Operating Segments

9 Months Ended

Sep. 30, 2012

Operating Segments

Operating Segments

12.Operating Segments

Effective with the Nalco merger, the company added Nalco’s three legacy operating units (Water Services, Paper Services and Energy Services) as additional reportable segments to the merged company’s reporting structure.

Beginning in the first quarter of 2012, the Water Services, Paper Services and Energy Services reportable segments were renamed as the Global Water, Global Paper and Global Energy reportable segments, respectively. With the exception of the water treatment related business change discussed below, the underlying structure of the Global Water, Global Paper and Global Energy segments remains the same as 2011.

Beginning in the first quarter of 2012, the International reportable segment was renamed as the International Cleaning, Sanitizing & Other Services reportable segment. With the exception of the water treatment related business change discussed below, the underlying structure of the International Cleaning, Sanitizing & Other Services segment remains the same as 2011.

Beginning in the first quarter of 2012, due to changes in how the company internally manages and reports results within its legacy Ecolab Food & Beverage and Asia Pacific operating units, certain water treatment related businesses were moved from the U.S. Cleaning & Sanitizing and International Cleaning, Sanitizing & Other Services reportable segments to the Global Water reportable segment. The movement of these businesses did not significantly impact year-over-year comparability; therefore, prior year reported segment information has not been restated to reflect this change.

The company’s fifteen operating units are aggregated into six reportable segments: U.S. Cleaning & Sanitizing, U.S. Other Services, International Cleaning, Sanitizing & Other Services, Global Water, Global Paper and Global Energy. The profitability of the company’s operating units is evaluated by management based on operating income. The company has no intersegment revenues. Financial information for each of the company’s reportable segments is as follows:

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2012			2011			2012			2011
Net Sales
U.S. Cleaning & Sanitizing	$	774.1		$	763.1		$	2,243.9		$	2,197.0
U.S. Other Services	124.2			119.6			357.1			343.3
Int’l Cleaning, Sanitizing & Other Services	813.5			788.1			2,342.7			2,268.7
Global Water	542.9			—			1,551.2			—
Global Paper	202.4			—			602.2			—
Global Energy	586.6			—			1,671.8			—
Subtotal at fixed currency rates	3,043.7			1,670.8			8,768.9			4,809.0
Effect of foreign currency translation	(20.4		)	65.3			24.0			144.2
Consolidated	$	3,023.3		$	1,736.1		$	8,792.9		$	4,953.2
Operating Income
U.S. Cleaning & Sanitizing	$	183.9		$	157.7		$	482.6		$	412.6
U.S. Other Services	21.6			20.9			53.9			51.5
Int’l Cleaning, Sanitizing & Other Services	96.8			86.1			227.3			199.5
Global Water	69.8			—			167.6			—
Global Paper	23.7			—			60.7			—
Global Energy	94.2			—			257.4			—
Corporate	(87.0		)	(33.4		)	(357.5		)	(89.7		)
Subtotal at fixed currency rates	403.0			231.3			892.0			573.9
Effect of foreign currency translation	(1.8		)	8.3			1.5			15.7
Consolidated	$	401.2		$	239.6		$	893.5		$	589.6

The international amounts included within the International Cleaning, Sanitizing & Other Services, Global Water, Global Paper and Global Energy segments are based on translation into U.S. dollars at the fixed currency exchange rates used by management for 2012.

Consistent with the company’s internal management reporting, the Corporate segment includes amortization specifically from the Nalco merger intangible assets, merger integration costs and investments the company is making in business systems and structure. The Corporate segment also includes special (gains) and charges reported on the Consolidated Statement of Income.