Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 31, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 1-9328 | ||
Entity Registrant Name | ECOLAB INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 41-0231510 | ||
Entity Address, Address Line One | 1 Ecolab Place | ||
Entity Address, City or Town | St. Paul | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55102 | ||
City Area Code | 800 | ||
Local Phone Number | 232-6522 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 53,175,318,295 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 285,513,155 | ||
Entity Central Index Key | 0000031462 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm ID | 238 | ||
Auditor Location | Minneapolis, Minnesota | ||
Document Financial Statement Error Correction [Flag] | false | ||
COMMON STOCK | |||
Document and Entity Information | |||
Title of 12(b) Security | Common Stock, $1.00 par value | ||
Trading Symbol | ECL | ||
Security Exchange Name | NYSE | ||
2.625% Euro Notes due 2025 | |||
Document and Entity Information | |||
Title of 12(b) Security | 2.625% Euro Notes due 2025 | ||
Trading Symbol | ECL 25 | ||
Security Exchange Name | NYSE |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net sales | $ 15,320.2 | $ 14,187.8 | $ 12,733.1 |
Cost of sales (including special charges (a)) | 9,154.9 | 8,831 | 7,615.8 |
Selling, general and administrative expenses | 4,061.6 | 3,653.8 | 3,416.1 |
Special (gains) and charges | 111.4 | 140.5 | 102.6 |
Operating income | 1,992.3 | 1,562.5 | 1,598.6 |
Other (income) expense (b) | (59.9) | (24.5) | (33.9) |
Interest expense, net | 296.7 | 243.6 | 218.3 |
Income before income taxes | 1,755.5 | 1,343.4 | 1,414.2 |
Provision for income taxes | 362.5 | 234.5 | 270.2 |
Net income including noncontrolling interest | 1,393 | 1,108.9 | 1,144 |
Net income attributable to noncontrolling interest | 20.7 | 17.2 | 14.1 |
Net income attributable to Ecolab | $ 1,372.3 | $ 1,091.7 | $ 1,129.9 |
Earnings attributable to Ecolab per common share | |||
Basic (in dollars per share) | $ 4.82 | $ 3.83 | $ 3.95 |
Diluted (in dollars per share) | $ 4.79 | $ 3.81 | $ 3.91 |
Weighted-average common shares outstanding | |||
Basic (in shares) | 285 | 285.2 | 286.3 |
Diluted (in shares) | 286.5 | 286.6 | 289.1 |
Product and equipment sales | |||
Net sales | $ 12,316.8 | $ 11,446.2 | $ 10,153.3 |
Cost of sales (including special charges (a)) | 7,389.2 | 7,212.8 | 6,100.9 |
Service and lease sales | |||
Net sales | 3,003.4 | 2,741.6 | 2,579.8 |
Cost of sales (including special charges (a)) | $ 1,765.7 | $ 1,618.2 | $ 1,514.9 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Special (gains) and charges | $ 111.4 | $ 140.5 | $ 102.6 |
Cost of sales | |||
Special (gains) and charges | 22.5 | 69.9 | 93.9 |
Other (income) expense | |||
Special (gains) and charges | 50.6 | 37.2 | |
Interest expense | |||
Special (gains) and charges | 33.1 | ||
Product and equipment sales | Cost of sales | |||
Special (gains) and charges | 14.5 | 65 | 91.9 |
Service and lease sales | Cost of sales | |||
Special (gains) and charges | $ 8 | $ 4.9 | $ 2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income including noncontrolling interest | $ 1,393 | $ 1,108.9 | $ 1,144 |
Foreign currency translation adjustments | |||
Foreign currency translation | 10 | (333.4) | (10.9) |
(Loss) gain on net investment hedges | (73.1) | 108.3 | 51.6 |
Total foreign currency translation adjustments | (63.1) | (225.1) | 40.7 |
Derivatives and hedging instruments | (7.8) | (1.2) | 26 |
Pension and postretirement benefits | |||
Pension and postretirement benefits | (55.1) | 130.3 | 289.7 |
Subtotal | (126) | (96) | 356.4 |
Total comprehensive income, including noncontrolling interest | 1,267 | 1,012.9 | 1,500.4 |
Comprehensive income attributable to noncontrolling interest | 18.5 | 13 | 10.9 |
Comprehensive income attributable to Ecolab | $ 1,248.5 | $ 999.9 | $ 1,489.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 919.5 | $ 598.6 |
Accounts receivable, net | 2,834.2 | 2,698.1 |
Inventories | 1,497.2 | 1,792.8 |
Other current assets | 393.2 | 404.7 |
Total current assets | 5,644.1 | 5,494.2 |
Property, plant and equipment, net | 3,474.6 | 3,293.4 |
Goodwill | 8,148.2 | 8,012.7 |
Other intangible assets, net | 3,493.5 | 3,680.7 |
Operating lease assets | 553.5 | 448.2 |
Other assets | 532.7 | 535.1 |
Total assets | 21,846.6 | 21,464.3 |
Current liabilities | ||
Short-term debt | 630.4 | 505.1 |
Accounts payable | 1,566.3 | 1,728.2 |
Compensation and benefits | 655.5 | 493.6 |
Income taxes | 158.7 | 197.6 |
Other current liabilities | 1,334.9 | 1,285.9 |
Total current liabilities | 4,345.8 | 4,210.4 |
Long-term debt | 7,551.4 | 8,075.3 |
Pension and postretirement benefits | 651.7 | 670.3 |
Deferred income taxes | 418.2 | 505.6 |
Operating lease liabilities | 425.5 | 337.8 |
Other liabilities | 381.8 | 406.3 |
Total liabilities | 13,774.4 | 14,205.7 |
Commitments and contingencies (Note 15) | ||
Equity (a) | ||
Common stock | 365.7 | 364.7 |
Additional paid-in capital | 6,766.7 | 6,580.2 |
Retained earnings | 10,075.4 | 9,318.8 |
Accumulated other comprehensive loss | (1,850.4) | (1,726.6) |
Treasury stock | (7,312.7) | (7,301) |
Total Ecolab shareholders' equity | 8,044.7 | 7,236.1 |
Noncontrolling interest | 27.5 | 22.5 |
Total equity | 8,072.2 | 7,258.6 |
Total liabilities and equity | $ 21,846.6 | $ 21,464.3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, shares authorized | 800 | 800 |
Common stock, par value per share (in dollars per share) | $ 1 | $ 1 |
Common stock, shares outstanding | 285.4 | 284.5 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES | |||
Net income including noncontrolling interest | $ 1,393 | $ 1,108.9 | $ 1,144 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation | 616.7 | 618.5 | 604.4 |
Amortization | 306.9 | 320.2 | 238.7 |
Deferred income taxes | (55.7) | (142.6) | (1.1) |
Share-based compensation expense | 95.1 | 87.8 | 89.5 |
Pension and postretirement plan contributions | (109.3) | (64.3) | (60.2) |
Pension and postretirement plan expense (income), net | 3.1 | 45.5 | 42.4 |
Restructuring charges, net of cash paid | (32.6) | 66.2 | (41.7) |
Debt refinancing | 29.4 | ||
Other, net | 31.9 | 24.9 | 15.9 |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (84.3) | (319.6) | (178.2) |
Inventories | 320.3 | (402.9) | (73) |
Other assets | 72.2 | (278.2) | (92.9) |
Accounts payable | (232.3) | 394.7 | 200.4 |
Other liabilities | 86.8 | 329.3 | 144.3 |
Cash provided by operating activities | 2,411.8 | 1,788.4 | 2,061.9 |
INVESTING ACTIVITIES | |||
Capital expenditures | (774.8) | (712.8) | (643) |
Property and other assets sold | 9.9 | 2.2 | 12.2 |
Acquisitions and investments in affiliates, net of cash acquired | (180.4) | (7.2) | (3,923.7) |
Other, net | (45.2) | 1 | (25.2) |
Cash used for investing activities | (990.5) | (716.8) | (4,579.7) |
FINANCING ACTIVITIES | |||
Net (repayments) issuances of commercial paper and notes payable | (1.9) | (404.3) | 393.6 |
Long-term debt borrowings | 494 | 2,775 | |
Long-term debt repayments | (500) | (1,017.9) | |
Reacquired shares | (13.7) | (518.2) | (106.6) |
Dividends paid | (617.3) | (602.8) | (566.4) |
Exercise of employee stock options | 96.8 | 29.1 | 143.5 |
Debt refinancing | (29.4) | ||
Hedge settlements | (15.3) | 172 | 25.9 |
Other, net | (3.3) | (7.1) | (14.5) |
Cash used for financing activities | (1,054.7) | (837.3) | 1,603.2 |
Effect of exchange rate changes on cash and cash equivalents | (45.7) | 4.4 | 14.3 |
Increase (decrease) in cash and cash equivalents | 320.9 | 238.7 | (900.3) |
Cash and cash equivalents, beginning of period | 598.6 | 359.9 | 1,260.2 |
Cash and cash equivalents, end of period | 919.5 | 598.6 | 359.9 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Income taxes paid | 469.2 | 308.9 | 275.7 |
Net interest paid | $ 324.8 | $ 222.4 | $ 208.7 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Ecolab Shareholders' Equity | Common stock | Additional Paid-in Capital | Retained Earnings | AOCI (Loss) | Treasury Stock | Non-Controlling Interest | Total |
Balance, beginning at Dec. 31, 2020 | $ 6,166.5 | $ 362.6 | $ 6,235 | $ 8,243 | $ (1,994.4) | $ (6,679.7) | $ 35 | $ 6,201.5 |
Balance, beginning (in shares) at Dec. 31, 2020 | 362,553,443 | (76,801,025) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,129.9 | 1,129.9 | 14.1 | 1,144 | ||||
Other comprehensive income (loss) activity | 359.6 | 359.6 | (3.2) | 356.4 | ||||
Cash dividends declared (a) | (558.4) | (558.4) | (17) | (575.4) | ||||
Stock options and awards | 233.2 | $ 1.5 | 229.6 | $ 2.1 | 233.2 | |||
Stock options (in shares) | 1,270,757 | 29,684 | ||||||
Stock awards (in shares) | 315,162 | 17,760 | ||||||
Reacquired shares | (106.6) | $ (106.6) | (106.6) | |||||
Reacquired shares (in shares) | (502,132) | |||||||
Balance, Ending at Dec. 31, 2021 | 7,224.2 | $ 364.1 | 6,464.6 | 8,814.5 | (1,634.8) | $ (6,784.2) | 28.9 | 7,253.1 |
Balance, Ending (in shares) at Dec. 31, 2021 | 364,139,362 | (77,255,713) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,091.7 | 1,091.7 | 17.2 | 1,108.9 | ||||
Other comprehensive income (loss) activity | (91.8) | (91.8) | (4.2) | (96) | ||||
Cash dividends declared (a) | (587.4) | (587.4) | (20) | (607.4) | ||||
Fair value adjustment of prior acquisition | 0.6 | 0.6 | ||||||
Stock options and awards | 117.6 | $ 0.6 | 115.6 | $ 1.4 | 117.6 | |||
Stock options (in shares) | 276,059 | 14,525 | ||||||
Stock awards (in shares) | 296,420 | 17,794 | ||||||
Reacquired shares | (518.2) | $ (518.2) | (518.2) | |||||
Reacquired shares (in shares) | (3,038,107) | |||||||
Balance, Ending at Dec. 31, 2022 | 7,236.1 | $ 364.7 | 6,580.2 | 9,318.8 | (1,726.6) | $ (7,301) | 22.5 | $ 7,258.6 |
Balance, Ending (in shares) at Dec. 31, 2022 | 364,711,841 | (80,261,501) | 284,500,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 1,372.3 | 1,372.3 | 20.7 | $ 1,393 | ||||
Other comprehensive income (loss) activity | (123.8) | (123.8) | (2.2) | (126) | ||||
Cash dividends declared (a) | (615.7) | (615.7) | (13.5) | (629.2) | ||||
Changes in noncontrolling interest | (4.5) | (4.5) | (4.5) | |||||
Stock options and awards | 194 | $ 1 | 191 | $ 2 | 194 | |||
Stock options (in shares) | 802,645 | 14,629 | ||||||
Stock awards (in shares) | 234,154 | 30,437 | ||||||
Reacquired shares | (13.7) | $ (13.7) | (13.7) | |||||
Reacquired shares (in shares) | (83,674) | |||||||
Balance, Ending at Dec. 31, 2023 | $ 8,044.7 | $ 365.7 | $ 6,766.7 | $ 10,075.4 | $ (1,850.4) | $ (7,312.7) | $ 27.5 | $ 8,072.2 |
Balance, Ending (in shares) at Dec. 31, 2023 | 365,748,640 | (80,300,109) | 285,400,000 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF EQUITY | |||
Dividends declared per common share (in dollars per share) | $ 2.16 | $ 2.06 | $ 1.95 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
NATURE OF BUSINESS | |
NATURE OF BUSINESS | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS Ecolab is a global leader in water, hygiene and infection prevention solutions and services that protect people and vital resources. The Company delivers comprehensive solutions, data-driven insights and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries. The Company’s cleaning and sanitizing programs and products and pest elimination services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors. The Company’s products and technologies are also used in water treatment, pollution control, energy conservation, refining, primary metals manufacturing, papermaking, mining and other industrial processes. In December 2021, the Company acquired Purolite for total consideration of $3.7 billion in cash, net of cash acquired. Purolite is a leading and fast-growing global provider of high-end ion exchange resins for the separation and purification of solutions, that is highly complementary to the Company’s current offering and critical to safe, high quality drug production and biopharma product purification in the life sciences industries. It also provides purification and separation solutions for critical industrial markets like microelectronics, nuclear power and food and beverage. Headquartered in King of Prussia, Pennsylvania, Purolite operates in more than 30 countries. Purolite is reported within the Company’s Life Sciences operating segment. The Company is aligned into three reportable segments: Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences as discussed in Note 18 Operating Segments and Geographical Information. Operating segments that were not aggregated and do not exceed the quantitative criteria to be separately reported have been combined into Other. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and all subsidiaries in which the Company has a controlling financial interest. Investments in companies, joint ventures or partnerships in which the Company does not have control but has the ability to exercise significant influence over operating and financial decisions, are reported using the equity method of accounting. The alternative method of accounting is used in circumstance where the Company’s investments in companies, joint ventures and partnerships neither provide it control or significant influence over the investee and for investments that do not have readily identifiable fair values. Investments accounted for under the alternative method are recorded at cost and adjusted for impairments, if any, or observable price changes of the same or similar securities issued by the investee. International subsidiaries are included in the financial statements on the basis of their U.S. GAAP November 30 fiscal year ends to facilitate the timely inclusion of such entities in the Company’s consolidated financial reporting. All intercompany transactions and profits are eliminated in consolidation. Use of Estimates The preparation of the Company’s financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s critical accounting estimates include revenue recognition, litigation and environmental reserves, actuarially determined liabilities, income taxes, long-lived assets, intangible assets and goodwill. Foreign Currency Translation Financial position and reported results of operations of the Company’s non-U.S. dollar functional currency international subsidiaries are measured using local currencies as the functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at each fiscal year end. The translation adjustments related to assets and liabilities that arise from changes in exchange rates from period to period are included in accumulated other comprehensive income (loss) in shareholders’ equity. Income statement accounts are translated at average rates of exchange prevailing during the year. As discussed in Note 18 Operating Segments and Geographic Information, the Company evaluates its international operations based on fixed rates of exchange; however, changes in exchange rates from period to period impact the amount of reported income from consolidated operations. Concentration of Credit Risk Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed to perform as contracted. The Company believes the likelihood of incurring material losses due to concentration of credit risk is minimal. The principal financial instruments subject to credit risk are as follows: Cash and Cash Equivalents Accounts Receivable Foreign Currency and Interest Rate Contracts and Derivatives Cash and Cash Equivalents Cash equivalents include highly-liquid investments with a maturity of three months or less when purchased. Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are carried at the invoiced amounts, less an allowance for expected credit losses, and generally do not bear interest. The Company’s allowance for expected credit losses estimates the amount of expected future credit losses by analyzing accounts receivable balances by age and applying historical write-off and collection experience. The Company’s estimates separately consider macroeconomic trends, specific circumstances and credit conditions of customer receivables. Account balances are written off against the allowance when it is determined the receivable will not be recovered. The Company’s allowance for the expected return of products shipped and credits related to pricing or quantities shipped was $72 million, $59 million, and $19 million as of December 31, 2023, 2022 and 2021, respectively. Returns and credit activity is recorded directly as a reduction to revenue. The following table summarizes the activity in the allowance for expected credit losses: (millions) 2023 2022 2021 Beginning balance $71.9 $52.8 $68.4 Bad debt expense 54.0 38.1 15.0 Write-offs (46.2) (21.1) (27.4) Other (a) (2.4) 2.1 (3.2) Ending balance $77.3 $71.9 $52.8 (a) O ther amounts are primarily the effects of changes in currency translations and acquired balances. Inventory Valuations Inventories are valued at the lower of cost or net realizable value. Certain U.S. inventory costs are determined on a last-in, first-out (“LIFO”) basis. LIFO inventories represented 30% and 29% of consolidated inventories as of December 31, 2023 and 2022, respectively. All other inventory costs are determined using either the average cost or first-in, first-out (“FIFO”) methods. Inventory values at FIFO, as shown in Note 5, approximate replacement cost. Property, Plant and Equipment Property, plant and equipment assets are stated at cost. Merchandising and customer equipment consists principally of various dispensing systems for the Company’s cleaning and sanitizing products, warewashing machines and process control and monitoring equipment. Certain dispensing systems capitalized by the Company are accounted for on a mass asset basis, whereby equipment is capitalized and depreciated as a group and written off when fully depreciated. The Company capitalizes both internal and external costs to develop or purchase computer software. Costs incurred for data conversion, training and maintenance associated with capitalized software are expensed as incurred. Expenditures for major renewals and improvements, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. Expenditures for repairs and maintenance are charged to expense as incurred. Upon retirement or disposition of plant and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income. Depreciation is charged to operations using the straight-line method over the assets’ estimated useful lives ranging from 5 to 40 years for buildings and leasehold improvements, 3 to 20 years for machinery and equipment, 3 to 20 years for merchandising and customer equipment and 3 to 7 years for capitalized software. The straight-line method of depreciation reflects an appropriate allocation of the cost of the assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Depreciation expense was $617 million, $619 million and $604 million for 2023, 2022 and 2021, respectively. Goodwill and Other Intangible Assets Goodwill Goodwill arises from the Company’s acquisitions and represents the excess of the fair value of the purchase consideration exchanged over the fair value of net assets acquired. The Company’s reporting units are its ten operating segments. The Company assesses goodwill for impairment on an annual basis during the second quarter. If circumstances change or events occur that demonstrate it is more likely than not that the carrying amount of a reporting unit exceeds its fair value, the Company completes an interim goodwill impairment assessment of that reporting unit prior to the next annual assessment. If the results of an annual or interim goodwill impairment assessment demonstrate the carrying amount of a reporting unit is greater than its fair value, the Company will recognize an impairment loss for the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the carrying amount of goodwill assigned to that reporting unit. During the second quarter of 2023, the Company completed its annual goodwill impairment assessment for its ten reporting units using discounted cash flow analyses that incorporated assumptions regarding future growth rates, terminal values and discount rates. The Company’s goodwill impairment assessments for 2023 indicated the estimated fair values of each of these ten reporting units exceeded the carrying amounts of the respective reporting unit by a significant margin. The Company evaluates the need to complete interim goodwill impairment assessments when significant events or changes in business circumstances indicate that it is more likely than not that the carrying amount of a reporting unit may be higher than its fair value. No events were noted during the second half of 2023 that required completion of an interim goodwill impairment assessment for any of our ten reporting units. There has been no impairment of goodwill in any of the periods presented. The changes in the carrying amount of goodwill for each of the Company’s reportable segments were as follows: Global Global Global Institutional Healthcare & (millions) Industrial & Specialty Life Sciences Other Total December 31, 2021 $4,270.1 $576.5 $2,974.2 $243.1 $8,063.9 Prior year business combinations (a) 0.4 - 253.4 - 253.8 Effect of foreign currency translation (188.7) (8.9) (102.2) (5.2) (305.0) December 31, 2022 $4,081.8 $567.6 $3,125.4 $237.9 $8,012.7 Current year business combinations (b) 30.8 39.3 - - 70.1 Effect of foreign currency translation 28.0 3.1 33.0 1.3 65.4 December 31, 2023 $4,140.6 $610.0 $3,158.4 $239.2 $8,148.2 (a) Represents purchase price allocation adjustments for acquisitions deemed preliminary as of the end of the prior year. (b) Represents goodwill associated with current year acquisitions. For 2023, approximately $62 of goodwill related to businesses acquired is expected to be tax deductible related primarily to the acquisitions of Chemlink Laboratories LLC and Flottec, LLC (refer to Footnote 4 for additional information). Other Intangible Assets The Nalco trade name is the Company’s only indefinite life intangible asset, which is tested for impairment on an annual basis during the second quarter. During the second quarter of 2023, the Company completed its annual impairment assessment of the Nalco trade name using the relief from royalty discounted cash flow method, which incorporates assumptions regarding future sales projections, royalty rate and discount rates. The Company’s Nalco trade name impairment assessment for 2023 indicated the estimated fair value of the Nalco trade name exceeded its $1.2 billion carrying amount by a significant margin. No events were noted during the second half of 2023 that required completion of an interim impairment assessment of our Nalco trade name. There has been no impairment of the Nalco trade name intangible asset since it was acquired. The Company’s intangible assets subject to amortization include customer relationships, trademarks, patents and other technology primarily acquired through business acquisitions. The fair value of intangible assets acquired in business acquisitions are estimated primarily using discounted cash flow valuation methods at the time of acquisition. Intangible assets are amortized on a straight-line basis over their estimated lives. The weighted-average useful life of amortizable intangible assets was 15 years as of December 31, 2023 and 2022. The weighted-average useful life by type of amortizable asset at December 31, 2023 were as follows: (years) Customer relationships 15 Patents 15 Trademarks 13 Other technology 12 The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company evaluates the remaining useful life of its intangible assets subject to amortization each reporting period to determine whether events and circumstances warrant a change to the estimated remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over the updated remaining useful life. Amortization expense related to other intangible assets during the last three years and future estimated amortization were as follows: (millions) 2021 $239 2022 320 2023 307 2024 301 2025 294 2026 281 2027 155 2028 145 Long-Lived Assets The Company reviews its long-lived and amortizable intangible assets for impairment when significant events or changes in business circumstances indicate that the carrying amount of the assets, or asset group to which it is assigned, may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset or asset group, a significant adverse change in the manner in which the asset or asset group is being used or history of cash flow losses associated with the use of an asset or asset group. Impairment losses could occur when the carrying amount of an asset or asset group exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the asset’s or asset group’s carrying value over its fair value. In addition, the Company periodically reassesses the estimated remaining useful lives of its long-lived assets. Changes to estimated useful lives would impact the amount of depreciation and amortization recorded in earnings. The Company has not experienced significant changes in the carrying amount or estimated remaining useful lives of its long-lived or amortizable intangible assets. Rental and Leases Lessee The Company determines whether a lease exists at the inception of the arrangement. In assessing whether a contract is or contains a lease, the Company evaluates whether the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company accounts for lease components separately from the nonlease components (e.g., common-area maintenance costs, property taxes, parking, etc.). Operating leases are recorded in operating lease assets, other current liabilities and operating lease liabilities in the Consolidated Balance Sheets. Operating lease assets and operating lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the estimated lease term at the lease commencement date. The Company uses the rate implicit in the lease when available or determinable. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the lease liability and are recognized as incurred. The Company identified real estate, vehicles and other equipment as the primary classes of its leases. Certain leases with a similar class of underlying assets are accounted for as a portfolio of leases. The Company does not record operating lease assets or liabilities for leases with terms of twelve months or less. Those lease payments are recognized in the Consolidated Statements of Income over the lease term as incurred. Many of the Company’s leases include options to renew or cancel, which are at the Company’s sole discretion. Renewal terms can extend the lease term from one month to multiple years, whereas, cancellation terms can shorten the lease term by multiple years. The lease start date is the date when the leased asset is available for use and in possession of the Company. The lease end date, which includes any options to renew or cancel that are reasonably certain to be exercised, is based on the terms of the contract. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material restrictive covenants. Lessor The Company accounts for lease and nonlease components separately. The nonlease components, such as product and service revenue, are accounted for under Topic 606 Revenue from Contracts with Customers, refer to Note 17 for more information. Revenue from leasing equipment is recognized on a straight-line basis over the life of the lease. Cost of sales includes the depreciation expense for assets under operating leases. The assets are depreciated over their estimated useful lives. Initial lease terms range from one year to five years and most leases include renewal options. Lease contracts convey the right for the customer to control the equipment for a period of time as defined by the contract. There are no options for the customer to purchase the equipment and therefore the equipment remains the property of the Company at the end of the lease term. Refer to Note 13 for additional information regarding rental and leases. Income Taxes Income taxes are recognized during the period in which transactions enter into the determination of financial statement income, with deferred income taxes provided for the tax effect of temporary differences between the carrying amount of assets and liabilities and their tax bases. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. Relevant factors in determining the realizability of deferred tax assets include historical results, sources of future taxable income, the expected timing of the reversal of temporary differences, tax planning strategies and the expiration dates of the various tax attributes. The Company records liabilities for unrecognized tax benefits in accordance with the U.S. GAAP recognition and measurement criteria guidance. The Company has elected the period cost method and considers the estimated global intangible low taxed income (“GILTI”) impact in tax expense. The Company recognizes interest and penalties related to unrecognized tax benefits in the income tax provision. Refer to Note 12 for additional information regarding income taxes. Share-Based Compensation The Company measures compensation expense for share-based awards at fair value at the date of grant and recognizes compensation expense over the service period for awards expected to vest. The majority of grants to retirement eligible recipients (age 55 with required years of service) are recorded to expense using the non-substantive vesting method and are fully expensed over a six-month period following the date of grant. In addition, the Company includes a forfeiture estimate in the amount of compensation expense being recognized based on an estimate of the number of outstanding awards expected to vest. All excess tax benefits or deficiencies are recognized as discrete income tax items on the Consolidated Statements of Income. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. Refer to Note 11 for additional information regarding equity compensation plans. Restructuring Activities The Company’s restructuring activities are associated with plans to enhance its efficiency, effectiveness and sharpen its competitiveness. These 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 in which the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract termination costs. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Refer to Note 3 for additional information regarding restructuring activities. Revenue Recognition Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing service. Product and Sold Equipment Revenue from product and sold equipment is recognized when obligations under the terms of a contract with the customer are satisfied, which generally occurs with the transfer of the product or delivery of the equipment. Service and Lease Equipment Revenue from service and leased equipment is recognized when the services are provided, or the customer receives the benefit from the leased equipment, which is over time. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue for leased equipment is accounted for under Topic 842 Leases and recognized on a straight-line basis over the length of the lease contract. Other Considerations Contracts with customers may include multiple performance obligations. For contracts with multiple performance obligations, the consideration is allocated between products and services based on their stand-alone selling prices. Stand-alone selling prices are generally based on the prices charged to customers when the good or service is not bundled with other product or services or using an expected cost plus margin. Judgment is used in determining the amount of service that is embedded within the Company’s contracts, which is based on the amount of time spent on the performance obligation activities. The level of effort, including the estimated margin that would be charged, is used to determine the amount of service revenue. Depending on the terms of the contract, the Company may defer the recognition of revenue when a future performance obligation has not yet occurred. Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-producing transaction, which are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight are recognized in cost of sales when control over the product has transferred to the customer. Other estimates used in recognizing revenue include allocating variable consideration to customer programs and incentive offerings, including pricing arrangements, promotions and other volume-based incentives at the time the sale is recorded. These estimates are based primarily on historical experience and anticipated performance over the contract period. Based on the certainty in estimating these amounts, they are included in the transaction price of the contracts and the associated remaining performance obligations. The Company recognizes revenue when collection of the consideration expected to be received in exchange for transferring goods or providing services is probable. The Company’s revenue policies do not provide for general rights of return. Estimates used in recognizing revenue include the delay between the time that products are shipped and when they are received by customers, when title transfers and the amount of credit memos issued in subsequent periods. Depending on market conditions, the Company may increase customer incentive offerings, which could reduce gross profit margins over the term of the incentive. Earnings 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 and units 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 share amounts were as follows: (millions, except per share) 2023 2022 2021 Net income attributable to Ecolab $1,372.3 $1,091.7 $1,129.9 Weighted-average common shares outstanding Basic 285.0 285.2 286.3 Effect of dilutive stock options and units 1.6 1.4 2.8 Diluted 286.5 286.6 289.1 Earnings attributable to Ecolab per common share Basic EPS $4.82 $3.83 $3.95 Diluted EPS $4.79 $3.81 $3.91 Anti-dilutive securities excluded from the computation of diluted EPS 4.3 3.9 1.9 Amounts do not necessarily sum due to rounding. Other Significant Accounting Policies The following table includes a reference to additional significant accounting policies that are described in other notes to the financial statements, including the note number: Policy Note Fair value measurements 7 Derivatives and hedging transactions 8 Share-based compensation 10 Research and development expenditures 14 Legal contingencies 15 Pension and post-retirement benefit plans 16 Reportable segments 18 New Accounting Pronouncements Standards That Are Not Yet Adopted: Required Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2023-09 Income taxes (Topic 740): Improvements to Income Tax Disclosures December 2023 The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. January 1, 2025 The Company is currently evaluating the impact of adoption and additional disclosure requirements. ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures November 2023 The amendments in this ASU are to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. Effective for annual periods beginning after December 15, 2023 Entities are required to apply the disclosure amendments on a retrospective basis to all periods presented. The Company is currently evaluating the impact of adoption. Standards That Were Adopted: Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers October 2021 Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. January 1, 2023 The adoption of this standard did not have a significant impact on the Company's financial statements. No other new accounting pronouncement issued or effective has had or is expected to have a material impact on the Company’s consolidated financial statements. |
SPECIAL (GAINS) AND CHARGES
SPECIAL (GAINS) AND CHARGES | 12 Months Ended |
Dec. 31, 2023 | |
SPECIAL (GAINS) AND CHARGES | |
SPECIAL (GAINS) AND CHARGES | 3. SPECIAL (GAINS) AND CHARGES Special (gains) and charges reported on the Consolidated Statements of Income included the following: (millions) 2023 2022 2021 Cost of sales Restructuring activities $22.5 $21.4 $24.7 Acquisition and integration activities - 25.0 4.2 Russia/Ukraine - 7.2 - Other - 16.3 65.0 Cost of sales subtotal 22.5 69.9 93.9 Special (gains) and charges Restructuring activities 63.2 85.8 11.9 Acquisition and integration activities 16.1 14.5 29.9 Russia/Ukraine 1.4 5.9 - Other 30.7 34.3 60.8 Special (gains) and charges subtotal 111.4 140.5 102.6 Operating income subtotal 133.9 210.4 196.5 Other (income) expense - 50.6 37.2 Interest expense, net - - 33.1 Total special (gains) and charges $133.9 $261.0 $266.8 For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with the Company’s internal management reporting. Restructuring Activities Restructuring activities are primarily related to the Combined Program which is described below. These activities have been included as a component of cost of sales, special (gains) and charges, other (income) expense and interest expense, net on the Consolidated Statements of Income. Restructuring liabilities have been classified as a component of other current and other noncurrent liabilities on the Consolidated Balance Sheets. Combined Program In November 2022 the Company approved a Europe cost savings program. In connection with these actions, the Company expected to incur pre-tax charges of $130 million ($110 million after tax). In February 2023, the Company expanded its previously announced Europe cost savings program to focus on its Institutional and Healthcare businesses in other regions. In connection with the expanded program (“Combined Program”), the Company expects to incur total pre-tax charges of $195 million ($150 million after tax). The Company expects that these restructuring charges will be completed by the end of 2024. Program actions include headcount reductions from terminations, not filling certain open positions, and facility closures. The Combined Program charges are expected to be primarily cash expenditures related to severance and asset disposals. In anticipation of this Combined Program, a limited number of actions were taken in the fourth quarter of 2022. As a result, the Company reclassified $19.3 million ($14.5 million after tax) from other restructuring to the Combined Program in the first quarter of 2023. In 2023 and 2022, the Company recorded total Combined Program restructuring charges of $77.7 million ($66.4 million after tax) and $67.2 million ($56.0 million after tax), respectively, primarily related to severance. The Company has recorded $164.2 million ($136.9 million after tax) of cumulative charges under the Combined Plan. The net liability related to the Combined Program was $43.1 million and $62.0 million as of December 31, 2023 and 2022, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities. Restructuring activity related to the Combined Program since inception of the underlying actions includes the following: Employee Asset (millions) Costs Disposals Other Total 2022 Activity Recorded expense and accrual $67.2 $- $- $67.2 Net cash payments (5.2) - - (5.2) Net restructuring liability, December 31, 2022 62.0 - - 62.0 2023 Activity Recorded expense and accrual 47.0 14.0 16.7 77.7 Net cash payments (85.2) - (16.7) (101.9) Non-cash charges - (14.0) - (14.0) Reclassification 19.3 - 19.3 Net restructuring liability, December 31, 2023 $43.1 $- $- $43.1 Institutional Advancement Program The Company approved a restructuring plan in 2020 focused on the Institutional business (“the Institutional Plan”) which is intended to enhance the Company’s Institutional sales and service structure and allow the sales team to capture share and penetration while maximizing service effectiveness by leveraging the Company’s ongoing investments in digital technology. Certain activities contemplated in this Institutional Plan were previously approved in 2020 and included as part of Accelerate 2020. These activities were reclassified to the Institutional Plan. During 2023, 2022 and 2021, the Company recorded restructuring charges of $8.0 million ($6.0 million after tax), $6.3 million ($4.8 million after tax) and $12.6 million ($10.2 million after tax), respectively, primarily related to severance, disposals of equipment and office closures. The restructuring activities were completed at the end of 2023, with total costs of $62.1 million ($47.4 million after tax). Net cash payments were $2.6 million and non-cash net charges were $6.8 million during 2023. There was no liability related to the Institutional Plan as of December 31, 2023 and $1.9 million as of December 31, 2022. Accelerate 2020 During 2018, the Company formally commenced a restructuring plan, Accelerate 2020 (“the A2020 Plan”), to leverage technology and systems investments and organizational changes. The goals of the A2020 Plan were to further simplify and automate processes and tasks, reduce complexity and management layers, consolidate facilities and focus on key long-term growth areas by further leveraging technology and structural improvements. The Company recorded restructuring charges of $9.9 million ($8.4 million after tax) and $5.3 million ($6.2 million after tax) in 2022 and 2021, respectively, primarily related to severance. The restructuring activities were completed at the end of 2022, with total costs of $254.4 million ($198.4 million after tax). Net cash payments were $13.2 million during 2023. The liability related to the A2020 Plan were $4.9 million and $18.1 million as of December 31, 2023 and 2022, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities. Other Restructuring Activities During 2022, and 2021, the Company recorded other restructuring charges of $23.8 million ($17.9 million after tax), and $18.7 million ($17.0 million after tax), respectively, related to other immaterial restructuring activity. The charges are comprised primarily of severance and asset write-offs. The restructuring liability balance for all other restructuring plans excluding Combined Program, the A2020 Plan and the Institutional Plan was $3.3 million and $23.2 million as of December 31, 2023 and 2022, respectively. The decrease in liability was driven primarily by the reclass of $19.3 million from other restructuring to the Combined Program in the first quarter of 2023. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities. Cash payments during 2023 related to all other restructuring plans excluding the Combined Program, the A2020 Plan and Institutional Plan were $0.6 million. Acquisition and integration related costs Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income in 2023 include $16.1 million ($12.0 million after tax) related primarily to the Purolite Corporation (“Purolite”) acquisition and consist of integration related costs and advisory and legal fees. Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income in 2022 include $14.5 million ($11.4 million after tax) related primarily to the Purolite acquisition and consist of integration related costs and advisory and legal fees. Acquisition and integration related costs reported in product and equipment cost of sales on the Consolidated Statements of Income in 2022 included $25.0 million ($19.6 million after tax) related primarily to the recognition of fair value step-up in Purolite inventory and other integration related costs. Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income include $29.9 million ($23.5 million after tax) in 2021. Charges are related primarily to the Purolite acquisition and consisted of deal costs, integration costs and advisory and legal fees. Acquisition and integration costs reported in product and equipment cost of sales on the Consolidated Statements of Income in 2021 include $4.2 million ($3.3 million after tax) and are related to the recognition of fair value step-up in the Purolite inventory. In conjunction with its acquisitions, the Company incurred $0.8 million ($0.6 million after tax) of special (gains) and charges reported in interest expense in 2021. Russia/Ukraine In light of Russia’s invasion of Ukraine and the sanctions against Russia by the United States and other countries, the Company has made the determination that it will limit the Company’s Russian business to operations that are essential to life, providing minimal support for the Company’s healthcare, life sciences, food and beverage and certain water businesses. The Company incurred charges of $1.4 million ($1.1 million after tax) and $13.1 million ($12.6 million after tax) during 2023 and 2022, respectively, primarily related to recoverability risk of certain assets in both Russia and Ukraine. Other operating activities Other operating activities recorded to cost of sales on the Consolidated Statements of Income of $16.3 million ($12.7 million after tax) in 2022 and $65.0 million ($49.2 million after tax) in 2021 relate primarily to COVID-19 activities. Other operating activities recorded in special (gains) and charges on the Consolidated Statements of Income of $30.7 million ($23.3 million after tax) in 2023 relate primarily to certain legal charges. Other operating activities recorded in special (gains) and charges on the Consolidated Statements of Income of $34.3 million ($25.7 million after tax) in 2022 and $60.8 million ($46.4 million after tax) in 2021 relate primarily to COVID-19 activities and certain legal charges. Other (income) expense During 2022 and 2021, the Company incurred pension settlement expense recorded in other (income) expense on the Consolidated Statements of Income of $50.6 million ($38.2 million after tax) and $37.2 million ($28.7 million after tax), respectively, related to U.S. pension plan lump-sum payments to retirees. Interest expense, net During 2021, the Company recorded special charges of $32.3 million ($28.4 million after tax) in interest expense on the Consolidated Statements of Income related to debt issuance and refinancing charges. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | 4. ACQUISITIONS AND DISPOSITIONS Acquisitions The Company makes business acquisitions that align with its strategic business objectives. The assets and liabilities of acquired businesses are recorded in the Consolidated Balance Sheets based on estimates of the fair value of assets acquired, liabilities assumed and noncontrolling interests acquired as of the acquisition date. Goodwill is recognized in the amount that the purchase consideration paid exceeds the fair value of the net assets acquired. Purchase consideration includes both cash paid and the fair value of noncash consideration exchanged, including stock and/or contingent consideration exchanged, and is reduced by the amount of cash or cash equivalents acquired. Acquisitions during 2023, 2022 and 2021 were not significant to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented. 2023 Activity In November 2023, the Company acquired Flottec, LLC, a U.S.-based provider of flotation products and services for the mineral processing industry. The move will expand Nalco Water’s flotation offerings and its work to serve the industry from mine to metal. The acquisition became part of the Global Industrial reporting segment. The purchase accounting for this acquisition is preliminary and subject to change as the Company finalizes the valuation of intangible assets, income tax balances and working capital. The goodwill arising from the acquisition of Flottec, LLC is tax deductible. In May 2023, the Company acquired Chemlink Laboratories LLC, a U.S.-based producer of small format cleaning solutions. The Company made two other immaterial acquisitions during the second quarter of 2023. All three acquisitions became part of the Global Institutional & Specialty reporting segment. 2022 Activity No acquisitions occurred during 2022. 2021 Activity Purolite Acquisition On December 1, 2021, the Company acquired Purolite for total consideration of $3,706 million in cash, net of cash acquired. Purolite is a US-based business that is a leading and fast-growing global provider of resins for the separation and purification of solutions that is highly complementary to the Company’s current offering and critical to safe, high quality drug production and biopharma product purification in the life sciences industries. It also provides purification and separation solutions for critical industrial markets like microelectronics, nuclear power and food and beverage. Prior to acquisition, Purolite prepared its consolidated financial statements pursuant to the requirements of UK GAAP. The Purolite acquisition has been accounted for as a business combination with the assets acquired and liabilities assumed recognized at fair value as of the acquisition date. The fair values of intangible assets acquired were estimated using discounted cash flow analyses appropriate in the circumstances for the nature of the assets being valued. The valuation models incorporated projections of future cash flows and other valuation assumptions. Significant inputs and assumptions used in the Company’s customer relationship intangible asset valuations include projected revenues, contributory asset charges, tax savings due to amortization, income tax rates, customer attrition rates and discount rates. Significant inputs and assumptions used in the Company’s tradename and acquired technology intangible asset valuations include projected revenues, future asset utilities, royalty rates, tax saving due to amortization, income tax rates and discount rates. The Company incurred certain transaction and integration costs associated with the acquisition that were expensed and were recorded in the Consolidated Statements of Income. Further information related to the Company’s special (gains) and charges is included in Note 3. Purolite purchase accounting was finalized in the fourth quarter of 2022. The following table summarizes the final value of Purolite assets acquired and liabilities assumed, net of cash acquired, as of the acquisition date: (millions) December 1, 2021 Tangible assets $361.9 Identifiable intangible assets Customer relationships 870.0 Other technologies 285.0 Trademarks 73.0 Total assets acquired 1,589.9 Goodwill 2,260.6 Total liabilities 144.8 Total consideration transferred to sellers, net of cash acquired $3,705.7 During 2022, the Company recorded purchase accounting adjustments associated with the finalization of the purchase accounting for its acquisition of Purolite. As a result of these purchase accounting adjustments, the Company made $7.2 million of acquisition-related payments, acquisition related net tangible assets decreased by $54.0 million, definite-lived intangible assets decreased by $185.4 million and goodwill increased by $246.6 million. Tangible assets acquired primarily consist of accounts receivable of $61.6 million, property, plant and equipment of $156.5 million and inventory of $122.4 million. Liabilities assumed primarily consist of deferred tax liabilities of $38.2 million and current liabilities of $77.6 million. Identified intangible assets primarily consist of customer relationships, acquired technologies, and trade names and are being amortized over weighted average lives of 17 , 14 , and 5 years , respectively, with a weighted average life of 15 years . Goodwill of $2,260.6 million arising from the acquisition consists largely of the synergies and economies of scale expected through adding complementary geographies and innovative products to the Company’s Life Sciences businesses. Purolite became part of the Global Healthcare & Life Sciences reportable segment. Goodwill of $2,146.3 million is deductible for income tax purposes. Other Acquisitions In February 2021, the Company acquired TechTex Holdings Limited (“TechTex”), a U.K.-based business which sells wet and dry wipes and other nonwovens products primarily for life sciences and healthcare applications. TechTex became part of the Global Healthcare & Life Sciences reporting segment. The purchase price included an immaterial holdback amount that was settled prior to December 31, 2021. Purchase accounting was finalized in the first quarter of 2022. In July 2021, the Company acquired National Wiper Alliance, Inc. (“NWA”), a U.S.-based business which sells wipes for healthcare and institutional applications. NWA became part of the Global Healthcare & Life Sciences reporting segment. Purchase accounting was finalized in the third quarter of 2022. In September 2021, the Company acquired EPN Water Col, Ltd. (“EPN”), a South Korean-based business which sells chemical products and manages installations at water treatment chemical injection facilities. EPN became part of the Global Industrial reporting segment. Purchase accounting was finalized in the fourth quarter of 2022. The goodwill related to the acquisitions of TechTex or EPN is not tax deductible, whereas the goodwill arising from the acquisition of NWA is tax deductible. Acquisitions The components of the cash paid for other acquisitions, excluding the Purolite acquisition (as further disclosed above), for 2023, 2022 and 2021, are shown in the following table: (millions) 2023 2022 2021 Net tangible assets acquired $20.8 $- $3.6 Identifiable intangible assets Customer relationships 60.8 - 75.0 Trademarks - - 4.7 Non-compete agreements 2.1 - 3.0 Other technologies 25.8 - 1.5 Total intangible assets 88.7 - 84.2 Goodwill 70.2 - 140.6 Total aggregate purchase price 179.7 - 228.4 Acquisition-related liabilities and contingent consideration (a) (3.9) - (4.4) Total cash paid for acquisitions, including acquisition-related liabilities and contingent consideration, net of cash acquired $175.8 $- $224.0 (a) Subsequent to the acquisitions, $1.4 in contingent consideration was remitted to the seller during 2021 and is included in investing activities on the Consolidated Statements of Cash Flows. During 2023, the Company recorded purchase accounting adjustments. As a result of these purchase accounting adjustments, the Company made $4.1 million of acquisition-related payments, acquisition related net tangible assets increased by $1.7 million, acquisition related liabilities and contingent consideration decreased by $1.7 million and goodwill increased by $0.7 million. During 2022, the Company recorded purchase accounting adjustments associated with the finalization of the purchase accounting for its acquisitions of TechTex, NWA and EPN. As a result of these purchase accounting adjustments, acquisition related net tangible assets decreased by $1.6 million, definite-lived intangible assets decreased by $5.6 million, and goodwill increased by $7.2 million. The weighted average useful lives of identifiable intangible assets acquired during 2023 and 2021 were 12 and 13 years , respectively. No intangible assets were acquired during 2022. Dispositions No dispositions were significant to the Company’s consolidated financial statements for 2023, 2022 or 2021. |
BALANCE SHEET INFORMATION
BALANCE SHEET INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
BALANCE SHEET INFORMATION | |
BALANCE SHEET INFORMATION | 5. BALANCE SHEET INFORMATION December 31 December 31 (millions) 2023 2022 Accounts receivable, net Accounts receivable $2,983.2 $2,829.0 Allowance for expected credit losses and other accruals (149.0) (130.9) Total $2,834.2 $2,698.1 Inventories Finished goods $911.4 $1,122.7 Raw materials and parts 704.7 849.2 Inventories at FIFO cost 1,616.1 1,971.9 FIFO cost to LIFO cost difference (118.9) (179.1) Total $1,497.2 $1,792.8 Other current assets Prepaid assets $143.9 $123.9 Taxes receivable 186.9 184.1 Derivative assets 3.3 57.5 Other 59.1 39.2 Total $393.2 $404.7 Property, plant and equipment, net Land $155.6 $161.3 Buildings and leasehold improvements 1,171.0 1,126.9 Machinery and equipment 2,113.8 1,966.3 Merchandising and customer equipment 2,758.4 2,635.5 Capitalized software 985.9 962.1 Construction in progress 470.1 403.8 7,654.8 7,255.9 Accumulated depreciation (4,180.2) (3,962.5) Total $3,474.6 $3,293.4 Other intangible assets, net Intangible assets not subject to amortization Trade names $1,230.0 $1,230.0 Intangible assets subject to amortization Customer relationships 3,385.1 3,292.8 Patents 503.6 497.0 Trademarks 406.5 404.0 Other technologies 551.2 518.8 4,846.4 4,712.6 Accumulated amortization Customer relationships (1,805.0) (1,581.7) Patents (319.4) (292.3) Trademarks (238.0) (202.5) Other technologies (220.5) (185.4) (2,582.9) (2,261.9) Net intangible assets subject to amortization 2,263.5 2,450.7 Total $3,493.5 $3,680.7 Other assets Deferred income taxes $119.3 $108.1 Pension 118.4 118.4 Derivative asset 23.6 44.5 Other 271.4 264.1 Total $532.7 $535.1 December 31 December 31 (millions) 2023 2022 Other current liabilities Discounts and rebates $438.8 $357.8 Dividends payable 162.7 150.8 Interest payable 68.5 58.7 Taxes payable, other than income 153.2 162.9 Derivative liability 3.7 21.9 Restructuring 48.9 100.6 Contract liability 110.9 116.5 Operating lease liabilities 126.1 108.3 Other 222.1 208.4 Total $1,334.9 $1,285.9 Accumulated other comprehensive income (loss) Unrealized (loss) gain on derivative financial instruments, net of tax ($4.1) $3.7 Unrecognized pension and postretirement benefit expense, net of tax (534.7) (467.4) Cumulative translation, net of tax (1,311.6) (1,262.9) Total ($1,850.4) ($1,726.6) |
DEBT AND INTEREST
DEBT AND INTEREST | 12 Months Ended |
Dec. 31, 2023 | |
DEBT AND INTEREST | |
DEBT AND INTEREST | 6. DEBT AND INTEREST Short-term Debt The following table provides the components of the Company’s short-term debt obligations, along with applicable interest rates as of December 31, 2023 and 2022: 2023 2022 Average Average Carrying Interest Carrying Interest (millions) Value Rate Value Rate Short-term debt Commercial paper $- - % $- - % Notes payable 1.8 8.29 % 3.7 7.28 % Long-term debt, current maturities 628.6 501.4 Total $630.4 $505.1 Line of Credit As of December 31, 2023, the Company had in place a $2.0 billion multi-currency revolving credit facility which expires in April 2026. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of December 31, 2023 and 2022. The Company has $346 million of available bank supported letters of credit, surety bonds and guarantees available in support of its commercial business transactions of which $155 million is outstanding as of December 31, 2023. Commercial Paper The Company’s commercial paper program is used as a potential source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion. The Company had no outstanding commercial paper under its U.S. and Euro commercial paper programs as of December 31, 2023 and 2022. As of December 31, 2023, the Company’s short-term borrowing program was rated A-2 by Standard & Poor’s, P-2 by Moody’s and F-1 by Fitch. Notes Payable The Company’s notes payable consists of uncommitted credit lines with major international banks and financial institutions, primarily to support global cash pooling structures. As of December 31, 2023 and 2022, the Company had $1.8 million and $3.7 million, respectively, outstanding under these credit lines. Approximately $1,829 million and $1,925 million of these credit lines were available for use as of December 31, 2023 and 2022, respectively. Long-term Debt The following table provides the components of the Company’s long-term debt obligations, along with applicable interest rates as of December 31, 2023 and 2022: 2023 2022 Stated Effective Stated Effective Maturity Carrying Interest Interest Carrying Interest Interest (millions) by Year Value Rate Rate Value Rate Rate Long-term debt Public notes (2023 principal amount) Two year 2021 senior notes ( $500 million) 2023 $- - % - % $498.7 0.90 % 1.19 % Seven year 2016 senior notes ( €575 million) 2024 625.9 1.00 % 1.19 % 596.9 1.00 % 1.03 % Ten year 2015 senior notes ( €575 million) 2025 625.1 2.63 % 2.88 % 596.7 2.63 % 2.81 % Ten year 2016 senior notes ( $750 million) 2026 728.2 2.70 % 4.07 % 721.1 2.70 % 3.21 % Ten year 2017 senior notes ( $500 million) 2027 448.3 3.25 % 8.43 % 433.9 3.25 % 4.77 % Six Year 2021 senior notes ( $500 million) 2027 497.4 1.65 % 1.83 % 496.5 1.65 % 1.83 % Five Year 2022 senior notes ( $500 million) 2028 494.2 5.25 % 5.60 % 492.7 5.25 % 5.36 % Ten year 2020 senior notes ( $698 million) 2030 662.7 4.80 % 6.19 % 653.5 4.80 % 3.72 % Ten year 2020 senior notes ( $600 million) 2031 561.0 1.30 % 3.21 % 555.2 1.30 % 1.70 % Eleven year 2021 senior notes ( $650 million) 2032 645.2 2.13 % 2.06 % 644.6 2.13 % 2.24 % Thirty year 2011 senior notes ( $389 million) 2041 384.7 5.50 % 5.62 % 384.5 5.50 % 5.62 % Thirty year 2016 senior notes ( $200 million) 2046 197.4 3.70 % 3.80 % 197.3 3.70 % 3.81 % Thirty year 2017 senior notes ( $484 million) 2047 426.8 3.95 % 4.79 % 425.5 3.95 % 4.79 % Thirty year 2020 senior notes ( $500 million) 2050 491.1 2.13 % 2.23 % 490.7 2.13 % 2.23 % Thirty year 2021 senior notes ( $850 million) 2051 839.3 2.70 % 2.78 % 838.9 2.70 % 2.78 % Thirty-four year 2021 senior notes ( $685 million) 2055 539.2 2.75 % 3.86 % 537.2 2.75 % 3.86 % Finance lease obligations and other 13.5 12.8 Total debt 8,180.0 8,576.7 Long-term debt, current maturities (628.6) (501.4) Total long-term debt $7,551.4 $8,075.3 Public Notes In November 2022, the Company issued $500 million in aggregate principal five year fixed rate notes with a coupon rate of 5.25% (“New 5 -Year Note”). The proceeds are intended to be used for general corporate purposes, which may include, without limitation, repayment of commercial paper borrowings or other indebtedness. The notes mature January 2028. The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the public notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company. In January 2024, the Company repaid €575 million ($630 million) of long-term debt. Covenants and Future Maturities The Company is in compliance with all covenants under the Company’s outstanding indebtedness at December 31, 2023. As of December 31, 2023, the aggregate annual maturities of long-term debt for the next five years were: (millions) 2024 $629 2025 634 2026 729 2027 946 2028 495 Net Interest Expense Interest expense and interest income incurred during 2023, 2022 and 2021 were as follows: (millions) 2023 2022 2021 Interest expense $348.9 $252.1 $230.6 Interest income (52.2) (8.5) (12.3) Interest expense, net $296.7 $243.6 $218.3 Interest expense generally includes the expense associated with the interest on the Company’s outstanding borrowings. Interest expense also includes the amortization of debt issuance costs and debt discounts, which are both recognized over the term of the related debt. During 2021, the Company issued, exchanged and retired certain long-term debt, incurring debt refinancing charges of $32.3 million ($28.4 million after tax), which are included as a component of interest expense, net on the Consolidated Statements of Income. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, contingent consideration obligations, commercial paper, notes payable, foreign currency forward contracts, interest rate swap agreements, cross-currency swap derivative contracts and long-term debt. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels: Level 1 Level 2 Level 3 The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis were: December 31, 2023 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $26.6 $- $26.6 $- Cross-currency swap derivative contracts 29.1 - 29.1 - Liabilities Foreign currency forward contracts 27.0 - 27.0 - Interest rate swap agreements 146.5 - 146.5 - Cross-currency swap derivative contracts 24.9 - 24.9 - December 31, 2022 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $118.9 $- $118.9 $- Cross-currency swap derivative contracts 58.7 - 58.7 - Liabilities Foreign currency forward contracts 83.3 - 83.3 - Interest rate swap agreements 181.4 - 181.4 - Cross-currency swap derivative contracts 14.5 - 14.5 - The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and classified within Level 2. The carrying value of interest rate swap agreements is at fair value, which is determined based on current forward interest rates as of the balance sheet date and are classified within Level 2. The cross-currency swap derivative contracts are used to partially hedge the Company’s net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the Euro and the U.S. dollar and CNH (CNH is the Chinese Yuan traded in the offshore market). The carrying value of the cross-currency swap derivative contracts is at fair value, which is determined based on the income approach with the relevant interest rates and foreign currency current exchange rates and forward curves as inputs as of the balance sheet date and are classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. Further discussion of gross versus net presentation of the Company's derivatives within Note 8. Contingent consideration obligations are recognized and measured at fair value at the acquisition date and thereafter until settlement or expiration. Contingent consideration is classified within Level 3 as the underlying fair value is determined using income-based valuation approaches appropriate for the terms and conditions of each respective contingent consideration. The consideration expected to be transferred is based on the Company’s expectations of various financial measures. The ultimate payment of contingent consideration could deviate from current estimates based on the actual results of these financial measures. Contingent consideration during 2023, 2022 and 2021 were not significant to the Company’s consolidated financial statements. 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 (classified as Level 2). The carrying amount, which includes adjustments related to the impact of interest rate swap agreements, premiums and discounts, and deferred debt issuance costs, and the estimated fair value of long-term debt, including current maturities, held by the Company was: December 31, 2023 December 31, 2022 Carrying Fair Carrying Fair Amount Value Amount Value Long-term debt, including current maturities $8,180.0 $7,552.5 $8,576.7 $7,643.6 |
DERIVATIVES AND HEDGING TRANSAC
DERIVATIVES AND HEDGING TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
DERIVATIVES AND HEDGING TRANSACTIONS | |
DERIVATIVES AND HEDGING TRANSACTIONS | 8. DERIVATIVES AND HEDGING TRANSACTIONS The Company uses foreign currency forward contracts, interest rate swap agreements, cross-currency swap derivative contracts and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. The Company records derivatives as assets and liabilities in the Consolidated Balance Sheets at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the Consolidated Statements of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. The Company monitors its exposure to credit risk by using credit approvals and credit limits and by selecting major global banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary. Derivative Positions Summary Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives. The respective net amounts are included in other current assets, other assets, other current liabilities and other liabilities on the Consolidated Balance Sheets. The following table summarizes the gross fair value and the net value of the Company’s outstanding derivatives: Derivative Assets Derivative Liabilities December 31 December 31 December 31 December 31 (millions) 2023 2022 2023 2022 Derivatives designated as hedging instruments Foreign currency forward contracts $6.7 $78.6 $5.2 $9.2 Interest rate swap agreements - - 146.5 181.4 Cross-currency swap derivative contracts 29.1 58.7 24.9 14.5 Derivatives not designated as hedging instruments Foreign currency forward contracts 19.9 40.3 21.8 74.1 Gross value of derivatives 55.7 177.6 198.4 279.2 Gross amounts offset in the Consolidated Balance Sheets (28.8) (75.6) (28.8) (75.6) Net value of derivatives $26.9 $102.0 $169.6 $203.6 The following table summarizes the notional values of the Company’s outstanding derivatives: Notional Values December 31 December 31 (millions) 2023 2022 Foreign currency forward contracts $3,745 $5,745 Interest rate swap agreements 1,500 1,500 Cross-currency swap derivative contracts 998 650 Cash Flow Hedges The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, including inventory purchases and intercompany royalty, intercompany loans, management fee and other payments. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts are recorded in accumulated other comprehensive income (loss) (“AOCI”) until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the Consolidated Statements of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next year. For forward contracts designated as hedges of foreign currency exchange rate risk associated with forecasted foreign currency transactions, the Company excludes the changes in fair value attributable to time value from the assessment of hedge effectiveness. The initial value of the excluded component (i.e., the forward points) is amortized on a straight-line basis over the life of the hedging instrument and recognized in the same line item in the Consolidated Statements of Income as the underlying exposure being hedged for intercompany loans. For all other cash flow hedge types, the forward points are mark-to-market monthly and recognized in the same line item in the Consolidated Statements of Income as the underlying exposure being hedged. The difference between fair value changes of the excluded component and the amount amortized in the Consolidated Statements of Income is recorded in AOCI. Fair Value Hedges The Company manages interest expense using a mix of fixed and floating rate debt. To help manage exposure to interest rate movements and to reduce borrowing costs, the Company may enter into interest rate swaps under which the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest (income) expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest (income) expense. These fair value hedges are highly effective and thus, there is no impact on earnings due to hedge ineffectiveness. In aggregate, the Company has entered into a series of interest rate swap agreements to convert $1.5 billion of its debt from a fixed interest rate to a floating interest rate. The fixed interest rates range from 1.3% to 4.8% and mature between 2026 and 2031. These interest rate swap agreements are designated as fair value hedges. The following amounts were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of December 31 2023 and 2022: Line item in which the hedged item is included Carrying amount of the hedged liabilities Cumulative amount of the fair value hedging adjustment included in the carrying amount of the hedged liabilities (millions) 2023 2022 2023 2022 Long-term debt $1,353.7 $1,317.5 ($148.6) ($184.8) Net Investment Hedges In November 2023, the Company elected to de-designate as a net investment hedge €316 million of its Euro debt maturing on January 15, 2024. The Company designates its remaining outstanding €834 million ($908 million as of year-end 2023) senior notes (“Euronotes”) and related accrued interest as a hedge of its Euro denominated exposures from the Company’s investments in certain of its Euro denominated functional currency subsidiaries. The Company entered into a series of Euro cross-currency swap derivative contracts maturing in 2026 and 2030. These cross-currency swap derivative contracts are designated as net investment hedges of the Company’s Euro denominated exposures from the Company’s investments in certain of its Euro denominated functional currency subsidiaries. The cross-currency swap derivative contracts exchange fixed-rate payments in one currency for fixed-rate payments in another currency. As of December 31, 2023, the Company had a €625 million ($690 million) cross-currency swap derivative contracts outstanding as a hedge of the Company’s net investment in foreign operations. The changes in the spot rate of these instruments are recorded in AOCI in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCI. Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change. The interest income or expense from these swaps are recorded in interest expense on the accompanying Consolidated Statements of Income consistent with the classification of interest expense attributable to the underlying debt. In August and October of 2023, the Company entered into CNH cross-currency swap derivative contracts with a notional amount of CNH 1,094 million and CNH 1,098 million, respectively, both maturing in 2032. The cross-currency swap derivative contracts are designated as net investment hedges of its Chinese Yuan (“CNY”) denominated exposures from the Company’s investments in certain CNY denominated functional currency subsidiaries. The cross-currency swap derivative contracts exchange fixed-rate payments in USD for fixed-rate payments in CNH. As of December 31, 2023, the Company had in aggregate, CNH 2,192 million ($308 million) cross-currency swap derivative contracts outstanding as a hedge of the Company’s net investment in foreign operations. The changes in the spot rate of these instruments are recorded in AOCI in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCI. The interest income or expense from these swaps is recorded in interest expense on the accompanying Consolidated Statements of Income consistent with the classification of interest expense attributable to the underlying debt. The revaluation gains and losses on the Euronotes and cross-currency swap derivative contracts, which are designated and effective as hedges of the Company’s net investments, have been included as a component of the cumulative translation adjustment account, and were as follows: (millions) 2023 2022 2021 Revaluation (loss) gain, net of tax: Euronotes ($42.3) $81.9 $45.3 Cross-currency swap derivative contracts (30.8) 26.4 6.3 Total revaluation (loss) gain, net of tax ($73.1) $108.3 $51.6 Derivatives Not Designated as Hedging Instruments The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. Effect of all Derivative Instruments on Income The gain (loss) of all derivative instruments recognized in product and equipment cost of sales (“COS”), selling, general and administrative expenses (“SG&A”) and interest expense, net (“interest”) is summarized below: 2023 2022 2021 (millions) COS SG&A Interest COS SG&A Interest COS SG&A Interest Gain (loss) on derivatives in cash flow hedging relationship: Foreign currency forward contracts Amount of gain (loss) reclassified from AOCI to income $10.6 ($18.9) $- $6.4 $95.0 $- ($11.0) $47.6 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 7.7 - - 13.9 - - 21.0 Interest rate swap agreements Amount of (loss) gain reclassified from AOCI to income - - (1.9) - - (2.3) - - (2.3) Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of (loss) gain recognized in income - (26.2) - - 62.0 - - 73.7 - Total gain (loss) of all derivative instruments $10.6 ($45.1) $5.8 $6.4 $157.0 $11.6 ($11.0) $121.3 $18.7 |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | 9. OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION Other comprehensive income (loss) includes net income, foreign currency translation adjustments, 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 AOCI account in shareholders’ equity. The following table provides other comprehensive income (loss) information related to the Company’s derivatives and hedging instruments and pension and postretirement benefits. Refer to Note 8 for additional information related to the Company’s derivatives and hedging transactions. Refer to Note 16 for additional information related to the Company’s pension and postretirement benefits activity. (millions) 2023 2022 2021 Derivative and Hedging Instruments Unrealized (loss) gain on derivative & hedging instruments Amount recognized in AOCI ($12.8) $112.9 $87.5 (Gain) loss reclassified from AOCI into income COS (10.6) (6.4) 11.0 SG&A 18.9 (95.0) (47.6) Interest (income) expense, net (5.8) (11.6) (18.7) 2.5 (113.0) (55.3) Other activity - 1.1 (1.7) Tax impact 2.5 (2.2) (4.5) Net of tax ($7.8) ($1.2) $26.0 Pension and Postretirement Benefits Amount recognized in AOCI Current period net (loss) gain ($80.7) $83.3 $270.7 Amount reclassified from AOCI into income Settlement (income) charge (2.7) 51.6 38.8 Amortization of losses and prior period service credits, net 6.9 47.7 78.6 4.2 99.3 117.4 Tax impact 21.4 (52.3) (98.4) Net of tax ($55.1) $130.3 $289.7 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 10. SHAREHOLDERS’ EQUITY Authorized common stock, par value $1.00 per share, was 800 million shares at December 31, 2023, 2022 and 2021. Treasury stock is stated at cost. Dividends declared per share of common stock were $2.16 for 2023, $2.06 for 2022 and $1.95 for 2021. The Company has 15 million shares, without par value, of authorized but unissued and undesignated preferred stock. Share Repurchase Authorization In February 2015 and November 2022, the Company’s Board of Directors authorized the repurchase of up to 20,000,000 and 10,000,000, respectively, additional shares of its common stock, including shares to be repurchased under Rule 10b5-1. As of December 31, 2023, 12,917,097 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions. Share Repurchases During 2023, 2022 and 2021, the Company reacquired 83,674, 3,038,107 and 502,132 shares, respectively, of its common stock, of which 0, 2,933,090 and 389,759, respectively, related to share repurchases through open market or private purchases, and 83,674, 105,017 and 112,373, respectively, related to shares withheld for taxes on exercise of stock options and vesting of stock awards and units. The Inflation Reduction Act (“IRA”) was signed into U.S. law on August 16, 2022 and is effective January 1, 2023. The IRA includes an excise tax on the repurchase of corporate stock. The Company does not anticipate the excise tax to have a material impact on the Company’s financial statements. |
EQUITY COMPENSATION PLANS
EQUITY COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY COMPENSATION PLANS | |
EQUITY COMPENSATION PLANS | 11. EQUITY COMPENSATION PLANS The Company’s equity compensation plans provide for grants of stock options, performance-based restricted stock units (“PBRSUs”) and non-performance-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). Common shares available for grant as of December 31, 2023, 2022 and 2021 were 18,840,265, 5,475,903 and 7,544,458, respectively. The Company generally issues authorized but previously unissued shares to satisfy stock option exercises and stock award vesting. The Company’s annual long-term incentive share-based compensation program is made up of 40% stock options and 60% PBRSUs for 2023 and 50% stock options and 50% PBRSUs for 2022 and 2021. The Company also periodically grants RSUs. Total compensation expense related to all share-based compensation plans was $95.1 million ( $81.4 million net of tax benefit), $87.8 million ( $74.8 million net of tax benefit) and $89.5 million ( $75.4 million net of tax benefit) for 2023, 2022 and 2021, respectively. As of December 31, 2023, there was $174.0 million of total measured but unrecognized compensation expense related to non-vested share-based compensation arrangements granted under all of the Company’s plans. That cost is expected to be recognized over a weighted-average period of 2.2 years. Stock Options Stock options are granted to purchase shares of the Company’s stock at the average daily share price on the date of grant. These options generally expire within ten years from the grant date. The Company generally recognizes compensation expense for these awards on a straight-line basis over the three year vesting period. Stock option grants to retirement eligible recipients are attributed to expense using the non-substantive vesting method. A summary of stock option activity and average exercise prices is as follows: 2023 2022 2021 Number of Exercise Number of Exercise Number of Exercise Options Price (a) Options Price (a) Options Price (a) Outstanding, beginning of year 7,031,103 $160.45 6,217,161 $160.91 6,802,415 $144.20 Granted 861,840 190.53 1,228,673 148.79 812,853 223.85 Exercised (832,050) 119.41 (294,228) 101.08 (1,306,998) 110.91 Canceled (139,537) 183.77 (120,503) 210.26 (91,109) 192.49 Outstanding, end of year 6,921,356 $168.65 7,031,103 $160.45 6,217,161 $160.91 Exercisable, end of year 5,107,518 $165.77 5,168,161 $155.45 4,604,922 $141.21 Vested and expected to vest, end of year 6,862,799 $168.60 (a) Represents weighted average price per share. The total aggregate intrinsic value of options (the amount by which the stock price exceeded the exercise price of the option on the date of exercise) that were exercised during 2023, 2022 and 2021 was $47.7 million, $21.0 million and $148.1 million, respectively. The total aggregate intrinsic value of options outstanding as of December 31, 2023 was $244.4 million, with a corresponding weighted-average remaining contractual life of 6.3 years. The total aggregate intrinsic value of options exercisable as of December 31, 2023 was $199.6 million, with a corresponding weighted-average remaining contractual life of 5.3 years. The total aggregate intrinsic value of options vested and expected to vest as of December 31, 2023 was $242.5 million, with a corresponding weighted-average remaining contractual life of 6.3 years. The lattice (binomial) option-pricing model is used to estimate the fair value of options at grant date. The Company’s primary employee option grant occurs during the fourth quarter. The weighted-average grant-date fair value of options granted and the significant assumptions used in determining the underlying fair value of each option grant, on the date of grant were as follows: 2023 2022 2021 Weighted-average grant-date fair value of options granted at market prices $50.26 $37.04 $47.65 Assumptions Risk-free rate of return 4.1 % 3.5 % 1.2 % Expected life 6 years 6 years 6 years Expected volatility 22.4 % 23.5 % 23.0 % Expected dividend yield 1.2 % 1.4 % 0.9 % The risk-free rate of return is determined based on a yield curve of U.S. treasury rates from one month to ten years and a period commensurate with the expected life of the options granted. Expected volatility is established based on historical volatility of the Company’s stock price. The expected dividend yield is determined based on the Company’s annual dividend amount as a percentage of the average stock price at the time of the grant. PBRSUs, RSUs and RSAs The expense associated with PBRSUs is based on the average of the high and low share price of the Company’s common stock on the date of grant, adjusted for the absence of future dividends. The awards vest based on the Company achieving a defined performance target and with continued service for a three year period. Upon vesting, the Company issues shares of its common stock such that one award unit equals one share of common stock. The Company assesses the probability of achieving the performance target and recognizes expense over the three year vesting period when it is probable the performance target will be met. PBRSU awards granted to retirement eligible recipients are attributed to expense using the non-substantive vesting method. The awards are generally subject to forfeiture in the event of termination of employment. The expense associated with shares of non-performance based RSUs and RSAs is based on the average of the high and low share price of the Company’s common stock on the date of grant, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse. The Company currently has RSUs that vest over periods between 24 and 60 months . The awards are generally subject to forfeiture in the event of termination of employment. A summary of non-vested PBRSUs and restricted stock activity is as follows: PBRSU Grant Date RSAs and Grant Date Awards Fair Value (a) RSUs Fair Value (a) December 31, 2020 914,630 $165.76 163,683 $172.92 Granted 176,297 223.77 130,807 211.12 Vested / Earned (271,731) 131.74 (48,977) 160.84 Canceled (30,667) 178.46 (13,239) 192.12 December 31, 2021 788,529 $189.96 232,274 $195.95 Granted 291,496 142.24 240,370 146.90 Vested / Earned (232,210) 152.63 (68,864) 163.81 Canceled (24,645) 207.05 (18,683) 201.39 December 31, 2022 823,170 $181.68 385,097 $170.50 Granted 328,739 185.10 156,618 165.81 Vested / Earned (180,674) 178.26 (61,776) 191.22 Canceled (26,409) 175.05 (24,449) 166.22 December 31, 2023 944,826 $183.71 455,490 $166.31 (a) Represents weighted average price per share. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES Income before income taxes consisted of: (millions) 2023 2022 2021 United States (U.S.) $408.9 $295.6 $277.7 International 1,346.6 1,047.8 1,136.5 Total $1,755.5 $1,343.4 $1,414.2 The provision (benefit) for income taxes consisted of: (millions) 2023 2022 2021 U.S. federal and state $137.6 $145.7 $30.9 International 280.0 231.4 240.2 Total current 417.6 377.1 271.1 U.S. federal and state (40.1) (78.9) 3.6 International (15.0) (63.7) (4.5) Total deferred (55.1) (142.6) (0.9) Provision for income taxes $362.5 $234.5 $270.2 The Company’s overall net deferred tax assets and deferred tax liabilities were comprised of the following: December 31 (millions) 2023 2022 Deferred tax assets Pension and post-retirement benefits $82.1 $87.0 Other accrued liabilities 162.0 129.6 Lease liability 135.9 109.2 Credit carryforwards 83.7 97.8 Capitalization of R&D costs 180.9 84.5 Loss carryforwards 57.3 67.2 Share-based compensation 54.5 51.2 Deferred income 27.9 59.6 Other, net 113.3 98.8 Valuation allowance (65.7) (65.2) Total deferred tax assets 831.9 719.7 Deferred tax liabilities Goodwill (160.1) (124.8) Intangible assets (451.3) (486.3) Property, plant and equipment (332.3) (319.7) Lease asset (136.1) (109.1) Financing (32.1) (33.5) Other, net (18.9) (43.8) Total deferred tax liabilities (1,130.8) (1,117.2) Net deferred tax liabilities balance ($298.9) ($397.5) Presentation of prior year amounts relating to goodwill and intangible assets are now presented separately and have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operations. As of December 31, 2023 the Company has tax effected federal, state and international net operating loss carryforwards of $0.2 million, $16.2 million and $40.9 million, respectively, and a tax effected federal tax capital loss carryforward of $3.6 million which will be available to offset future taxable income. The federal and state loss carryforwards of $16.4 million expire from 2024 to 2044. The international loss carryforwards of $14.1 million expire from 2024 to 2043 and $26.8 million have no expiration. The federal capital loss carryforwards of $3.6 million expire in 2025. The tax loss carryforwards expiring in 2024 are not material. Additionally, the Company has $83.7 million of net credit carryforwards that are primarily related to U.S. foreign tax credits and various state credits. The U.S. foreign tax credit carryforwards of $74.7 million expire from 2030 to 2033. Other state and international credit carryforwards will expire from 2024 to 2038. The tax credit carryforwards expiring in 2024 are not material. The Company has valuation allowances on certain deferred tax assets of $65.7 million and $65.2 million at December 31, 2023 and 2022, respectively. The increase in valuation allowance from year end 2022 to year end 2023 was primarily due to U.S. state tax attributes, foreign net operating losses and other deferred tax assets. In connection with the implementation of Organization for Economic Co-operation and Development (“OECD”) global minimum tax initiative known as Pillar Two, any existing deferred taxes not disclosed in the Company’s 2023 financial statements will not be available in the future to reduce tax otherwise due under Pillar Two. Accordingly, the Company is disclosing the existence of gross tax loss carryforwards in Luxembourg of $1.3 billion. The losses are determined to have a remote possibility of realization and, therefore, are not reported in the table above. The Company obtained tax benefits from a tax holiday in the Dominican Republic. The Company received a permit of operation, which expires in April 2036, from the National Council of Free Zones of Exportation for the Dominican Republic. Companies operating under the Free Zones are not subject to income tax in the Dominican Republic on export income. The tax reduction as the result of the tax holiday for 2023 was $6.6 million ($0.02 per diluted share), 2022 was $5.8 million ($0.02 per diluted share) and 2021 was $2.9 million ($0.01 per diluted share). A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows: 2023 2022 2021 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.4 1.3 0.6 Foreign operations (0.5) (0.8) (0.6) Excess stock benefits (0.3) (0.4) (2.0) R&D credit (1.3) (1.4) (1.3) Foreign derived intangible income (1.2) (1.8) (1.6) Change in valuation allowance 0.5 0.7 0.5 Legal entity rationalization 0.1 (1.5) - One-time transfer of intangibles - - 1.8 Other, net 0.9 0.4 0.7 Effective income tax rate 20.6 % 17.5 % 19.1 % The change in the Company’s effective income tax rate includes the tax impact of special (gains) and charges and discrete tax items, which have impacted the comparability of the Company’s historical effective income tax rates, as amounts included in special (gains) and charges are derived from tax jurisdictions with rates that vary from the statutory U.S. rate, and discrete tax items are not necessarily consistent across periods. The tax impact of special (gains) and charges and discrete tax items will likely continue to impact comparability of the Company’s effective income tax rate in the future. The Company’s 2023 effective tax rate of 20.6% includes $24.7 million of net tax benefits on special (gains) and charges, and net tax expense of $11.2 million associated with discrete items. The net discrete tax expense was primarily related to the filing of federal, state and foreign tax returns and other income tax adjustments including the impact of changes in tax laws, audit settlements, share-based compensation excess tax benefit and other changes in estimates. The Company’s 2022 effective tax rate of 17.5% includes $53.7 million of net tax benefits on special (gains) and charges, and net tax benefit of $11.8 million associated with discrete items. Discrete items included a deferred tax benefits of $14.6 million associated with utilization of tax attributes as a result of legal entity rationalization and share-based compensation excess tax benefits of $6.0 million. The remaining discrete tax expense of $8.8 million was primarily related to the filing of federal, state and foreign tax returns and other income tax adjustments including the impact of changes in tax laws, audit settlements and other changes in estimates. The Company’s 2021 effective tax rate of 19.1% includes $53.3 million of net tax benefits on special (gains) and charges, and net tax expense of $5.8 million associated with discrete items. During 2021, the Company recorded a discrete tax benefit of $29.1 million related to share-based compensation excess tax benefits. Additionally, the Company recorded $34.9 million discrete tax charges including a non-cash deferred tax charge of $25.1 million associated with transferring certain intangible property between affiliates. The remaining $9.8 million tax expense primarily related to the filing of federal, state and foreign tax returns and other income tax adjustments including the impact of changes in tax laws, audit settlements and other changes in estimates. A deferred tax liability of $2.8 million is recorded as of December 31, 2023 related to deferred tax liabilities on unremitted earnings, which are not permanently reinvested. The Company otherwise continues to assert permanent reinvestment of the undistributed earnings of international affiliates unless the earnings can be remitted in a net income tax benefit or tax-neutral manner. If there are policy changes, the Company would record the applicable taxes in the period of change. Due to the complexity of the legal entity structure, the number of legal entities and jurisdictions involved, and the complexity of the laws and regulations, the Company believes it is not practicable to estimate the amount of additional taxes which may be payable upon distribution of these undistributed earnings. Accordingly, no deferred taxes have been provided for withholding taxes or other taxes on permanently reinvested earnings. A reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits is as follows: (millions) 2023 2022 2021 Balance at beginning of year $24.9 $25.1 $20.7 Additions based on tax positions related to the current year 5.8 2.7 3.8 Additions for tax positions of prior years 1.7 3.6 3.0 Current year acquisitions - - 4.4 Reductions for tax positions of prior years - (1.5) - Reductions for tax positions due to statute of limitations (2.7) (0.7) (3.0) Settlements (5.5) (3.4) (3.7) Foreign currency translation - (0.9) (0.1) Balance at end of year $24.2 $24.9 $25.1 The total amount of unrecognized tax benefits, if recognized would affect the effective tax rate by $21.6 million as of December 31, 2023, $23.1 million as of December 31, 2022 and $22.8 million as of December 31, 2021. The Company files U.S. federal income tax returns and income tax returns in various U.S. state and non- U.S. jurisdictions. With few exceptions, the Company is no longer subject to state and foreign income tax examinations by tax authorities for years before 2017. The IRS has completed examinations of the Company’s U.S. federal income tax returns through 2016, and the years 2017 through 2020 are currently under audit. In addition to the U.S. federal examination, there is ongoing audit activity in several U.S. state and foreign jurisdictions. The Company anticipates changes to unrecognized tax benefits due to closing of various audits and statutes closing on years mentioned above. The Company does not believe these changes will result in a material impact during the next twelve months. Decreases in the Company’s gross liability could result in offsets to other balance sheet accounts, cash payments, and adjustments to tax expense. The occurrence of these events and/or other events not included above within the next twelve months could change depending on a variety of factors. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company had $4.0 million, $4.0 million and $3.2 million of accrued interest, including minor amounts for penalties, at December 31, 2023, 2022 and 2021, respectively. |
RENTALS AND LEASES
RENTALS AND LEASES | 12 Months Ended |
Dec. 31, 2023 | |
RENTALS AND LEASES | |
RENTAL AND LEASES | 13. RENTALS AND LEASES Lessee The Company leases sales and administrative office facilities, distribution centers, research and manufacturing facilities, as well as vehicles and other equipment under operating leases. Certain of the Company’s lease arrangements are finance leases, which are immaterial individually and in the aggregate. The Company’s operating lease cost was as follows: (millions) 2023 2022 2021 Operating lease cost* $215.4 $196.9 $179.4 *Includes immaterial short-term and variable lease costs Future maturity of operating lease liabilities as of December 31, 2023 were as follows: (millions) 2024 $147 2025 128 2026 101 2027 69 2028 39 Thereafter 148 Total lease payments 632 Less: imputed interest 80 Present value of lease liabilities $552 The Company’s operating leases term and discount rate were as follows: December 31 December 31 December 31 2023 2022 2021 Weighted-average remaining lease terms (years) 6.44 6.71 5.99 Weighted-average discount rate 4.02 % 2.98 % 3.07 % The Company’s other lease information was as follows: December 31 December 31 December 31 (millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $170.6 $157.3 $157.0 Leased assets obtained in exchange for new operating lease liabilities 251.5 202.7 116.8 Lessor The Company leases warewashing and water treatment equipment to customers under operating leases. Gross assets under operating leases recorded in Property, plant and equipment, net is $1,397.5 million and $1,288.3 million, and related accumulated depreciation is $878.9 million and $811.2 million, as of December 31, 2023 and 2022, respectively. The Company’s operating lease revenue was as follows: (millions) 2023 2022 2021 Operating lease revenue* $511.8 $466.7 $412.5 *Includes immaterial variable lease revenue Future revenue from operating leases for existing contracts as of December 31, 2023 were as follows: (millions) 2024 $424 2025 304 2026 243 2027 168 2028 84 Thereafter 49 Total lease revenue $1,272 The Company mitigates the risk of residual value subsequent to the lease term by redeploying assets. As such, the Company expects to receive revenue from the operating lease assets through the remaining useful life and therefore subsequent to the initial contract termination date. |
RESEARCH AND DEVELOPMENT EXPEND
RESEARCH AND DEVELOPMENT EXPENDITURES | 12 Months Ended |
Dec. 31, 2023 | |
RESEARCH AND DEVELOPMENT EXPENDITURES | |
RESEARCH AND DEVELOPMENT EXPENDITURES | 14. RESEARCH AND DEVELOPMENT EXPENDITURES Research expenditures that relate to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. Such costs were $192 million in 2023, $190 million in 2022 and $186 million in 2021. The Company did not participate in any material customer sponsored research during any of the years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
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, which are discussed in Note 12. The Company also has contractual obligations including lease commitments, which are discussed in Note 13. The Company records liabilities when a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. Insurance Globally, the Company has insurance policies with varying deductible levels for property and casualty losses. The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The Company determines its liabilities for claims on an actuarial basis. Litigation and Environmental Matters The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include from time to time antitrust, employment, commercial, patent infringement, tort, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The Company has established accruals for certain lawsuits, claims and environmental matters. The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position. TPC Group Litigation On November 27, 2019, a Butadiene production plant owned and operated by TPC Group, Inc. (“TPC”) in Port Neches, Texas, experienced an explosion and fire that resulted in personal injuries, the release of chemical fumes and extensive property damage to the plant and surrounding areas in and near Port Neches, Texas. Nalco Company LLC, a subsidiary of Ecolab, supplied process chemicals to TPC used in TPC’s production processes. Nalco did not operate, manage, maintain or control any aspect of TPC’s plant operations. In connection with its provision of process chemicals to TPC, Nalco has been named in numerous lawsuits stemming from the plant explosion. Nalco has been named a defendant, along with TPC and other defendants, in multi-district litigation (“MDL”) proceedings pending in Orange County, Texas, alleging among other things claims for personal injury, property damage and business losses (In re TPC Group Litigation – A2020-0236-MDL, Orange County, Texas). In addition, numerous other lawsuits have been filed against Nalco, including TPC Group v. Nalco, E0208239, Jefferson County, Texas, a subrogation claim by TPC’s insurers seeking reimbursement for property damage losses. Over 5,000 plaintiffs (including the subrogation matter) currently have asserted claims against Nalco. All of these cases make similar allegations and seek damages for personal injury, property damage, business losses and other damages, including exemplary damages. The Company expects all these cases will be consolidated for pretrial purposes into the Orange County MDL referenced above. Due to the large number of plaintiffs, the early stage of the litigation and the fact that many of the claims do not specify an amount of damages, any estimate of any loss or range of losses cannot be made at this time. On June 1, 2022, TPC and seven of its affiliated companies filed for bankruptcy under Chapter 11 (Case No. 22-10493-CTG, United States Bankruptcy Court for the District of Delaware). In connection with the bankruptcy cases, TPC disclosed an estimated range of its liability related to the Port Neches incident to individuals and homeowners (including subrogation claims) of approximately $152 million to $520 million. As part of their bankruptcy plan, TPC and its affiliates announced a settlement which allows the MDL plaintiffs a $500 million claim solely for purposes of claim allowance in the chapter 11 case and distribution of value pursuant to TPC’s bankruptcy plan. Other key terms of the settlement between TPC and the MDL plaintiffs include the establishment of a settlement trust for the benefit of certain general unsecured creditors, which is funded with $30 million and the assignment of TPC’s claims and causes of action, if any, against certain third parties, including Nalco, related to the TPC plant explosion. As part of the bankruptcy process, TPC and its debtor affiliates received a discharge of all MDL related claims, as did certain non-debtor affiliates to the extent third parties did not opt out of the non-debtor releases. Nalco opted out of these releases, preserving any direct causes of action it may have against non-debtors. Furthermore, the allowance of the $500 million claim should have no effect on any claims or defenses asserted against or by Nalco in the MDL litigation. On December 1, 2022, the bankruptcy court confirmed the TPC bankruptcy plan, including the approval of the settlement and establishment of the aforementioned settlement trust. On December 16, 2022, the TPC bankruptcy plan went effective. The Company believes the claims asserted against Nalco in the lawsuits stemming from the TPC plant explosion are without merit and intends to defend the claims vigorously. The Company also believes any potential loss should be covered by insurance subject to deductibles. However, the Company cannot predict the outcome of these lawsuits, the involvement the Company might have in these matters in the future or the potential for future litigation. Environmental Matters The Company is currently participating in environmental assessments and remediation at approximately 25 locations, the majority of which are in the U.S., and environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2023 | |
RETIREMENT PLANS | |
RETIREMENT PLANS | 16. RETIREMENT PLANS Pension and Postretirement Health Care Benefits Plans The Company has a non-contributory, qualified, defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory, non-qualified, defined benefit pension plans, which provide for benefits to employees in excess of limits permitted under its pension plans. The U.S. non-qualified plans are not funded and the recorded benefit obligations for the non-qualified plans were $87 million and $86 million at December 31, 2023 and 2022, respectively. The measurement date used for determining the U.S. pension plan assets and obligations is December 31. Various international subsidiaries have defined benefit pension plans. International plans are funded based on local country requirements. The measurement date used for determining the international pension plan assets and obligations is November 30, the fiscal year end of the Company’s international subsidiaries. The Company provides postretirement health care and life insurance benefits to certain U.S. employees and retirees. The U.S. postretirement health care plans are contributory based on years of service and choice of coverage (family or single), with retiree contributions adjusted annually. The Company also maintains several U.S. postretirement life insurance plans. The measurement date used to determine the U.S. postretirement health care and life insurance plan assets and obligations is December 31. Certain employees outside the U.S. are covered under government-sponsored programs, which are not required to be fully funded. The expense and obligation for providing international postretirement health care benefits are not significant. The following table sets forth financial information related to the Company’s pension and postretirement benefit plans: U.S. International U.S. Postretirement Pensions Pensions Benefits (millions) 2023 2022 2023 2022 2023 2022 Accumulated benefit obligation, end of year $1,859.5 $1,799.0 $1,125.8 $1,171.1 $112.0 $115.5 Projected benefit obligation Projected benefit obligation, beginning of year $1,799.0 $2,462.7 $1,221.9 $1,779.7 $115.5 $155.4 Service cost 40.9 40.8 21.7 28.4 0.4 0.8 Interest cost 88.1 65.3 45.9 22.0 5.6 3.3 Participant contributions - - 2.8 3.0 3.8 3.7 Plan amendments - - (1.5) - - - Actuarial (gain) loss 90.2 (479.8) (101.0) (436.8) (0.1) (33.7) Assumed through acquisitions - - - 15.1 - - Other events - - 2.9 - - - Benefits paid (158.7) (290.0) (69.8) (54.3) (13.2) (14.0) Foreign currency translation - - 51.1 (135.2) - - Projected benefit obligation, end of year $1,859.5 $1,799.0 $1,174.0 $1,221.9 $112.0 $115.5 Plan assets Fair value of plan assets, beginning of year $1,668.5 $2,376.8 $905.1 $1,219.9 $3.2 $5.2 Actual returns on plan assets 149.1 (430.3) (44.0) (218.3) 0.2 (0.8) Company contributions 60.8 12.0 35.4 38.3 12.2 12.8 Participant contributions - - 2.8 3.0 - - Acquired through acquisitions - - 2.9 15.1 - - Benefits paid (158.7) (290.0) (67.6) (54.3) (13.2) (14.0) Foreign currency translation - - 36.6 (98.6) - - Fair value of plan assets, end of year $1,719.7 $1,668.5 $871.2 $905.1 $2.4 $3.2 Funded Status, end of year ($139.8) ($130.5) ($302.8) ($316.8) ($109.6) ($112.3) Amounts recognized in the Consolidated Balance Sheets: Other assets $- $- $118.4 $118.6 $- $- Other current liabilities ($9.2) (9.2) (33.0) (28.6) (8.7) (7.6) Postretirement healthcare and pension benefits ($130.6) (121.3) (388.2) (406.8) (100.9) (104.7) Net liability ($139.8) ($130.5) ($302.8) ($316.8) ($109.6) ($112.3) Amounts recognized in accumulated other comprehensive loss (income): Unrecognized net actuarial loss (gain) $495.2 $411.9 $278.5 $279.7 ($40.8) ($43.6) Unrecognized net prior service (benefits) costs (16.7) (21.2) (0.4) 0.3 - - Tax (benefit) expense (122.8) (100.8) (64.4) (66.5) 6.2 7.7 Accumulated other comprehensive loss (income), net of tax $355.7 $289.9 $213.7 $213.5 ($34.6) ($35.9) Change in accumulated other comprehensive loss (income): Amortization of net actuarial gain (loss) ($0.2) ($30.2) ($14.8) ($22.7) $3.1 $0.6 Amortization of prior service credits 4.5 4.5 0.5 0.1 - - Current period net actuarial loss (gain) 83.5 97.0 (1.0) (147.8) (0.3) (32.5) Current period prior service costs - - (1.5) - - - Curtailments and settlements - (51.6) 2.7 - - - Tax (benefit) expense (22.0) (5.5) 2.1 51.3 (1.5) 6.5 Foreign currency translation - - 12.2 (35.1) - - Other comprehensive loss (income) $65.8 $14.2 $0.2 ($154.2) $1.3 ($25.4) Estimate amounts in accumulated other comprehensive loss expected to be reclassified to net period cost during 2024 were as follows: U.S. Post- U.S. International Retirement (millions) Pensions Pensions Benefits Net actuarial loss (gain) $6.1 $10.0 ($3.2) Net prior service benefits (4.6) (0.6) - Total $1.5 $9.4 ($3.2) Service cost is included with employee compensation cost in either cost of sales and selling, general and administrative expenses in the Consolidated Statements of Income based on employee roles in the Company while all non-service components are included in other (income) expense in the Consolidated Statements of Income. The aggregate projected benefit obligation, accumulated benefit obligation and fair value of pension plan assets for plans with accumulated benefit obligations in excess of plan assets were as follows: December 31, (millions) 2023 2022 Aggregate projected benefit obligation $2,428.8 $2,392.1 Accumulated benefit obligation 2,392.4 2,355.8 Fair value of plan assets 1,868.9 1,828.1 These plans include the U.S. non-qualified pension plans which are not funded as well as various international pension plans which are funded consistent with local practices and requirements. For the year ended December 31, 2023, the year-over-year decrease in the Company's consolidated net benefit obligations was due to an increase in pension plan assets, partially offset by a smaller increase in pension plan liabilities. Pension liabilities increased on a global basis primarily due to decreases in pension discount rates for U.S. plans, partially offset by increases in pension discount rates for international plans. The Company's pension discount rates are largely determined based on observable yields of investment grade corporate bonds or government issued debt-securities. The Company's pension plan assets are reported at fair value. The fair value of the Company's pension assets increased on a global basis primarily due to higher returns on the Company's equity and fixed income investments compared to prior year. For the year ended December 31, 2022, the year-over-year decrease in the Company’s consolidated net benefit obligations was due to decreases in both pension liabilities and pension plan assets. Pension liabilities decreased on a global basis primarily due to increases in pension discount rates used to discount projected pension benefit payments. The Company’s pension discount rates are largely determined based on observable yields of investment grade corporate bonds or government issued debt-securities. Yields on these securities increased sharply in 2022 due, in part, to actions taken by many central banks to curb global inflation. The Company’s pension plan assets are reported at fair value. The fair value of the Company’s pension assets decreased on a global basis primarily due to unfavorable returns on the Company’s equity and fixed income investments. Net Periodic Benefit Costs and Plan Assumptions Pension and postretirement benefits expense for the Company’s operations were as follows: U.S. International U.S. Postretirement Pensions Pensions Benefits (millions) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Service cost $40.9 $40.8 $43.9 $21.7 $28.4 $31.4 $0.4 $0.8 $1.0 Interest cost on benefit obligation 88.1 65.3 51.4 45.9 22.0 17.3 5.6 3.3 2.9 Expected return on plan assets (145.1) (144.4) (152.3) (56.1) (69.8) (70.7) (0.2) (0.3) (0.4) Recognition of net actuarial loss (gain) 0.2 30.2 56.7 12.5 22.8 28.7 (3.1) (0.6) 0.7 Amortization of prior service benefit (4.5) (4.5) (6.9) (0.5) (0.1) (0.1) - - - Curtailments and settlements (a) - 51.6 35.3 (2.7) - 3.5 - - - Total expense (benefit) ($20.4) $39.0 $28.1 $20.8 $3.3 $10.1 $2.7 $3.2 $4.2 (a) $50.6 and $37.2 of settlement expense was recognized as special charges in 2022 and 2021, respectively. During 2022 and 2021, the Company incurred settlement expense in the U.S. of $51.6 million ($38.9 million after tax) and $35.3 million ($26.8 million after tax), respectively, related to lump-sum payments to retirees in its U.S. pension plans. In addition to the U.S. qualified plan settlements in 2022 and 2021, the Company has historically recognized settlements and curtailment gains and losses associated with its U.S. nonqualified pension plans and International pension plans, the amounts of which have been historically not material. These charges have been included as a component of other (income) expense on the Consolidated Statements of Income. The measurement of the Company’s pension and postretirement benefit obligations are dependent on a variety of assumptions determined by management and used by actuaries in their valuation method and calculations. The significant assumptions used in developing the required estimates of the projected benefit obligations are the discount rates, expected returns on assets, projected salary increases, and mortality tables. Assumptions for the Company were as follows: Plan Assumptions U.S. International U.S. Postretirement Pensions Pensions Benefits (percent) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Weighted-average actuarial assumptions used to determine benefit obligations as of year end: Discount rate 4.95 % 5.17 % 2.86 % 4.34 % 3.70 % 1.45 % 4.95 % 5.14 % 2.75 % Projected salary increase 4.03 4.03 4.03 2.84 2.81 2.42 Weighted-average actuarial assumptions used to determine net cost: Interest credit rate for cash balance plans 3.89 1.56 0.87 N/A N/A N/A N/A N/A N/A Discount rate 5.17 2.86 2.49 3.70 1.46 1.37 5.14 2.75 2.37 Expected return on plan assets 7.75 7.00 7.00 6.27 6.18 6.24 7.75 7.00 7.00 Projected salary increase 4.03 4.03 4.03 3.08 2.47 2.31 Discount rate assumptions for the U.S. plans are developed using a bond yield curve constructed from a population of high-quality, non-callable, corporate bonds with maturities ranging from six months to thirty years . Discount rates are estimated for the U.S. plans based on the timing of the expected benefit payments. The Company measures service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows. The Company believes this approach provides a more precise measurement of service and interest costs by aligning the timing of the plans’ liability cash flows to the corresponding spot rates on the yield curve. The expected long-term rate of return used for the U.S. plans is based on the respective pension plan’s asset mix. The Company considers expected long-term real returns on asset categories, expectations for inflation, and estimates of the impact of active management of the assets in determining the expected long-term rate of return to use. The Company also considers historical returns. The expected long-term rate of return used for the Company’s international plans is determined in each local jurisdiction and is based on the assets held in that jurisdiction, the expected rate of returns for the type of assets held and any guaranteed rate of return provided by the investment. The other assumptions used to measure the international pension obligations, including discount rate, vary by country based on specific local requirements and information. The Company uses mortality tables appropriate in the circumstances, which generally are the recent available mortality tables as of the respective U.S. and international measurement dates. The Company’s 2023 and 2022 year-end U.S. valuations reflect mortality tables that estimate the impacts of COVID in an endemic state. This represents a change from 2021 when the impact of COVID on future mortality could not be reasonably estimated. For postretirement benefit measurement purposes as of December 31, 2023, the annual rates of increase in the per capita cost of covered health care were assumed to be 7.46% for pre-65 costs. Post-65 costs are no longer used. The rates are assumed to decrease each year until they reach 4.5% in 2034 and remain at those levels thereafter. Health care costs for certain employees which are eligible for subsidy by the Company are limited by a cap on the subsidy. Plan Asset Management The Company’s U.S. investment strategy and policies are designed to maximize the possibility of having sufficient funds to meet the long-term liabilities of the qualified pension plan, while achieving a balance between the goals of asset growth of the qualified pension plan and keeping risk at a reasonable level. Investment income is not a primary goal of the policy. The asset allocation position reflects the Company’s ability and willingness to accept relatively more short-term variability in the performance of the qualified pension plan asset portfolio in exchange for the expectation of better long-term returns, lower pension costs and better funded status in the long run. The U.S. qualified pension plan’s asset are diversified across a number of asset classes and securities. Selected individual portfolios within the asset classes may be undiversified while maintaining the diversified nature of total plan assets. The Company has no significant concentration of risk in its U.S. qualified pension plan assets. Assets of funded international retirement plans are managed in each local jurisdiction and asset allocation strategy is set in accordance with local rules, regulations and practices; therefore, no overall target asset allocation is presented. Although foreign equity securities are all considered international for the Company, some equity securities are considered domestic for the local plan. The funds are invested in a variety of equities, bonds and real estate investments and, in some cases, the assets are managed by insurance companies which may offer a guaranteed rate of return. The Company has no significant concentration of risk in the assets of its international pension plans. The fair value hierarchy is used to categorize investments measured at fair value in one of three levels in the fair value hierarchy. This categorization is based on the observability of the inputs used in valuing the investments. Refer to Note 7 for definitions of these levels. The fair value of the Company’s U.S. qualified pension plan assets were as follows: Fair Value as of Fair Value as of (millions) December 31, 2023 December 31, 2022 Level 1 Level 2 Total Level 1 Level 2 Total Cash $30.1 $- $30.1 $54.8 $- $54.8 Equity securities: Large cap equity 276.1 - 276.1 237.1 - 237.1 Small cap equity 14.6 29.6 44.2 15.4 25.1 40.5 International equity 40.4 19.2 59.6 37.4 17.2 54.6 Fixed income: Core fixed income 150.7 669.6 820.3 145.5 646.5 792.0 High-yield bonds 34.7 - 34.7 33.4 - 33.4 Emerging markets - 24.8 24.8 - 25.4 25.4 Total investments at fair value 546.6 743.2 1,289.8 523.6 714.2 1,237.8 Investments measured at net asset value 432.3 433.9 Total $546.6 $743.2 $1,722.1 $523.6 $714.2 $1,671.7 The Company had no Level 3 assets as part of its U.S. qualified pension plan assets as of December 31, 2023 or 2022. The allocation of the Company’s U.S. qualified pension plan assets plans were as follows: Target Asset Asset Category Allocation Percentage Percentage of Plan Assets December 31 2023 2022 2023 2022 Cash - % - % 2 % 3 % Equity securities: Large cap equity 21 21 16 14 Small cap equity 3 3 3 2 International equity 13 13 9 9 Fixed income: Core fixed income 48 48 48 47 High-yield bonds 3 3 2 2 Emerging markets 2 2 1 2 Other: Real estate 3 3 3 4 Private equity 5 5 14 15 Distressed debt 2 2 2 2 Total 100 % 100 % 100 % 100 % The fair value of the Company’s international plan assets for its defined benefit pension plans were as follows: Fair Value as of Fair Value as of (millions) December 31, 2023 December 31, 2022 Level 1 Level 2 Total Level 1 Level 2 Total Cash $12.6 $- $12.6 $9.9 $- $9.9 Equity securities: International equity - 182.5 182.5 - 219.3 219.3 Fixed income: Corporate bonds - 147.5 147.5 - 158.5 158.5 Government bonds - 321.4 321.4 - 365.9 365.9 Insurance company accounts - 163.4 163.4 - 106.2 106.2 Total investments at fair value 12.6 814.8 827.4 9.9 849.9 859.8 Investments measured at net asset value 43.8 45.3 Total $12.6 $814.8 $871.2 $9.9 $849.9 $905.1 The Company had no Level 3 assets as part of its international plan assets as of December 31, 2023 or 2022. The allocation of plan assets of the Company’s international plan assets for its defined benefit pension plans were as follows: Percentage Asset Category of Plan Assets December 31 2023 2022 Cash 1 % 1 % Equity securities: International equity 21 24 Fixed income: Corporate bonds 17 18 Government bonds 37 40 Total fixed income 54 58 Other: Insurance contracts 19 12 Real estate 5 5 Total 100 % 100 % Cash Flows As of year-end 2023, the Company’s estimate of pension and postretirement benefits expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter are as follows: (millions) All Plans 2024 $242 2025 242 2026 241 2027 244 2028 246 2029 - 2033 1,215 Depending on plan funding levels, the U.S. qualified pension plan provides certain terminating participants with an option to receive their pension benefits in the form of a lump sum payout. The Company is currently in compliance with all funding requirements of its U.S. pension and postretirement benefit plans. A $50.0 million voluntary contribution was made to its non-contributory qualified U.S. pension plan in 2023. The Company is required to fund certain international pension benefit plans in accordance with local legal requirements. The Company estimates contributions to be made to its international plans will approximate $47 million in 2024. The Company seeks to maintain balance in its U.S. assets that meet the long-term funding requirements identified by the projections of the pension plans’ actuaries while simultaneously satisfying the fiduciary responsibilities prescribed in ERISA. The Company also takes into consideration the tax deductibility of contributions to the benefit plans. Savings Plan and ESOP The Company provides a 401(k) savings plan for the majority of its U.S. employees under the Company’s 401(k) savings plans, the Ecolab Savings Plan and ESOP (the “Ecolab Savings Plan”). Under the Ecolab Savings Plan, Employee before-tax contributions of up to 4% of eligible compensation are matched 100% by the Company and employee before-tax contributions over 4% and up to 8% of eligible compensation are matched 50% by the Company. The Company’s matching contributions are 100% vested immediately. The Company’s matching contribution expense was $88.2 million, $81.6 million and $78.2 million in 2023, 2022 and 2021, respectively. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2023 | |
REVENUES | |
REVENUES | 17. REVENUES Revenue Recognition Product and Sold Equipment Product revenue is generated from sales of cleaning, sanitizing, water treatment, process treatment and colloidal silica products. In addition, the Company sells equipment which may be used in combination with its specialized products. Revenue recognized from product and sold equipment is recognized at the point in time when the obligations in the contract with the customer are satisfied, which generally occurs with the transfer of the product or delivery of the equipment. On June 3, 2020, the Company completed the separation of its Upstream Energy business (“ChampionX”). The Company entered into a Master Cross Supply and Product Transfer agreement with ChampionX to provide, receive or transfer certain products for a period up to 36 months and for a smaller set of products with limited suppliers over the next few years. Sales of product to ChampionX under this agreement are recorded in product and equipment sales in the Corporate segment along with the related cost of sales, while purchases from ChampionX are recorded in inventory. Sales of product to ChampionX post-separation for 2023, 2022 and 2021 were $69.0 million, $123.8 million and $139.1 million, respectively. As of December 31, 2023 and 2022, the Company had an outstanding accounts receivable balance for sales of product to ChampionX of $3.8 and 12.9 million, respectively. Service and Lease Equipment Service and lease equipment revenue is generated from providing services or leasing equipment to customers. Service offerings include installing or repairing certain types of equipment, activities that supplement or replace headcount at the customer location, or fulfilling deliverables included in the contract. Global Industrial segment services are associated with water treatment and paper process applications. Global Institutional & Specialty services include cleaning and sanitizing programs and wash process solutions. Global Healthcare & Life Sciences segment services include pharmaceutical, personal care, infection and containment control solutions. Revenues included in Other primarily related to services designed to detect, eliminate and prevent pests. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized over time using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue recognized from leased equipment primarily relates to warewashing and water treatment equipment recognized on a straight-line basis over the length of the lease contract pursuant to Topic 842 Leases. Refer to Note 13 for additional information related to lease equipment. Practical Expedients and Exemptions The revenue standard can be applied to a portfolio of contracts with similar characteristics if it is reasonable that the effects of applying the standard at the portfolio level would not be significantly different than applying the standard at the individual contract level. The Company applies the portfolio approach primarily within each operating segment by geographical region. Application of the portfolio approach was focused on those characteristics that have the most significant accounting consequences in terms of their effect on the timing of revenue recognition or the amount of revenue recognized. The Company determined the key criteria to assess with respect to the portfolio approach, including the related deliverables, the characteristics of the customers and the timing and transfer of goods and services, which most closely aligned within the operating segments. In addition, the accountability for the business operations, as well as the operational decisions on how to go to market and the product offerings, are performed at the operating segment level. The following table shows principal activities, separated by reportable segments, from which the Company generates its revenue. The reportable segments have been revised to align with the Company’s reportable segments in the current year. Corporate segment includes sales to ChampionX under the Master Cross Supply and Product Transfer agreements entered into as part of the ChampionX Separation. For more information about the Company’s reportable segments, refer to Note 18. Net sales at public exchange rates by reportable segment were as follows: (millions) 2023 2022 2021 Global Industrial Product and sold equipment $6,331.0 $5,937.0 $5,372.4 Service and lease equipment 890.8 868.0 865.5 Global Institutional & Specialty Product and sold equipment 4,087.4 3,655.3 3,276.3 Service and lease equipment 911.8 776.8 690.5 Global Healthcare & Life Sciences Product and sold equipment 1,476.3 1,398.3 1,068.8 Service and lease equipment 109.7 112.2 112.8 Other Product and sold equipment 353.1 331.9 297.9 Service and lease equipment 1,091.1 984.5 909.8 Corporate Product and sold equipment 69.0 123.7 137.9 Service and lease equipment - 0.1 1.2 Total Total product and sold equipment $12,316.8 $11,446.2 $10,153.3 Total service and lease equipment 3,003.4 2,741.6 2,579.8 Net sales at public exchange rates by geographic region were as follows: Global Industrial Global Institutional & Specialty (millions) 2023 2022 2021 2023 2022 2021 United States $3,059.3 $2,945.1 $2,603.1 $3,454.2 $3,050.0 $2,721.8 Europe 1,496.6 1,373.6 1,367.1 681.9 624.0 558.0 Asia Pacific 880.0 830.1 802.5 231.2 212.6 201.2 Latin America 737.2 621.7 551.5 188.3 162.3 135.0 Greater China 391.4 419.3 394.9 158.5 134.7 143.1 India, Middle East and Africa 452.1 419.4 344.4 67.0 54.6 44.2 Canada 205.2 195.8 174.4 218.1 193.9 163.5 Total $7,221.8 $6,805.0 $6,237.9 $4,999.2 $4,432.1 $3,966.8 Global Healthcare & Life Sciences Other (millions) 2023 2022 2021 2023 2022 2021 United States $647.7 $612.5 $443.8 $898.6 $816.0 $719.9 Europe 735.0 688.8 625.3 301.7 272.7 264.9 Asia Pacific 95.3 92.8 65.2 85.9 76.1 72.4 Latin America 25.5 24.7 5.5 57.6 51.9 50.3 Greater China 51.2 61.0 10.1 69.2 68.6 69.2 India, Middle East and Africa 24.8 25.0 25.4 9.0 10.3 11.6 Canada 6.5 5.7 6.3 22.2 20.8 19.4 Total $1,586.0 $1,510.5 $1,181.6 $1,444.2 $1,316.4 $1,207.7 Corporate (millions) 2023 2022 2021 United States $55.6 $107.5 $98.1 Europe 3.0 3.0 3.9 Asia Pacific 3.7 4.1 5.5 Latin America 5.6 7.3 24.6 Greater China - 0.1 2.3 India, Middle East and Africa - 0.3 3.4 Canada 1.1 1.5 1.3 Total $69.0 $123.8 $139.1 Net sales by geographic region were determined based on origin of sale. There were no sales from a single foreign country or individual customer that were material to the Company’s consolidated net sales. Sales of warewashing products were approximately 12%, 12%, and 10% of consolidated net sales in 2023, 2022 and 2021, respectively. Contract Liability Payments received from customers are based on invoices or billing schedules as established in contracts with customers. Accounts receivable are recorded when the right to consideration becomes unconditional. The contract liability relates to billings in advance of performance (primarily service obligations) under the contract. Contract liabilities are recognized as revenue when the performance obligation has been performed, which primarily occurs during the subsequent quarter. December 31 December 31 (millions) 2023 2022 Contract liability as of beginning of the year $116.5 $91.7 Revenue recognized in the year from: Amounts included in the contract liability at the beginning of the year (116.5) (91.7) Increases due to billings excluding amounts recognized as revenue during the year ended 110.9 116.5 Contract liability as of end of year $110.9 $116.5 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 2023 | |
OPERATING SEGMENTS | |
OPERATING SEGMENTS | 18. OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s ten operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level. The Company’s operating segments that share similar economic characteristics and future prospects, nature of the products and production processes, end-use markets, channels of distribution and regulatory environment have been aggregated into three reportable segments: Global Industrial, Global Institutional & Specialty and Global Healthcare & Life Sciences. The Company’s operating segments that do not meet the quantitative criteria to be separately reported have been combined into Other. The Company provides similar information for Other as the Company considers the information regarding its underlying operating segments as useful in understanding its consolidated results. The Company’s operating segments are aggregated as follows: Global Industrial Includes the Water, Food & Beverage and Paper operating segments. It provides water treatment and process applications, and cleaning and sanitizing solutions primarily to large industrial customers within the manufacturing, food and beverage processing, transportation, chemical, primary metals and mining, power generation, pulp and paper, commercial laundry, global petroleum and petrochemical industries. The underlying operating segments exhibit similar manufacturing processes, distribution methods and economic characteristics. Global Institutional & Specialty Includes the Institutional and Specialty operating segments. It provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education and retail industries. The underlying operating segments exhibit similar manufacturing processes, distribution methods and economic characteristics. Global Healthcare & Life Sciences Includes the Healthcare and Life Sciences operating segments. It provides specialized cleaning and sanitizing products to the healthcare, personal care and pharmaceutical industries. The underlying operating segments exhibit similar manufacturing processes, distribution methods and economic characteristics. Other Includes the Pest Elimination operating segment which provides services to detect, eliminate and prevent pests, such as rodents and insects, the CTG operating segment which produces and sells colloidal silica, which is comprised of nano-sized particles of silica in water used primarily for binding and polishing applications and the Textile Care operating segment which provides products and services that manage the entire wash process through custom designed programs, premium products, dispensing equipment, water and energy management and reduction, and real time data management. Corporate Consistent with the Company’s internal management reporting, Corporate amounts in the table below include sales to ChampionX under the Master Cross Supply and Product Transfer agreements entered into as part of the ChampionX Separation, as discussed in Note 4. Corporate also includes intangible asset amortization specifically from the Nalco and Purolite acquisitions and special (gains) and charges, as discussed in Note 3, that are not allocated to the Company’s reportable segments. Comparability of Reportable Segments Effective January 1, 2023, the Company’s former Downstream operating segment is now part of the Water operating segment. This change did not have any impact on the Global Industrial reportable segment. The Company evaluates the performance of its non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on its international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. The “Fixed Currency Rate Change” column shown in the following table reflects international operations at fixed currency exchange rates established by management at the beginning of 2023, rather than the 2022 established rates. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the “Effect of foreign currency translation” row in the following table. The “Other” column shown in the following table reflects immaterial changes between reportable segments, including the movement of certain customers and cost allocations. The impact of the preceding changes on previously reported full year 2022 and 2021 reportable segment net sales and operating income is summarized as follows: December 31, 2022 2022 Reported Fixed 2022 Reported Valued at 2022 Currency Valued at 2023 (millions) Fixed Currency Rates Other Rate Change Fixed Currency Rates Net Sales Global Industrial $6,944.0 $- ($207.7) $6,736.3 Global Institutional & Specialty 4,480.0 10.2 (75.9) 4,414.3 Global Healthcare & Life Sciences 1,570.0 - (64.2) 1,505.8 Other 1,355.0 (10.2) (31.5) 1,313.3 Corporate 124.1 - (0.4) 123.7 Subtotal at fixed currency rates 14,473.1 - (379.7) 14,093.4 Effect of foreign currency translation (285.3) - 379.7 94.4 Consolidated reported GAAP net sales $14,187.8 $- $- $14,187.8 Operating Income Global Industrial $977.0 $0.8 ($42.0) $935.8 Global Institutional & Specialty 634.5 (1.6) (11.2) 621.7 Global Healthcare & Life Sciences 205.0 (1.8) (9.9) 193.3 Other 212.8 2.6 (5.5) 209.9 Corporate (416.7) - 2.3 (414.4) Subtotal at fixed currency rates 1,612.6 - (66.3) 1,546.3 Effect of foreign currency translation (50.1) - 66.3 16.2 Consolidated reported GAAP operating income $1,562.5 $- $- $1,562.5 December 31, 2021 2021 Reported Fixed 2021 Reported Valued at 2022 Segment Currency Valued at 2023 (millions) Fixed Currency Rates Change Rate Change Fixed Currency Rates Net Sales Global Industrial $6,086.8 $- ($178.3) $5,908.5 Global Institutional & Specialty 3,908.8 10.9 (63.0) 3,856.7 Global Healthcare & Life Sciences 1,149.6 - (48.5) 1,101.1 Other 1,201.0 (10.9) (27.6) 1,162.5 Corporate 137.4 - - 137.4 Subtotal at fixed currency rates 12,483.6 - (317.4) 12,166.2 Effect of foreign currency translation 249.5 - 317.4 566.9 Consolidated reported GAAP net sales $12,733.1 $- $- $12,733.1 Operating Income Global Industrial $985.7 $0.4 ($42.7) $943.4 Global Institutional & Specialty 545.7 (1.4) (7.6) 536.7 Global Healthcare & Life Sciences 152.3 (1.6) (9.7) 141.0 Other 184.0 2.6 (5.3) 181.3 Corporate (316.6) - 2.3 (314.3) Subtotal at fixed currency rates 1,551.1 - (63.0) 1,488.1 Effect of foreign currency translation 47.5 - 63.0 110.5 Consolidated reported GAAP operating income $1,598.6 $- $- $1,598.6 Reportable Segment Information Financial information for each of the Company’s reportable segments were as follows: Net Sales Operating Income (Loss) (millions) 2023 2022 2021 2023 2022 2021 Global Industrial $7,193.1 $6,736.3 $5,908.5 $1,080.7 $935.8 $943.4 Global Institutional & Specialty 4,994.0 4,414.3 3,856.7 823.0 621.7 536.7 Global Healthcare & Life Sciences 1,576.9 1,505.8 1,101.1 160.0 193.3 141.0 Other 1,442.3 1,313.3 1,162.5 255.0 209.9 181.3 Corporate 69.1 123.7 137.4 (331.7) (414.4) (314.3) Subtotal at fixed currency 15,275.4 14,093.4 12,166.2 1,987.0 1,546.3 1,488.1 Effect of foreign currency translation 44.8 94.4 566.9 5.3 16.2 110.5 Consolidated reported GAAP $15,320.2 $14,187.8 $12,733.1 $1,992.3 $1,562.5 $1,598.6 The profitability of the Company’s operating segments is evaluated by management based on operating income. Consistent with the Company’s internal management reporting, Corporate amounts in the table above include sales to ChampionX in accordance with the long-term supply agreement entered into with the Transaction, as discussed in Note 17. Corporate also includes intangible asset amortization specifically from the Nalco and Purolite acquisitions and special (gains) and charges, as discussed in Note 3, that are not allocated to the Company’s reportable segments. The Company has an integrated supply chain function that serves all of its reportable segments. As such, asset and capital expenditure information by reportable segment has not been provided and is not available, since the Company does not produce or utilize such information internally. In addition, although depreciation and amortization expense is a component of each reportable segment’s operating results, it is not discretely identifiable. Geographic Information Long-lived assets, which includes property, plant and equipment and right of use assets, at public exchange rates by geographic region were as follows: Long-Lived Assets, net (millions) 2023 2022 United States $2,708.6 $2,508.9 Europe 631.2 574.3 Asia Pacific 213.0 210.3 Latin America 175.1 146.5 Greater China 167.4 176.6 India, Middle East and Africa 68.2 64.1 Canada 64.6 60.9 Total $4,028.1 $3,741.6 Geographic data for long-lived assets is based on physical location of those assets. Refer to Note 17 for net sales by geographic region. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2023 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 19. QUARTERLY FINANCIAL DATA (UNAUDITED) First Second Third Fourth (millions, except per share) Quarter Quarter Quarter Quarter Year 2023 Net sales $3,571.6 $3,852.1 $3,958.1 $3,938.4 $15,320.2 Operating expenses Cost of sales (a) 2,205.2 2,334.8 2,330.5 2,284.4 9,154.9 Selling, general and administrative expenses 990.3 1,011.6 1,024.9 1,034.8 4,061.6 Special (gains) and charges 24.5 21.0 36.7 29.2 111.4 Operating income 351.6 484.7 566.0 590.0 1,992.3 Other (income) expense (b) (13.1) (14.4) (14.5) (17.9) (59.9) Interest expense, net 74.2 77.8 74.3 70.4 296.7 Income before income taxes 290.5 421.3 506.2 537.5 1,755.5 Provision for income taxes 52.4 86.6 96.8 126.7 362.5 Net income including noncontrolling interest 238.1 334.7 409.4 410.8 1,393.0 Net income attributable to noncontrolling interest 4.7 5.0 5.4 5.6 20.7 Net income attributable to Ecolab $233.4 $329.7 $404.0 $405.2 $1,372.3 Earnings attributable to Ecolab per common share Basic $ 0.82 $ 1.16 $ 1.42 $ 1.42 $ 4.82 Diluted $ 0.82 $ 1.15 $ 1.41 $ 1.41 $ 4.79 Weighted-average common shares outstanding Basic 284.6 284.9 285.1 285.3 285.0 Diluted 285.9 286.3 286.9 287.1 286.5 2022 Net sales $3,266.7 $3,580.6 $3,669.3 $3,671.2 $14,187.8 Operating expenses Cost of sales (a) 2,073.4 2,211.1 2,291.6 2,254.9 8,831.0 Selling, general and administrative expenses 914.7 940.1 876.9 922.1 3,653.8 Special (gains) and charges 24.1 3.6 17.8 95.0 140.5 Operating income 254.5 425.8 483.0 399.2 1,562.5 Other (income) expense (b) (18.8) (19.5) 5.7 8.1 (24.5) Interest expense, net 53.0 56.0 65.1 69.5 243.6 Income before income taxes 220.3 389.3 412.2 321.6 1,343.4 Provision for income taxes 45.6 76.6 60.2 52.1 234.5 Net income including noncontrolling interest 174.7 312.7 352.0 269.5 1,108.9 Net income attributable to noncontrolling interest 2.8 4.4 4.9 5.1 17.2 Net income attributable to Ecolab $171.9 $308.3 $347.1 $264.4 $1,091.7 Earnings attributable to Ecolab per common share Basic $ 0.60 $ 1.08 $ 1.22 $ 0.93 $ 3.83 Diluted $ 0.60 $ 1.08 $ 1.21 $ 0.93 $ 3.81 Weighted-average common shares outstanding Basic 286.2 285.1 284.9 284.6 285.2 Diluted 288.1 286.6 286.3 285.8 286.6 Per share amounts do not necessarily sum due to changes in the calculation of shares outstanding for each discrete period and rounding. Gross profit is calculated as net sales minus cost of sales. (a) Cost of sales includes special charges of $3.2 , $8.1 , $5.9 and $5.3 in Q1, Q2, Q3 and Q4 of 2023, respectively, and $52.9 , $1.7 , $7.1 and $8.2 in Q1, Q2, Q3 and Q4 of 2022, respectively. (b) Other (income) expense includes special charges of $24.8 and $25.8 in Q3 and Q4 of 2022, respectively. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and all subsidiaries in which the Company has a controlling financial interest. Investments in companies, joint ventures or partnerships in which the Company does not have control but has the ability to exercise significant influence over operating and financial decisions, are reported using the equity method of accounting. The alternative method of accounting is used in circumstance where the Company’s investments in companies, joint ventures and partnerships neither provide it control or significant influence over the investee and for investments that do not have readily identifiable fair values. Investments accounted for under the alternative method are recorded at cost and adjusted for impairments, if any, or observable price changes of the same or similar securities issued by the investee. International subsidiaries are included in the financial statements on the basis of their U.S. GAAP November 30 fiscal year ends to facilitate the timely inclusion of such entities in the Company’s consolidated financial reporting. All intercompany transactions and profits are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s critical accounting estimates include revenue recognition, litigation and environmental reserves, actuarially determined liabilities, income taxes, long-lived assets, intangible assets and goodwill. |
Foreign Currency Translation | |
Concentration of Credit Risk | Concentration of Credit Risk Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed to perform as contracted. The Company believes the likelihood of incurring material losses due to concentration of credit risk is minimal. The principal financial instruments subject to credit risk are as follows: Cash and Cash Equivalents Accounts Receivable Foreign Currency and Interest Rate Contracts and Derivatives |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include highly-liquid investments with a maturity of three months or less when purchased. |
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are carried at the invoiced amounts, less an allowance for expected credit losses, and generally do not bear interest. The Company’s allowance for expected credit losses estimates the amount of expected future credit losses by analyzing accounts receivable balances by age and applying historical write-off and collection experience. The Company’s estimates separately consider macroeconomic trends, specific circumstances and credit conditions of customer receivables. Account balances are written off against the allowance when it is determined the receivable will not be recovered. The Company’s allowance for the expected return of products shipped and credits related to pricing or quantities shipped was $72 million, $59 million, and $19 million as of December 31, 2023, 2022 and 2021, respectively. Returns and credit activity is recorded directly as a reduction to revenue. The following table summarizes the activity in the allowance for expected credit losses: (millions) 2023 2022 2021 Beginning balance $71.9 $52.8 $68.4 Bad debt expense 54.0 38.1 15.0 Write-offs (46.2) (21.1) (27.4) Other (a) (2.4) 2.1 (3.2) Ending balance $77.3 $71.9 $52.8 (a) O ther amounts are primarily the effects of changes in currency translations and acquired balances. |
Inventory Valuations | Inventory Valuations Inventories are valued at the lower of cost or net realizable value. Certain U.S. inventory costs are determined on a last-in, first-out (“LIFO”) basis. LIFO inventories represented 30% and 29% of consolidated inventories as of December 31, 2023 and 2022, respectively. All other inventory costs are determined using either the average cost or first-in, first-out (“FIFO”) methods. Inventory values at FIFO, as shown in Note 5, approximate replacement cost. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment assets are stated at cost. Merchandising and customer equipment consists principally of various dispensing systems for the Company’s cleaning and sanitizing products, warewashing machines and process control and monitoring equipment. Certain dispensing systems capitalized by the Company are accounted for on a mass asset basis, whereby equipment is capitalized and depreciated as a group and written off when fully depreciated. The Company capitalizes both internal and external costs to develop or purchase computer software. Costs incurred for data conversion, training and maintenance associated with capitalized software are expensed as incurred. Expenditures for major renewals and improvements, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. Expenditures for repairs and maintenance are charged to expense as incurred. Upon retirement or disposition of plant and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income. Depreciation is charged to operations using the straight-line method over the assets’ estimated useful lives ranging from 5 to 40 years for buildings and leasehold improvements, 3 to 20 years for machinery and equipment, 3 to 20 years for merchandising and customer equipment and 3 to 7 years for capitalized software. The straight-line method of depreciation reflects an appropriate allocation of the cost of the assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Depreciation expense was $617 million, $619 million and $604 million for 2023, 2022 and 2021, respectively. |
Goodwill and Other Intangible Assets | |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived and amortizable intangible assets for impairment when significant events or changes in business circumstances indicate that the carrying amount of the assets, or asset group to which it is assigned, may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset or asset group, a significant adverse change in the manner in which the asset or asset group is being used or history of cash flow losses associated with the use of an asset or asset group. Impairment losses could occur when the carrying amount of an asset or asset group exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the asset’s or asset group’s carrying value over its fair value. In addition, the Company periodically reassesses the estimated remaining useful lives of its long-lived assets. Changes to estimated useful lives would impact the amount of depreciation and amortization recorded in earnings. The Company has not experienced significant changes in the carrying amount or estimated remaining useful lives of its long-lived or amortizable intangible assets. |
Rental and Leases, Lessee | Lessee The Company determines whether a lease exists at the inception of the arrangement. In assessing whether a contract is or contains a lease, the Company evaluates whether the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company accounts for lease components separately from the nonlease components (e.g., common-area maintenance costs, property taxes, parking, etc.). Operating leases are recorded in operating lease assets, other current liabilities and operating lease liabilities in the Consolidated Balance Sheets. Operating lease assets and operating lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the estimated lease term at the lease commencement date. The Company uses the rate implicit in the lease when available or determinable. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the lease liability and are recognized as incurred. The Company identified real estate, vehicles and other equipment as the primary classes of its leases. Certain leases with a similar class of underlying assets are accounted for as a portfolio of leases. The Company does not record operating lease assets or liabilities for leases with terms of twelve months or less. Those lease payments are recognized in the Consolidated Statements of Income over the lease term as incurred. Many of the Company’s leases include options to renew or cancel, which are at the Company’s sole discretion. Renewal terms can extend the lease term from one month to multiple years, whereas, cancellation terms can shorten the lease term by multiple years. The lease start date is the date when the leased asset is available for use and in possession of the Company. The lease end date, which includes any options to renew or cancel that are reasonably certain to be exercised, is based on the terms of the contract. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material restrictive covenants. |
Rental and Leases, Lessor | Lessor The Company accounts for lease and nonlease components separately. The nonlease components, such as product and service revenue, are accounted for under Topic 606 Revenue from Contracts with Customers, refer to Note 17 for more information. Revenue from leasing equipment is recognized on a straight-line basis over the life of the lease. Cost of sales includes the depreciation expense for assets under operating leases. The assets are depreciated over their estimated useful lives. Initial lease terms range from one year to five years and most leases include renewal options. Lease contracts convey the right for the customer to control the equipment for a period of time as defined by the contract. There are no options for the customer to purchase the equipment and therefore the equipment remains the property of the Company at the end of the lease term. Refer to Note 13 for additional information regarding rental and leases. |
Income Taxes | Income Taxes Income taxes are recognized during the period in which transactions enter into the determination of financial statement income, with deferred income taxes provided for the tax effect of temporary differences between the carrying amount of assets and liabilities and their tax bases. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. Relevant factors in determining the realizability of deferred tax assets include historical results, sources of future taxable income, the expected timing of the reversal of temporary differences, tax planning strategies and the expiration dates of the various tax attributes. The Company records liabilities for unrecognized tax benefits in accordance with the U.S. GAAP recognition and measurement criteria guidance. The Company has elected the period cost method and considers the estimated global intangible low taxed income (“GILTI”) impact in tax expense. The Company recognizes interest and penalties related to unrecognized tax benefits in the income tax provision. Refer to Note 12 for additional information regarding income taxes. |
Share-based compensation | Share-Based Compensation The Company measures compensation expense for share-based awards at fair value at the date of grant and recognizes compensation expense over the service period for awards expected to vest. The majority of grants to retirement eligible recipients (age 55 with required years of service) are recorded to expense using the non-substantive vesting method and are fully expensed over a six-month period following the date of grant. In addition, the Company includes a forfeiture estimate in the amount of compensation expense being recognized based on an estimate of the number of outstanding awards expected to vest. All excess tax benefits or deficiencies are recognized as discrete income tax items on the Consolidated Statements of Income. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. Refer to Note 11 for additional information regarding equity compensation plans. |
Restructuring Activities | Restructuring Activities The Company’s restructuring activities are associated with plans to enhance its efficiency, effectiveness and sharpen its competitiveness. These 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 in which the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract termination costs. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Refer to Note 3 for additional information regarding restructuring activities. |
Revenue Recognition | Revenue Recognition Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing service. Product and Sold Equipment Revenue from product and sold equipment is recognized when obligations under the terms of a contract with the customer are satisfied, which generally occurs with the transfer of the product or delivery of the equipment. Service and Lease Equipment Revenue from service and leased equipment is recognized when the services are provided, or the customer receives the benefit from the leased equipment, which is over time. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue for leased equipment is accounted for under Topic 842 Leases and recognized on a straight-line basis over the length of the lease contract. Other Considerations Contracts with customers may include multiple performance obligations. For contracts with multiple performance obligations, the consideration is allocated between products and services based on their stand-alone selling prices. Stand-alone selling prices are generally based on the prices charged to customers when the good or service is not bundled with other product or services or using an expected cost plus margin. Judgment is used in determining the amount of service that is embedded within the Company’s contracts, which is based on the amount of time spent on the performance obligation activities. The level of effort, including the estimated margin that would be charged, is used to determine the amount of service revenue. Depending on the terms of the contract, the Company may defer the recognition of revenue when a future performance obligation has not yet occurred. Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-producing transaction, which are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight are recognized in cost of sales when control over the product has transferred to the customer. Other estimates used in recognizing revenue include allocating variable consideration to customer programs and incentive offerings, including pricing arrangements, promotions and other volume-based incentives at the time the sale is recorded. These estimates are based primarily on historical experience and anticipated performance over the contract period. Based on the certainty in estimating these amounts, they are included in the transaction price of the contracts and the associated remaining performance obligations. The Company recognizes revenue when collection of the consideration expected to be received in exchange for transferring goods or providing services is probable. The Company’s revenue policies do not provide for general rights of return. Estimates used in recognizing revenue include the delay between the time that products are shipped and when they are received by customers, when title transfers and the amount of credit memos issued in subsequent periods. Depending on market conditions, the Company may increase customer incentive offerings, which could reduce gross profit margins over the term of the incentive. |
Earnings Per Common Share | Earnings 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 and units 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 share amounts were as follows: (millions, except per share) 2023 2022 2021 Net income attributable to Ecolab $1,372.3 $1,091.7 $1,129.9 Weighted-average common shares outstanding Basic 285.0 285.2 286.3 Effect of dilutive stock options and units 1.6 1.4 2.8 Diluted 286.5 286.6 289.1 Earnings attributable to Ecolab per common share Basic EPS $4.82 $3.83 $3.95 Diluted EPS $4.79 $3.81 $3.91 Anti-dilutive securities excluded from the computation of diluted EPS 4.3 3.9 1.9 Amounts do not necessarily sum due to rounding. |
Fair value measurements | The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, contingent consideration obligations, commercial paper, notes payable, foreign currency forward contracts, interest rate swap agreements, cross-currency swap derivative contracts and long-term debt. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels: Level 1 Level 2 Level 3 |
Derivatives and hedging transactions | The Company uses foreign currency forward contracts, interest rate swap agreements, cross-currency swap derivative contracts and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. The Company records derivatives as assets and liabilities in the Consolidated Balance Sheets at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the Consolidated Statements of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. The Company monitors its exposure to credit risk by using credit approvals and credit limits and by selecting major global banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary. |
Research and development expenditures | Research expenditures that relate to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. |
Legal 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, which are discussed in Note 12. The Company also has contractual obligations including lease commitments, which are discussed in Note 13. The Company records liabilities when a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. Insurance Globally, the Company has insurance policies with varying deductible levels for property and casualty losses. The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The Company determines its liabilities for claims on an actuarial basis. Litigation and Environmental Matters The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include from time to time antitrust, employment, commercial, patent infringement, tort, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The Company has established accruals for certain lawsuits, claims and environmental matters. The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position. |
Pension and post-retirement benefit plans | Pension and Postretirement Health Care Benefits Plans The Company has a non-contributory, qualified, defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory, non-qualified, defined benefit pension plans, which provide for benefits to employees in excess of limits permitted under its pension plans. The U.S. non-qualified plans are not funded and the recorded benefit obligations for the non-qualified plans were $87 million and $86 million at December 31, 2023 and 2022, respectively. The measurement date used for determining the U.S. pension plan assets and obligations is December 31. Various international subsidiaries have defined benefit pension plans. International plans are funded based on local country requirements. The measurement date used for determining the international pension plan assets and obligations is November 30, the fiscal year end of the Company’s international subsidiaries. The Company provides postretirement health care and life insurance benefits to certain U.S. employees and retirees. The U.S. postretirement health care plans are contributory based on years of service and choice of coverage (family or single), with retiree contributions adjusted annually. The Company also maintains several U.S. postretirement life insurance plans. The measurement date used to determine the U.S. postretirement health care and life insurance plan assets and obligations is December 31. Certain employees outside the U.S. are covered under government-sponsored programs, which are not required to be fully funded. The expense and obligation for providing international postretirement health care benefits are not significant. |
Reportable segments | The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s ten operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level. |
New Accounting Pronouncements | New Accounting Pronouncements Standards That Are Not Yet Adopted: Required Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2023-09 Income taxes (Topic 740): Improvements to Income Tax Disclosures December 2023 The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. January 1, 2025 The Company is currently evaluating the impact of adoption and additional disclosure requirements. ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures November 2023 The amendments in this ASU are to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. Effective for annual periods beginning after December 15, 2023 Entities are required to apply the disclosure amendments on a retrospective basis to all periods presented. The Company is currently evaluating the impact of adoption. Standards That Were Adopted: Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers October 2021 Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. January 1, 2023 The adoption of this standard did not have a significant impact on the Company's financial statements. No other new accounting pronouncement issued or effective has had or is expected to have a material impact on the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Summarized activity in the allowance for doubtful accounts | (millions) 2023 2022 2021 Beginning balance $71.9 $52.8 $68.4 Bad debt expense 54.0 38.1 15.0 Write-offs (46.2) (21.1) (27.4) Other (a) (2.4) 2.1 (3.2) Ending balance $77.3 $71.9 $52.8 (a) O ther amounts are primarily the effects of changes in currency translations and acquired balances. |
Changes in the carrying amount of goodwill | Global Global Global Institutional Healthcare & (millions) Industrial & Specialty Life Sciences Other Total December 31, 2021 $4,270.1 $576.5 $2,974.2 $243.1 $8,063.9 Prior year business combinations (a) 0.4 - 253.4 - 253.8 Effect of foreign currency translation (188.7) (8.9) (102.2) (5.2) (305.0) December 31, 2022 $4,081.8 $567.6 $3,125.4 $237.9 $8,012.7 Current year business combinations (b) 30.8 39.3 - - 70.1 Effect of foreign currency translation 28.0 3.1 33.0 1.3 65.4 December 31, 2023 $4,140.6 $610.0 $3,158.4 $239.2 $8,148.2 (a) Represents purchase price allocation adjustments for acquisitions deemed preliminary as of the end of the prior year. (b) Represents goodwill associated with current year acquisitions. For 2023, approximately $62 of goodwill related to businesses acquired is expected to be tax deductible related primarily to the acquisitions of Chemlink Laboratories LLC and Flottec, LLC (refer to Footnote 4 for additional information). |
Weighted-average useful life by type of asset | The weighted-average useful life by type of amortizable asset at December 31, 2023 were as follows: (years) Customer relationships 15 Patents 15 Trademarks 13 Other technology 12 |
Future estimated amortization expenses | (millions) 2021 $239 2022 320 2023 307 2024 301 2025 294 2026 281 2027 155 2028 145 |
Computations of the basic and diluted EPS | The computations of the basic and diluted earnings attributable to Ecolab per share amounts were as follows: (millions, except per share) 2023 2022 2021 Net income attributable to Ecolab $1,372.3 $1,091.7 $1,129.9 Weighted-average common shares outstanding Basic 285.0 285.2 286.3 Effect of dilutive stock options and units 1.6 1.4 2.8 Diluted 286.5 286.6 289.1 Earnings attributable to Ecolab per common share Basic EPS $4.82 $3.83 $3.95 Diluted EPS $4.79 $3.81 $3.91 Anti-dilutive securities excluded from the computation of diluted EPS 4.3 3.9 1.9 Amounts do not necessarily sum due to rounding. |
Other significant accounting policies | Policy Note Fair value measurements 7 Derivatives and hedging transactions 8 Share-based compensation 10 Research and development expenditures 14 Legal contingencies 15 Pension and post-retirement benefit plans 16 Reportable segments 18 |
Schedule of new accounting pronouncements | New Accounting Pronouncements Standards That Are Not Yet Adopted: Required Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2023-09 Income taxes (Topic 740): Improvements to Income Tax Disclosures December 2023 The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. January 1, 2025 The Company is currently evaluating the impact of adoption and additional disclosure requirements. ASU 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures November 2023 The amendments in this ASU are to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed. Effective for annual periods beginning after December 15, 2023 Entities are required to apply the disclosure amendments on a retrospective basis to all periods presented. The Company is currently evaluating the impact of adoption. Standards That Were Adopted: Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers October 2021 Update to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. January 1, 2023 The adoption of this standard did not have a significant impact on the Company's financial statements. |
SPECIAL (GAINS) AND CHARGES (Ta
SPECIAL (GAINS) AND CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring Activities | |
Special (gains) and charges | (millions) 2023 2022 2021 Cost of sales Restructuring activities $22.5 $21.4 $24.7 Acquisition and integration activities - 25.0 4.2 Russia/Ukraine - 7.2 - Other - 16.3 65.0 Cost of sales subtotal 22.5 69.9 93.9 Special (gains) and charges Restructuring activities 63.2 85.8 11.9 Acquisition and integration activities 16.1 14.5 29.9 Russia/Ukraine 1.4 5.9 - Other 30.7 34.3 60.8 Special (gains) and charges subtotal 111.4 140.5 102.6 Operating income subtotal 133.9 210.4 196.5 Other (income) expense - 50.6 37.2 Interest expense, net - - 33.1 Total special (gains) and charges $133.9 $261.0 $266.8 |
Combined Program | |
Restructuring Activities | |
Restructuring activity | Employee Asset (millions) Costs Disposals Other Total 2022 Activity Recorded expense and accrual $67.2 $- $- $67.2 Net cash payments (5.2) - - (5.2) Net restructuring liability, December 31, 2022 62.0 - - 62.0 2023 Activity Recorded expense and accrual 47.0 14.0 16.7 77.7 Net cash payments (85.2) - (16.7) (101.9) Non-cash charges - (14.0) - (14.0) Reclassification 19.3 - 19.3 Net restructuring liability, December 31, 2023 $43.1 $- $- $43.1 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Acquisitions and Investment | |
Business acquisitions | |
Schedule of final consideration transferred to acquire all of the acquired entity's stock | (millions) 2023 2022 2021 Net tangible assets acquired $20.8 $- $3.6 Identifiable intangible assets Customer relationships 60.8 - 75.0 Trademarks - - 4.7 Non-compete agreements 2.1 - 3.0 Other technologies 25.8 - 1.5 Total intangible assets 88.7 - 84.2 Goodwill 70.2 - 140.6 Total aggregate purchase price 179.7 - 228.4 Acquisition-related liabilities and contingent consideration (a) (3.9) - (4.4) Total cash paid for acquisitions, including acquisition-related liabilities and contingent consideration, net of cash acquired $175.8 $- $224.0 (a) Subsequent to the acquisitions, $1.4 in contingent consideration was remitted to the seller during 2021 and is included in investing activities on the Consolidated Statements of Cash Flows. |
Purolite | |
Business acquisitions | |
Schedule of assets acquired and liabilities assumed | (millions) December 1, 2021 Tangible assets $361.9 Identifiable intangible assets Customer relationships 870.0 Other technologies 285.0 Trademarks 73.0 Total assets acquired 1,589.9 Goodwill 2,260.6 Total liabilities 144.8 Total consideration transferred to sellers, net of cash acquired $3,705.7 |
BALANCE SHEET INFORMATION (Tabl
BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BALANCE SHEET INFORMATION | |
Balance Sheet Information | December 31 December 31 (millions) 2023 2022 Accounts receivable, net Accounts receivable $2,983.2 $2,829.0 Allowance for expected credit losses and other accruals (149.0) (130.9) Total $2,834.2 $2,698.1 Inventories Finished goods $911.4 $1,122.7 Raw materials and parts 704.7 849.2 Inventories at FIFO cost 1,616.1 1,971.9 FIFO cost to LIFO cost difference (118.9) (179.1) Total $1,497.2 $1,792.8 Other current assets Prepaid assets $143.9 $123.9 Taxes receivable 186.9 184.1 Derivative assets 3.3 57.5 Other 59.1 39.2 Total $393.2 $404.7 Property, plant and equipment, net Land $155.6 $161.3 Buildings and leasehold improvements 1,171.0 1,126.9 Machinery and equipment 2,113.8 1,966.3 Merchandising and customer equipment 2,758.4 2,635.5 Capitalized software 985.9 962.1 Construction in progress 470.1 403.8 7,654.8 7,255.9 Accumulated depreciation (4,180.2) (3,962.5) Total $3,474.6 $3,293.4 Other intangible assets, net Intangible assets not subject to amortization Trade names $1,230.0 $1,230.0 Intangible assets subject to amortization Customer relationships 3,385.1 3,292.8 Patents 503.6 497.0 Trademarks 406.5 404.0 Other technologies 551.2 518.8 4,846.4 4,712.6 Accumulated amortization Customer relationships (1,805.0) (1,581.7) Patents (319.4) (292.3) Trademarks (238.0) (202.5) Other technologies (220.5) (185.4) (2,582.9) (2,261.9) Net intangible assets subject to amortization 2,263.5 2,450.7 Total $3,493.5 $3,680.7 Other assets Deferred income taxes $119.3 $108.1 Pension 118.4 118.4 Derivative asset 23.6 44.5 Other 271.4 264.1 Total $532.7 $535.1 December 31 December 31 (millions) 2023 2022 Other current liabilities Discounts and rebates $438.8 $357.8 Dividends payable 162.7 150.8 Interest payable 68.5 58.7 Taxes payable, other than income 153.2 162.9 Derivative liability 3.7 21.9 Restructuring 48.9 100.6 Contract liability 110.9 116.5 Operating lease liabilities 126.1 108.3 Other 222.1 208.4 Total $1,334.9 $1,285.9 Accumulated other comprehensive income (loss) Unrealized (loss) gain on derivative financial instruments, net of tax ($4.1) $3.7 Unrecognized pension and postretirement benefit expense, net of tax (534.7) (467.4) Cumulative translation, net of tax (1,311.6) (1,262.9) Total ($1,850.4) ($1,726.6) |
DEBT AND INTEREST (Tables)
DEBT AND INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DEBT AND INTEREST | |
Schedule of short-term debt obligations | 2023 2022 Average Average Carrying Interest Carrying Interest (millions) Value Rate Value Rate Short-term debt Commercial paper $- - % $- - % Notes payable 1.8 8.29 % 3.7 7.28 % Long-term debt, current maturities 628.6 501.4 Total $630.4 $505.1 |
Schedule of long-term debt obligations including current maturities | 2023 2022 Stated Effective Stated Effective Maturity Carrying Interest Interest Carrying Interest Interest (millions) by Year Value Rate Rate Value Rate Rate Long-term debt Public notes (2023 principal amount) Two year 2021 senior notes ( $500 million) 2023 $- - % - % $498.7 0.90 % 1.19 % Seven year 2016 senior notes ( €575 million) 2024 625.9 1.00 % 1.19 % 596.9 1.00 % 1.03 % Ten year 2015 senior notes ( €575 million) 2025 625.1 2.63 % 2.88 % 596.7 2.63 % 2.81 % Ten year 2016 senior notes ( $750 million) 2026 728.2 2.70 % 4.07 % 721.1 2.70 % 3.21 % Ten year 2017 senior notes ( $500 million) 2027 448.3 3.25 % 8.43 % 433.9 3.25 % 4.77 % Six Year 2021 senior notes ( $500 million) 2027 497.4 1.65 % 1.83 % 496.5 1.65 % 1.83 % Five Year 2022 senior notes ( $500 million) 2028 494.2 5.25 % 5.60 % 492.7 5.25 % 5.36 % Ten year 2020 senior notes ( $698 million) 2030 662.7 4.80 % 6.19 % 653.5 4.80 % 3.72 % Ten year 2020 senior notes ( $600 million) 2031 561.0 1.30 % 3.21 % 555.2 1.30 % 1.70 % Eleven year 2021 senior notes ( $650 million) 2032 645.2 2.13 % 2.06 % 644.6 2.13 % 2.24 % Thirty year 2011 senior notes ( $389 million) 2041 384.7 5.50 % 5.62 % 384.5 5.50 % 5.62 % Thirty year 2016 senior notes ( $200 million) 2046 197.4 3.70 % 3.80 % 197.3 3.70 % 3.81 % Thirty year 2017 senior notes ( $484 million) 2047 426.8 3.95 % 4.79 % 425.5 3.95 % 4.79 % Thirty year 2020 senior notes ( $500 million) 2050 491.1 2.13 % 2.23 % 490.7 2.13 % 2.23 % Thirty year 2021 senior notes ( $850 million) 2051 839.3 2.70 % 2.78 % 838.9 2.70 % 2.78 % Thirty-four year 2021 senior notes ( $685 million) 2055 539.2 2.75 % 3.86 % 537.2 2.75 % 3.86 % Finance lease obligations and other 13.5 12.8 Total debt 8,180.0 8,576.7 Long-term debt, current maturities (628.6) (501.4) Total long-term debt $7,551.4 $8,075.3 |
Schedule of aggregate annual maturities of long-term debt | (millions) 2024 $629 2025 634 2026 729 2027 946 2028 495 |
Schedule of interest expense and interest income | (millions) 2023 2022 2021 Interest expense $348.9 $252.1 $230.6 Interest income (52.2) (8.5) (12.3) Interest expense, net $296.7 $243.6 $218.3 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of the carrying amount and estimated fair value of assets and liabilities measured on recurring basis | December 31, 2023 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $26.6 $- $26.6 $- Cross-currency swap derivative contracts 29.1 - 29.1 - Liabilities Foreign currency forward contracts 27.0 - 27.0 - Interest rate swap agreements 146.5 - 146.5 - Cross-currency swap derivative contracts 24.9 - 24.9 - December 31, 2022 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $118.9 $- $118.9 $- Cross-currency swap derivative contracts 58.7 - 58.7 - Liabilities Foreign currency forward contracts 83.3 - 83.3 - Interest rate swap agreements 181.4 - 181.4 - Cross-currency swap derivative contracts 14.5 - 14.5 - |
Schedule of carrying amount and estimated fair value of long-term debt | December 31, 2023 December 31, 2022 Carrying Fair Carrying Fair Amount Value Amount Value Long-term debt, including current maturities $8,180.0 $7,552.5 $8,576.7 $7,643.6 |
DERIVATIVES AND HEDGING TRANS_2
DERIVATIVES AND HEDGING TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DERIVATIVES AND HEDGING TRANSACTIONS | |
Gross fair value of the company's outstanding derivative assets and liabilities | Derivative Assets Derivative Liabilities December 31 December 31 December 31 December 31 (millions) 2023 2022 2023 2022 Derivatives designated as hedging instruments Foreign currency forward contracts $6.7 $78.6 $5.2 $9.2 Interest rate swap agreements - - 146.5 181.4 Cross-currency swap derivative contracts 29.1 58.7 24.9 14.5 Derivatives not designated as hedging instruments Foreign currency forward contracts 19.9 40.3 21.8 74.1 Gross value of derivatives 55.7 177.6 198.4 279.2 Gross amounts offset in the Consolidated Balance Sheets (28.8) (75.6) (28.8) (75.6) Net value of derivatives $26.9 $102.0 $169.6 $203.6 |
Summary of notional values of outstanding derivatives | Notional Values December 31 December 31 (millions) 2023 2022 Foreign currency forward contracts $3,745 $5,745 Interest rate swap agreements 1,500 1,500 Cross-currency swap derivative contracts 998 650 |
Schedule of amounts on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges | Line item in which the hedged item is included Carrying amount of the hedged liabilities Cumulative amount of the fair value hedging adjustment included in the carrying amount of the hedged liabilities (millions) 2023 2022 2023 2022 Long-term debt $1,353.7 $1,317.5 ($148.6) ($184.8) |
Revaluation gains and losses on euro notes and cross-currency swap derivative | (millions) 2023 2022 2021 Revaluation (loss) gain, net of tax: Euronotes ($42.3) $81.9 $45.3 Cross-currency swap derivative contracts (30.8) 26.4 6.3 Total revaluation (loss) gain, net of tax ($73.1) $108.3 $51.6 |
Impact on AOCI and earnings from derivative contracts qualified as cash flow hedges | 2023 2022 2021 (millions) COS SG&A Interest COS SG&A Interest COS SG&A Interest Gain (loss) on derivatives in cash flow hedging relationship: Foreign currency forward contracts Amount of gain (loss) reclassified from AOCI to income $10.6 ($18.9) $- $6.4 $95.0 $- ($11.0) $47.6 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 7.7 - - 13.9 - - 21.0 Interest rate swap agreements Amount of (loss) gain reclassified from AOCI to income - - (1.9) - - (2.3) - - (2.3) Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of (loss) gain recognized in income - (26.2) - - 62.0 - - 73.7 - Total gain (loss) of all derivative instruments $10.6 ($45.1) $5.8 $6.4 $157.0 $11.6 ($11.0) $121.3 $18.7 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | |
Schedule of other comprehensive income (loss) information related to the Company's derivatives and hedging instruments and pension and postretirement benefits | (millions) 2023 2022 2021 Derivative and Hedging Instruments Unrealized (loss) gain on derivative & hedging instruments Amount recognized in AOCI ($12.8) $112.9 $87.5 (Gain) loss reclassified from AOCI into income COS (10.6) (6.4) 11.0 SG&A 18.9 (95.0) (47.6) Interest (income) expense, net (5.8) (11.6) (18.7) 2.5 (113.0) (55.3) Other activity - 1.1 (1.7) Tax impact 2.5 (2.2) (4.5) Net of tax ($7.8) ($1.2) $26.0 Pension and Postretirement Benefits Amount recognized in AOCI Current period net (loss) gain ($80.7) $83.3 $270.7 Amount reclassified from AOCI into income Settlement (income) charge (2.7) 51.6 38.8 Amortization of losses and prior period service credits, net 6.9 47.7 78.6 4.2 99.3 117.4 Tax impact 21.4 (52.3) (98.4) Net of tax ($55.1) $130.3 $289.7 |
EQUITY COMPENSATION PLANS (Tabl
EQUITY COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY COMPENSATION PLANS | |
Summary of stock option activity and average exercise prices | 2023 2022 2021 Number of Exercise Number of Exercise Number of Exercise Options Price (a) Options Price (a) Options Price (a) Outstanding, beginning of year 7,031,103 $160.45 6,217,161 $160.91 6,802,415 $144.20 Granted 861,840 190.53 1,228,673 148.79 812,853 223.85 Exercised (832,050) 119.41 (294,228) 101.08 (1,306,998) 110.91 Canceled (139,537) 183.77 (120,503) 210.26 (91,109) 192.49 Outstanding, end of year 6,921,356 $168.65 7,031,103 $160.45 6,217,161 $160.91 Exercisable, end of year 5,107,518 $165.77 5,168,161 $155.45 4,604,922 $141.21 Vested and expected to vest, end of year 6,862,799 $168.60 (a) Represents weighted average price per share. |
Weighted-average grant-date fair value of options granted and significant assumptions used in determining the underlying fair value of each option grant | 2023 2022 2021 Weighted-average grant-date fair value of options granted at market prices $50.26 $37.04 $47.65 Assumptions Risk-free rate of return 4.1 % 3.5 % 1.2 % Expected life 6 years 6 years 6 years Expected volatility 22.4 % 23.5 % 23.0 % Expected dividend yield 1.2 % 1.4 % 0.9 % |
Summary of non-vested PBRSU awards and restricted stock activity | PBRSU Grant Date RSAs and Grant Date Awards Fair Value (a) RSUs Fair Value (a) December 31, 2020 914,630 $165.76 163,683 $172.92 Granted 176,297 223.77 130,807 211.12 Vested / Earned (271,731) 131.74 (48,977) 160.84 Canceled (30,667) 178.46 (13,239) 192.12 December 31, 2021 788,529 $189.96 232,274 $195.95 Granted 291,496 142.24 240,370 146.90 Vested / Earned (232,210) 152.63 (68,864) 163.81 Canceled (24,645) 207.05 (18,683) 201.39 December 31, 2022 823,170 $181.68 385,097 $170.50 Granted 328,739 185.10 156,618 165.81 Vested / Earned (180,674) 178.26 (61,776) 191.22 Canceled (26,409) 175.05 (24,449) 166.22 December 31, 2023 944,826 $183.71 455,490 $166.31 (a) Represents weighted average price per share. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Income before income taxes | (millions) 2023 2022 2021 United States (U.S.) $408.9 $295.6 $277.7 International 1,346.6 1,047.8 1,136.5 Total $1,755.5 $1,343.4 $1,414.2 |
Provision (benefit) for income taxes | (millions) 2023 2022 2021 U.S. federal and state $137.6 $145.7 $30.9 International 280.0 231.4 240.2 Total current 417.6 377.1 271.1 U.S. federal and state (40.1) (78.9) 3.6 International (15.0) (63.7) (4.5) Total deferred (55.1) (142.6) (0.9) Provision for income taxes $362.5 $234.5 $270.2 |
Net deferred tax assets and deferred tax liabilities | December 31 (millions) 2023 2022 Deferred tax assets Pension and post-retirement benefits $82.1 $87.0 Other accrued liabilities 162.0 129.6 Lease liability 135.9 109.2 Credit carryforwards 83.7 97.8 Capitalization of R&D costs 180.9 84.5 Loss carryforwards 57.3 67.2 Share-based compensation 54.5 51.2 Deferred income 27.9 59.6 Other, net 113.3 98.8 Valuation allowance (65.7) (65.2) Total deferred tax assets 831.9 719.7 Deferred tax liabilities Goodwill (160.1) (124.8) Intangible assets (451.3) (486.3) Property, plant and equipment (332.3) (319.7) Lease asset (136.1) (109.1) Financing (32.1) (33.5) Other, net (18.9) (43.8) Total deferred tax liabilities (1,130.8) (1,117.2) Net deferred tax liabilities balance ($298.9) ($397.5) |
Reconciliation of the statutory U.S. federal income tax rate to the company's effective income tax rate | 2023 2022 2021 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.4 1.3 0.6 Foreign operations (0.5) (0.8) (0.6) Excess stock benefits (0.3) (0.4) (2.0) R&D credit (1.3) (1.4) (1.3) Foreign derived intangible income (1.2) (1.8) (1.6) Change in valuation allowance 0.5 0.7 0.5 Legal entity rationalization 0.1 (1.5) - One-time transfer of intangibles - - 1.8 Other, net 0.9 0.4 0.7 Effective income tax rate 20.6 % 17.5 % 19.1 % |
Reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits | (millions) 2023 2022 2021 Balance at beginning of year $24.9 $25.1 $20.7 Additions based on tax positions related to the current year 5.8 2.7 3.8 Additions for tax positions of prior years 1.7 3.6 3.0 Current year acquisitions - - 4.4 Reductions for tax positions of prior years - (1.5) - Reductions for tax positions due to statute of limitations (2.7) (0.7) (3.0) Settlements (5.5) (3.4) (3.7) Foreign currency translation - (0.9) (0.1) Balance at end of year $24.2 $24.9 $25.1 |
RENTALS AND LEASES (Tables)
RENTALS AND LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RENTALS AND LEASES | |
Schedule of operating lease cost | (millions) 2023 2022 2021 Operating lease cost* $215.4 $196.9 $179.4 *Includes immaterial short-term and variable lease costs |
Schedule of future maturity of operating lease liabilities | (millions) 2024 $147 2025 128 2026 101 2027 69 2028 39 Thereafter 148 Total lease payments 632 Less: imputed interest 80 Present value of lease liabilities $552 |
Schedule of operating leases term and discount rate | December 31 December 31 December 31 2023 2022 2021 Weighted-average remaining lease terms (years) 6.44 6.71 5.99 Weighted-average discount rate 4.02 % 2.98 % 3.07 % |
Schedule of other lease information | December 31 December 31 December 31 (millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $170.6 $157.3 $157.0 Leased assets obtained in exchange for new operating lease liabilities 251.5 202.7 116.8 |
Schedule of operating lease revenue | (millions) 2023 2022 2021 Operating lease revenue* $511.8 $466.7 $412.5 |
Schedule of revenue from operating leases for existing contracts | Future revenue from operating leases for existing contracts as of December 31, 2023 were as follows: (millions) 2024 $424 2025 304 2026 243 2027 168 2028 84 Thereafter 49 Total lease revenue $1,272 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Pension and Postretirement Plans | |
Financial information related to pension and postretirement health care plans | U.S. International U.S. Postretirement Pensions Pensions Benefits (millions) 2023 2022 2023 2022 2023 2022 Accumulated benefit obligation, end of year $1,859.5 $1,799.0 $1,125.8 $1,171.1 $112.0 $115.5 Projected benefit obligation Projected benefit obligation, beginning of year $1,799.0 $2,462.7 $1,221.9 $1,779.7 $115.5 $155.4 Service cost 40.9 40.8 21.7 28.4 0.4 0.8 Interest cost 88.1 65.3 45.9 22.0 5.6 3.3 Participant contributions - - 2.8 3.0 3.8 3.7 Plan amendments - - (1.5) - - - Actuarial (gain) loss 90.2 (479.8) (101.0) (436.8) (0.1) (33.7) Assumed through acquisitions - - - 15.1 - - Other events - - 2.9 - - - Benefits paid (158.7) (290.0) (69.8) (54.3) (13.2) (14.0) Foreign currency translation - - 51.1 (135.2) - - Projected benefit obligation, end of year $1,859.5 $1,799.0 $1,174.0 $1,221.9 $112.0 $115.5 Plan assets Fair value of plan assets, beginning of year $1,668.5 $2,376.8 $905.1 $1,219.9 $3.2 $5.2 Actual returns on plan assets 149.1 (430.3) (44.0) (218.3) 0.2 (0.8) Company contributions 60.8 12.0 35.4 38.3 12.2 12.8 Participant contributions - - 2.8 3.0 - - Acquired through acquisitions - - 2.9 15.1 - - Benefits paid (158.7) (290.0) (67.6) (54.3) (13.2) (14.0) Foreign currency translation - - 36.6 (98.6) - - Fair value of plan assets, end of year $1,719.7 $1,668.5 $871.2 $905.1 $2.4 $3.2 Funded Status, end of year ($139.8) ($130.5) ($302.8) ($316.8) ($109.6) ($112.3) Amounts recognized in the Consolidated Balance Sheets: Other assets $- $- $118.4 $118.6 $- $- Other current liabilities ($9.2) (9.2) (33.0) (28.6) (8.7) (7.6) Postretirement healthcare and pension benefits ($130.6) (121.3) (388.2) (406.8) (100.9) (104.7) Net liability ($139.8) ($130.5) ($302.8) ($316.8) ($109.6) ($112.3) Amounts recognized in accumulated other comprehensive loss (income): Unrecognized net actuarial loss (gain) $495.2 $411.9 $278.5 $279.7 ($40.8) ($43.6) Unrecognized net prior service (benefits) costs (16.7) (21.2) (0.4) 0.3 - - Tax (benefit) expense (122.8) (100.8) (64.4) (66.5) 6.2 7.7 Accumulated other comprehensive loss (income), net of tax $355.7 $289.9 $213.7 $213.5 ($34.6) ($35.9) Change in accumulated other comprehensive loss (income): Amortization of net actuarial gain (loss) ($0.2) ($30.2) ($14.8) ($22.7) $3.1 $0.6 Amortization of prior service credits 4.5 4.5 0.5 0.1 - - Current period net actuarial loss (gain) 83.5 97.0 (1.0) (147.8) (0.3) (32.5) Current period prior service costs - - (1.5) - - - Curtailments and settlements - (51.6) 2.7 - - - Tax (benefit) expense (22.0) (5.5) 2.1 51.3 (1.5) 6.5 Foreign currency translation - - 12.2 (35.1) - - Other comprehensive loss (income) $65.8 $14.2 $0.2 ($154.2) $1.3 ($25.4) |
Estimated amounts in accumulated other comprehensive loss expected to be reclassified to net period cost | U.S. Post- U.S. International Retirement (millions) Pensions Pensions Benefits Net actuarial loss (gain) $6.1 $10.0 ($3.2) Net prior service benefits (4.6) (0.6) - Total $1.5 $9.4 ($3.2) |
Aggregate projected benefit obligation, accumulated benefit obligation and fair value of pension plan assets for plans with accumulated benefit obligations in excess of plan assets | December 31, (millions) 2023 2022 Aggregate projected benefit obligation $2,428.8 $2,392.1 Accumulated benefit obligation 2,392.4 2,355.8 Fair value of plan assets 1,868.9 1,828.1 |
Net periodic pension and postretirement health care benefit costs | U.S. International U.S. Postretirement Pensions Pensions Benefits (millions) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Service cost $40.9 $40.8 $43.9 $21.7 $28.4 $31.4 $0.4 $0.8 $1.0 Interest cost on benefit obligation 88.1 65.3 51.4 45.9 22.0 17.3 5.6 3.3 2.9 Expected return on plan assets (145.1) (144.4) (152.3) (56.1) (69.8) (70.7) (0.2) (0.3) (0.4) Recognition of net actuarial loss (gain) 0.2 30.2 56.7 12.5 22.8 28.7 (3.1) (0.6) 0.7 Amortization of prior service benefit (4.5) (4.5) (6.9) (0.5) (0.1) (0.1) - - - Curtailments and settlements (a) - 51.6 35.3 (2.7) - 3.5 - - - Total expense (benefit) ($20.4) $39.0 $28.1 $20.8 $3.3 $10.1 $2.7 $3.2 $4.2 (a) $50.6 and $37.2 of settlement expense was recognized as special charges in 2022 and 2021, respectively. |
Plan Assumptions | Plan Assumptions U.S. International U.S. Postretirement Pensions Pensions Benefits (percent) 2023 2022 2021 2023 2022 2021 2023 2022 2021 Weighted-average actuarial assumptions used to determine benefit obligations as of year end: Discount rate 4.95 % 5.17 % 2.86 % 4.34 % 3.70 % 1.45 % 4.95 % 5.14 % 2.75 % Projected salary increase 4.03 4.03 4.03 2.84 2.81 2.42 Weighted-average actuarial assumptions used to determine net cost: Interest credit rate for cash balance plans 3.89 1.56 0.87 N/A N/A N/A N/A N/A N/A Discount rate 5.17 2.86 2.49 3.70 1.46 1.37 5.14 2.75 2.37 Expected return on plan assets 7.75 7.00 7.00 6.27 6.18 6.24 7.75 7.00 7.00 Projected salary increase 4.03 4.03 4.03 3.08 2.47 2.31 |
Estimated future benefits payments | (millions) All Plans 2024 $242 2025 242 2026 241 2027 244 2028 246 2029 - 2033 1,215 |
U.S. Pension and Postretirement Health Care Benefits | |
Pension and Postretirement Plans | |
Allocation and fair value of plan assets for defined benefit pension and postretirement health care benefit plans | The fair value of the Company’s U.S. qualified pension plan assets were as follows: Fair Value as of Fair Value as of (millions) December 31, 2023 December 31, 2022 Level 1 Level 2 Total Level 1 Level 2 Total Cash $30.1 $- $30.1 $54.8 $- $54.8 Equity securities: Large cap equity 276.1 - 276.1 237.1 - 237.1 Small cap equity 14.6 29.6 44.2 15.4 25.1 40.5 International equity 40.4 19.2 59.6 37.4 17.2 54.6 Fixed income: Core fixed income 150.7 669.6 820.3 145.5 646.5 792.0 High-yield bonds 34.7 - 34.7 33.4 - 33.4 Emerging markets - 24.8 24.8 - 25.4 25.4 Total investments at fair value 546.6 743.2 1,289.8 523.6 714.2 1,237.8 Investments measured at net asset value 432.3 433.9 Total $546.6 $743.2 $1,722.1 $523.6 $714.2 $1,671.7 The Company had no Level 3 assets as part of its U.S. qualified pension plan assets as of December 31, 2023 or 2022. The allocation of the Company’s U.S. qualified pension plan assets plans were as follows: Target Asset Asset Category Allocation Percentage Percentage of Plan Assets December 31 2023 2022 2023 2022 Cash - % - % 2 % 3 % Equity securities: Large cap equity 21 21 16 14 Small cap equity 3 3 3 2 International equity 13 13 9 9 Fixed income: Core fixed income 48 48 48 47 High-yield bonds 3 3 2 2 Emerging markets 2 2 1 2 Other: Real estate 3 3 3 4 Private equity 5 5 14 15 Distressed debt 2 2 2 2 Total 100 % 100 % 100 % 100 % |
International Pension | |
Pension and Postretirement Plans | |
Allocation and fair value of plan assets for defined benefit pension and postretirement health care benefit plans | Fair Value as of Fair Value as of (millions) December 31, 2023 December 31, 2022 Level 1 Level 2 Total Level 1 Level 2 Total Cash $12.6 $- $12.6 $9.9 $- $9.9 Equity securities: International equity - 182.5 182.5 - 219.3 219.3 Fixed income: Corporate bonds - 147.5 147.5 - 158.5 158.5 Government bonds - 321.4 321.4 - 365.9 365.9 Insurance company accounts - 163.4 163.4 - 106.2 106.2 Total investments at fair value 12.6 814.8 827.4 9.9 849.9 859.8 Investments measured at net asset value 43.8 45.3 Total $12.6 $814.8 $871.2 $9.9 $849.9 $905.1 The Company had no Level 3 assets as part of its international plan assets as of December 31, 2023 or 2022. The allocation of plan assets of the Company’s international plan assets for its defined benefit pension plans were as follows: Percentage Asset Category of Plan Assets December 31 2023 2022 Cash 1 % 1 % Equity securities: International equity 21 24 Fixed income: Corporate bonds 17 18 Government bonds 37 40 Total fixed income 54 58 Other: Insurance contracts 19 12 Real estate 5 5 Total 100 % 100 % |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUES | |
Schedule of principal activities, separated by reportable segments and geographic region | (millions) 2023 2022 2021 Global Industrial Product and sold equipment $6,331.0 $5,937.0 $5,372.4 Service and lease equipment 890.8 868.0 865.5 Global Institutional & Specialty Product and sold equipment 4,087.4 3,655.3 3,276.3 Service and lease equipment 911.8 776.8 690.5 Global Healthcare & Life Sciences Product and sold equipment 1,476.3 1,398.3 1,068.8 Service and lease equipment 109.7 112.2 112.8 Other Product and sold equipment 353.1 331.9 297.9 Service and lease equipment 1,091.1 984.5 909.8 Corporate Product and sold equipment 69.0 123.7 137.9 Service and lease equipment - 0.1 1.2 Total Total product and sold equipment $12,316.8 $11,446.2 $10,153.3 Total service and lease equipment 3,003.4 2,741.6 2,579.8 Net sales at public exchange rates by geographic region were as follows: Global Industrial Global Institutional & Specialty (millions) 2023 2022 2021 2023 2022 2021 United States $3,059.3 $2,945.1 $2,603.1 $3,454.2 $3,050.0 $2,721.8 Europe 1,496.6 1,373.6 1,367.1 681.9 624.0 558.0 Asia Pacific 880.0 830.1 802.5 231.2 212.6 201.2 Latin America 737.2 621.7 551.5 188.3 162.3 135.0 Greater China 391.4 419.3 394.9 158.5 134.7 143.1 India, Middle East and Africa 452.1 419.4 344.4 67.0 54.6 44.2 Canada 205.2 195.8 174.4 218.1 193.9 163.5 Total $7,221.8 $6,805.0 $6,237.9 $4,999.2 $4,432.1 $3,966.8 Global Healthcare & Life Sciences Other (millions) 2023 2022 2021 2023 2022 2021 United States $647.7 $612.5 $443.8 $898.6 $816.0 $719.9 Europe 735.0 688.8 625.3 301.7 272.7 264.9 Asia Pacific 95.3 92.8 65.2 85.9 76.1 72.4 Latin America 25.5 24.7 5.5 57.6 51.9 50.3 Greater China 51.2 61.0 10.1 69.2 68.6 69.2 India, Middle East and Africa 24.8 25.0 25.4 9.0 10.3 11.6 Canada 6.5 5.7 6.3 22.2 20.8 19.4 Total $1,586.0 $1,510.5 $1,181.6 $1,444.2 $1,316.4 $1,207.7 Corporate (millions) 2023 2022 2021 United States $55.6 $107.5 $98.1 Europe 3.0 3.0 3.9 Asia Pacific 3.7 4.1 5.5 Latin America 5.6 7.3 24.6 Greater China - 0.1 2.3 India, Middle East and Africa - 0.3 3.4 Canada 1.1 1.5 1.3 Total $69.0 $123.8 $139.1 |
Schedule of contract liability | December 31 December 31 (millions) 2023 2022 Contract liability as of beginning of the year $116.5 $91.7 Revenue recognized in the year from: Amounts included in the contract liability at the beginning of the year (116.5) (91.7) Increases due to billings excluding amounts recognized as revenue during the year ended 110.9 116.5 Contract liability as of end of year $110.9 $116.5 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OPERATING SEGMENTS | |
Schedule of financial information for each of the entity's reportable segments, including the impact of the preceding changes on previously reported full year 2021 net sales and operating income | December 31, 2022 2022 Reported Fixed 2022 Reported Valued at 2022 Currency Valued at 2023 (millions) Fixed Currency Rates Other Rate Change Fixed Currency Rates Net Sales Global Industrial $6,944.0 $- ($207.7) $6,736.3 Global Institutional & Specialty 4,480.0 10.2 (75.9) 4,414.3 Global Healthcare & Life Sciences 1,570.0 - (64.2) 1,505.8 Other 1,355.0 (10.2) (31.5) 1,313.3 Corporate 124.1 - (0.4) 123.7 Subtotal at fixed currency rates 14,473.1 - (379.7) 14,093.4 Effect of foreign currency translation (285.3) - 379.7 94.4 Consolidated reported GAAP net sales $14,187.8 $- $- $14,187.8 Operating Income Global Industrial $977.0 $0.8 ($42.0) $935.8 Global Institutional & Specialty 634.5 (1.6) (11.2) 621.7 Global Healthcare & Life Sciences 205.0 (1.8) (9.9) 193.3 Other 212.8 2.6 (5.5) 209.9 Corporate (416.7) - 2.3 (414.4) Subtotal at fixed currency rates 1,612.6 - (66.3) 1,546.3 Effect of foreign currency translation (50.1) - 66.3 16.2 Consolidated reported GAAP operating income $1,562.5 $- $- $1,562.5 December 31, 2021 2021 Reported Fixed 2021 Reported Valued at 2022 Segment Currency Valued at 2023 (millions) Fixed Currency Rates Change Rate Change Fixed Currency Rates Net Sales Global Industrial $6,086.8 $- ($178.3) $5,908.5 Global Institutional & Specialty 3,908.8 10.9 (63.0) 3,856.7 Global Healthcare & Life Sciences 1,149.6 - (48.5) 1,101.1 Other 1,201.0 (10.9) (27.6) 1,162.5 Corporate 137.4 - - 137.4 Subtotal at fixed currency rates 12,483.6 - (317.4) 12,166.2 Effect of foreign currency translation 249.5 - 317.4 566.9 Consolidated reported GAAP net sales $12,733.1 $- $- $12,733.1 Operating Income Global Industrial $985.7 $0.4 ($42.7) $943.4 Global Institutional & Specialty 545.7 (1.4) (7.6) 536.7 Global Healthcare & Life Sciences 152.3 (1.6) (9.7) 141.0 Other 184.0 2.6 (5.3) 181.3 Corporate (316.6) - 2.3 (314.3) Subtotal at fixed currency rates 1,551.1 - (63.0) 1,488.1 Effect of foreign currency translation 47.5 - 63.0 110.5 Consolidated reported GAAP operating income $1,598.6 $- $- $1,598.6 |
Schedule of financial information for each of the entity's reportable segments | Net Sales Operating Income (Loss) (millions) 2023 2022 2021 2023 2022 2021 Global Industrial $7,193.1 $6,736.3 $5,908.5 $1,080.7 $935.8 $943.4 Global Institutional & Specialty 4,994.0 4,414.3 3,856.7 823.0 621.7 536.7 Global Healthcare & Life Sciences 1,576.9 1,505.8 1,101.1 160.0 193.3 141.0 Other 1,442.3 1,313.3 1,162.5 255.0 209.9 181.3 Corporate 69.1 123.7 137.4 (331.7) (414.4) (314.3) Subtotal at fixed currency 15,275.4 14,093.4 12,166.2 1,987.0 1,546.3 1,488.1 Effect of foreign currency translation 44.8 94.4 566.9 5.3 16.2 110.5 Consolidated reported GAAP $15,320.2 $14,187.8 $12,733.1 $1,992.3 $1,562.5 $1,598.6 |
Schedule of net sales and long-lived assets at public exchange rates by geographic region | Long-Lived Assets, net (millions) 2023 2022 United States $2,708.6 $2,508.9 Europe 631.2 574.3 Asia Pacific 213.0 210.3 Latin America 175.1 146.5 Greater China 167.4 176.6 India, Middle East and Africa 68.2 64.1 Canada 64.6 60.9 Total $4,028.1 $3,741.6 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Quarterly financial data | First Second Third Fourth (millions, except per share) Quarter Quarter Quarter Quarter Year 2023 Net sales $3,571.6 $3,852.1 $3,958.1 $3,938.4 $15,320.2 Operating expenses Cost of sales (a) 2,205.2 2,334.8 2,330.5 2,284.4 9,154.9 Selling, general and administrative expenses 990.3 1,011.6 1,024.9 1,034.8 4,061.6 Special (gains) and charges 24.5 21.0 36.7 29.2 111.4 Operating income 351.6 484.7 566.0 590.0 1,992.3 Other (income) expense (b) (13.1) (14.4) (14.5) (17.9) (59.9) Interest expense, net 74.2 77.8 74.3 70.4 296.7 Income before income taxes 290.5 421.3 506.2 537.5 1,755.5 Provision for income taxes 52.4 86.6 96.8 126.7 362.5 Net income including noncontrolling interest 238.1 334.7 409.4 410.8 1,393.0 Net income attributable to noncontrolling interest 4.7 5.0 5.4 5.6 20.7 Net income attributable to Ecolab $233.4 $329.7 $404.0 $405.2 $1,372.3 Earnings attributable to Ecolab per common share Basic $ 0.82 $ 1.16 $ 1.42 $ 1.42 $ 4.82 Diluted $ 0.82 $ 1.15 $ 1.41 $ 1.41 $ 4.79 Weighted-average common shares outstanding Basic 284.6 284.9 285.1 285.3 285.0 Diluted 285.9 286.3 286.9 287.1 286.5 2022 Net sales $3,266.7 $3,580.6 $3,669.3 $3,671.2 $14,187.8 Operating expenses Cost of sales (a) 2,073.4 2,211.1 2,291.6 2,254.9 8,831.0 Selling, general and administrative expenses 914.7 940.1 876.9 922.1 3,653.8 Special (gains) and charges 24.1 3.6 17.8 95.0 140.5 Operating income 254.5 425.8 483.0 399.2 1,562.5 Other (income) expense (b) (18.8) (19.5) 5.7 8.1 (24.5) Interest expense, net 53.0 56.0 65.1 69.5 243.6 Income before income taxes 220.3 389.3 412.2 321.6 1,343.4 Provision for income taxes 45.6 76.6 60.2 52.1 234.5 Net income including noncontrolling interest 174.7 312.7 352.0 269.5 1,108.9 Net income attributable to noncontrolling interest 2.8 4.4 4.9 5.1 17.2 Net income attributable to Ecolab $171.9 $308.3 $347.1 $264.4 $1,091.7 Earnings attributable to Ecolab per common share Basic $ 0.60 $ 1.08 $ 1.22 $ 0.93 $ 3.83 Diluted $ 0.60 $ 1.08 $ 1.21 $ 0.93 $ 3.81 Weighted-average common shares outstanding Basic 286.2 285.1 284.9 284.6 285.2 Diluted 288.1 286.6 286.3 285.8 286.6 Per share amounts do not necessarily sum due to changes in the calculation of shares outstanding for each discrete period and rounding. Gross profit is calculated as net sales minus cost of sales. (a) Cost of sales includes special charges of $3.2 , $8.1 , $5.9 and $5.3 in Q1, Q2, Q3 and Q4 of 2023, respectively, and $52.9 , $1.7 , $7.1 and $8.2 in Q1, Q2, Q3 and Q4 of 2022, respectively. (b) Other (income) expense includes special charges of $24.8 and $25.8 in Q3 and Q4 of 2022, respectively. |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 01, 2021 USD ($) | Dec. 31, 2021 USD ($) country | Dec. 31, 2023 segment country | |
NATURE OF BUSINESS | |||
Number of reportable segments | segment | 3 | ||
Purolite | |||
NATURE OF BUSINESS | |||
Number of countries in which company delivers comprehensive programs and services | 30 | ||
Consideration transferred | $ | $ 3,706 | $ 3,700 | |
Minimum | |||
NATURE OF BUSINESS | |||
Number of countries in which company delivers comprehensive programs and services | 170 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Valuation Allowance and Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable and Allowance for Doubtful Accounts | |||
Allowance for doubtful accounts, returns and credits | $ 72 | $ 59 | $ 19 |
Activity in the allowance for doubtful accounts | |||
Beginning balance | 71.9 | 52.8 | 68.4 |
Bad debt expense | 54 | 38.1 | 15 |
Write-offs | (46.2) | (21.1) | (27.4) |
Other (a) | (2.4) | 2.1 | (3.2) |
Ending balance | $ 77.3 | $ 71.9 | $ 52.8 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Valuations | |||
Percentage of consolidated inventories | 30% | 29% | |
Property, Plant and Equipment | |||
Depreciation expense | $ 616.7 | $ 618.5 | $ 604.4 |
Buildings and Leasehold Improvements | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 5 years | ||
Buildings and Leasehold Improvements | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 40 years | ||
Machinery and Equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 3 years | ||
Machinery and Equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 20 years | ||
Merchandising and Customer Equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 3 years | ||
Merchandising and Customer Equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 20 years | ||
Capitalized Software | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life | 3 years | ||
Capitalized Software | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life | 7 years |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Other Intangible Assets (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) item segment | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | |
Changes in the carrying amount of goodwill for each of the company's reportable segments | |||
Number of reporting units | item | 10 | ||
Number of operating units | segment | 10 | 10 | |
Changes in the carrying amount of goodwill | |||
Beginning goodwill | $ 8,012.7 | $ 8,063.9 | |
Prior year business combinations | 0.7 | 253.8 | |
Effect of foreign currency translation | 65.4 | (305) | |
Current year business combinations | 70.1 | ||
Ending goodwill | 8,148.2 | 8,012.7 | |
Goodwill expected to be tax deductible | 62 | ||
Impairment of goodwill | 0 | 0 | |
Nalco Holding Company ("Nalco") | Trademarks | |||
Changes in the carrying amount of goodwill | |||
Carrying value of asset subject to impairment testing | $ 1,200 | ||
Impairment of indefinite life intangible asset | 0 | ||
Global Industrial | |||
Changes in the carrying amount of goodwill | |||
Beginning goodwill | 4,081.8 | 4,270.1 | |
Prior year business combinations | 0.4 | ||
Effect of foreign currency translation | 28 | (188.7) | |
Current year business combinations | 30.8 | ||
Ending goodwill | 4,140.6 | 4,081.8 | |
Global Institutional and Specialty | |||
Changes in the carrying amount of goodwill | |||
Beginning goodwill | 567.6 | 576.5 | |
Effect of foreign currency translation | 3.1 | (8.9) | |
Current year business combinations | 39.3 | ||
Ending goodwill | 610 | 567.6 | |
Global Healthcare and Life Sciences | |||
Changes in the carrying amount of goodwill | |||
Beginning goodwill | 3,125.4 | 2,974.2 | |
Prior year business combinations | 253.4 | ||
Effect of foreign currency translation | 33 | (102.2) | |
Ending goodwill | 3,158.4 | 3,125.4 | |
Other | |||
Changes in the carrying amount of goodwill | |||
Beginning goodwill | 237.9 | 243.1 | |
Effect of foreign currency translation | 1.3 | (5.2) | |
Ending goodwill | $ 239.2 | $ 237.9 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Total amortization expense related to other intangible assets during the last three years and future estimated amortization | |||
Total amortization expense related to other intangible assets | $ 307 | $ 320 | $ 239 |
2024 | 301 | ||
2025 | 294 | ||
2026 | 281 | ||
2027 | 155 | ||
2028 | $ 145 | ||
Customer relationships | |||
Other intangible assets | |||
Weighted-average useful life of other amortizable assets | 15 years | ||
Patents | |||
Other intangible assets | |||
Weighted-average useful life of other amortizable assets | 15 years | ||
Trademarks | |||
Other intangible assets | |||
Weighted-average useful life of other amortizable assets | 13 years | ||
Other technologies | |||
Other intangible assets | |||
Weighted-average useful life of other amortizable assets | 12 years | ||
Other assets | |||
Other intangible assets | |||
Weighted-average useful life of other amortizable assets | 15 years | 15 years |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Rentals and Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Lessor | |
Lessor, Operating Lease, Existence of Lessee Option to Purchase Underlying Asset [true false] | false |
Minimum | |
Lessee | |
Renewal term - Operating | 1 month |
Lessor | |
Lessor, Operating Lease, Term of Contract | 1 year |
Maximum | |
Lessor | |
Lessor, Operating Lease, Term of Contract | 5 years |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Statutory U.S. rate (as a percent) | 21% | 21% | 21% |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Computations of the basic and diluted earnings attributable to Ecolab per share amounts | |||||||||||
Net income (loss) attributable to Ecolab | $ 1,372.3 | $ 1,091.7 | $ 1,129.9 | ||||||||
Weighted-average common shares outstanding | |||||||||||
Basic (in shares) | 285.3 | 285.1 | 284.9 | 284.6 | 284.6 | 284.9 | 285.1 | 286.2 | 285 | 285.2 | 286.3 |
Effect of dilutive stock options and units (in shares) | 1.6 | 1.4 | 2.8 | ||||||||
Diluted (in shares) | 287.1 | 286.9 | 286.3 | 285.9 | 285.8 | 286.3 | 286.6 | 288.1 | 286.5 | 286.6 | 289.1 |
Basic EPS | |||||||||||
Earnings attributable to Ecolab | $ 1.42 | $ 1.42 | $ 1.16 | $ 0.82 | $ 0.93 | $ 1.22 | $ 1.08 | $ 0.60 | $ 4.82 | $ 3.83 | $ 3.95 |
Diluted EPS | |||||||||||
Earnings attributable to Ecolab | $ 1.41 | $ 1.41 | $ 1.15 | $ 0.82 | $ 0.93 | $ 1.21 | $ 1.08 | $ 0.60 | $ 4.79 | $ 3.81 | $ 3.91 |
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 4.3 | 3.9 | 1.9 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - New Accounting Pronouncements (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
SIGNIFICANT ACCOUNTING POLICIES | ||
New accounting guidance, cumulative effect | $ 10,075.4 | $ 9,318.8 |
SPECIAL (GAINS) AND CHARGES - C
SPECIAL (GAINS) AND CHARGES - Charges Reported on Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Special (gains) and charges | |||||||||||
Other (income) expense | $ 29.2 | $ 36.7 | $ 21 | $ 24.5 | $ 95 | $ 17.8 | $ 3.6 | $ 24.1 | $ 111.4 | $ 140.5 | $ 102.6 |
Total special (gains) and charges | 133.9 | 261 | 266.8 | ||||||||
Russia/Ukraine charges | |||||||||||
Special (gains) and charges | |||||||||||
Russia/Ukraine charges | 1.4 | 13.1 | |||||||||
Cost of sales | |||||||||||
Special (gains) and charges | |||||||||||
Restructuring activities | $ 22.5 | $ 21.4 | $ 24.7 | ||||||||
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods and Services Sold | Cost of Goods and Services Sold | Cost of Goods and Services Sold | ||||||||
Acquisition and integration activities | $ 16.1 | $ 25 | $ 4.2 | ||||||||
Other special gains and charges | 16.3 | 65 | |||||||||
Other (income) expense | 22.5 | 69.9 | 93.9 | ||||||||
Cost of sales | Russia/Ukraine charges | |||||||||||
Special (gains) and charges | |||||||||||
Russia/Ukraine charges | 7.2 | ||||||||||
Special (gains) and charges | |||||||||||
Special (gains) and charges | |||||||||||
Restructuring activities | $ 63.2 | $ 85.8 | $ 11.9 | ||||||||
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (income) expense | Other (income) expense | Other (income) expense | ||||||||
Acquisition and integration activities | $ 16.1 | $ 14.5 | $ 29.9 | ||||||||
Other special gains and charges | 30.7 | 34.3 | 60.8 | ||||||||
Other (income) expense | 111.4 | 140.5 | 102.6 | ||||||||
Special (gains) and charges | Russia/Ukraine charges | |||||||||||
Special (gains) and charges | |||||||||||
Russia/Ukraine charges | 1.4 | 5.9 | |||||||||
Operating income subtotal | |||||||||||
Special (gains) and charges | |||||||||||
Other (income) expense | $ 133.9 | 210.4 | 196.5 | ||||||||
Other (income) expense | |||||||||||
Special (gains) and charges | |||||||||||
Other (income) expense | $ 25.8 | $ 24.8 | 50.6 | 37.2 | |||||||
Interest expense | |||||||||||
Special (gains) and charges | |||||||||||
Acquisition and integration activities | $ 0.8 | ||||||||||
Other (income) expense | $ 33.1 |
SPECIAL (GAINS) AND CHARGES - R
SPECIAL (GAINS) AND CHARGES - Restructuring and Non-Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 28, 2023 | Nov. 30, 2022 | |
Other restructuring information | |||||||||||||
Special (gains) and charges | $ 29.2 | $ 36.7 | $ 21 | $ 24.5 | $ 95 | $ 17.8 | $ 3.6 | $ 24.1 | $ 111.4 | $ 140.5 | $ 102.6 | ||
Non-restructuring Special (Gains) and Charges | |||||||||||||
Accounts payable | 1,566.3 | 1,728.2 | 1,566.3 | 1,728.2 | |||||||||
Other current liabilities | 1,334.9 | 1,285.9 | 1,334.9 | 1,285.9 | |||||||||
Special (gains) and charges | |||||||||||||
Other restructuring information | |||||||||||||
Restructuring charges incurred, pre-tax | 63.2 | 85.8 | 11.9 | ||||||||||
Business combination advisory and legal fees, pre tax | 16.1 | 14.5 | 29.9 | ||||||||||
Business combination advisory and legal fees, after tax | 23.5 | ||||||||||||
Other special gains and charges | 30.7 | 34.3 | 60.8 | ||||||||||
Special (gains) and charges | 111.4 | 140.5 | 102.6 | ||||||||||
Non-restructuring Special (Gains) and Charges | |||||||||||||
Business combination and integration related costs, pre tax | 14.5 | ||||||||||||
Business combination and integration related costs, after tax | 11.4 | ||||||||||||
Cost of sales | |||||||||||||
Other restructuring information | |||||||||||||
Restructuring charges incurred, pre-tax | 22.5 | 21.4 | 24.7 | ||||||||||
Business combination advisory and legal fees, pre tax | 16.1 | 25 | 4.2 | ||||||||||
Business combination advisory and legal fees, after tax | 12 | 3.3 | |||||||||||
Other special gains and charges | 16.3 | 65 | |||||||||||
Special (gains) and charges | 22.5 | 69.9 | 93.9 | ||||||||||
Non-restructuring Special (Gains) and Charges | |||||||||||||
Business combination and integration related costs, pre tax | 25 | ||||||||||||
Business combination and integration related costs, after tax | 19.6 | ||||||||||||
Other operating income (expense) | 16.3 | 65 | |||||||||||
Other operating income (expense), net, after tax | 12.7 | 49.2 | |||||||||||
Interest expense | |||||||||||||
Other restructuring information | |||||||||||||
Business combination advisory and legal fees, pre tax | 0.8 | ||||||||||||
Business combination advisory and legal fees, after tax | 0.6 | ||||||||||||
Special (gains) and charges | 33.1 | ||||||||||||
Non-restructuring Special (Gains) and Charges | |||||||||||||
Debt refinancing charges, pre-tax | 32.3 | ||||||||||||
Debt refinancing charges, net of tax | 28.4 | ||||||||||||
Specific legal reserve and related legal charges | |||||||||||||
Other restructuring information | |||||||||||||
Other special gains and charges | 30.7 | 34.3 | 60.8 | ||||||||||
Other special gains and charges, after-tax | 23.3 | 25.7 | 46.4 | ||||||||||
Other (income) expense | |||||||||||||
Other restructuring information | |||||||||||||
Special (gains) and charges | 25.8 | $ 24.8 | 50.6 | 37.2 | |||||||||
Pension settlements and curtailments | 50.6 | 37.2 | |||||||||||
Pension settlements and curtailments, after tax | 38.2 | 28.7 | |||||||||||
Russia/Ukraine charges | |||||||||||||
Other restructuring information | |||||||||||||
Russia/Ukraine charges | 1.4 | 13.1 | |||||||||||
Charges related to recoverability risk | 1.1 | 12.6 | |||||||||||
Russia/Ukraine charges | Special (gains) and charges | |||||||||||||
Other restructuring information | |||||||||||||
Russia/Ukraine charges | 1.4 | 5.9 | |||||||||||
Russia/Ukraine charges | Cost of sales | |||||||||||||
Other restructuring information | |||||||||||||
Russia/Ukraine charges | 7.2 | ||||||||||||
Product and equipment sales | Cost of sales | |||||||||||||
Other restructuring information | |||||||||||||
Special (gains) and charges | 14.5 | 65 | 91.9 | ||||||||||
Institutional Advancement Program | |||||||||||||
Restructuring | |||||||||||||
Non-cash net charges | (6.8) | ||||||||||||
Other restructuring information | |||||||||||||
Restructuring liability | 0 | 1.9 | 0 | 1.9 | |||||||||
Restructuring charges incurred to date, pre-tax | 62.1 | 62.1 | |||||||||||
Restructuring charges incurred to date, after-tax | 47.4 | 47.4 | |||||||||||
Restructuring charges incurred, pre-tax | 8 | 6.3 | 12.6 | ||||||||||
Restructuring charges incurred, after tax | 6 | 4.8 | 10.2 | ||||||||||
Cash payments | 2.6 | ||||||||||||
Accelerate 2020 Restructuring Plan | |||||||||||||
Other restructuring information | |||||||||||||
Restructuring charge expected to be incurred, pre-tax | 254.4 | 254.4 | |||||||||||
Restructuring charge expected to be incurred, after tax | 198.4 | 198.4 | |||||||||||
Cash payments | 13.2 | ||||||||||||
Accelerate 2020 Restructuring Plan | Special (gains) and charges | |||||||||||||
Restructuring | |||||||||||||
Recorded expense | 9.9 | 5.3 | |||||||||||
Other restructuring information | |||||||||||||
Restructuring charges, after tax | 8.4 | 6.2 | |||||||||||
Restructuring liability | 4.9 | 18.1 | 4.9 | 18.1 | |||||||||
Other Restructuring Plan | |||||||||||||
Restructuring | |||||||||||||
Recorded expense | 23.8 | 18.7 | |||||||||||
Restructuring reserve, period increase (decrease) | (19.3) | ||||||||||||
Other restructuring information | |||||||||||||
Restructuring charges, after tax | 17.9 | $ 17 | |||||||||||
Prior Year Plans | |||||||||||||
Other restructuring information | |||||||||||||
Restructuring liability | 3.3 | 23.2 | 3.3 | 23.2 | |||||||||
Cash payments | 0.6 | ||||||||||||
Combined Program | |||||||||||||
Restructuring | |||||||||||||
Recorded expense (income) and accrual | 77.7 | 67.2 | |||||||||||
Net cash payments | (101.9) | (5.2) | |||||||||||
Non-cash charges | (14) | ||||||||||||
Reclassification | 19.3 | ||||||||||||
Other restructuring information | |||||||||||||
Restructuring charge expected to be incurred, pre-tax | 19.3 | $ 195 | |||||||||||
Restructuring charge expected to be incurred, after tax | $ 14.5 | $ 150 | |||||||||||
Restructuring liability | 43.1 | 62 | 43.1 | 62 | |||||||||
Restructuring charges incurred, pre-tax | 164.2 | ||||||||||||
Restructuring charges incurred, after tax | 136.9 | ||||||||||||
Combined Program | Employee termination costs | |||||||||||||
Restructuring | |||||||||||||
Recorded expense (income) and accrual | 47 | 67.2 | |||||||||||
Net cash payments | (85.2) | (5.2) | |||||||||||
Reclassification | 19.3 | ||||||||||||
Other restructuring information | |||||||||||||
Restructuring liability | $ 43.1 | $ 62 | 43.1 | 62 | |||||||||
Restructuring charges incurred, pre-tax | 77.7 | 67.2 | |||||||||||
Restructuring charges incurred, after tax | 66.4 | $ 56 | |||||||||||
Combined Program | Asset disposals | |||||||||||||
Restructuring | |||||||||||||
Recorded expense (income) and accrual | 14 | ||||||||||||
Non-cash charges | (14) | ||||||||||||
Combined Program | Other. | |||||||||||||
Restructuring | |||||||||||||
Recorded expense (income) and accrual | 16.7 | ||||||||||||
Net cash payments | $ (16.7) | ||||||||||||
Europe Program | |||||||||||||
Other restructuring information | |||||||||||||
Restructuring charge expected to be incurred, pre-tax | $ 130 | ||||||||||||
Restructuring charge expected to be incurred, after tax | $ 110 |
ACQUISITIONS - Acquisition Summ
ACQUISITIONS - Acquisition Summary (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 01, 2021 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2023 item | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of acquisitions | item | 3 | 0 | ||||
Total assets acquired | $ 84,200,000 | $ 88,700,000 | $ 84,200,000 | |||
Current liabilities | 77,600,000 | |||||
Net tangible assets (liabilities) acquired | 20,800,000 | 3,600,000 | ||||
Customer relationships | 60,800,000 | 75,000,000 | ||||
Trademarks | 4,700,000 | |||||
Non-compete agreements | 2,100,000 | 3,000,000 | ||||
Other technology | 25,800,000 | 1,500,000 | ||||
Goodwill | 70,200,000 | 140,600,000 | ||||
Total aggregate purchase price | 179,700,000 | 228,400,000 | ||||
Acquisition related liabilities and contingent consideration | 3,900,000 | 4,400,000 | ||||
Net cash paid for acquisitions, including acquisition-related liabilities and contingent consideration | 175,800,000 | 224,000,000 | ||||
Payments for merger related costs | 4,100,000 | |||||
Prior year business combinations, net tangible assets adjustments | 1,700,000 | |||||
Acquisition related liabilities and contingent consideration, purchase accounting adjustments | 1,700,000 | |||||
Prior year business combinations | 700,000 | $ 253,800,000 | ||||
Prior year business combinations, goodwill adjustments | 700,000 | 253,800,000 | ||||
Goodwill | 8,063,900,000 | 8,148,200,000 | 8,012,700,000 | 8,063,900,000 | ||
Goodwill expected to be tax deductible | $ 62,000,000 | |||||
Contingent consideration | 1,400,000 | $ 1,400,000 | ||||
Weighted average useful lives of definite-lived intangible assets acquired from other acquisitions | 12 years | 13 years | ||||
Finite-lived intangible assets acquired | 0 | |||||
Purolite | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 3,706,000,000 | $ 3,700,000,000 | ||||
Tangible assets | 361,900,000 | |||||
Total assets acquired | 1,589,900,000 | |||||
Total liabilities | 144,800,000 | |||||
Net consideration transferred to sellers | 3,705,700,000 | |||||
Accounts receivable | 61,600,000 | |||||
Property, plant and equipment | 156,500,000 | |||||
Inventory | 122,400,000 | |||||
Deferred tax liabilities | 38,200,000 | |||||
Payments for merger related costs | 7,200,000 | |||||
Prior year business combinations, net tangible assets adjustments | (54,000,000) | |||||
Prior year business combinations | 246,600,000 | |||||
Prior year business combinations, net intangible assets adjustments | (185,400,000) | |||||
Prior year business combinations, goodwill adjustments | 246,600,000 | |||||
Goodwill | $ 2,260,600,000 | 2,260,600,000 | ||||
Goodwill expected to be tax deductible | 2,146,300,000 | |||||
Weighted average useful lives of definite-lived intangible assets acquired from other acquisitions | 15 years | |||||
Purolite | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 870,000,000 | |||||
Weighted average useful lives of definite-lived intangible assets acquired from other acquisitions | 17 years | |||||
Purolite | Other technologies | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 285,000,000 | |||||
Purolite | Trademarks | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 73,000,000 | |||||
Weighted average useful lives of definite-lived intangible assets acquired from other acquisitions | 5 years | |||||
Purolite | Acquired technologies | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average useful lives of definite-lived intangible assets acquired from other acquisitions | 14 years | |||||
Business Acquisitions and Investment | ||||||
Business Acquisition [Line Items] | ||||||
Prior year business combinations, net tangible assets adjustments | (1,600,000) | |||||
Prior year business combinations | 7,200,000 | |||||
Prior year business combinations, net intangible assets adjustments | (5,600,000) | |||||
Prior year business combinations, goodwill adjustments | $ 7,200,000 |
BALANCE SHEETS INFORMATION (Det
BALANCE SHEETS INFORMATION (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, net | ||
Accounts receivable | $ 2,983.2 | $ 2,829 |
Allowance for expected credit losses and other accruals | (149) | (130.9) |
Total | 2,834.2 | 2,698.1 |
Inventories | ||
Finished goods | 911.4 | 1,122.7 |
Raw materials and parts | 704.7 | 849.2 |
Inventories at FIFO cost | 1,616.1 | 1,971.9 |
FIFO cost to LIFO cost difference | (118.9) | (179.1) |
Total | 1,497.2 | 1,792.8 |
Other current assets | ||
Prepaid assets | 143.9 | 123.9 |
Taxes receivable | 186.9 | 184.1 |
Derivative assets | 3.3 | 57.5 |
Other | 59.1 | 39.2 |
Total | 393.2 | 404.7 |
Property, plant and equipment, net | ||
Land | 155.6 | 161.3 |
Buildings and leasehold improvements | 1,171 | 1,126.9 |
Machinery and equipment | 2,113.8 | 1,966.3 |
Merchandising and customer equipment | 2,758.4 | 2,635.5 |
Capitalized software | 985.9 | 962.1 |
Construction in progress | 470.1 | 403.8 |
Property, plant and equipment, gross | 7,654.8 | 7,255.9 |
Accumulated depreciation | (4,180.2) | (3,962.5) |
Total | 3,474.6 | 3,293.4 |
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 4,846.4 | 4,712.6 |
Accumulated amortization | (2,582.9) | (2,261.9) |
Net intangible assets subject to amortization | 2,263.5 | 2,450.7 |
Total | 3,493.5 | 3,680.7 |
Other assets | ||
Deferred income taxes | 119.3 | 108.1 |
Pension | 118.4 | 118.4 |
Derivative asset | 23.6 | 44.5 |
Other | 271.4 | 264.1 |
Total | 532.7 | 535.1 |
Other current liabilities | ||
Discounts and rebates | 438.8 | 357.8 |
Dividends payable | 162.7 | 150.8 |
Interest payable | 68.5 | 58.7 |
Taxes payable, other than income | 153.2 | 162.9 |
Derivative liability | 3.7 | 21.9 |
Restructuring | 48.9 | 100.6 |
Contract liability | 110.9 | 116.5 |
Operating lease liabilities | $ 126.1 | $ 108.3 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total | Total |
Other | $ 222.1 | $ 208.4 |
Total | 1,334.9 | 1,285.9 |
Accumulated other comprehensive income (loss) | ||
Unrealized (loss) gain on derivative financial instruments, net of tax | (4.1) | 3.7 |
Unrecognized pension and postretirement benefit expense, net of tax | (534.7) | (467.4) |
Cumulative translation, net of tax | (1,311.6) | (1,262.9) |
Total | (1,850.4) | (1,726.6) |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 3,385.1 | 3,292.8 |
Accumulated amortization | (1,805) | (1,581.7) |
Trademarks | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 406.5 | 404 |
Accumulated amortization | (238) | (202.5) |
Patents | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 503.6 | 497 |
Accumulated amortization | (319.4) | (292.3) |
Other technologies | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 551.2 | 518.8 |
Accumulated amortization | (220.5) | (185.4) |
Trade names. | ||
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 | Dec. 31, 2023 | Dec. 31, 2022 |
Components of the company's debt obligations | ||
Long-term debt, current maturities | $ 628.6 | $ 501.4 |
Short-term debt including current maturities of long-term debt | 630.4 | 505.1 |
Amount outstanding under the credit agreement | 0 | 0 |
Letters of Credit, Surety Bonds and Guarantees, Outstanding, Amount | 155 | |
Maximum borrowing capacity for letters of credit, surety bonds and guarantees | 346 | |
Outstanding amount for letters of credit, surety bonds and guarantees | 155 | |
Commercial paper | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity, commercial paper | 2,000 | |
U.S. commercial paper program | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity, commercial paper | 2,000 | |
Outstanding commercial paper | 0 | 0 |
European commercial paper | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity, commercial paper | 2,000 | |
Outstanding commercial paper | 0 | 0 |
Notes payable | ||
Components of the company's debt obligations | ||
Short term borrowings | $ 1.8 | $ 3.7 |
Average interest rate (as a percent) | 8.29% | 7.28% |
Remaining capacity | $ 1,829 | $ 1,925 |
Multi Currency Revolving Credit Facility | ||
Components of the company's debt obligations | ||
Maximum borrowing capacity under the credit agreement | $ 2,000 |
DEBT AND INTEREST - Other Debt
DEBT AND INTEREST - Other Debt Information (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Jan. 31, 2024 USD ($) | Jan. 31, 2024 EUR (€) | Nov. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | |
Debt instrument | |||||||||||||||
Carrying value | $ 8,180 | $ 8,576.7 | $ 8,180 | $ 8,576.7 | |||||||||||
Long-term debt, current maturities | (628.6) | (501.4) | (628.6) | (501.4) | |||||||||||
Long-term debt | 7,551.4 | 8,075.3 | 7,551.4 | 8,075.3 | |||||||||||
Repayments of long-term debt | 500 | $ 1,017.9 | |||||||||||||
Aggregate annual maturities of long-term debt | |||||||||||||||
2024 | 629 | 629 | |||||||||||||
2025 | 634 | 634 | |||||||||||||
2026 | 729 | 729 | |||||||||||||
2027 | 946 | 946 | |||||||||||||
2028 | 495 | 495 | |||||||||||||
Interest | |||||||||||||||
Interest expense | 348.9 | 252.1 | 230.6 | ||||||||||||
Interest income | (52.2) | (8.5) | (12.3) | ||||||||||||
Interest expense, net | 70.4 | $ 74.3 | $ 77.8 | $ 74.2 | 69.5 | $ 65.1 | $ 56 | $ 53 | $ 296.7 | 243.6 | 218.3 | ||||
Subsequent event | |||||||||||||||
Debt instrument | |||||||||||||||
Repayments of long-term debt | $ 630 | € 575 | |||||||||||||
Interest expense | |||||||||||||||
Debt instrument | |||||||||||||||
Debt refinancing charges, pre-tax | 32.3 | ||||||||||||||
Debt refinancing charges, net of tax | $ 28.4 | ||||||||||||||
Public Notes | |||||||||||||||
Debt instrument | |||||||||||||||
Principal outstanding payable at time of prepayment of notes (as a percent) | 101% | ||||||||||||||
Two Year 2021 Senior Notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 498.7 | $ 498.7 | |||||||||||||
AVERAGE INTEREST RATE (as a percent) | 0.90% | 0.90% | |||||||||||||
Effective interest rate (as a percent) | 1.19% | 1.19% | |||||||||||||
Aggregate principal amount | 500 | $ 500 | |||||||||||||
Debt instrument, term | 2 years | ||||||||||||||
Five Year 2022 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 494.2 | $ 492.7 | $ 494.2 | $ 492.7 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 5.25% | 5.25% | 5.25% | 5.25% | 5.25% | ||||||||||
Effective interest rate (as a percent) | 5.60% | 5.36% | 5.60% | 5.36% | 5.60% | ||||||||||
Aggregate principal amount | $ 500 | $ 500 | |||||||||||||
Debt instrument, term | 5 years | ||||||||||||||
Six Year 2021 Senior Notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 497.4 | $ 496.5 | $ 497.4 | $ 496.5 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% | ||||||||||
Effective interest rate (as a percent) | 1.83% | 1.83% | 1.83% | 1.83% | 1.83% | ||||||||||
Aggregate principal amount | $ 500 | $ 500 | |||||||||||||
Debt instrument, term | 6 years | ||||||||||||||
Ten year 2017 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 448.3 | $ 433.9 | $ 448.3 | $ 433.9 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 3.25% | 3.25% | 3.25% | 3.25% | 3.25% | ||||||||||
Effective interest rate (as a percent) | 8.43% | 4.77% | 8.43% | 4.77% | 8.43% | ||||||||||
Aggregate principal amount | $ 500 | $ 500 | |||||||||||||
Debt instrument, term | 10 years | ||||||||||||||
Ten year 2020 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 662.7 | $ 653.5 | $ 662.7 | $ 653.5 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 4.80% | 4.80% | 4.80% | 4.80% | 4.80% | ||||||||||
Effective interest rate (as a percent) | 6.19% | 3.72% | 6.19% | 3.72% | 6.19% | ||||||||||
Aggregate principal amount | $ 698 | $ 698 | |||||||||||||
Debt instrument, term | 10 years | ||||||||||||||
Ten year 2020 senior notes, maturing in 2031 | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 561 | $ 555.2 | $ 561 | $ 555.2 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 1.30% | 1.30% | 1.30% | 1.30% | 1.30% | ||||||||||
Effective interest rate (as a percent) | 3.21% | 1.70% | 3.21% | 1.70% | 3.21% | ||||||||||
Aggregate principal amount | $ 600 | $ 600 | |||||||||||||
Debt instrument, term | 10 years | ||||||||||||||
Eleven Year 2021 Senior Notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 645.2 | $ 644.6 | $ 645.2 | $ 644.6 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.13% | 2.13% | 2.13% | 2.13% | 2.13% | ||||||||||
Effective interest rate (as a percent) | 2.06% | 2.24% | 2.06% | 2.24% | 2.06% | ||||||||||
Aggregate principal amount | $ 650 | $ 650 | |||||||||||||
Debt instrument, term | 11 years | ||||||||||||||
Thirty year 2011 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 384.7 | $ 384.5 | $ 384.7 | $ 384.5 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% | ||||||||||
Effective interest rate (as a percent) | 5.62% | 5.62% | 5.62% | 5.62% | 5.62% | ||||||||||
Aggregate principal amount | $ 389 | $ 389 | |||||||||||||
Debt instrument, term | 30 years | ||||||||||||||
Thirty year 2017 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 426.8 | $ 425.5 | $ 426.8 | $ 425.5 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 3.95% | 3.95% | 3.95% | 3.95% | 3.95% | ||||||||||
Effective interest rate (as a percent) | 4.79% | 4.79% | 4.79% | 4.79% | 4.79% | ||||||||||
Aggregate principal amount | $ 484 | $ 484 | |||||||||||||
Debt instrument, term | 30 years | ||||||||||||||
Thirty year 2020 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 491.1 | $ 490.7 | $ 491.1 | $ 490.7 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.13% | 2.13% | 2.13% | 2.13% | 2.13% | ||||||||||
Effective interest rate (as a percent) | 2.23% | 2.23% | 2.23% | 2.23% | 2.23% | ||||||||||
Aggregate principal amount | $ 500 | $ 500 | |||||||||||||
Debt instrument, term | 30 years | ||||||||||||||
Thirty Year 2021 Senior Notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 839.3 | $ 838.9 | $ 839.3 | $ 838.9 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.70% | 2.70% | 2.70% | 2.70% | 2.70% | ||||||||||
Effective interest rate (as a percent) | 2.78% | 2.78% | 2.78% | 2.78% | 2.78% | ||||||||||
Aggregate principal amount | $ 850 | $ 850 | |||||||||||||
Debt instrument, term | 30 years | ||||||||||||||
Thirty-four year 2021 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 539.2 | $ 537.2 | $ 539.2 | $ 537.2 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% | ||||||||||
Effective interest rate (as a percent) | 3.86% | 3.86% | 3.86% | 3.86% | 3.86% | ||||||||||
Aggregate principal amount | $ 685 | $ 685 | |||||||||||||
Debt instrument, term | 34 years | ||||||||||||||
Seven year 2016 senior euro notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 625.9 | $ 596.9 | $ 625.9 | $ 596.9 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 1% | 1% | 1% | 1% | 1% | ||||||||||
Effective interest rate (as a percent) | 1.19% | 1.03% | 1.19% | 1.03% | 1.19% | ||||||||||
Aggregate principal amount | € | € 575 | ||||||||||||||
Debt instrument, term | 7 years | ||||||||||||||
Ten year 2016 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 728.2 | $ 721.1 | $ 728.2 | $ 721.1 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.70% | 2.70% | 2.70% | 2.70% | 2.70% | ||||||||||
Effective interest rate (as a percent) | 4.07% | 3.21% | 4.07% | 3.21% | 4.07% | ||||||||||
Aggregate principal amount | $ 750 | $ 750 | |||||||||||||
Debt instrument, term | 10 years | ||||||||||||||
Thirty year 2016 senior notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 197.4 | $ 197.3 | $ 197.4 | $ 197.3 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 3.70% | 3.70% | 3.70% | 3.70% | 3.70% | ||||||||||
Effective interest rate (as a percent) | 3.80% | 3.81% | 3.80% | 3.81% | 3.80% | ||||||||||
Aggregate principal amount | $ 200 | $ 200 | |||||||||||||
Debt instrument, term | 30 years | ||||||||||||||
Ten Year 2015 senior euro notes | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 625.1 | $ 596.7 | $ 625.1 | $ 596.7 | |||||||||||
AVERAGE INTEREST RATE (as a percent) | 2.63% | 2.63% | 2.63% | 2.63% | 2.63% | ||||||||||
Effective interest rate (as a percent) | 2.88% | 2.81% | 2.88% | 2.81% | 2.88% | ||||||||||
Aggregate principal amount | € | € 575 | ||||||||||||||
Debt instrument, term | 10 years | ||||||||||||||
New 5-Year Note | |||||||||||||||
Debt instrument | |||||||||||||||
Aggregate principal amount | $ 500 | ||||||||||||||
Debt instrument, term | 5 years | ||||||||||||||
Interest rate (as a percent) | 5.25% | ||||||||||||||
Other debt. | |||||||||||||||
Debt instrument | |||||||||||||||
Carrying value | $ 13.5 | $ 12.8 | $ 13.5 | $ 12.8 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Amount | Foreign currency forward contracts | ||
Assets: | ||
Foreign currency forward contracts | $ 26.6 | $ 118.9 |
Liabilities: | ||
Foreign currency forward contracts | 27 | 83.3 |
Carrying Amount | Interest rate swap agreements | ||
Liabilities: | ||
Interest rate swap agreements | 146.5 | 181.4 |
Carrying Amount | Cross-currency swap derivative contracts | ||
Assets: | ||
Foreign currency forward contracts | 29.1 | 58.7 |
Liabilities: | ||
Foreign currency forward contracts | 24.9 | 14.5 |
Level 2 | Foreign currency forward contracts | ||
Assets: | ||
Foreign currency forward contracts | 26.6 | 118.9 |
Liabilities: | ||
Foreign currency forward contracts | 27 | 83.3 |
Level 2 | Interest rate swap agreements | ||
Liabilities: | ||
Interest rate swap agreements | 146.5 | 181.4 |
Level 2 | Cross-currency swap derivative contracts | ||
Assets: | ||
Foreign currency forward contracts | 29.1 | 58.7 |
Liabilities: | ||
Foreign currency forward contracts | $ 24.9 | $ 14.5 |
FAIR VALUE MEASUREMENTS - Long-
FAIR VALUE MEASUREMENTS - Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt, including current maturities | $ 8,180 | $ 8,576.7 |
Fair Value | Level 2 | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt, including current maturities | $ 7,552.5 | $ 7,643.6 |
DERIVATIVES AND HEDGING TRANS_3
DERIVATIVES AND HEDGING TRANSACTIONS - Derivative Positions Summary (Details) € in Millions, ¥ in Millions, $ in Millions | Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 USD ($) |
Asset Derivatives | ||||
Gross value of derivatives | $ 55.7 | $ 177.6 | ||
Gross amounts offset in the Consolidated Balance Sheet | (28.8) | (75.6) | ||
Net value of derivatives presented in the Consolidated Balance Sheet | 26.9 | 102 | ||
Liability Derivatives | ||||
Gross value of derivatives | 198.4 | 279.2 | ||
Gross amounts offset in the Consolidated Balance Sheet | (28.8) | (75.6) | ||
Net value of derivatives presented in the Consolidated Balance Sheet | 169.6 | 203.6 | ||
Cash collateral received | 0 | |||
Cash collateral pledged | 0 | |||
Foreign currency forward contracts | ||||
Liability Derivatives | ||||
Notional values | 3,745 | 5,745 | ||
Interest rate swap agreements | ||||
Liability Derivatives | ||||
Notional values | 1,500 | 1,500 | ||
Cross-currency swap derivative contracts | ||||
Liability Derivatives | ||||
Notional values | 998 | € 625 | ¥ 2,192 | 650 |
Derivatives designated as hedging instruments | Foreign currency forward contracts | ||||
Asset Derivatives | ||||
Gross value of derivatives | 6.7 | 78.6 | ||
Liability Derivatives | ||||
Gross value of derivatives | 5.2 | 9.2 | ||
Derivatives designated as hedging instruments | Interest rate swap agreements | ||||
Liability Derivatives | ||||
Gross value of derivatives | 146.5 | 181.4 | ||
Derivatives designated as hedging instruments | Cross-currency swap derivative contracts | ||||
Asset Derivatives | ||||
Gross value of derivatives | 29.1 | 58.7 | ||
Liability Derivatives | ||||
Gross value of derivatives | 24.9 | 14.5 | ||
Derivatives not designated as hedging instruments | Foreign currency forward contracts | ||||
Asset Derivatives | ||||
Gross value of derivatives | 19.9 | 40.3 | ||
Liability Derivatives | ||||
Gross value of derivatives | $ 21.8 | $ 74.1 |
DERIVATIVES AND HEDGING TRANS_4
DERIVATIVES AND HEDGING TRANSACTIONS - Information by Type of Derivative and Hedging Activities (Details) € in Millions, ¥ in Millions, $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2023 CNY (¥) | Nov. 30, 2023 EUR (€) | Oct. 31, 2023 CNY (¥) | Aug. 31, 2023 CNY (¥) | Apr. 30, 2022 | |
Fair Value Hedges | |||||||||
Derivative liability | $ 169.6 | $ 203.6 | |||||||
Net Investment Hedges | |||||||||
Revaluation (loss) gain, net of tax | (73.1) | 108.3 | $ 51.6 | ||||||
Seven year 2008 senior notes | |||||||||
Fair Value Hedges | |||||||||
Aggregate principal amount | 1,500 | ||||||||
Cost of sales | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) on derivative recognized in income | $ 10.6 | $ 6.4 | $ (11) | ||||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods and Services Sold | Cost of Goods and Services Sold | Cost of Goods and Services Sold | ||||||
Selling, general and administrative expenses | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) on derivative recognized in income | $ (45.1) | $ 157 | $ 121.3 | ||||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | ||||||
Interest expense, net | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) on derivative recognized in income | $ 5.8 | $ 11.6 | $ 18.7 | ||||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, Net | Interest Expense, Net | Interest Expense, Net | ||||||
Foreign currency forward contracts | |||||||||
Net Investment Hedges | |||||||||
Notional values | $ 3,745 | $ 5,745 | |||||||
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 | $ (26.2) | $ 62 | $ 73.7 | ||||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | ||||||
Interest rate swap agreements | |||||||||
Net Investment Hedges | |||||||||
Notional values | $ 1,500 | $ 1,500 | |||||||
Cross-currency swap derivative contracts | |||||||||
Net Investment Hedges | |||||||||
Notional values | 998 | 650 | € 625 | ¥ 2,192 | |||||
Cross-currency swap derivative contracts | Euro | |||||||||
Net Investment Hedges | |||||||||
Notional values | 690 | ||||||||
Cross-currency swap derivative contracts | CNY | |||||||||
Net Investment Hedges | |||||||||
Notional values | 308 | ||||||||
Minimum | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Interest rate (as a percent) | 1.30% | ||||||||
Fair Value Hedges | |||||||||
Interest rate (as a percent) | 1.30% | ||||||||
Maximum | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Interest rate (as a percent) | 4.80% | ||||||||
Fair Value Hedges | |||||||||
Interest rate (as a percent) | 4.80% | ||||||||
Cash Flow Hedges. | Foreign currency forward contracts | Derivatives designated as hedging instruments | Cost of sales | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | 10.6 | 6.4 | $ (11) | ||||||
Cash Flow Hedges. | Foreign currency forward contracts | Derivatives designated as hedging instruments | Selling, general and administrative expenses | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | (18.9) | 95 | 47.6 | ||||||
Cash Flow Hedges. | Foreign currency forward contracts | Derivatives designated as hedging instruments | Interest expense, net | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value | 7.7 | 13.9 | 21 | ||||||
Cash Flow Hedges. | Interest rate swap agreements | Derivatives designated as hedging instruments | |||||||||
Impact on AOCI and earnings from derivative contracts | |||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | $ (1.9) | $ (2.3) | $ (2.3) | ||||||
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, Net | Interest Expense, Net | Interest Expense, Net | ||||||
Fair Value Hedges | Interest rate swap agreements | |||||||||
Fair Value Hedges | |||||||||
Cumulative amount of fair value hedging adjustment | $ (148.6) | $ (184.8) | |||||||
Derivative liability | 1,353.7 | 1,317.5 | |||||||
Net Investment Hedge | |||||||||
Net Investment Hedges | |||||||||
Revaluation (loss) gain, net of tax | (73.1) | 108.3 | $ 51.6 | ||||||
Net Investment Hedge | Senior euro notes | |||||||||
Net Investment Hedges | |||||||||
Notional values | 908 | € 834 | |||||||
Net Investment Hedge | Euro debt maturing on January 15, 2024 | |||||||||
Net Investment Hedges | |||||||||
Net investment hedge elected to de-designate | € | € 316 | ||||||||
Net Investment Hedge | Euro Notes | |||||||||
Net Investment Hedges | |||||||||
Revaluation (loss) gain, net of tax | (42.3) | 81.9 | 45.3 | ||||||
Net Investment Hedge | Cross-currency swap derivative contracts | |||||||||
Net Investment Hedges | |||||||||
Revaluation (loss) gain, net of tax | $ (30.8) | $ 26.4 | $ 6.3 | ||||||
Net Investment Hedge | Cross currency interest rate contract maturing in 2032 | |||||||||
Net Investment Hedges | |||||||||
Notional values | ¥ | ¥ 1,098 | ¥ 1,094 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reclassification adjustments | |||||||||||
COS | $ (2,284.4) | $ (2,330.5) | $ (2,334.8) | $ (2,205.2) | $ (2,254.9) | $ (2,291.6) | $ (2,211.1) | $ (2,073.4) | $ (9,154.9) | $ (8,831) | $ (7,615.8) |
SG&A | (1,034.8) | (1,024.9) | (1,011.6) | (990.3) | (922.1) | (876.9) | (940.1) | (914.7) | (4,061.6) | (3,653.8) | (3,416.1) |
Interest (income) expense, net | $ (70.4) | $ (74.3) | $ (77.8) | $ (74.2) | $ (69.5) | $ (65.1) | $ (56) | $ (53) | (296.7) | (243.6) | (218.3) |
Subtotal | (126) | (96) | 356.4 | ||||||||
Derivative & Hedging Instruments | |||||||||||
Reclassification adjustments | |||||||||||
Amount recognized in AOCI | (12.8) | 112.9 | 87.5 | ||||||||
Other activity | 1.1 | (1.7) | |||||||||
Tax impact | 2.5 | (2.2) | (4.5) | ||||||||
Subtotal | (7.8) | (1.2) | 26 | ||||||||
Derivative & Hedging Instruments | Reclassifications adjustments | |||||||||||
Reclassification adjustments | |||||||||||
COS | (10.6) | (6.4) | 11 | ||||||||
SG&A | 18.9 | (95) | (47.6) | ||||||||
Interest (income) expense, net | (5.8) | (11.6) | (18.7) | ||||||||
(Gains) losses reclassified from AOCI into income | 2.5 | (113) | (55.3) | ||||||||
Pension & Postretirement Benefits | |||||||||||
Reclassification adjustments | |||||||||||
Amount recognized in AOCI | 4.2 | 99.3 | 117.4 | ||||||||
Tax impact | 21.4 | (52.3) | (98.4) | ||||||||
Subtotal | (55.1) | 130.3 | 289.7 | ||||||||
Current period net actuarial (loss) gain | |||||||||||
Reclassification adjustments | |||||||||||
Amount recognized in AOCI | (80.7) | 83.3 | 270.7 | ||||||||
Settlement charge | Reclassifications adjustments | |||||||||||
Reclassification adjustments | |||||||||||
(Gains) losses reclassified from AOCI into income | (2.7) | 51.6 | 38.8 | ||||||||
Prior service costs | Reclassifications adjustments | |||||||||||
Reclassification adjustments | |||||||||||
(Gains) losses reclassified from AOCI into income | $ 6.9 | $ 47.7 | $ 78.6 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2022 | Feb. 28, 2015 | |
SHAREHOLDERS' EQUITY | |||||
Common stock, par value per share (in dollars per share) | $ 1 | $ 1 | |||
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | |||
Dividends declared per common share (in dollars per share) | $ 2.16 | $ 2.06 | $ 1.95 | ||
COMMON STOCK | |||||
SHAREHOLDERS' EQUITY | |||||
Common stock, par value per share (in dollars per share) | $ 1 | $ 1 | $ 1 | ||
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | 800,000,000 | ||
Dividends declared per common share (in dollars per share) | $ 2.16 | $ 2.06 | $ 1.95 | ||
Common stock, shares authorized to be repurchased | 20,000,000 | ||||
Reacquired shares (in shares) | 83,674 | 3,038,107 | 502,132 | ||
Remaining shares authorized to be repurchased | 12,917,097 | ||||
Number of shares reacquired through the open market | 0 | 2,933,090 | 389,759 | ||
Number of shares that have been repurchased through the exercise of stock options and vesting of stock awards | 83,674 | 105,017 | 112,373 | ||
COMMON STOCK | Maximum | |||||
SHAREHOLDERS' EQUITY | |||||
Common stock, shares authorized to be repurchased | 10,000,000 | ||||
Undesignated preferred stock | |||||
SHAREHOLDERS' EQUITY | |||||
Preferred stock, shares authorized | 15,000,000 |
EQUITY COMPENSATION PLANS (Deta
EQUITY COMPENSATION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
EQUITY COMPENSATION PLANS | |||
Common shares available for grant (in shares) | 18,840,265 | 5,475,903 | 7,544,458 |
Value of awards granted, portion from stock options under current program (as a percent) | 40% | 50% | 50% |
Value of awards granted, portion from PBRSUs under current program (as a percent) | 60% | 50% | 50% |
Total compensation expense related to all share-based compensation plans | $ 95.1 | $ 87.8 | $ 89.5 |
Total compensation expense, net of tax benefit | 81.4 | $ 74.8 | $ 75.4 |
Total measured but unrecognized compensation expense related to non-vested share-based compensation arrangements granted under all of the company's plans | $ 174 | ||
Weighted-average period over which unrecognized compensation costs on nonvested awards expected to be recognized | 2 years 2 months 12 days |
EQUITY COMPENSATION PLANS - Sto
EQUITY COMPENSATION PLANS - Stock Options (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock incentive and option plans | |||
Stock option expiration period | 10 years | ||
Stock option vesting period | 3 years | ||
SHARES | |||
Outstanding, beginning of year (in shares) | 7,031,103 | 6,217,161 | 6,802,415 |
Granted (in shares) | 861,840 | 1,228,673 | 812,853 |
Exercised (in shares) | (832,050) | (294,228) | (1,306,998) |
Canceled (in shares) | (139,537) | (120,503) | (91,109) |
Outstanding, end of year (in shares) | 6,921,356 | 7,031,103 | 6,217,161 |
Exercisable, end of year (in shares) | 5,107,518 | 5,168,161 | 4,604,922 |
Vested and expected to vest, end of year (in shares) | 6,862,799 | ||
AVERAGE PRICE PER SHARE | |||
Outstanding, beginning of year (in dollars per share) | $ 160.45 | $ 160.91 | $ 144.20 |
Granted (in dollars per share) | 190.53 | 148.79 | 223.85 |
Exercised (in dollars per share) | 119.41 | 101.08 | 110.91 |
Canceled (in dollars per share) | 183.77 | 210.26 | 192.49 |
Outstanding, end of year (in dollars per share) | 168.65 | 160.45 | 160.91 |
Exercisable, end of year (in dollars per share) | 165.77 | $ 155.45 | $ 141.21 |
Vested and expected to vest, end of year (in dollars per shares) | $ 168.60 | ||
Total intrinsic value of options exercised during period | $ 47.7 | $ 21 | $ 148.1 |
Total aggregate intrinsic value of in-the-money options outstanding | $ 244.4 | ||
Weighted-average remaining contractual life of options outstanding | 6 years 3 months 18 days | ||
Total aggregate intrinsic value of in-the-money options exercisable | $ 199.6 | ||
Weighted-average remaining contractual life of options exercisable | 5 years 3 months 18 days | ||
Aggregate intrinsic value of vested and expected to vest options outstanding | $ 242.5 | ||
Weighted-average remaining contractual life of vested and expected to vest options outstanding | 6 years 3 months 18 days |
EQUITY COMPENSATION PLANS - Fai
EQUITY COMPENSATION PLANS - Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Option [Member] | |||
Assumptions | |||
Weighted average grant date fair value of options granted at market prices (in dollars per share) | $ 50.26 | $ 37.04 | $ 47.65 |
Risk-free rate of return (as a percent) | 4.10% | 3.50% | 1.20% |
Expected life | 6 years | 6 years | 6 years |
Expected volatility (as a percent) | 22.40% | 23.50% | 23% |
Expected dividend yield (as a percent) | 1.20% | 1.40% | 0.90% |
Vesting period | 3 years | ||
Employee Stock Option [Member] | Minimum | |||
Assumptions | |||
Yield curve of U.S. treasury rates | 1 month | ||
Employee Stock Option [Member] | Maximum | |||
Assumptions | |||
Yield curve of U.S. treasury rates | 10 years | ||
PBRSU Awards | |||
Assumptions | |||
Period of requisite continued service | 3 years | ||
Common stock issuable for each vested stock award (in shares) | 1 | ||
Vesting period | 3 years | ||
Restricted Stock Awards and Units | Minimum | |||
Assumptions | |||
Vesting period | 24 months | ||
Restricted Stock Awards and Units | Maximum | |||
Assumptions | |||
Vesting period | 60 months |
EQUITY COMPENSATION PLANS - Oth
EQUITY COMPENSATION PLANS - Other Information (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
PBRSU Awards | |||
Summary of PBRSU awards and restricted stock activity: | |||
Stock awards outstanding, at the beginning of period (in shares) | 823,170 | 788,529 | 914,630 |
Stock awards granted (in shares) | 328,739 | 291,496 | 176,297 |
Stock awards vested/ earned (in shares) | (180,674) | (232,210) | (271,731) |
Stock awards cancelled (in shares) | (26,409) | (24,645) | (30,667) |
Stock awards outstanding, at the end of period (in shares) | 944,826 | 823,170 | 788,529 |
Weighted-average fair value at grant-date of stock awards outstanding, at the beginning of period (in dollars per share) | $ 181.68 | $ 189.96 | $ 165.76 |
Weighted-average fair value at grant-date of stock awards granted (in dollars per share) | 185.10 | 142.24 | 223.77 |
Weighted-average fair value at grant-date of stock awards vested/earned (in dollars per share) | 178.26 | 152.63 | 131.74 |
Weighted-average fair value at grant-date of stock awards cancelled (in dollars per share) | 175.05 | 207.05 | 178.46 |
Weighted-average fair value at grant-date of stock awards outstanding, at the end of period (in dollars per share) | $ 183.71 | $ 181.68 | $ 189.96 |
Restricted Stock Awards and Units | |||
Summary of PBRSU awards and restricted stock activity: | |||
Stock awards outstanding, at the beginning of period (in shares) | 385,097 | 232,274 | 163,683 |
Stock awards granted (in shares) | 156,618 | 240,370 | 130,807 |
Stock awards vested/ earned (in shares) | (61,776) | (68,864) | (48,977) |
Stock awards cancelled (in shares) | (24,449) | (18,683) | (13,239) |
Stock awards outstanding, at the end of period (in shares) | 455,490 | 385,097 | 232,274 |
Weighted-average fair value at grant-date of stock awards outstanding, at the beginning of period (in dollars per share) | $ 170.50 | $ 195.95 | $ 172.92 |
Weighted-average fair value at grant-date of stock awards granted (in dollars per share) | 165.81 | 146.90 | 211.12 |
Weighted-average fair value at grant-date of stock awards vested/earned (in dollars per share) | 191.22 | 163.81 | 160.84 |
Weighted-average fair value at grant-date of stock awards cancelled (in dollars per share) | 166.22 | 201.39 | 192.12 |
Weighted-average fair value at grant-date of stock awards outstanding, at the end of period (in dollars per share) | $ 166.31 | $ 170.50 | $ 195.95 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income before income taxes. | |||||||||||
United States | $ 408.9 | $ 295.6 | $ 277.7 | ||||||||
International | 1,346.6 | 1,047.8 | 1,136.5 | ||||||||
Income before income taxes | $ 537.5 | $ 506.2 | $ 421.3 | $ 290.5 | $ 321.6 | $ 412.2 | $ 389.3 | $ 220.3 | 1,755.5 | 1,343.4 | 1,414.2 |
Current income tax expense (benefit) | |||||||||||
Federal and state | 137.6 | 145.7 | 30.9 | ||||||||
International | 280 | 231.4 | 240.2 | ||||||||
Total current | 417.6 | 377.1 | 271.1 | ||||||||
Deferred income tax expense (benefit) | |||||||||||
Federal and state | (40.1) | (78.9) | 3.6 | ||||||||
International | (15) | (63.7) | (4.5) | ||||||||
Total deferred | (55.1) | (142.6) | (0.9) | ||||||||
Provision for income taxes | $ 126.7 | $ 96.8 | $ 86.6 | $ 52.4 | $ 52.1 | $ 60.2 | $ 76.6 | $ 45.6 | $ 362.5 | $ 234.5 | $ 270.2 |
INCOME TAXES - Net Deferred Tax
INCOME TAXES - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets | ||
Pension and post-retirement benefits | $ 82.1 | $ 87 |
Other accrued liabilities | 162 | 129.6 |
Lease liability | 135.9 | 109.2 |
Credit carryforwards | 83.7 | 97.8 |
Capitalization of R&D costs | 180.9 | 84.5 |
Loss carryforwards | 57.3 | 67.2 |
Share-based compensation | 54.5 | 51.2 |
Deferred income | 27.9 | 59.6 |
Other, net | 113.3 | 98.8 |
Valuation allowance | (65.7) | (65.2) |
Total deferred tax assets | 831.9 | 719.7 |
Deferred tax liabilities | ||
Goodwill | (160.1) | (124.8) |
Intangible assets | (451.3) | (486.3) |
Property, plant and equipment | (332.3) | (319.7) |
Lease asset | (136.1) | (109.1) |
Financing | (32.1) | (33.5) |
Other, net | (18.9) | (43.8) |
Total deferred tax liabilities | (1,130.8) | (1,117.2) |
Net deferred tax liabilities balance | (298.9) | $ (397.5) |
Federal | ||
Deferred tax assets | ||
Loss carryforwards | 0.2 | |
State | ||
Deferred tax assets | ||
Loss carryforwards | 16.2 | |
International | ||
Deferred tax assets | ||
Credit carryforwards | 74.7 | |
Loss carryforwards | $ 40.9 |
INCOME TAXES - Loss Carryforwar
INCOME TAXES - Loss Carryforwards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating loss carryforwards | |||
Statutory U.S. rate (as a percent) | 21% | 21% | 21% |
Net operating loss carryforwards | $ 57.3 | $ 67.2 | |
Valuation allowance on deferred tax asset | 65.7 | 65.2 | |
Deferred Tax Liabilities, Net | 298.9 | 397.5 | |
Total deferred | (55.1) | (142.6) | $ (0.9) |
Excess tax benefits, share-based compensation | 6 | 29.1 | |
Federal | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 0.2 | ||
Capital loss carryforward | 3.6 | ||
Capital loss carryforwards,Subject to Expiration | 3.6 | ||
Carryforwards subject to expiration | 16.4 | ||
State | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 16.2 | ||
International | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 40.9 | ||
Carryforwards subject to expiration | 14.1 | ||
No expiration | 26.8 | ||
Tax reduction due to tax holiday | $ 6.6 | $ 5.8 | $ 2.9 |
Tax holiday impact on diluted earnings per share (in dollars per share) | $ 0.02 | $ 0.02 | $ 0.01 |
International | Luxembourg | |||
Operating loss carryforwards | |||
Operating loss carryforward, not reported in financial statements | $ 1,300 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the Statutory Rate to Effective Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the statutory U.S. federal income tax rate to the company's effective income tax rate | |||
Statutory U.S. rate (as a percent) | 21% | 21% | 21% |
State income taxes, net of federal benefit (as a percent) | 1.40% | 1.30% | 0.60% |
Foreign operations (as a percent) | (0.50%) | (0.80%) | (0.60%) |
Excess stock benefits (as a percent) | (0.30%) | (0.40%) | (2.00%) |
R&D credit (as a percent) | (1.30%) | (1.40%) | (1.30%) |
Foreign derived intangible income (as a percent) | (1.20%) | (1.80%) | (1.60%) |
Change in valuation allowance (as a percent) | 0.50% | 0.70% | 0.50% |
Legal entity rationalization (as a percent) | 0.10% | (1.50%) | |
One-time transfer of intangibles (as a percent) | 1.80% | ||
Other, net (as a percent) | 0.90% | 0.40% | 0.70% |
Effective income tax rate (as a percent) | 20.60% | 17.50% | 19.10% |
Discrete tax charges | $ 34.9 | ||
Non-cash deferred tax charge | 25.1 | ||
Remaining tax expense | $ 8.8 | 9.8 | |
Special gains and charges, recognized discrete tax expense (benefit), net, | $ (24.7) | 53.7 | 53.3 |
Recognized discrete tax expense (benefit), net | 5.8 | ||
Recognized discrete tax benefits, legal entity rationalization | 14.6 | ||
Excess tax benefits, share-based compensation | 6 | 29.1 | |
Recognized discrete tax benefits | 11.2 | 11.8 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | |||
Balance at beginning of year | 24.9 | 25.1 | 20.7 |
Additions based on tax positions related to the current year | 5.8 | 2.7 | 3.8 |
Additions for tax positions of prior years | 1.7 | 3.6 | 3 |
Current year acquisitions | 4.4 | ||
Assumed in connection with acquisitions | 4.4 | ||
Reductions for tax positions of prior years | (1.5) | ||
Reductions for tax positions due to statute of limitations | (2.7) | (0.7) | (3) |
Settlements | (5.5) | (3.4) | (3.7) |
Foreign currency translation | (0.9) | (0.1) | |
Balance at end of year | 24.2 | 24.9 | 25.1 |
Unrecognized tax benefits that would affect the annual effective tax rate | 21.6 | 23.1 | 22.8 |
Accrued interest, including minor amounts for penalties | 4 | $ 4 | $ 3.2 |
Purolite | |||
Reconciliation of the statutory U.S. federal income tax rate to the company's effective income tax rate | |||
Deferred tax liability | $ 2.8 |
RENTALS AND LEASES - Lessee (De
RENTALS AND LEASES - Lessee (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RENTALS AND LEASES | |||
Operating lease cost | $ 215.4 | $ 196.9 | $ 179.4 |
RENTALS AND LEASES - Future Mat
RENTALS AND LEASES - Future Maturity and Minimum Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating leases maturities: | |||
2024 | $ 147 | ||
2025 | 128 | ||
2026 | 101 | ||
2027 | 69 | ||
2028 | 39 | ||
Thereafter | 148 | ||
Total lease payments | 632 | ||
Less: imputed interest | 80 | ||
Present value of lease liabilities | $ 552 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Operating Lease, Liability, Current, Operating Lease Liability Noncurrent, Excluded From Long-term Debt | ||
Weighted-average remaining lease term - operating leases | 6 years 5 months 8 days | 6 years 8 months 15 days | 5 years 11 months 26 days |
Weighted-average discount rate - operating leases | 4.02% | 2.98% | 3.07% |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 170.6 | $ 157.3 | $ 157 |
Leased assets obtained in exchange for new operating lease liabilities | $ 251.5 | $ 202.7 | $ 116.8 |
RENTALS AND LEASES - Lessor (De
RENTALS AND LEASES - Lessor (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessor, Lease, Description [Line Items] | |||
Property, plant and equipment, gross | $ 7,654.8 | $ 7,255.9 | |
Accumulated depreciation | 4,180.2 | 3,962.5 | |
Operating Leases, Income Statement, Lease Revenue | |||
Operating lease revenue | $ 511.8 | $ 466.7 | $ 412.5 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Operating Income (Loss) | Operating Income (Loss) | Operating Income (Loss) |
Operating Leases, Future Minimum Payments Receivable | |||
2024 | $ 424 | ||
2025 | 304 | ||
2026 | 243 | ||
2027 | 168 | ||
2028 | 84 | ||
Thereafter | 49 | ||
Total lease revenue | 1,272 | ||
Operating Leases Recorded in Property, Plant and Equipment | |||
Lessor, Lease, Description [Line Items] | |||
Property, plant and equipment, gross | 1,397.5 | $ 1,288.3 | |
Accumulated depreciation | $ 878.9 | $ 811.2 |
RESEARCH AND DEVELOPMENT EXPE_2
RESEARCH AND DEVELOPMENT EXPENDITURES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RESEARCH AND DEVELOPMENT EXPENDITURES | |||
Research expenditures related to the development of new products and processes, including significant improvements and refinements to existing products | $ 192 | $ 190 | $ 186 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 item location | Jun. 01, 2022 USD ($) | |
Loss contingencies | ||
Estimated settlement | $ 500 | |
Environmental matters | ||
Number of locations for environmental assessments and remediation | location | 25 | |
Nalco Holding Company ("Nalco") | ||
Loss contingencies | ||
Estimated settlement | 30 | |
Number of plaintiffs having claims | item | 5,000 | |
Maximum | Nalco Holding Company ("Nalco") | ||
Loss contingencies | ||
Estimated possible loss | 520 | |
Minimum | Nalco Holding Company ("Nalco") | ||
Loss contingencies | ||
Estimated possible loss | $ 152 |
RETIREMENT PLANS - Information
RETIREMENT PLANS - Information Related to Pension and Postretirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Projected Benefit Obligation | |||
Recorded benefit obligations | $ 87 | $ 86 | |
Settlement expense | $ 50.6 | $ 37.2 | |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonrecurring (Income) Expense | Other Nonrecurring (Income) Expense | |
Amounts recognized in Consolidated Balance Sheet: | |||
Other assets | $ 118.4 | $ 118.4 | |
Postretirement health care and pension benefits | (651.7) | (670.3) | |
Amounts recognized in Accumulated Other Comprehensive Loss (Income): | |||
Accumulated other comprehensive loss (income), net of tax | 534.7 | 467.4 | |
Change in Accumulated Other Comprehensive Loss (Income): | |||
Other comprehensive loss (income) | 55.1 | (130.3) | (289.7) |
Aggregate projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets: | |||
Aggregate projected benefit obligation | 2,428.8 | 2,392.1 | |
Accumulated benefit obligation | 2,392.4 | 2,355.8 | |
Fair value of plan assets | 1,868.9 | 1,828.1 | |
U.S. Pension. | Pension | |||
Defined Benefit Plan Disclosure | |||
Accumulated Benefit Obligation, end of year | 1,859.5 | 1,799 | |
Projected Benefit Obligation | |||
Projected benefit obligation, beginning of year | 1,799 | 2,462.7 | |
Service cost | 40.9 | 40.8 | |
Interest cost | 88.1 | 65.3 | |
Actuarial (gain) loss | 90.2 | (479.8) | |
Benefits paid | (158.7) | (290) | |
Projected benefit obligation, end of year | 1,859.5 | 1,799 | 2,462.7 |
Plan Assets | |||
Fair value of plan assets, beginning of year | 1,668.5 | 2,376.8 | |
Actual returns on plan assets | 149.1 | (430.3) | |
Company contributions | 60.8 | 12 | |
Benefits paid | (158.7) | (290) | |
Fair value of plan assets, end of year | 1,719.7 | 1,668.5 | 2,376.8 |
Funded Status, end of year | (139.8) | (130.5) | |
Amounts recognized in Consolidated Balance Sheet: | |||
Other current liabilities | (9.2) | (9.2) | |
Postretirement health care and pension benefits | (130.6) | (121.3) | |
Net liability | (139.8) | (130.5) | |
Amounts recognized in Accumulated Other Comprehensive Loss (Income): | |||
Unrecognized net actuarial loss (gain) | 495.2 | 411.9 | |
Unrecognized net prior service costs (benefits) | (16.7) | (21.2) | |
Tax (benefit) expense | (122.8) | (100.8) | |
Accumulated other comprehensive loss (income), net of tax | 355.7 | 289.9 | |
Change in Accumulated Other Comprehensive Loss (Income): | |||
Amortization of net actuarial gain (loss) | (0.2) | (30.2) | |
Amortization of prior service credits | 4.5 | 4.5 | |
Current period net actuarial loss (gain) | 83.5 | 97 | |
Curtailments and settlements | (51.6) | ||
Tax (benefit) expense | (22) | (5.5) | |
Other comprehensive loss (income) | 65.8 | 14.2 | |
Estimated amounts in accumulated other comprehensive loss expected to be reclassified to net period cost during 2021 | |||
Net actuarial loss (gain) | 6.1 | ||
Net prior service costs (benefits) | (4.6) | ||
Total | 1.5 | ||
U.S. Pension. | U.S. Postretirement Benefits | |||
Defined Benefit Plan Disclosure | |||
Accumulated Benefit Obligation, end of year | 112 | 115.5 | |
Projected Benefit Obligation | |||
Projected benefit obligation, beginning of year | 115.5 | 155.4 | |
Service cost | 0.4 | 0.8 | 31.4 |
Interest cost | 5.6 | 3.3 | 17.3 |
Participant contributions | 3.8 | 3.7 | |
Actuarial (gain) loss | (0.1) | (33.7) | |
Benefits paid | (13.2) | (14) | |
Projected benefit obligation, end of year | 112 | 115.5 | 155.4 |
Plan Assets | |||
Fair value of plan assets, beginning of year | 3.2 | 5.2 | |
Actual returns on plan assets | 0.2 | (0.8) | |
Company contributions | 12.2 | 12.8 | |
Benefits paid | (13.2) | (14) | |
Fair value of plan assets, end of year | 2.4 | 3.2 | 5.2 |
Funded Status, end of year | (109.6) | (112.3) | |
Amounts recognized in Consolidated Balance Sheet: | |||
Other current liabilities | (8.7) | (7.6) | |
Postretirement health care and pension benefits | (100.9) | (104.7) | |
Net liability | (109.6) | (112.3) | |
Amounts recognized in Accumulated Other Comprehensive Loss (Income): | |||
Unrecognized net actuarial loss (gain) | (40.8) | (43.6) | |
Tax (benefit) expense | 6.2 | 7.7 | |
Accumulated other comprehensive loss (income), net of tax | (34.6) | (35.9) | |
Change in Accumulated Other Comprehensive Loss (Income): | |||
Amortization of net actuarial gain (loss) | 3.1 | 0.6 | |
Current period net actuarial loss (gain) | (0.3) | (32.5) | |
Tax (benefit) expense | (1.5) | 6.5 | |
Other comprehensive loss (income) | 1.3 | (25.4) | |
Estimated amounts in accumulated other comprehensive loss expected to be reclassified to net period cost during 2021 | |||
Net actuarial loss (gain) | (3.2) | ||
Total | (3.2) | ||
International Pension | Pension | |||
Defined Benefit Plan Disclosure | |||
Accumulated Benefit Obligation, end of year | 1,125.8 | 1,171.1 | |
Projected Benefit Obligation | |||
Projected benefit obligation, beginning of year | 1,221.9 | 1,779.7 | |
Service cost | 21.7 | 28.4 | |
Interest cost | 45.9 | 22 | |
Participant contributions | 2.8 | 3 | |
Plan amendments | (1.5) | ||
Actuarial (gain) loss | (101) | (436.8) | |
Assumed through acquisitions | 15.1 | ||
Other events | 2.9 | ||
Benefits paid | (69.8) | (54.3) | |
Foreign currency translation | 51.1 | (135.2) | |
Projected benefit obligation, end of year | 1,174 | 1,221.9 | 1,779.7 |
Plan Assets | |||
Fair value of plan assets, beginning of year | 905.1 | 1,219.9 | |
Actual returns on plan assets | (44) | (218.3) | |
Company contributions | 35.4 | 38.3 | |
Participant contributions | 2.8 | 3 | |
Acquired through acquisitions | 2.9 | 15.1 | |
Benefits paid | (67.6) | (54.3) | |
Foreign currency translation | 36.6 | (98.6) | |
Fair value of plan assets, end of year | 871.2 | 905.1 | $ 1,219.9 |
Funded Status, end of year | (302.8) | (316.8) | |
Amounts recognized in Consolidated Balance Sheet: | |||
Other assets | 118.4 | 118.6 | |
Other current liabilities | (33) | (28.6) | |
Postretirement health care and pension benefits | (388.2) | (406.8) | |
Net liability | (302.8) | (316.8) | |
Amounts recognized in Accumulated Other Comprehensive Loss (Income): | |||
Unrecognized net actuarial loss (gain) | 278.5 | 279.7 | |
Unrecognized net prior service costs (benefits) | (0.4) | 0.3 | |
Tax (benefit) expense | (64.4) | (66.5) | |
Accumulated other comprehensive loss (income), net of tax | 213.7 | 213.5 | |
Change in Accumulated Other Comprehensive Loss (Income): | |||
Amortization of net actuarial gain (loss) | (14.8) | (22.7) | |
Amortization of prior service credits | 0.5 | 0.1 | |
Current period net actuarial loss (gain) | (1) | (147.8) | |
Current period prior service costs | (1.5) | ||
Curtailments and settlements | 2.7 | ||
Tax (benefit) expense | 2.1 | 51.3 | |
Foreign currency translation | 12.2 | (35.1) | |
Other comprehensive loss (income) | 0.2 | $ (154.2) | |
Estimated amounts in accumulated other comprehensive loss expected to be reclassified to net period cost during 2021 | |||
Net actuarial loss (gain) | 10 | ||
Net prior service costs (benefits) | (0.6) | ||
Total | $ 9.4 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other (income) expense | |||
Other Pension Plan Information | |||
Settlement expense before tax | $ 51.6 | $ 35.3 | |
Settlement expense after tax | 38.9 | 26.8 | |
U.S. Pension. | Pension | |||
Net periodic benefit costs | |||
Service cost | $ 40.9 | 40.8 | |
Interest cost on benefit obligation | 88.1 | 65.3 | |
Expected return on plan assets | (145.1) | ||
Recognition of net actuarial loss (gain) | 0.2 | ||
Amortization of prior service benefit | (4.5) | ||
Total expense | (20.4) | ||
U.S. Pension. | U.S. Postretirement Benefits | |||
Net periodic benefit costs | |||
Service cost | 0.4 | 0.8 | 31.4 |
Interest cost on benefit obligation | 5.6 | 3.3 | 17.3 |
Expected return on plan assets | (70.7) | ||
Recognition of net actuarial loss (gain) | 28.7 | ||
Amortization of prior service benefit | (0.1) | ||
Curtailments and settlements | 3.5 | ||
Total expense | $ 10.1 | ||
International Pension | Pension | |||
Net periodic benefit costs | |||
Service cost | 21.7 | 28.4 | |
Interest cost on benefit obligation | $ 45.9 | $ 22 |
RETIREMENT PLANS - Assumption D
RETIREMENT PLANS - Assumption Details (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. Pension. | Corporate bonds | Minimum | |||
Weighted-average actuarial assumptions used to determine net cost: | |||
Maturity period of debt securities | 6 months | ||
U.S. Pension. | Corporate bonds | Maximum | |||
Weighted-average actuarial assumptions used to determine net cost: | |||
Maturity period of debt securities | 30 years | ||
U.S. Pension. | Pension | |||
Weighted-average actuarial assumptions used to determine benefit obligations as of year end: | |||
Discount rate (as a percent) | 4.95% | 5.17% | 2.86% |
Projected salary increase (as a percent) | 4.03% | 4.03% | 4.03% |
Weighted-average actuarial assumptions used to determine net cost: | |||
Interest credit rate for cash balance plans | 3.89% | 1.56% | 0.87% |
Discount rate (as a percent) | 5.17% | 2.86% | 2.49% |
Expected return on plan assets (as a percent) | 7.75% | 7% | 7% |
Projected salary increase (as a percent) | 4.03% | 4.03% | 4.03% |
U.S. Pension. | U.S. Postretirement Benefits | |||
Weighted-average actuarial assumptions used to determine benefit obligations as of year end: | |||
Discount rate (as a percent) | 4.95% | 5.14% | 2.75% |
Weighted-average actuarial assumptions used to determine net cost: | |||
Discount rate (as a percent) | 5.14% | 2.75% | 2.37% |
Expected return on plan assets (as a percent) | 7.75% | 7% | 7% |
Defined Benefit Plan Assumed Health Care Cost Trend Rates | |||
Annual rates of increase in the per capita cost of covered health care for pre-age 65 retirees (as a percent) | 7.46% | ||
Rate of per capita cost of covered health care, in 2028 (as a percent) | 4.50% | ||
International Pension | Pension | |||
Weighted-average actuarial assumptions used to determine benefit obligations as of year end: | |||
Discount rate (as a percent) | 4.34% | 3.70% | 1.45% |
Projected salary increase (as a percent) | 2.84% | 2.81% | 2.42% |
Weighted-average actuarial assumptions used to determine net cost: | |||
Discount rate (as a percent) | 3.70% | 1.46% | 1.37% |
Expected return on plan assets (as a percent) | 6.27% | 6.18% | 6.24% |
Projected salary increase (as a percent) | 3.08% | 2.47% | 2.31% |
Defined Benefit Plan Assumed Health Care Cost Trend Rates | |||
Plan amendments, decrease in benefit obligation | $ (1.5) |
RETIREMENT PLANS - Fair Value o
RETIREMENT PLANS - Fair Value of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Pension | U.S. Pension. | |||
Defined Benefit Plan Disclosure | |||
Total | $ 1,719.7 | $ 1,668.5 | $ 2,376.8 |
Pension | International Pension | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 827.4 | 859.8 | |
Investments measured at NAV | 43.8 | 45.3 | |
Total | 871.2 | 905.1 | $ 1,219.9 |
Pension | International Pension | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 12.6 | 9.9 | |
Total | 12.6 | 9.9 | |
Pension | International Pension | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 814.8 | 849.9 | |
Total | 814.8 | 849.9 | |
Pension | International Pension | Level 3 | |||
Defined Benefit Plan Disclosure | |||
Total | 0 | 0 | |
Pension | International Pension | Cash | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 12.6 | 9.9 | |
Pension | International Pension | Cash | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 12.6 | 9.9 | |
Pension | International Pension | International equity | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 182.5 | 219.3 | |
Pension | International Pension | International equity | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 182.5 | 219.3 | |
Pension | International Pension | Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 147.5 | 158.5 | |
Pension | International Pension | Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 147.5 | 158.5 | |
Pension | International Pension | Government bonds | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 321.4 | 365.9 | |
Pension | International Pension | Government bonds | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 321.4 | 365.9 | |
Pension | International Pension | Insurance contracts | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 163.4 | 106.2 | |
Pension | International Pension | Insurance contracts | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 163.4 | 106.2 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 1,289.8 | 1,237.8 | |
Total | 1,722.1 | 1,671.7 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 546.6 | 523.6 | |
Total | 546.6 | 523.6 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 743.2 | 714.2 | |
Total | 743.2 | 714.2 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Level 3 | |||
Defined Benefit Plan Disclosure | |||
Total | 0 | 0 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Cash | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 30.1 | 54.8 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Cash | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 30.1 | 54.8 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Large cap equity | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 276.1 | 237.1 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Large cap equity | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 276.1 | 237.1 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Small cap equity | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 44.2 | 40.5 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Small cap equity | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 14.6 | 15.4 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Small cap equity | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 29.6 | 25.1 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | International equity | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 59.6 | 54.6 | |
Investments measured at NAV | 432.3 | 433.9 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | International equity | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 40.4 | 37.4 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | International equity | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 19.2 | 17.2 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Core fixed income | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 820.3 | 792 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Core fixed income | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 150.7 | 145.5 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Core fixed income | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 669.6 | 646.5 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | High-yield bonds | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 34.7 | 33.4 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | High-yield bonds | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 34.7 | 33.4 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Emerging markets | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | 24.8 | 25.4 | |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Emerging markets | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Total investments at fair value | $ 24.8 | $ 25.4 |
RETIREMENT PLANS - Allocation P
RETIREMENT PLANS - Allocation Plan Assets (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pension | International Pension | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 100% | 100% |
Pension | International Pension | Cash | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 1% | 1% |
Pension | International Pension | International equity | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 21% | 24% |
Pension | International Pension | Corporate bonds | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 17% | 18% |
Pension | International Pension | Government bonds | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 37% | 40% |
Pension | International Pension | Total fixed income | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 54% | 58% |
Pension | International Pension | Insurance contracts | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 19% | 12% |
Pension | International Pension | Real estate | ||
Asset allocation percentages | ||
PERCENTAGE OF PLAN ASSETS | 5% | 5% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 100% | 100% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Large cap equity | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 21% | 21% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Small cap equity | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 3% | 3% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | International equity | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 13% | 13% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Core fixed income | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 48% | 48% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | High-yield bonds | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 3% | 3% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Emerging markets | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 2% | 2% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Real estate | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 3% | 3% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | PRIVATE EQUITY | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 5% | 5% |
U.S. Pension and Postretirement Health Care Benefits | U.S. Pension. | Distressed debt | ||
Asset allocation percentages | ||
TARGET ASSET ALLOCATION PERCENTAGE | 2% | 2% |
RETIREMENT PLANS - Cash Flows (
RETIREMENT PLANS - Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Estimate of benefits expected to be paid for company's pension and postretirement health care benefit plans: | |||
Settlement charge | $ (50.6) | $ (37.2) | |
Pension | U.S. Pension. | |||
Estimate of benefits expected to be paid for company's pension and postretirement health care benefit plans: | |||
Employer voluntary contribution to defined benefit plan | $ 50 | ||
Pension | International Pension | |||
Estimate of benefits expected to be paid for company's pension and postretirement health care benefit plans: | |||
Estimated contribution to pension benefit plan during 2022 | 47 | ||
U.S. Pension and Postretirement Health Care Benefits | |||
Estimate of benefits expected to be paid for company's pension and postretirement health care benefit plans: | |||
2024 | 242 | ||
2025 | 242 | ||
2026 | 241 | ||
2027 | 244 | ||
2028 | 246 | ||
2029-2033 | $ 1,215 |
RETIREMENT PLANS - Savings Plan
RETIREMENT PLANS - Savings Plan and ESOP (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of matching contribution by company vested immediately | 100% | ||
Employer matching contribution expense | $ 88.2 | $ 81.6 | $ 78.2 |
Ecolab Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of matching contribution made by company, up to 4% eligible compensation | 100% | ||
Percentage of matching contribution made by company for employee contributions between 4% and 8% | 50% | ||
Minimum | Ecolab Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of eligible compensation, matched 50% | 4% | ||
Maximum | Ecolab Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of eligible compensation, matched 100% | 4% | ||
Percentage of eligible compensation, matched 50% | 8% |
REVENUES - Product and Sold Equ
REVENUES - Product and Sold Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 03, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disposal Group, Including Discontinued Operation, Classified Balance Sheet Disclosures [Abstract] | ||||
Accounts receivable, net | $ 2,834.2 | $ 2,698.1 | ||
ChampionX | Discontinued Operations, Disposed of By Sale | ||||
Disposal Group, Including Discontinued Operation, Classified Balance Sheet Disclosures [Abstract] | ||||
Period of time post-separation that the entity may transfer or receive certain products | 36 months | |||
Post-separation sales | 69 | 123.8 | $ 139.1 | |
Accounts receivable, net | $ 3.8 | $ 12.9 |
REVENUES - Principal Activities
REVENUES - Principal Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of revenue | |||||||||||
Net sales | $ 3,938.4 | $ 3,958.1 | $ 3,852.1 | $ 3,571.6 | $ 3,671.2 | $ 3,669.3 | $ 3,580.6 | $ 3,266.7 | $ 15,320.2 | $ 14,187.8 | $ 12,733.1 |
Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 12,316.8 | 11,446.2 | 10,153.3 | ||||||||
Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | $ 3,003.4 | $ 2,741.6 | $ 2,579.8 | ||||||||
Warewashing Products | Product concentration | Consolidated net sales | |||||||||||
Disaggregation of revenue | |||||||||||
Percentage of consolidated sales | 12% | 12% | 10% | ||||||||
Corporate | Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | $ 69 | $ 123.7 | $ 137.9 | ||||||||
Corporate | Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 0.1 | 1.2 | |||||||||
Global Industrial | Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 6,331 | 5,937 | 5,372.4 | ||||||||
Global Industrial | Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 890.8 | 868 | 865.5 | ||||||||
Global Industrial | Operating segment | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 7,221.8 | 6,805 | 6,237.9 | ||||||||
Global Industrial | Operating segment | United States | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 3,059.3 | 2,945.1 | 2,603.1 | ||||||||
Global Industrial | Operating segment | Europe | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 1,496.6 | 1,373.6 | 1,367.1 | ||||||||
Global Industrial | Operating segment | Asia Pacific | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 880 | 830.1 | 802.5 | ||||||||
Global Industrial | Operating segment | Latin America | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 737.2 | 621.7 | 551.5 | ||||||||
Global Industrial | Operating segment | Greater China | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 391.4 | 419.3 | 394.9 | ||||||||
Global Industrial | Operating segment | India, Middle East and Africa | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 452.1 | 419.4 | 344.4 | ||||||||
Global Industrial | Operating segment | Canada | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 205.2 | 195.8 | 174.4 | ||||||||
Global Institutional and Specialty | Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 4,087.4 | 3,655.3 | 3,276.3 | ||||||||
Global Institutional and Specialty | Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 911.8 | 776.8 | 690.5 | ||||||||
Global Institutional and Specialty | Operating segment | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 4,999.2 | 4,432.1 | 3,966.8 | ||||||||
Global Institutional and Specialty | Operating segment | United States | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 3,454.2 | 3,050 | 2,721.8 | ||||||||
Global Institutional and Specialty | Operating segment | Europe | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 681.9 | 624 | 558 | ||||||||
Global Institutional and Specialty | Operating segment | Asia Pacific | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 231.2 | 212.6 | 201.2 | ||||||||
Global Institutional and Specialty | Operating segment | Latin America | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 188.3 | 162.3 | 135 | ||||||||
Global Institutional and Specialty | Operating segment | Greater China | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 158.5 | 134.7 | 143.1 | ||||||||
Global Institutional and Specialty | Operating segment | India, Middle East and Africa | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 67 | 54.6 | 44.2 | ||||||||
Global Institutional and Specialty | Operating segment | Canada | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 218.1 | 193.9 | 163.5 | ||||||||
Global Healthcare and Life Sciences | Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 1,476.3 | 1,398.3 | 1,068.8 | ||||||||
Global Healthcare and Life Sciences | Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 109.7 | 112.2 | 112.8 | ||||||||
Global Healthcare and Life Sciences | Operating segment | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 1,586 | 1,510.5 | 1,181.6 | ||||||||
Global Healthcare and Life Sciences | Operating segment | United States | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 647.7 | 612.5 | 443.8 | ||||||||
Global Healthcare and Life Sciences | Operating segment | Europe | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 735 | 688.8 | 625.3 | ||||||||
Global Healthcare and Life Sciences | Operating segment | Asia Pacific | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 95.3 | 92.8 | 65.2 | ||||||||
Global Healthcare and Life Sciences | Operating segment | Latin America | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 25.5 | 24.7 | 5.5 | ||||||||
Global Healthcare and Life Sciences | Operating segment | Greater China | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 51.2 | 61 | 10.1 | ||||||||
Global Healthcare and Life Sciences | Operating segment | India, Middle East and Africa | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 24.8 | 25 | 25.4 | ||||||||
Global Healthcare and Life Sciences | Operating segment | Canada | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 6.5 | 5.7 | 6.3 | ||||||||
Other | Product and equipment sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 353.1 | 331.9 | 297.9 | ||||||||
Other | Service and lease sales | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 1,091.1 | 984.5 | 909.8 | ||||||||
Other | Operating segment | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 1,444.2 | 1,316.4 | 1,207.7 | ||||||||
Other | Operating segment | United States | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 898.6 | 816 | 719.9 | ||||||||
Other | Operating segment | Europe | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 301.7 | 272.7 | 264.9 | ||||||||
Other | Operating segment | Asia Pacific | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 85.9 | 76.1 | 72.4 | ||||||||
Other | Operating segment | Latin America | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 57.6 | 51.9 | 50.3 | ||||||||
Other | Operating segment | Greater China | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 69.2 | 68.6 | 69.2 | ||||||||
Other | Operating segment | India, Middle East and Africa | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 9 | 10.3 | 11.6 | ||||||||
Other | Operating segment | Canada | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 22.2 | 20.8 | 19.4 | ||||||||
Corporate | Operating segment | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 69 | 123.8 | 139.1 | ||||||||
Corporate | Operating segment | United States | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 55.6 | 107.5 | 98.1 | ||||||||
Corporate | Operating segment | Europe | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 3 | 3 | 3.9 | ||||||||
Corporate | Operating segment | Asia Pacific | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 3.7 | 4.1 | 5.5 | ||||||||
Corporate | Operating segment | Latin America | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 5.6 | 7.3 | 24.6 | ||||||||
Corporate | Operating segment | Greater China | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 0.1 | 2.3 | |||||||||
Corporate | Operating segment | India, Middle East and Africa | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | 0.3 | 3.4 | |||||||||
Corporate | Operating segment | Canada | |||||||||||
Disaggregation of revenue | |||||||||||
Net sales | $ 1.1 | $ 1.5 | $ 1.3 |
REVENUES - Contract Liability (
REVENUES - Contract Liability (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Change in contract liability | ||
Contract liability as of beginning of the year | $ 116.5 | $ 91.7 |
Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period | (116.5) | (91.7) |
Increases due to billings excluding amounts recognized as revenue during the period ended | 110.9 | 116.5 |
Contract liability as of end of period | $ 110.9 | $ 116.5 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Financial information of reportable segments | |||||||||||
Number of operating units | segment | 10 | 10 | |||||||||
Number of reportable segments | segment | 3 | ||||||||||
Net sales | $ 3,938.4 | $ 3,958.1 | $ 3,852.1 | $ 3,571.6 | $ 3,671.2 | $ 3,669.3 | $ 3,580.6 | $ 3,266.7 | $ 15,320.2 | $ 14,187.8 | $ 12,733.1 |
Operating Income (Loss) | $ 590 | $ 566 | $ 484.7 | $ 351.6 | $ 399.2 | $ 483 | $ 425.8 | $ 254.5 | 1,992.3 | 1,562.5 | 1,598.6 |
Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 14,187.8 | 12,733.1 | |||||||||
Operating Income (Loss) | 1,562.5 | 1,598.6 | |||||||||
Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 14,187.8 | 12,733.1 | |||||||||
Operating Income (Loss) | 1,562.5 | 1,598.6 | |||||||||
Operating segment | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 15,275.4 | 14,093.4 | 12,166.2 | ||||||||
Operating Income (Loss) | 1,987 | 1,546.3 | 1,488.1 | ||||||||
Operating segment | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 14,473.1 | 12,483.6 | |||||||||
Operating Income (Loss) | 1,612.6 | 1,551.1 | |||||||||
Operating segment | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 14,093.4 | 12,166.2 | |||||||||
Operating Income (Loss) | 1,546.3 | 1,488.1 | |||||||||
Operating segment | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (379.7) | (317.4) | |||||||||
Operating Income (Loss) | (66.3) | (63) | |||||||||
Operating segment | Global Industrial | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 7,221.8 | 6,805 | 6,237.9 | ||||||||
Operating segment | Global Industrial | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 7,193.1 | 6,736.3 | 5,908.5 | ||||||||
Operating Income (Loss) | 1,080.7 | 935.8 | 943.4 | ||||||||
Operating segment | Global Industrial | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 6,944 | 6,086.8 | |||||||||
Operating Income (Loss) | 977 | 985.7 | |||||||||
Operating segment | Global Industrial | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 6,736.3 | 5,908.5 | |||||||||
Operating Income (Loss) | 935.8 | 943.4 | |||||||||
Operating segment | Global Industrial | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (207.7) | (178.3) | |||||||||
Operating Income (Loss) | (42) | (42.7) | |||||||||
Operating segment | Global Industrial | Purchase Price Adjustments | Segment Changes | |||||||||||
Financial information of reportable segments | |||||||||||
Operating Income (Loss) | 0.8 | 0.4 | |||||||||
Operating segment | Global Institutional and Specialty | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 4,999.2 | 4,432.1 | 3,966.8 | ||||||||
Operating segment | Global Institutional and Specialty | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 4,994 | 4,414.3 | 3,856.7 | ||||||||
Operating Income (Loss) | 823 | 621.7 | 536.7 | ||||||||
Operating segment | Global Institutional and Specialty | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 4,480 | 3,908.8 | |||||||||
Operating Income (Loss) | 634.5 | 545.7 | |||||||||
Operating segment | Global Institutional and Specialty | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 4,414.3 | 3,856.7 | |||||||||
Operating Income (Loss) | 621.7 | 536.7 | |||||||||
Operating segment | Global Institutional and Specialty | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (75.9) | (63) | |||||||||
Operating Income (Loss) | (11.2) | (7.6) | |||||||||
Operating segment | Global Institutional and Specialty | Purchase Price Adjustments | Segment Changes | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 10.2 | 10.9 | |||||||||
Operating Income (Loss) | (1.6) | (1.4) | |||||||||
Operating segment | Global Healthcare and Life Sciences | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,586 | 1,510.5 | 1,181.6 | ||||||||
Operating segment | Global Healthcare and Life Sciences | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,576.9 | 1,505.8 | 1,101.1 | ||||||||
Operating Income (Loss) | 160 | 193.3 | 141 | ||||||||
Operating segment | Global Healthcare and Life Sciences | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,570 | 1,149.6 | |||||||||
Operating Income (Loss) | 205 | 152.3 | |||||||||
Operating segment | Global Healthcare and Life Sciences | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,505.8 | 1,101.1 | |||||||||
Operating Income (Loss) | 193.3 | 141 | |||||||||
Operating segment | Global Healthcare and Life Sciences | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (64.2) | (48.5) | |||||||||
Operating Income (Loss) | (9.9) | (9.7) | |||||||||
Operating segment | Global Healthcare and Life Sciences | Purchase Price Adjustments | Segment Changes | |||||||||||
Financial information of reportable segments | |||||||||||
Operating Income (Loss) | (1.8) | (1.6) | |||||||||
Operating segment | Other | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,444.2 | 1,316.4 | 1,207.7 | ||||||||
Operating segment | Other | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,442.3 | 1,313.3 | 1,162.5 | ||||||||
Operating Income (Loss) | 255 | 209.9 | 181.3 | ||||||||
Operating segment | Other | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,355 | 1,201 | |||||||||
Operating Income (Loss) | 212.8 | 184 | |||||||||
Operating segment | Other | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 1,313.3 | 1,162.5 | |||||||||
Operating Income (Loss) | 209.9 | 181.3 | |||||||||
Operating segment | Other | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (31.5) | (27.6) | |||||||||
Operating Income (Loss) | (5.5) | (5.3) | |||||||||
Operating segment | Other | Purchase Price Adjustments | Segment Changes | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (10.2) | (10.9) | |||||||||
Operating Income (Loss) | 2.6 | 2.6 | |||||||||
Operating segment | Corporate | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 69 | 123.8 | 139.1 | ||||||||
Currency impact | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 44.8 | 94.4 | 566.9 | ||||||||
Operating Income (Loss) | 5.3 | 16.2 | 110.5 | ||||||||
Currency impact | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (285.3) | 249.5 | |||||||||
Operating Income (Loss) | (50.1) | 47.5 | |||||||||
Currency impact | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 94.4 | 566.9 | |||||||||
Operating Income (Loss) | 16.2 | 110.5 | |||||||||
Currency impact | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 379.7 | 317.4 | |||||||||
Operating Income (Loss) | 66.3 | 63 | |||||||||
Corporate | Valued at 2021 Management Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 69.1 | 123.7 | 137.4 | ||||||||
Operating Income (Loss) | $ (331.7) | (414.4) | (314.3) | ||||||||
Corporate | Previously Reported | Valued at 2022 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 124.1 | 137.4 | |||||||||
Operating Income (Loss) | (416.7) | (316.6) | |||||||||
Corporate | Previously Reported | Valued at 2023 Fixed Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | 123.7 | 137.4 | |||||||||
Operating Income (Loss) | (414.4) | (314.3) | |||||||||
Corporate | Purchase Price Adjustments | Changes in Currency Rates | |||||||||||
Financial information of reportable segments | |||||||||||
Net sales | (0.4) | ||||||||||
Operating Income (Loss) | $ 2.3 | $ 2.3 |
OPERATING SEGMENTS - Net Sales
OPERATING SEGMENTS - Net Sales and Long-lived Assets by Geographic Region (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
OPERATING SEGMENTS | ||
Long-Lived Assets, net | $ 4,028.1 | $ 3,741.6 |
United States | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 2,708.6 | 2,508.9 |
Europe | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 631.2 | 574.3 |
Asia Pacific. | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 213 | 210.3 |
Latin America | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 175.1 | 146.5 |
Greater China | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 167.4 | 176.6 |
India, Middle East and Africa. | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | 68.2 | 64.1 |
Canada | ||
OPERATING SEGMENTS | ||
Long-Lived Assets, net | $ 64.6 | $ 60.9 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net sales | $ 3,938.4 | $ 3,958.1 | $ 3,852.1 | $ 3,571.6 | $ 3,671.2 | $ 3,669.3 | $ 3,580.6 | $ 3,266.7 | $ 15,320.2 | $ 14,187.8 | $ 12,733.1 |
Cost of sales | 2,284.4 | 2,330.5 | 2,334.8 | 2,205.2 | 2,254.9 | 2,291.6 | 2,211.1 | 2,073.4 | 9,154.9 | 8,831 | 7,615.8 |
Selling, general and administrative expenses | 1,034.8 | 1,024.9 | 1,011.6 | 990.3 | 922.1 | 876.9 | 940.1 | 914.7 | 4,061.6 | 3,653.8 | 3,416.1 |
Special (gains) and charges | 29.2 | 36.7 | 21 | 24.5 | 95 | 17.8 | 3.6 | 24.1 | 111.4 | 140.5 | 102.6 |
Operating Income | 590 | 566 | 484.7 | 351.6 | 399.2 | 483 | 425.8 | 254.5 | 1,992.3 | 1,562.5 | 1,598.6 |
Other (income) expense (b) | (17.9) | (14.5) | (14.4) | (13.1) | 8.1 | 5.7 | (19.5) | (18.8) | (59.9) | (24.5) | (33.9) |
Interest expense, net | 70.4 | 74.3 | 77.8 | 74.2 | 69.5 | 65.1 | 56 | 53 | 296.7 | 243.6 | 218.3 |
Income before income taxes | 537.5 | 506.2 | 421.3 | 290.5 | 321.6 | 412.2 | 389.3 | 220.3 | 1,755.5 | 1,343.4 | 1,414.2 |
Provision for income taxes | 126.7 | 96.8 | 86.6 | 52.4 | 52.1 | 60.2 | 76.6 | 45.6 | 362.5 | 234.5 | $ 270.2 |
Net income from continuing operations including noncontrolling interest | 410.8 | 409.4 | 334.7 | 238.1 | 269.5 | 352 | 312.7 | 174.7 | 1,393 | 1,108.9 | |
Net income from continuing operations attributable to noncontrolling interest | 5.6 | 5.4 | 5 | 4.7 | 5.1 | 4.9 | 4.4 | 2.8 | 20.7 | 17.2 | |
Net income attributable to Ecolab | $ 405.2 | $ 404 | $ 329.7 | $ 233.4 | $ 264.4 | $ 347.1 | $ 308.3 | $ 171.9 | $ 1,372.3 | $ 1,091.7 | |
Basic EPS | |||||||||||
Earnings attributable to Ecolab | $ 1.42 | $ 1.42 | $ 1.16 | $ 0.82 | $ 0.93 | $ 1.22 | $ 1.08 | $ 0.60 | $ 4.82 | $ 3.83 | $ 3.95 |
Diluted EPS | |||||||||||
Earnings attributable to Ecolab | $ 1.41 | $ 1.41 | $ 1.15 | $ 0.82 | $ 0.93 | $ 1.21 | $ 1.08 | $ 0.60 | $ 4.79 | $ 3.81 | $ 3.91 |
Weighted-average common shares outstanding | |||||||||||
Basic (in shares) | 285.3 | 285.1 | 284.9 | 284.6 | 284.6 | 284.9 | 285.1 | 286.2 | 285 | 285.2 | 286.3 |
Diluted (in shares) | 287.1 | 286.9 | 286.3 | 285.9 | 285.8 | 286.3 | 286.6 | 288.1 | 286.5 | 286.6 | 289.1 |
Cost of sales | |||||||||||
Special (gains) and charges | $ 22.5 | $ 69.9 | $ 93.9 | ||||||||
Weighted-average common shares outstanding | |||||||||||
Cost of sales, special charges | $ 5.3 | $ 5.9 | $ 8.1 | $ 3.2 | $ 8.2 | $ 7.1 | $ 1.7 | $ 52.9 | |||
Other (income) expense | |||||||||||
Special (gains) and charges | $ 25.8 | $ 24.8 | $ 50.6 | $ 37.2 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 1,372.3 | $ 1,091.7 | $ 1,129.9 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule10b51ArrModified [Flag] | false |
NonRule10b51ArrModified [Flag] | false |