EX-99.1 2 a13-10799_1ex99d1.htm EX-99.1

Exhibit (99.1)

 

As more fully described below, this Current Report on Form 8-K includes supplemental unaudited revised reportable segment net sales, pro forma net sales, operating income and pro forma operating income information, provided on an annual and quarterly basis for the years ended December 31, 2012 and 2011.  Actual quarterly segment information for the year ended December 31, 2011 has not been included in this Current Report.  Ecolab Inc. (“Ecolab” or “the company”) did not operate under the realigned reportable segment structure until the first quarter of 2013 and will begin to report comparative prior period results under the new structure effective with the filing of its Quarterly Report on Form 10Q for the quarter ended March 31, 2013.

 

Effective in the first quarter of 2013, the company changed its reportable segments due to recent changes in its underlying organizational model designed to support the business following the Nalco merger and to facilitate global growth. As a result, the company’s new segment structure will focus on global businesses, with its ten global operating units, which are also operating segments, aggregated into four reportable segments as follows:

 

·                  “Global Institutional” will consist of the Global Institutional, Global Specialty and Global Healthcare operating units.

 

·                  “Global Industrial” will consist of the Global Food & Beverage, Global Water, Global Paper, and Global Textile Care operating units.

 

·                  “Global Energy” will consist of the Global Energy operating unit.

 

·                  “Other” will consist of the Global Pest Elimination and Equipment Care operating units as well as the Vehicle Care operating unit for periods through its sale on December 1, 2012.

 

Consistent with the company’s internal management reporting, the company also presents a Corporate segment which includes amortization specifically from the Nalco merger intangible assets, and certain merger integration costs. The Corporate segment also includes special (gains) and charges reported on the company’s consolidated statement of income.

 

On December 1, 2011, Nalco Holding Company (“Nalco”) merged into a wholly-owned subsidiary of Ecolab. The company’s actual results of operations include Nalco since the close of the merger on December 1, 2011.

 

The company evaluates the performance of its international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on its international operations. Fixed currency amounts for the “Previously Reported” values shown in the following tables are based on translation into U.S. dollars at fixed foreign currency exchange rates established by management at the beginning of 2012. The “Changes” columns reflect both the movement of operating units from the previous reportable segments to the new global reportable segments and the establishment of international operations at fixed currency exchange rates established by management at the beginning of 2013. Presenting the “Revised” column at 2013 management rates was done to allow for consistent comparisons against 2013 results.

 


 

The financial information presented herein reflects the impact of the preceding segment structure changes. The impact of the preceding changes on previously reported 2012 and 2011 reportable segment net sales and operating income is summarized as follows:

 

 

 

Net Sales

 

Operating Income

 

Year ended December 31, 2012

 

Previously

 

 

 

 

 

Previously

 

 

 

 

 

(millions)

 

Reported

 

Changes

 

Revised

 

Reported

 

Changes

 

Revised

 

U.S. Cleaning & Sanitizing

 

$

2,992.9

 

$

(2,992.9

)

$

—

 

$

651.4

 

$

(651.4

)

$

—

 

U.S. Other Services

 

474.6

 

(474.6

)

—

 

70.8

 

(70.8

)

—

 

Int’l Cleaning, Sanitizing & Other Services

 

3,175.8

 

(3,175.8

)

—

 

340.8

 

(340.8

)

—

 

Global Water

 

2,087.4

 

(2,087.4

)

—

 

235.9

 

(235.9

)

—

 

Global Paper

 

805.4

 

(805.4

)

—

 

86.3

 

(86.3

)

—

 

Global Energy

 

2,268.0

 

7.4

 

2,275.4

 

360.1

 

0.6

 

360.7

 

Global Industrial

 

—

 

4,762.2

 

4,762.2

 

—

 

569.5

 

569.5

 

Global Institutional

 

—

 

4,063.2

 

4,063.2

 

—

 

700.7

 

700.7

 

Other

 

—

 

736.3

 

736.3

 

—

 

103.0

 

103.0

 

Corporate

 

—

 

—

 

—

 

(459.9

)

17.6

 

(442.3

)

Subtotal at fixed currency

 

11,804.1

 

33.0

 

11,837.1

 

1,285.4

 

6.2

 

1,291.6

 

Effect of foreign currency rates

 

34.6

 

(33.0

)

1.6

 

3.9

 

(6.2

)

(2.3

)

Consolidated

 

$

11,838.7

 

$

—

 

$

11,838.7

 

$

1,289.3

 

$

—

 

$

1,289.3

 

 

 

 

Net Sales

 

Operating Income

 

Year ended December 31, 2011

 

Previously

 

 

 

 

 

Previously

 

 

 

 

 

(millions)

 

Reported

 

Changes

 

Revised

 

Reported

 

Changes

 

Revised

 

U.S. Cleaning & Sanitizing

 

$

2,930.3

 

$

(2,930.3

)

$

—

 

$

556.7

 

$

(556.7

)

$

—

 

U.S. Other Services

 

457.1

 

(457.1

)

—

 

69.7

 

(69.7

)

—

 

Int’l Cleaning, Sanitizing & Other Services

 

3,075.1

 

(3,075.1

)

—

 

285.8

 

(285.8

)

—

 

Global Water

 

67.2

 

(67.2

)

—

 

11.0

 

(11.0

)

—

 

Global Paper

 

33.9

 

(33.9

)

—

 

6.2

 

(6.2

)

—

 

Global Energy

 

92.3

 

8.2

 

100.5

 

17.7

 

(1.5

)

16.2

 

Global Industrial

 

—

 

2,036.6

 

2,036.6

 

—

 

234.3

 

234.3

 

Global Institutional

 

—

 

3,852.0

 

3,852.0

 

—

 

585.6

 

585.6

 

Other

 

—

 

701.4

 

701.4

 

—

 

96.6

 

96.6

 

Corporate

 

(29.6

)

—

 

(29.6

)

(211.6

)

19.2

 

(192.4

)

Subtotal at fixed currency

 

6,626.3

 

34.6

 

6,660.9

 

735.5

 

4.8

 

740.3

 

Effect of foreign currency rates

 

172.2

 

(34.6

)

137.6

 

18.3

 

(4.8

)

13.5

 

Consolidated

 

$

6,798.5

 

$

—

 

$

6,798.5

 

$

753.8

 

$

—

 

$

753.8

 

 

Because Nalco’s operations had such a significant impact on Ecolab’s operations, a comparison of the company’s reported results for 2012 against reported results for 2011 is not entirely meaningful. To allow for a more meaningful comparison, 2011 pro forma reportable segment net sales and operating income is summarized in the tables below.  Ecolab and Nalco previously reported historical financial information is presented in the “Ecolab” and “Nalco” columns. Amounts in “Pro Forma Adjustments” represent the changes incorporated to historical financial information to give effect to the pro forma events that are directly attributed the merger, supportable and expected to have a continuing impact on the combined results.  The “Pro Forma Adjustments” include the movement of certain Ecolab water-related businesses to Global Water, impact of using fixed currency exchange rates established by management for 2012, impact of using Ecolab’s methodology to allocate Nalco corporate management costs and the increased depreciation and amortization expense from the fair-value step up adjustments

 


 

to the acquired property, plant and equipment and amortizable intangible assets of Nalco.  The “Pro Forma Combined” column provides financial information reported in Ecolab’s 2012 quarterly and annual filings as pro forma financial information at the fixed currency exchange rates established by management for 2012.  The “Changes” column reflects both the movement of operating units from the previous reportable segments to the new global reportable segments and the establishment of international operations at fixed currency exchange rates established by management at the beginning of 2013.  The unaudited pro forma results are not necessarily indicative of the results of operations that would have actually occurred had the merger been completed as of the date indicated, nor are they indicative of future operating results of the combined company.

 

 

 

Net Sales

 

Year ended December 31, 2011
(millions)

 

Ecolab

 

Nalco

 

Pro Forma
Adjustments

 

Pro Forma
Combined

 

Changes

 

Pro Forma
Revised

 

U.S. Cleaning & Sanitizing

 

$

2,930.3

 

$

—

 

$

(91.3

)

$

2,839.0

 

$

(2,839.0

)

$

—

 

U.S. Other Services

 

457.1

 

—

 

—

 

457.1

 

(457.1

)

—

 

Int’l Cleaning, Sanitizing & Other Services

 

3,100.8

 

—

 

(73.4

)

3,027.4

 

(3,027.4

)

—

 

Global Water

 

67.2

 

1,883.2

 

63.6

 

2,014.0

 

(2,014.0

)

—

 

Global Paper

 

33.9

 

799.0

 

(21.1

)

811.8

 

(811.8

)

—

 

Global Energy

 

92.3

 

1,824.8

 

(43.7

)

1,873.4

 

8.8

 

1,882.2

 

Global Industrial

 

—

 

—

 

—

 

—

 

4,623.3

 

4,623.3

 

Global Institutional

 

—

 

—

 

—

 

—

 

3,852.0

 

3,852.0

 

Other

 

—

 

—

 

—

 

—

 

701.4

 

701.4

 

Corporate (1)

 

(29.6

)

—

 

—

 

(29.6

)

—

 

(29.6

)

Subtotal at fixed currency

 

6,652.0

 

4,507.0

 

(165.9

)

10,993.1

 

36.2

 

11,029.3

 

Effect of foreign currency rates

 

146.5

 

—

 

144.3

 

290.8

 

(36.2

)

254.6

 

Consolidated

 

$

6,798.5

 

$

4,507.0

 

$

(21.6

)

$

11,283.9

 

$

—

 

$

11,283.9

 

 

 

 

Operating Income

 

Year ended December 31, 2011
(millions)

 

Ecolab

 

Nalco

 

Pro Forma
Adjustments

 

Pro Forma
Combined

 

Changes

 

Pro Forma
Revised

 

U.S. Cleaning & Sanitizing

 

$

556.7

 

$

—

 

$

11.8

 

$

568.5

 

$

(568.5

)

$

—

 

U.S. Other Services

 

69.7

 

—

 

—

 

69.7

 

(69.7

)

—

 

Int’l Cleaning, Sanitizing & Other Services

 

290.5

 

—

 

(10.2

)

280.3

 

(280.3

)

—

 

Global Water

 

11.0

 

322.8

 

(137.1

)

196.7

 

(196.7

)

—

 

Global Paper

 

6.2

 

116.7

 

(47.0

)

75.9

 

(75.9

)

—

 

Global Energy

 

17.7

 

352.8

 

(106.5

)

264.0

 

(0.6

)

263.4

 

Global Industrial

 

—

 

—

 

—

 

—

 

496.9

 

496.9

 

Global Institutional

 

—

 

—

 

—

 

—

 

585.6

 

585.6

 

Other

 

—

 

—

 

—

 

—

 

96.6

 

96.6

 

Corporate (1)

 

(211.9

)

(205.6

)

190.9

 

(226.6

)

19.2

 

(207.4

)

Subtotal at fixed currency

 

739.9

 

586.7

 

(98.1

)

1,228.5

 

6.6

 

1,235.1

 

Effect of foreign currency rates

 

13.9

 

—

 

14.3

 

28.2

 

(6.6

)

21.6

 

Consolidated

 

$

753.8

 

$

586.7

 

$

(83.8

)

$

1,256.7

 

$

—

 

$

1,256.7

 

 

(1)         Within the Corporate line the “Ecolab” column includes net special charges of $29.6 million and $169.5 million for Net Sales and Operating Income, respectively. Within the Corporate line of the Operating Income table, the “Nalco” column includes net special gains of $61.6 million.

 


 

Supplemental quarterly recast reported net sales and reported operating income for 2012 is as follows:

 

 

 

First

 

Second

 

Third

 

Fourth

 

 

 

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Year

 

 

 

Ended

 

Ended

 

Ended

 

Ended

 

Ended

 

Net Sales

 

Mar. 31

 

Jun. 30

 

Sept. 30

 

Dec. 31

 

Dec. 31

 

(millions)

 

2012

 

2012

 

2012

 

2012

 

2012

 

Global Industrial

 

$

1,129.9

 

$

1,178.7

 

$

1,225.3

 

$

1,228.3

 

$

4,762.2

 

Global Institutional

 

951.3

 

1,028.5

 

1,047.7

 

1,035.7

 

4,063.2

 

Global Energy

 

538.9

 

550.1

 

588.2

 

598.2

 

2,275.4

 

Other

 

175.5

 

188.9

 

190.4

 

181.5

 

736.3

 

Subtotal at fixed currency

 

2,795.6

 

2,946.2

 

3,051.6

 

3,043.7

 

11,837.1

 

Effect of foreign currency rates

 

15.3

 

12.5

 

(28.3

)

2.1

 

1.6

 

Consolidated

 

$

2,810.9

 

$

2,958.7

 

$

3,023.3

 

$

3,045.8

 

$

11,838.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

Global Industrial

 

$

98.1

 

$

134.1

 

$

164.1

 

$

173.2

 

$

569.5

 

Global Institutional

 

132.9

 

180.6

 

197.1

 

190.1

 

700.7

 

Global Energy

 

82.1

 

79.1

 

95.4

 

104.1

 

360.7

 

Other

 

19.9

 

27.4

 

30.0

 

25.7

 

103.0

 

Corporate

 

(167.3

)

(95.2

)

(82.3

)

(97.5

)

(442.3

)

Subtotal at fixed currency

 

165.7

 

326.0

 

404.3

 

395.6

 

1,291.6

 

Effect of foreign currency rates

 

0.1

 

0.5

 

(3.1

)

0.2

 

(2.3

)

Consolidated

 

$

165.8

 

$

326.5

 

$

401.2

 

$

395.8

 

$

1,289.3

 

 

Supplemental quarterly recast pro forma net sales and pro forma operating income for 2011 is as follows:

 

 

 

First

 

Second

 

Third

 

Fourth

 

 

 

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Year

 

 

 

Ended

 

Ended

 

Ended

 

Ended

 

Ended

 

Net Sales

 

Mar. 31

 

Jun. 30

 

Sept. 30

 

Dec. 31

 

Dec. 31

 

(millions)

 

2011

 

2011

 

2011

 

2011

 

2011

 

Global Industrial

 

$

1,080.6

 

$

1,160.4

 

$

1,193.6

 

$

1,188.7

 

$

4,623.3

 

Global Institutional

 

890.5

 

977.9

 

998.6

 

985.0

 

3,852.0

 

Global Energy

 

419.5

 

462.6

 

491.8

 

508.3

 

1,882.2

 

Other

 

167.5

 

178.9

 

179.8

 

175.2

 

701.4

 

Corporate

 

—

 

—

 

—

 

(29.6

)

(29.6

)

Subtotal at fixed currency

 

2,558.1

 

2,779.8

 

2,863.8

 

2,827.6

 

11,029.3

 

Effect of foreign currency rates

 

27.5

 

86.9

 

103.5

 

36.7

 

254.6

 

Consolidated

 

$

2,585.6

 

$

2,866.7

 

$

2,967.3

 

$

2,864.3

 

$

11,283.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

Global Industrial

 

$

100.6

 

$

127.9

 

$

141.1

 

$

127.3

 

$

496.9

 

Global Institutional

 

108.6

 

147.5

 

170.0

 

159.5

 

585.6

 

Global Energy

 

54.3

 

67.0

 

73.6

 

68.5

 

263.4

 

Other

 

20.6

 

23.2

 

27.6

 

25.2

 

96.6

 

Corporate

 

74.0

 

(80.3

)

(77.5

)

(123.6

)

(207.4

)

Subtotal at fixed currency

 

358.1

 

285.3

 

334.8

 

256.9

 

1,235.1

 

Effect of foreign currency rates

 

0.6

 

7.5

 

11.5

 

2.0

 

21.6

 

Consolidated

 

$

358.7

 

$

292.8

 

$

346.3

 

$

258.9

 

$

1,256.7