015.2 | 1,044.1 |
Raw materials and parts | 451.9 | 447.3 |
Inventories at FIFO cost | 1,467.1 | 1,491.4 |
Excess of FIFO cost over LIFO cost | (4.4) | (24.5) |
Total | 1,462.7 | 1,466.9 |
Other current assets | ||
Prepaid assets | 111.7 | 104.7 |
Taxes receivable | 228.2 | 133 |
Derivative assets | 128.9 | 57.4 |
Other | 69.6 | 71.5 |
Total | 538.4 | 366.6 |
Property, plant and equipment, net | ||
Land | 208.1 | 199.9 |
Buildings and improvements | 880.7 | 759.9 |
Leasehold improvements | 83.1 | 84.6 |
Machinery and equipment | 1,876.2 | 1,858.1 |
Merchandising and customer equipment | 1,954.7 | 1,917.5 |
Capitalized software | 469.6 | 443.9 |
Construction in progress | 318.4 | 277.5 |
Property, plant and equipment, gross | 5,790.8 | 5,541.4 |
Accumulated depreciation | (2,667.4) | (2,490.8) |
Total | 3,123.4 | 3,050.6 |
Cost of intangible assets subject to amortization: | ||
Other intangible assets, gross | 4,188.9 | 4,345.3 |
Total | 4,231 | 4,456.8 |
Other assets | ||
Deferred income taxes | 60.3 | 71.5 |
Deferred financing costs | 27.4 | 27.1 |
Pension | 22.2 | 15.9 |
Other | 268.5 | 256.7 |
Total | 378.4 | 371.2 |
Other current liabilities | ||
Discounts and rebates | 269.2 | 255.4 |
Dividends payable | 97.6 | 99.1 |
Interest payable | 23.7 | 18.9 |
Taxes payable, other than income | 107.1 | 122.6 |
Derivative liabilities | 17.4 | 34 |
Restructuring | 54.5 | 66.3 |
Other | 259.4 | 255.4 |
Total | 828.9 | 851.7 |
Other liabilities | ||
Deferred income taxes | 1,405.4 | 1,415.8 |
Income taxes payable - non-current | 79.7 | 86.4 |
Restructuring | 11.6 | 9.3 |
Other | 131.2 | 134 |
Total | 1,627.9 | 1,645.5 |
Accumulated other comprehensive loss | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | 2.2 | (2.7) |
Unrecognized pension and postretirement benefit expense, net of tax | (514.2) | (552.5) |
Cumulative translation, net of tax | (683.1) | (396.7) |
Total | (1,195.1) | (951.9) |
Customer relationships | ||
Cost of intangible assets subject to amortization: | ||
Other intangible assets, gross | 3,273.2 | 3,385.7 |
Accumulated amortization | (866.1) | (794.6) |
Trademarks | ||
Cost of intangible assets subject to amortization: | ||
Other intangible assets, gross | 297.1 | 311.1 |
Accumulated amortization | (94) | (91.5) |
Patents | ||
Cost of intangible assets subject to amortization: | ||
Other intangible assets, gross | 414.8 | 434.5 |
Accumulated amortization | (115) | (124.9) |
Other technology | ||
Cost of intangible assets subject to amortization: | ||
Other intangible assets, gross | 203.8 | 214 |
Accumulated amortization | (112.8) | (107.5) |
Trade names | ||
Cost of intangible assets not subject to amortization: | ||
Other intangible assets, gross | $ 1,230 | $ 1,230 |
Debt and Interest (Details)
Debt and Interest (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Components of the company's debt obligations | ||
Long-term debt, current maturities | $ 790.4 | $ 755.5 |
Short-term debt including current maturities of long-term debt | 2,185.3 | 1,705.4 |
Commercial paper. | ||
Components of the company's debt obligations | ||
Short-term debt | 1,331.9 | 887.8 |
U.S. commercial paper program | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity, commercial paper | 2,000 | |
Outstanding commercial paper | 1,332 | 888 |
European commercial paper | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity, commercial paper | 200 | |
Notes payable | ||
Components of the company's debt obligations | ||
Short-term debt | 63 | $ 62.1 |
Credit facility | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity under the credit agreement | $ 2,000 |
Debt and Interest (Details 2)
Debt and Interest (Details 2) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2015EUR (€) | Mar. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | |
Debt instrument | |||||||||||
CARRYING VALUE | $ 5,619.5 | $ 5,914.6 | |||||||||
Long-term debt, current maturities | (755.5) | (790.4) | |||||||||
Long-term debt | 4,864 | 5,124.2 | |||||||||
Interest | |||||||||||
Interest expense | $ 63.5 | $ 68.6 | $ 128.7 | $ 135.9 | |||||||
Interest income | (2.3) | (2.4) | (5) | (4.6) | |||||||
Interest expense, net | $ 61.2 | $ 66.2 | $ 123.7 | $ 131.3 | |||||||
Beneficial Interest in Trust, Naperville Facility | |||||||||||
Components of the aggregate purchase prices of the completed acquisitions | |||||||||||
Debt assumed | $ 100.2 | $ 100.2 | |||||||||
Property, plant and equipment | 135.2 | $ 135.2 | |||||||||
Cash consideration | 19.8 | ||||||||||
Seven year 2008 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | $ 250 | ||||||||||
Aggregate principal amount | 0 | ||||||||||
Repayment of debt | $ 250 | ||||||||||
Interest rate (as a percent) | 4.88% | 4.88% | |||||||||
Debt instrument, term | 7 years | ||||||||||
Series A private placement senior notes due 2018 | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | $ 250 | 249 | |||||||||
Aggregate principal amount | 250 | ||||||||||
Series B private placement senior notes due 2023 | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 250 | 250 | |||||||||
Aggregate principal amount | 250 | ||||||||||
Series B private placement senior euro notes, due 2016 | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 217.9 | 192.2 | |||||||||
Aggregate principal amount | € | € 175 | ||||||||||
Three year 2012 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 500 | 500 | |||||||||
Aggregate principal amount | 500 | ||||||||||
Debt instrument, term | 3 years | ||||||||||
Five year 2011 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 1,249.1 | 1,249.4 | |||||||||
Aggregate principal amount | 1,250 | ||||||||||
Debt instrument, term | 5 years | ||||||||||
Ten year 2011 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 1,249.4 | 1,249.5 | |||||||||
Aggregate principal amount | 1,250 | ||||||||||
Debt instrument, term | 10 years | ||||||||||
Thirty year 2011 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 743.1 | 743.2 | |||||||||
Aggregate principal amount | 750 | ||||||||||
Debt instrument, term | 30 years | ||||||||||
Five year 2012 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 497.6 | 500.5 | |||||||||
Aggregate principal amount | 500 | ||||||||||
Debt instrument, term | 5 years | ||||||||||
Term loan | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 400 | 275 | |||||||||
Aggregate principal amount | 275 | ||||||||||
Repayment of debt | $ 125 | ||||||||||
Capital lease obligations | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 9.3 | 9.2 | |||||||||
Other | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | $ 3.1 | 96.9 | |||||||||
2015 Public Debt Offering | |||||||||||
Debt instrument | |||||||||||
Aggregate principal amount | $ 600 | ||||||||||
Principal outstanding plus accrued unpaid interest payable at prepayment of notes (as a percent) | 101.00% | ||||||||||
Three year 2015 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 299.8 | ||||||||||
Aggregate principal amount | 300 | ||||||||||
Issuance of Debt securities | $ 300 | ||||||||||
Interest rate (as a percent) | 1.55% | ||||||||||
Debt instrument, term | 3 years | ||||||||||
Five year 2015 senior notes | |||||||||||
Debt instrument | |||||||||||
CARRYING VALUE | 299.9 | ||||||||||
Aggregate principal amount | $ 300 | ||||||||||
Issuance of Debt securities | $ 300 | ||||||||||
Interest rate (as a percent) | 2.25% | ||||||||||
Debt instrument, term | 5 years | ||||||||||
Ten year 2015 senior notes | Subsequent event | |||||||||||
Debt instrument | |||||||||||
Aggregate principal amount | € | € 575 | ||||||||||
Interest rate (as a percent) | 2.63% | ||||||||||
Debt instrument, term | 10 years | ||||||||||
Principal outstanding plus accrued unpaid interest payable at prepayment of notes (as a percent) | 101.00% |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | |
Goodwill and Other Intangible Assets | ||||
Number of operating units | segment | 10 | 10 | ||
Impairment of goodwill | $ 0 | |||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill, net | 6,717,000,000 | |||
Current year business combinations | 7,000,000 | |||
Prior year business combinations | (300,000) | |||
Dispositions | (400,000) | |||
Effect of foreign currency translation | (209,900,000) | |||
Ending goodwill, net | $ 6,513,400,000 | 6,513,400,000 | ||
Goodwill expected to be tax deductible | 900,000 | 900,000 | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||||
Total amortization expense related to other intangible assets | 72,900,000 | $ 76,700,000 | 146,000,000 | $ 154,800,000 |
Future estimated amortization expense related to amortizable other identifiable intangible assets | ||||
2015 (Remainder: six-month period) | 142,000,000 | 142,000,000 | ||
2,016 | 286,000,000 | 286,000,000 | ||
2,017 | 283,000,000 | 283,000,000 | ||
2,018 | 278,000,000 | 278,000,000 | ||
2,019 | 266,000,000 | 266,000,000 | ||
2,020 | 262,000,000 | 262,000,000 | ||
Nalco | Trademarks | ||||
Changes in the carrying amount of goodwill | ||||
Impairment of indefinite life intangible asset | 0 | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 1,200,000,000 | 1,200,000,000 | ||
Global Industrial | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill, net | 2,642,200,000 | |||
Prior year business combinations | (300,000) | |||
Dispositions | (400,000) | |||
Reclassifications | (23,700,000) | |||
Effect of foreign currency translation | (81,800,000) | |||
Ending goodwill, net | 2,536,000,000 | 2,536,000,000 | ||
Global Institutional | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill, net | 691,200,000 | |||
Current year business combinations | 6,100,000 | |||
Reclassifications | 2,900,000 | |||
Effect of foreign currency translation | (21,900,000) | |||
Ending goodwill, net | 678,300,000 | 678,300,000 | ||
Global Energy | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill, net | 3,262,100,000 | |||
Reclassifications | 20,800,000 | |||
Effect of foreign currency translation | (102,400,000) | |||
Ending goodwill, net | 3,180,500,000 | $ 3,180,500,000 | ||
Other | ||||
Goodwill and Other Intangible Assets | ||||
Number of operating units | segment | 2 | |||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill, net | $ 121,500,000 | |||
Current year business combinations | 900,000 | |||
Effect of foreign currency translation | (3,800,000) | |||
Ending goodwill, net | $ 118,600,000 | $ 118,600,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Level 1 | ||
Assets: | ||
Investments held in rabbi trusts | $ 2.1 | $ 3.4 |
Level 2 | ||
Assets: | ||
Foreign currency forward contracts | 187.4 | 75.5 |
Interest rate swap contracts | 0.9 | |
Liabilities: | ||
Foreign currency forward contracts | 36.3 | 27.9 |
Interest rate swap contracts | 23.5 | 24.2 |
Level 3 | ||
Assets: | ||
Contingent consideration | 0.3 | 0.3 |
Liabilities: | ||
Contingent consideration | 0.8 | 1.6 |
Carrying Amount | ||
Assets: | ||
Investments held in rabbi trusts | 2.1 | 3.4 |
Foreign currency forward contracts | 187.4 | 75.5 |
Interest rate swap contracts | 0.9 | |
Contingent consideration | 0.3 | 0.3 |
Liabilities: | ||
Foreign currency forward contracts | 36.3 | 27.9 |
Interest rate swap contracts | 23.5 | 24.2 |
Contingent consideration | $ 0.8 | $ 1.6 |
Fair Value Measurements (Deta46
Fair Value Measurements (Details 2) - Contingent consideration $ in Millions | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | |
Balance at beginning of year | $ 1.3 |
Settlements | (0.8) |
Balance at end of year | $ 0.5 |
Fair Value Measurements (Deta47
Fair Value Measurements (Details 3) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Carrying Amount | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt (including current maturities) | $ 5,914.6 | $ 5,619.5 |
Fair Value | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt (including current maturities) | $ 6,154.2 | $ 5,980.9 |
Derivatives and Hedging Trans48
Derivatives and Hedging Transactions (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jul. 31, 2015EUR (€) | Jun. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2006contract | Jun. 30, 2015USD ($) | Mar. 31, 2015EUR (€) | Jan. 31, 2015USD ($) | Dec. 31, 2014EUR (€) | Dec. 31, 2014USD ($) | May. 31, 2014USD ($) | |
Derivatives and Hedging Transactions | ||||||||||||||
Maximum period for hedged transactions | 12 months | 12 months | ||||||||||||
Number of interest rate swap contracts entered into and subsequently closed | contract | 2 | |||||||||||||
Net Investment Hedge: | ||||||||||||||
Revaluation gains (losses), net of tax | $ 21.8 | $ 1.9 | $ 78.8 | $ (1.8) | ||||||||||
Five year 2012 senior notes | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | $ 500 | |||||||||||||
Three year 2015 senior notes | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | 300 | |||||||||||||
Interest rate (as a percent) | 1.55% | |||||||||||||
Series A private placement senior notes due 2018 | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | 250 | |||||||||||||
Five year 2011 senior notes | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | 1,250 | |||||||||||||
Ten year 2015 senior notes | Subsequent event | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | € | € 575 | |||||||||||||
Interest rate (as a percent) | 2.63% | |||||||||||||
Foreign currency forward contracts. | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | 3,300 | $ 2,800 | ||||||||||||
Interest rate swap | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | € 400 | € 400 | $ 1,425 | € 400 | $ 725 | |||||||||
Cash Flow Hedges | Derivatives designated as hedging instruments | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) recognized in income (effective portion) | 4.1 | 2.1 | 8.2 | 1.5 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) recognized in income (effective portion) | 5.5 | 3.1 | 10.8 | 3.5 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | AOCI (equity) | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Unrealized gain (loss) recognized into AOCI (effective portion) | (5.4) | (2.9) | 19.9 | (2.7) | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Cost of sales | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) recognized in income (effective portion) | 5.1 | 2.7 | 9.9 | 2.5 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Selling, general and administrative expenses | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) recognized in income (effective portion) | 0.4 | 0.4 | 0.9 | 1 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) on derivative recognized in income | (11.2) | 0.7 | (11.3) | 1.4 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Selling, general and administrative expenses | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) on derivative recognized in income | (5.5) | 3.7 | (0.7) | 6.8 | ||||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Interest expense, net | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) on derivative recognized in income | (5.7) | (3) | (10.6) | (5.4) | ||||||||||
Cash Flow Hedges | Interest rate swap | Derivatives designated as hedging instruments | AOCI (equity) | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Unrealized gain (loss) recognized into AOCI (effective portion) | 7.9 | (6.5) | ||||||||||||
Cash Flow Hedges | Interest rate swap | Derivatives designated as hedging instruments | Interest expense, net | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) recognized in income (effective portion) | (1.4) | (1) | (2.6) | (2) | ||||||||||
Fair Value Hedges | Interest rate swap | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | $ 500 | |||||||||||||
Interest rate (as a percent) | 1.45% | |||||||||||||
Fair Value Hedges | Interest rate swap | Three year 2015 senior notes | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | $ 300 | |||||||||||||
Interest rate (as a percent) | 1.55% | |||||||||||||
Fair Value Hedges | Interest rate swap | Series A private placement senior notes due 2018 | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | $ 250 | |||||||||||||
Interest rate (as a percent) | 3.69% | |||||||||||||
Fair Value Hedges | Interest rate swap | Five year 2011 senior notes | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Aggregate principal amount | $ 1,250 | |||||||||||||
Interest rate (as a percent) | 3.00% | |||||||||||||
Fair Value Hedges | Interest rate swap | Interest expense, net | ||||||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||||||
Gain (loss) on derivative recognized in income | 0.9 | (1) | 1.9 | (1) | ||||||||||
Gain (loss) on hedged item recognized in income | (0.9) | 1 | (1.9) | 1 | ||||||||||
Net Investment Hedges | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | € | 575 | 575 | € 495 | |||||||||||
Revaluation gains (losses), net of tax | $ 21.8 | $ 1.9 | 78.8 | $ (1.8) | ||||||||||
Net Investment Hedges | Subsequent event | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional contract amount closed | € | € 495 | |||||||||||||
Net Investment Hedges | Senior euro notes | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Euro-denominated debt outstanding | 175 | $ 192 | ||||||||||||
Net Investment Hedges | Foreign currency forward contract 1 | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | € | € 360 | |||||||||||||
Net Investment Hedges | Foreign currency forward contract 2 | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | € | € 80 | |||||||||||||
Net Investment Hedges | Foreign currency forward contract 3 | Derivatives designated as hedging instruments | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional amount de-designated | € | 360 | |||||||||||||
Net Investment Hedges | Foreign currency forward contract 3 | Derivatives not designated as hedging instruments | ||||||||||||||
Net Investment Hedge: | ||||||||||||||
Notional values | € | € 360 | € 360 |
Derivatives and Hedging Trans49
Derivatives and Hedging Transactions (Details 2) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Asset Derivatives | ||
Gross value of derivatives | $ 188.3 | $ 75.5 |
Gross amounts offset in the Consolidated Balance Sheet | (42.4) | (18.1) |
Net value of derivatives presented in the Consolidated Balance Sheet | 145.9 | 57.4 |
Liability Derivatives | ||
Gross value of derivatives | 59.8 | 52.1 |
Gross amounts offset in the Consolidated Balance Sheet | (42.4) | (18.1) |
Net value of derivatives presented in the Consolidated Balance Sheet | $ 17.4 | $ 34 |
Derivatives and Hedging Trans50
Derivatives and Hedging Transactions (Details 3) € in Millions, $ in Millions | Jun. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | Dec. 31, 2014EUR (€) | Dec. 31, 2014USD ($) |
Fair value company's outstanding derivatives | ||||
Asset Derivatives | $ 188.3 | $ 75.5 | ||
Liability Derivatives | 59.8 | 52.1 | ||
Net Investment Hedges | ||||
Fair value company's outstanding derivatives | ||||
Notional values | € | € 575 | € 495 | ||
Foreign currency forward contracts. | ||||
Fair value company's outstanding derivatives | ||||
Notional values | 3,300 | 2,800 | ||
Interest rate swap | ||||
Fair value company's outstanding derivatives | ||||
Notional values | € 400 | 1,425 | € 400 | 725 |
Derivatives designated as hedging instruments | Foreign currency forward contracts. | ||||
Fair value company's outstanding derivatives | ||||
Asset Derivatives | 49.8 | 17.9 | ||
Liability Derivatives | 4.2 | 0.6 | ||
Derivatives designated as hedging instruments | Interest rate swap | ||||
Fair value company's outstanding derivatives | ||||
Asset Derivatives | 0.9 | |||
Liability Derivatives | 23.5 | 24.2 | ||
Derivatives not designated as hedging instruments | Foreign currency forward contracts. | ||||
Fair value company's outstanding derivatives | ||||
Asset Derivatives | 137.6 | 57.6 | ||
Liability Derivatives | $ 32.1 | $ 27.3 |
Other Comprehensive Income In51
Other Comprehensive Income Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification adjustments | ||||
Cost of sales | $ 1,806.5 | $ 1,909.4 | $ 3,571.8 | $ 3,728.6 |
SG&A | 1,079.2 | 1,152.7 | 2,216 | 2,289.6 |
Interest expense, net | 61.2 | 66.2 | 123.7 | 131.3 |
Income before income taxes | (376.6) | (446) | (701.8) | (731.8) |
Tax impact | 67.8 | 131 | 157.6 | 222.3 |
Net of Tax | (308.8) | (315) | (544.2) | (509.5) |
Derivative (gains) losses reclassified from AOCI into income, net of tax | (3.1) | (1.6) | (6.3) | (1.3) |
Pension and postretirement net actuarial loss and prior service cost reclassified from AOCI into income, net of tax | 8.1 | 2.5 | 16.1 | 5.1 |
Derivative & Hedging Instruments | Reclassifications adjustments | ||||
Reclassification adjustments | ||||
Income before income taxes | (4.1) | (2.1) | (8.2) | (1.5) |
Translation & other insignificant activity | (0.1) | (0.4) | (0.5) | 0.3 |
Tax impact | (1.2) | 1.3 | 0.2 | (0.2) |
Net of Tax | (2.9) | (4.1) | 4.9 | (4.1) |
Derivative & Hedging Instruments | Foreign currency forward contracts. | ||||
Reclassification adjustments | ||||
Amount recognized in AOCI | 2.5 | (2.9) | 13.4 | (2.7) |
Derivative & Hedging Instruments | Foreign currency forward contracts. | Reclassifications adjustments | ||||
Reclassification adjustments | ||||
Cost of sales | (5.1) | (2.7) | (9.9) | (2.5) |
SG&A | (0.4) | (0.4) | (0.9) | (1) |
Derivative & Hedging Instruments | Interest rate swap | Reclassifications adjustments | ||||
Reclassification adjustments | ||||
Interest expense, net | 1.4 | 1 | 2.6 | 2 |
Pension & Postretirement Benefits | Reclassifications adjustments | ||||
Reclassification adjustments | ||||
Income before income taxes | 12.5 | 4 | 25.3 | 8.1 |
Actuarial losses | 14.5 | 5.7 | 29 | 11.5 |
Prior service costs | (2) | (1.7) | (3.7) | (3.4) |
Tax impact | (4.4) | (1.5) | (9.2) | (3) |
Net of Tax | $ 8.1 | $ 2.5 | $ 16.1 | $ 5.1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | Feb. 28, 2015 | Aug. 31, 2011 | Jun. 30, 2015 | Dec. 31, 2014 | |
Shareholder's Equity | |||||
Authorized amount of share repurchase program | $ 1,000 | ||||
Remaining authorized amount of share repurchase program | $ 390 | ||||
COMMON STOCK | |||||
Shareholder's Equity | |||||
Common stock, shares authorized to be repurchased | 20,000,000 | ||||
Amount of common stock to be repurchased under ASR agreement | $ 300 | ||||
Shares received under ASR agreement | 555,511 | 2,066,293 | |||
Shares received under the ASR agreement compared to the shares the company expected to receive (as a percent) | 80.00% | ||||
Common stock, shares reacquired through open and private market purchases | 6,197,699 | 3,547,334 | |||
Shares authorized to be repurchased | 22,968,599 | ||||
Number of shares reacquired related to the withholding of taxes for the exercise of stock options and the vesting of stock awards | 224,058 | 489,854 | |||
Common stock, shares reacquired | 6,421,757 | ||||
COMMON STOCK | Nalco | |||||
Shareholder's Equity | |||||
Additional shares authorized to be repurchased contingent upon merger | 10,000,000 |
Earnings Attributable to Ecol53
Earnings Attributable to Ecolab Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Computations of the basic and diluted earnings attributable to Ecolab per share amounts | ||||
Net income attributable to Ecolab | $ 302 | $ 311.4 | $ 535.4 | $ 502.4 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 296.2 | 299.6 | 297.2 | 300.1 |
Effect of dilutive stock options, units and awards (in shares) | 4.9 | 5.6 | 5 | 5.8 |
Diluted (in shares) | 301.1 | 305.2 | 302.2 | 305.9 |
Earnings attributable to Ecolab per common share | ||||
Basic (in dollars per share) | $ 1.02 | $ 1.04 | $ 1.80 | $ 1.67 |
Diluted (in dollars per share) | $ 1 | $ 1.02 | $ 1.77 | $ 1.64 |
Anti-dilutive stock options, units and awards excluded from computation of earnings per share (in shares) | 1.9 | 1.9 | 1.9 | 1.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective income tax rate (as a percent) | 18.00% | 29.40% | 22.50% | 30.40% | ||
Recognized discrete tax expense (Benefit), net | $ (39.4) | $ 8.3 | $ (36.8) | $ 18.2 | ||
Valuation allowance on deferred tax asset | $ 67 | $ 67 | $ 74 | |||
Forecast | ||||||
Approximate amount of the valuation allowance to be released (as a percent) | 50.00% |
Pension and Postretirement Pl55
Pension and Postretirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
U.S. Pension | ||||
Net periodic benefit costs | ||||
Service cost | $ 19.1 | $ 16.6 | $ 38.2 | $ 33.2 |
Interest cost on benefit obligation | 22.8 | 22.5 | 45.6 | 45 |
Expected return on plan assets | (33.1) | (32.1) | (66.3) | (64.2) |
Recognition of net actuarial (gain) loss | 12.2 | 5.9 | 24.3 | 11.8 |
Amortization of prior service cost (benefit) | (1.8) | (1.7) | (3.5) | (3.4) |
Total expense | 19.2 | 11.2 | 38.3 | 22.4 |
Other Pension Plan Information | ||||
Contributions to plan | 5 | |||
Contributions anticipated to be made during the remainder of 2015 | 3 | |||
International Pension | ||||
Net periodic benefit costs | ||||
Service cost | 8.2 | 8.2 | 16.7 | 16.6 |
Interest cost on benefit obligation | 9.9 | 12.6 | 20.2 | 25.3 |
Expected return on plan assets | (13.7) | (13.8) | (27.8) | (27.6) |
Recognition of net actuarial (gain) loss | 3.8 | 1.8 | 7.8 | 3.7 |
Amortization of prior service cost (benefit) | (0.1) | 0.1 | (0.1) | 0.2 |
Settlements/curtailments | 0.1 | 0.1 | ||
Total expense | 8.1 | 9 | 16.8 | 18.3 |
Other Pension Plan Information | ||||
Contributions to plan | 25 | |||
Contributions anticipated to be made during the remainder of 2015 | 20 | |||
U.S. Postretirement Health Care | ||||
Net periodic benefit costs | ||||
Service cost | 1 | 1.1 | 1.9 | 2.2 |
Interest cost on benefit obligation | 2.4 | 2.7 | 4.8 | 5.4 |
Expected return on plan assets | (0.3) | (0.3) | (0.5) | (0.6) |
Recognition of net actuarial (gain) loss | (1.5) | (2) | (3.1) | (4) |
Amortization of prior service cost (benefit) | (0.1) | (0.1) | (0.1) | (0.2) |
Total expense | $ 1.5 | $ 1.4 | 3 | $ 2.8 |
Other Pension Plan Information | ||||
Contributions to plan | 8 | |||
Contributions anticipated to be made during the remainder of 2015 | $ 10 |
Operating Segments (Details)
Operating Segments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | |
Financial information of reportable segments | ||||
Number of operating segments aggregated for classification as reportable segments | segment | 8 | |||
Number of operating units | segment | 10 | 10 | ||
Number of reportable segments | segment | 3 | |||
Net sales | $ 3,389.1 | $ 3,568.2 | $ 6,686.7 | $ 6,904.8 |
Operating Income (Loss) | 437.8 | 512.2 | $ 825.5 | 863.1 |
Other | ||||
Financial information of reportable segments | ||||
Number of operating units | segment | 2 | |||
Operating segment | ||||
Financial information of reportable segments | ||||
Net sales | 3,455.2 | 3,385.1 | $ 6,762.9 | 6,561.2 |
Operating Income (Loss) | 445.4 | 488.1 | 834 | 823 |
Operating segment | Global Industrial | ||||
Financial information of reportable segments | ||||
Net sales | 1,195.4 | 1,147.4 | 2,325.1 | 2,224.6 |
Operating Income (Loss) | 163.9 | 150.8 | 283.1 | 264.4 |
Operating segment | Global Institutional | ||||
Financial information of reportable segments | ||||
Net sales | 1,099.6 | 1,037.7 | 2,117.6 | 1,994.4 |
Operating Income (Loss) | 234.7 | 194 | 404.2 | 346 |
Operating segment | Global Energy | ||||
Financial information of reportable segments | ||||
Net sales | 964.8 | 1,014.1 | 1,946.7 | 1,987.8 |
Operating Income (Loss) | 134.6 | 152.4 | 263.3 | 280 |
Operating segment | Other | ||||
Financial information of reportable segments | ||||
Net sales | 195.4 | 185.9 | 373.5 | 354.4 |
Operating Income (Loss) | 33 | 29.7 | 56.4 | 51.1 |
Currency impact | ||||
Financial information of reportable segments | ||||
Net sales | (66.1) | 183.1 | (76.2) | 343.6 |
Operating Income (Loss) | (7.6) | 24.1 | (8.5) | 40.1 |
Corporate | ||||
Financial information of reportable segments | ||||
Operating Income (Loss) | $ (120.8) | $ (38.8) | (173) | $ (118.5) |
Intersegment | ||||
Financial information of reportable segments | ||||
Net sales | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - 6 months ended Jun. 30, 2015 | complaintlocationitemlawsuit |
Environmental matters | |
Number of locations for environmental assessments and remediation | location | 35 |
Loss contingencies | |
Number of open wage hour lawsuits | lawsuit | 6 |
Number of complaints filed by individuals | 23 |
Period to appeal court's decision after entry of final judgment under Federal Rule of Appellate Procedure | 30 days |
Wage Hour Claims | |
Loss contingencies | |
Number of lawsuits certified for class action status | lawsuit | 2 |
Deepwater Horizon Incident | Nalco | |
Loss contingencies | |
Number of oil dispersants for which the EPA released toxicity data | 8 |
Number of putative class action complaints filed | 6 |
Number of master complaints naming Nalco and others who responded to the oil spill (known as the "B3 Bundle") | complaint | 1 |
Number of proposed class action settlements | 2 |