8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 3, 2016

ECOLAB INC.

(Exact name of registrant as specified in its charter)

Delaware	1-9328	41-0231510
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

370 Wabasha Street North, Saint Paul, Minnesota	55102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 1-800-232-6522

(Not applicable)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 3, 2016, Ecolab Inc. (“Ecolab”) announced earnings for the first quarter ended March 31, 2016.  A copy of the (i) News Release issued by Ecolab in connection with this report under Item 2.02 is furnished and attached as Exhibit (99.1), (ii) Supplemental Data to be used in connection with the conference call to be held discussing the first quarter results is furnished and attached as Exhibit (99.2), and (iii) Supplemental Discussion and related materials to be used in such conference call is furnished and attached as Exhibit (99.3), each of which is incorporated by reference herein. Ecolab also will publish the attached exhibits on its website located at www.ecolab.com.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished pursuant to Item 2.02 of Form 8-K and should not be deemed to be “filed” under the Securities Exchange Act of 1934.

(99.1) Ecolab Inc. News Release dated May 3, 2016.

(99.2) Supplemental Data for First Quarter dated May 3, 2016.

(99.3) Supplemental Discussion for First Quarter dated May 3, 2016.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ECOLAB INC.
Date: May 3, 2016	By:	/s/ David F. Duvick
		David F. Duvick
		Assistant Secretary

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EXHIBIT INDEX

Exhibit No.	Description	Method Of Filing
(99.1)	Ecolab Inc. News Release dated May 3, 2016.	Filed herewith electronically.
(99.2)	Supplemental Data for First Quarter dated May 3, 2016.	Filed herewith electronically.
(99.3)	Supplemental Discussion for First Quarter dated May 3, 2016.	Filed herewith electronically.

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EX-99.1

Exhibit 99.1

News Release

Ecolab Inc.

370 Wabasha Street North

St. Paul, Minnesota  55102

FOR IMMEDIATE RELEASE

Michael J. Monahan(651) 250-2809

ECOLAB REPORTED AND ADJUSTED FIRST QUARTER DILUTED EPS $0.77;

ADJUSTED DILUTED EPS -4% INCLUDING $0.11 (14%) CURRENCY HEADWIND

2016 full-year adjusted EPS forecast remains $4.35 to $4.55

FIRST QUARTER HIGHLIGHTS:

· Reported diluted EPS $0.77

· Adjusted diluted EPS also $0.77, -4%, excluding special gains and charges and discrete tax items, as lower delivered product costs, cost savings and lower shares partially offset an $0.11 (14%) per share currency headwind

· Reported sales -6%; acquisition adjusted fixed currency sales -2%

· Strong Global Institutional, Global Industrial and Other segment acquisition adjusted fixed currency sales +4%, offset by Global Energy sales decline. Regional growth led by Latin America and Europe.

· Strong adjusted fixed currency operating margin expansion, +60 bps; reported operating margin +20 bps

· Robust free cash flow of $332 million, led by working capital improvement

	First Quarter Ended March 31
	(unaudited)
	Reported						Adjusted*
	First Quarter				%		First Quarter				%
(Millions, except per share)	2016		2015		change		2016		2015		change
Net Sales	$	3,097.4	$	3,297.6	-6	%	$	3,097.4	$	3,297.6	-6	%
Operating Income		371.5		387.7	-4	%		377.8		396.1	-5	%
Net Income Attributable to Ecolab		230.8		233.4	-1	%		230.4		241.3	-5	%
Diluted Net Income Per Share	$	0.77	$	0.77	0	%	$	0.77	$	0.80	-4	%

* Operating income is adjusted for special gains and charges; net income and diluted net income per share are adjusted for special gains and charges and discrete tax items.

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ST. PAUL, Minn., May 3, 2016:  Continued solid Global Institutional, Global Industrial and Other segment sales growth along with margin expansion partially offset a Global Energy segment decline to deliver 10% first quarter earnings per share growth before currency effects.  Unfavorable currency translation of $0.11 per share (a 14% impact) more than offset the operating gain, yielding a 4% decrease in adjusted earnings per share.

CEO comment

Douglas M. Baker, Jr., Ecolab chairman and chief executive officer, commented, saying, “First quarter results were as expected, as we largely overcame a 14% unfavorable currency translation impact. We delivered solid underlying business growth and margin expansion in the face of sluggish global economies and a very difficult oil and gas market.  Effective new products and strong new business gains, along with our focus on excellent service delivery, drove our operating results.

“Looking ahead, we remain focused on driving growth and outperforming our end markets through a continued focus on product innovation and new business productivity while also investing to build growth for the future.  Though global economies and currencies remain challenging, our Institutional, Industrial and Other segments continue to deliver mid-single digit acquisition adjusted fixed currency sales growth and healthy margin expansion.  These are more than offsetting the difficulties our Energy segment is facing from continued significant declines in its end markets.  

“We are well-positioned to deliver within our full year 2016 forecast. Our energy and currency year on year comparison challenges should lessen as the year progresses and our Institutional, Industrial and Other segment businesses are expected to continue their strong performance. Importantly, we are investing in our future, with our combined R&D and technology investments growing year on year as they did last year. We are confident we are taking the right steps to deliver growth this year while also investing in the innovation and technology needed to drive future growth.”

Venezuela

As previously disclosed, Ecolab deconsolidated its Venezuela operations at year-end 2015.  This change in accounting treatment, in which we stopped consolidating the results of our local Venezuelan operations in our 2016 financial statements, does not directly affect the local operations of our Venezuelan businesses. We continue to serve customers in Venezuela after the deconsolidation.

Also as previously disclosed, the full-year earnings per share impact of currency on growth rates versus 2015 includes the $0.15 per share effect of the Venezuela bolivar devaluation during 2015. The combined impact of the Venezuela bolivar devaluation and deconsolidation on adjusted earnings per share represents a total year-on-year 2016 headwind of approximately $0.17 per share. 

To provide useful period-to-period comparison of results, acquisition adjusted growth rates exclude the results of any acquired business from the first twelve months post-acquisition, exclude the results of divested businesses from the previous twelve months prior to divestiture, and exclude the Venezuelan results of operations from both the current period and comparable period of the prior year.

Quarter overview

	First Quarter Ended March 31
	(unaudited)
	Reported				%		Adjusted Fixed Currency*				%
(Millions)	2016		2015		Change		2016		2015		Change
Net Sales	$	3,097.4	$	3,297.6	-6	%	$	3,075.4	$	3,075.7	0	%
Operating Income		371.5		387.7	-4	%		373.6		354.0	6	%

* Operating income is adjusted for special gains and charges

Ecolab's reported sales declined 6% to $3.1 billion in the first quarter of 2016.  Fixed currency sales were flat and acquisition adjusted fixed currency sales declined 2%. 

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First quarter 2016 reported operating income decreased 4% to $372 million. Both reported first quarter 2016 and 2015 results include special gains and charges.  Excluding special gains and charges, first quarter 2016 adjusted operating income of $378 million declined 5% when compared with first quarter 2015 adjusted operating income.  Excluding special gains and charges and at fixed currency rates, first quarter 2016 adjusted fixed currency operating income of $374 million increased 6% when compared with first quarter 2015 adjusted fixed currency operating income. 

First quarter 2016 reported net income attributable to Ecolab decreased 1% to $231 million, representing $0.77 per diluted share.  Excluding special gains and charges and discrete tax items, first quarter 2016 adjusted net income attributable to Ecolab declined 5% to $230 million, and adjusted diluted earnings per share declined 4% to $0.77, when compared with first quarter 2015 adjusted diluted earnings per share of $0.80.  Before the negative currency impact of $0.11 per share (14%), first quarter 2016 adjusted earnings per share rose 10%.

Segment review

First quarter 2016 sales for the Global Industrial segment, when measured at fixed currency rates, rose 4% to $1,079 million and fixed currency operating income increased 25% to $129 million.  Acquisition adjusted fixed currency sales rose 2% and acquisition adjusted fixed currency operating income increased 23%, with gains in all operating units.  Latin America led the regional growth, with modest gains in Europe, North America and Asia Pacific. When measured at public currency rates, Global Industrial sales were $1,089 million and operating income was $131 million.

First quarter 2016 sales for the Global Institutional segment, when measured at fixed currency rates, rose 8% to $1,049 million, and fixed currency operating income increased 18% to $196 million compared with last year. Acquisition adjusted fixed currency sales rose 4%, and acquisition adjusted fixed currency operating income increased 19%.  Sales growth was led by the Institutional and Specialty businesses.  Sales for the segment showed good growth in North America and Asia Pacific.  When measured at public currency rates, Global Institutional sales were $1,053 million and operating income was $197 million.

Global Energy segment sales, when measured at fixed currency rates, decreased 15% to $760 million in the first quarter 2016.  Fixed currency operating income decreased 42% to $60 million.  Acquisition adjusted fixed currency sales also decreased 15% and acquisition adjusted fixed currency operating income declined 46%. Sales growth in the downstream business was more than offset by a decline in our upstream business. When measured at public currency rates, Global Energy sales were $767 million and operating income was $62 million.

Other segment sales, when measured at fixed currency rates, increased 9% to $188 million in the first quarter.  Fixed currency operating income increased 30% to $30 million.  When measured at public currency rates, Other segment sales were $188 million and operating income was $30 million.

The Corporate segment includes amortization expense of $42 million in both the first quarter of 2016 and 2015, related to the Nalco merger intangible assets. The Corporate segment also includes special gains and charges. Total special gains and charges for the first quarter of 2016 were a net charge of $6 million ($4 million after-tax).  Special gains and charges for the first quarter 2015 were a net charge of $8 million ($5 million after-tax).

The reported income tax rate for the first quarter 2016 was 24.0%, compared with the reported rate of 27.6% in the first quarter 2015.  Discrete tax items for the first quarter 2016 were a favorable $5 million.  Excluding the tax rate impact of the special gains and charges and discrete tax items, the adjusted tax rate was 25.7% in the first quarter 2016, compared with 27.1% for the same period last year.  The improved adjusted tax rate was primarily driven by the permanent enactment of the R&D tax credit and global tax planning strategies.

Ecolab reacquired 3.1 million shares of its common stock during the first quarter. The reacquired shares included 2.5 million shares acquired as part of an accelerated share repurchase undertaken during the quarter.

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Business Outlook

2016

Ecolab continues to expect full year 2016 adjusted EPS growth in the $4.35 to $4.55 range.   

When compared with our 2015 performance, we expect mid-single digit acquisition adjusted fixed currency sales growth in our Global Institutional, Global Industrial and Other segments with a mid to upper single digit decline in Global Energy segment sales.  We look for improved adjusted gross margin, with a comparable selling, general and administrative (SG&A) ratio to sales, higher interest expense and a similar adjusted tax rate versus 2015.  We expect to repurchase approximately $700 million of our shares in the first half of 2016, similar to 2015. 

Our detailed outlook for the full year 2016 is as follows:

Adjusted Gross Margin, excluding special gains and charges	47% to 48%
SG&A % of Sales	approx. 32%
Interest expense, net	approx. $270 million
Adjusted tax rate	approx. 26%
Noncontrolling interest	$0.06 to $0.10
Adjusted EPS, excluding special gains and charges	$4.35 - $4.55
Diluted shares	approx. 297 million

We expect special gains and charges and quantifiable discrete tax items for the full-year 2016 to be immaterial. Amounts do not reflect the impact of other future discrete tax items that are not currently quantifiable.

Reported 2015 diluted earnings per share of $3.32 included special gains and charges and discrete tax items.  Excluding these items, 2015 adjusted diluted earnings per share were $4.37.

2016 — Second Quarter

Ecolab expects second quarter adjusted earnings per share in the $1.03 to $1.11 range, compared with adjusted earnings per share of $1.08 a year ago. 

At current rates of exchange, we expect foreign currency and the impact of Venezuelan deconsolidation to have an unfavorable impact of approximately four percentage points on second quarter sales and a 7% ($0.08) unfavorable impact on diluted earnings per share.

Our detailed outlook for the second quarter 2016 is as follows:

Adjusted Gross Margin, excluding special gains and charges	approx. 48%
SG&A % of Sales	approx. 33%
Interest expense, net	approx. $67 million
Adjusted tax rate	approx. 26%
Noncontrolling interest	$0.01 to $0.02
Adjusted EPS, excluding special gains and charges	$1.03 - $1.11
Diluted shares	approx. 295 million

We expect special gains and charges and quantifiable discrete tax items for the second quarter of 2016 to be immaterial. Amounts do not reflect the impact of other future discrete tax items that are not currently quantifiable.

Reported second quarter 2015 diluted earnings per share of $1.00 included special gains and charges and discrete tax items.  Excluding these items, second quarter 2015 adjusted diluted earnings per share were $1.08.

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About Ecolab

A trusted partner at more than one million customer locations, Ecolab (ECL) is the global leader in water, hygiene and energy technologies and services that protect people and vital resources. With 2015 sales of $13.5 billion and 47,000 associates, Ecolab delivers comprehensive solutions and on-site service to promote safe food, maintain clean environments, optimize water and energy use and improve operational efficiencies for customers in the food, healthcare, energy, hospitality and industrial markets in more than 170 countries around the world. For more Ecolab news and information, visit www.ecolab.com.  

Ecolab will host a live webcast to review the first quarter earnings announcement and earnings guidance today at 1:00 p.m. Eastern Time.  The webcast, along with related materials, will be available to the public on Ecolab's website at www.ecolab.com/investor.  A replay of the webcast and related materials will be available at that site. Listening to the webcast requires Internet access, the Windows Media Player or other compatible streaming media player.

Cautionary Statements Regarding Forward-Looking Information

This communication contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project,” “may,” “will,” “intend,” “plan,” “believe,” “target,” “forecast” (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding our financial and business performance and prospects, including forecasted 2016 second quarter and full-year financial and business results, including sales growth, adjusted gross margin, SG&A ratios to sales, interest expense, adjusted tax rate, adjusted earnings per share, noncontrolling interest and diluted shares outstanding; share repurchases; foreign currency and the transaction impact of foreign currency; and special gains and charges and quantifiable discrete tax items.  These statements are based on the current expectations of management of the company. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. In particular, the ultimate results of any restructuring, integration and business improvement actions, including cost synergies, depend on a number of factors, including the development of final plans, the impact of local regulatory requirements regarding employee terminations, the time necessary to develop and implement the restructuring and other business improvement initiatives and the level of success achieved through such actions in improving competitiveness, efficiency and effectiveness.

Additional risks and uncertainties that may affect operating results and business performance are set forth under Item 1A of our most recent Form 10-K, and our other public filings with the Securities and Exchange Commission (the "SEC") and include the vitality of the markets we serve, including the impact of oil price fluctuations on the markets served by our Global Energy segment; the impact of economic factors such as the worldwide economy, capital flows, interest rates and  foreign currency risk, including  reduced sales and earnings in other countries resulting from the weakening of local currencies versus the U.S. dollar; our ability to attract and retain high caliber management talent to lead our business; our ability to execute key business initiatives; potential information technology infrastructure failures and cybersecurity attacks; exposure to global economic, political and legal risks related to our international operations including with respect to our operations in Russia and Venezuela; the costs and effects of complying with laws and regulations, including those relating to the environment and to the manufacture, storage, distribution, sale and use of our products; the occurrence of litigation or claims, including related to the Deepwater Horizon oil spill; our ability to develop competitive advantages through innovation; difficulty in procuring raw materials or fluctuations in raw material costs; our substantial indebtedness; our ability to acquire complementary businesses and to effectively integrate such businesses; restraints on pricing flexibility due to contractual obligations; pressure on operations from consolidation of customers, vendors or competitors; public health epidemics; potential losses arising from the impairment of goodwill or other assets; potential loss of deferred tax assets; potential chemical spill or release; potential class action lawsuits;  the loss or insolvency of a major customer or distributor; acts of war or terrorism; natural or man-made disasters; water shortages; severe weather conditions; and other uncertainties or risks reported from time to time in our reports to the SEC. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. We caution that undue reliance should not be placed on forward-looking statements,

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which speak only as of the date made. Ecolab does not undertake, and expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in expectations, except as required by law.

Non-GAAP Financial Information

This news release and certain of the accompanying tables include financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP financial measures include fixed currency sales, acquisition adjusted fixed currency sales, adjusted gross margins, fixed currency operating income, adjusted operating income, adjusted fixed currency operating income, adjusted fixed currency operating income margin, adjusted tax rate, adjusted net income and adjusted diluted earnings per share.

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

We include in special gains and charges items that are unusual in nature, and significant in amount. In order to better allow investors to compare underlying business performance period-to-period, we provide adjusted gross margin, adjusted operating income, adjusted fixed currency operating income, adjusted fixed currency operating income margin, adjusted net income and adjusted diluted earnings per share, which excludes special gains and charges and discrete tax items.

The adjusted effective tax rate measure promotes period-to-period comparability of the underlying effective tax rate because it excludes the tax rate impact of special gains and charges and discrete tax items which do not necessarily reflect costs associated with historical trends or expected future results.

We evaluate the performance of our international operations based on fixed currency rates of foreign exchange. Fixed currency amounts included in this release are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of 2016. Fixed currency amounts also reflect all Venezuelan bolivar operations, prior to the deconsolidation of our Venezuelan operations, at the Marginal Currency System (SIMADI) rate of approximately 200 bolivares to 1 U.S. dollar. Fixed currency sales, acquisition adjusted fixed currency sales, fixed currency operating income and adjusted fixed currency operating income measures eliminate the impact of exchange rate fluctuations on our international sales, acquisition adjusted sales, operating income and adjusted operating income, respectively, and promote a better understanding of our sales and operating income trends from underlying business performance.

Acquisition adjusted growth rates generally exclude the results of any acquired business from the first twelve months post acquisition and exclude the results of divested businesses from the previous twelve months prior to divestiture.  Acquisition adjusted growth rates also exclude the Venezuelan results of operations from both the current period and comparable period of the prior year.

These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the GAAP measures included in this news release. A reconciliation of reported diluted earnings per share to adjusted diluted earnings per share is provided in the table "Supplemental Diluted Earnings per Share Information" included in this news release.

###

(ECL-E)

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ECOLAB INC.

CONSOLIDATED STATEMENT OF INCOME

FIRST QUARTER ENDED MARCH 31

(unaudited)

	First Quarter Ended
	March 31				%
(millions, except per share)	2016		2015		Change
Net sales	$	3,097.4	$	3,297.6	-6	%
Cost of sales (1)		1,631.4		1,765.3	-8	%
Selling, general and administrative expenses		1,088.2		1,136.8	-4	%
Special (gains) and charges (1)		6.3		7.8
Operating income		371.5		387.7	-4	%
Interest expense, net		66.1		62.5	6	%
Income before income taxes		305.4		325.2	-6	%
Provision for income taxes		73.4		89.8	-18	%
Net income including noncontrolling interest		232.0		235.4	-1	%
Less: Net income attributable to noncontrolling interest		1.2		2.0
Net income attributable to Ecolab	$	230.8	$	233.4	-1	%
Earnings attributable to Ecolab per common share
Basic	$	0.78	$	0.78	0	%
Diluted	$	0.77	$	0.77	0	%
Weighted-average common shares outstanding
Basic		294.4		298.2	-1	%
Diluted		298.3		303.2	-2	%

(1) Special (gains) and charges in the Consolidated Statement of Income above include the following:

(millions)	2016		2015
Cost of sales
Restructuring charges	$	—	$	0.6
Special (gains) and charges
Restructuring charges		3.0		2.1
Champion integration costs		—		5.2
Nalco integration costs		—		0.5
Other		3.3		—
Subtotal		6.3		7.8
Total special (gains) and charges	$	6.3	$	8.4

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ECOLAB INC.

REPORTABLE SEGMENT INFORMATION

FIRST QUARTER ENDED MARCH 31

(unaudited)

	Fixed Currency Rates
	First Quarter Ended
	March 31
(millions)	2016		2015		% Change
Net Sales
Global Industrial	$	1,079.1	$	1,037.7	4	%
Global Institutional		1,048.7		975.2	8	%
Global Energy		760.0		890.8	-15	%
Other		187.6		172.0	9	%
Subtotal at fixed currency rates		3,075.4		3,075.7	0	%
Currency impact		22.0		221.9
Consolidated	$	3,097.4	$	3,297.6	-6	%
Operating Income
Global Industrial	$	128.7	$	102.6	25	%
Global Institutional		196.1		166.3	18	%
Global Energy		60.4		104.2	-42	%
Other		30.1		23.1	30	%
Corporate		(48.0)		(50.6)
Subtotal at fixed currency rates		367.3		345.6	6	%
Currency impact		4.2		42.1
Consolidated	$	371.5	$	387.7	-4	%
	Public Currency Rates
	First Quarter Ended
	March 31
(millions)	2016		2015		% Change
Net Sales
Global Industrial	$	1,088.8	$	1,127.2	-3	%
Global Institutional		1,052.9		1,013.1	4	%
Global Energy		767.3		979.4	-22	%
Other		188.4		177.9	6	%
Consolidated	$	3,097.4	$	3,297.6	-6	%
Operating Income
Global Industrial	$	130.5	$	118.4	10	%
Global Institutional		196.7		170.0	16	%
Global Energy		62.3		128.3	-51	%
Other		30.2		23.1	31	%
Corporate		(48.2)		(52.1)
Consolidated	$	371.5	$	387.7	-4	%

Note:

As shown in the “Fixed Currency Rates” table above, we evaluate the performance of our international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on our international operations. The difference between the fixed currency exchange rates and the public currency exchange rates is reported as “Currency impact” in the “Fixed Currency Rates” table above.

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Values shown in the “Public Currency Rates” table above reflect amounts translated at actual public average rates of exchange prevailing during the corresponding period, and are provided for informational purposes.

The Corporate segment includes amortization from the Nalco merger intangible assets. The Corporate segment also includes special (gains) and charges reported on the Consolidated Statement of Income. 

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ECOLAB INC.

CONSOLIDATED BALANCE SHEET

(unaudited)

	March 31		December 31		March 31
(millions)	2016		2015		2015
Assets
Current assets
Cash and cash equivalents	$	268.5	$	92.8	$	237.9
Accounts receivable, net		2,248.8		2,390.2		2,546.9
Inventories		1,386.1		1,388.2		1,503.0
Deferred income taxes		—		250.0		172.8
Other current assets		291.5		326.3		461.2
Total current assets		4,194.9		4,447.5		4,921.8
Property, plant and equipment, net		3,227.0		3,228.3		3,115.1
Goodwill		6,474.9		6,490.8		6,529.0
Other intangible assets, net		4,031.1		4,109.2		4,326.7
Other assets		413.9		365.9		335.8
Total assets	$	18,341.8	$	18,641.7	$	19,228.4
Liabilities and Equity
Current liabilities
Short-term debt	$	1,756.6	$	2,205.3	$	1,797.2
Accounts payable		986.1		1,049.6		950.6
Compensation and benefits		435.5		509.0		435.7
Income taxes		58.5		52.2		70.5
Other current liabilities		922.8		948.3		866.7
Total current liabilities		4,159.5		4,764.4		4,120.7
Long-term debt		5,082.8		4,260.2		5,385.4
Postretirement health care and pension benefits		1,112.4		1,117.1		1,140.8
Deferred income taxes		1,106.4		1,281.2		1,424.5
Other liabilities		228.6		238.4		221.0
Total liabilities		11,689.7		11,661.3		12,292.4
Equity
Common stock		351.0		350.3		348.7
Additional paid-in capital		5,088.0		5,086.1		4,881.3
Retained earnings		6,288.3		6,160.3		5,690.4
Accumulated other comprehensive loss		(1,536.1)		(1,423.3)		(1,187.4)
Treasury stock		(3,609.8)		(3,263.5)		(2,862.0)
Total Ecolab shareholders’ equity		6,581.4		6,909.9		6,871.0
Noncontrolling interest		70.7		70.5		65.0
Total equity		6,652.1		6,980.4		6,936.0
Total liabilities and equity	$	18,341.8	$	18,641.7	$	19,228.4

Note:

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During the first quarter of 2016, we early-adopted the accounting guidance issued in November 2015 that requires all deferred tax assets and liabilities to be classified as noncurrent on the Consolidated Balance Sheet, using the prospective application method. Prior periods have not been retrospectively adjusted for adoption of this guidance.

During the third quarter of 2015, we early-adopted the updated accounting guidance related to simplifying the presentation of debt issue costs, using the retrospective application method. We updated our Consolidated Balance Sheet for prior periods to reflect the changes, resulting in reductions as of March 31, 2015 to other assets, short-term debt and long-term debt of $23.6 million, $0.3 million and $23.3 million, respectively. The updated guidance had no impact on previously reported earnings or consolidated cash flows.

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ECOLAB INC.

SUPPLEMENTAL DILUTED EARNINGS PER SHARE INFORMATION

(unaudited)

The table below provides a reconciliation of diluted earnings per share, as reported, to the non-GAAP measure of adjusted diluted earnings per share.

	First		Second		Six		Third		Nine		Fourth
	Quarter		Quarter		Months		Quarter		Months		Quarter		Year
	Ended		Ended		Ended		Ended		Ended		Ended		Ended
	Mar. 31		June 30		June 30		Sept. 30		Sept. 30		Dec. 31		Dec. 31
	2015		2015		2015		2015		2015		2015		2015
Diluted earnings per share, as reported (U.S. GAAP)	$	0.77	$	1.00	$	1.77	$	0.86	$	2.63	$	0.69	$	3.32
Adjustments:
Special (gains) and charges (1)		0.02		0.20		0.22		0.48		0.70		0.55		1.25
Tax expense (benefits) (2)		0.01		(0.13)		(0.12)		(0.06)		(0.19)		(0.02)		(0.21)
Adjusted diluted earnings per share (Non-GAAP)	$	0.80	$	1.08	$	1.87	$	1.28	$	3.15	$	1.22	$	4.37

	First		Second	Six	Third	Nine	Fourth
	Quarter		Quarter	Months	Quarter	Months	Quarter	Year
	Ended		Ended	Ended	Ended	Ended	Ended	Ended
	Mar. 31		June 30	June 30	Sept. 30	Sept. 30	Dec. 31	Dec. 31
	2016		2016	2016	2016	2016	2016	2016
Diluted earnings per share, as reported (U.S. GAAP)	$	0.77
Adjustments:
Special (gains) and charges (3)		0.01
Tax expense (benefits) (4)		(0.02)
Adjusted diluted earnings per share (Non-GAAP)	$	0.77

Per share amounts do not necessarily sum due to changes in shares outstanding and rounding.

(1) Special (gains) and charges for 2015 include restructuring charges of $1.6 million, $14.6 million, $10.0 million and $49.3 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2015 also include $3.2 million, $2.8 million, $2.4 million and $2.3 million of costs, net of tax, in the first, second, third and fourth quarters, respectively, related to Champion integration costs. Special (gains) and charges for 2015 also include $0.5 million, $0.1 million, $0.6 million and $0.1 million of costs, net of tax, in the first, second, third and fourth quarters, respectively, related to Nalco integration costs. Special (gains) and charges for 2015 also include $30.2 million, $124.6 million, $80.9 million, net of tax, in the second, third and fourth quarters, respectively, related to Venezuelan charges. Special (gains) and charges for 2015 also include $15.4 million, net of tax, in the fourth quarter related to a fixed asset impairment. Special (gains) and charges for 2015 also include $13.4 million, $7.8 million and $17.1 million, net of tax, in the second, third and fourth quarters, respectively, primarily related to other litigation related charges, a loss on the sale of a portion of our Ecovation business and the net impact of inventory reserve and inventory cost policy harmonization efforts.

(2) The first quarter 2015 discrete tax net expense of $2.6 million is driven primarily by a change to a deferred tax liability resulting from the Naperville facility transaction. The second quarter 2015 discrete tax net benefit of $39.4 million is driven primarily from our ability to recognize a worthless stock deduction for the tax basis in a wholly owned

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domestic subsidiary. The third quarter 2015 discrete tax net benefit of $19.2 million is driven primarily by the release of valuation allowances on certain deferred tax assets amd a refund claim for taxes paid in a prior period resulting from updated IRS regulations, offset partially by recognizing adjustments from filing our 2014 U.S. federal tax return. The fourth quarter discrete tax net benefit of $7.3 million is driven primarily by the finalization of prior year IRS audits, valuation allowance releases and other statute of limitation tax reserve releases.

(3) Special (gains) and charges for 2016 include restructuring charges of $1.8 million, net of tax, in the first quarter. Special (gains) and charges for 2016 also include $2.6 million, net of tax, in the first quarter, related to other charges.

(4) The first quarter 2016 discrete tax net benefit of $4.8 million is driven primarily by the release of reserves for uncertain tax positions due to expiration of statute of limitations in non-U.S. jurisdictions.

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EX-99.2

Exhibit 99.2

First Quarter 2016 Teleconference Supplemental Data

Cautionary Statement 2 Forward-Looking Information This communication contains forward looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our future financial and business performance and prospects, including forecasted 2016 second quarter and full year business and financial results, sales growth, performance against the market, investments, innovation, cost efficiencies, unfavorable foreign currency, Venezuelan deconsolidation impact and merger and acquisition opportunities. These statements are based on the current expectations of management of the Company. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are set forth under Item 1A of our most recent Annual Report on Form 10-K and our other our public filings with the Securities and Exchange Commission (the “SEC”) and include the vitality of the markets we serve, including the markets served by our Global Energy segment; the impact of worldwide economic factors such as the worldwide economy, credit markets, interest rates and foreign currency risk, including reduced sales and earnings in other countries resulting from the weakening of local currencies versus the U.S. dollar; exposure to economic, political and legal risks related to our international operations; the costs and effects of complying with laws and regulations relating to our operations; the occurrence of litigation or claims; and other uncertainties or risks reported from time to time in our reports to the SEC. In light of these risks, uncertainties and factors, the forward-looking events discussed in this communication may not occur. We caution that undue reliance should not be placed on forward-looking statements, which speak only as of the date made. Ecolab does not undertake, and expressly disclaims, any duty to update any forward-looking statement except as required by law. Non-GAAP Financial Information This communication includes Company information that does not conform to generally accepted accounting principles (GAAP). Management believes that a presentation of this information is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. Reconciliations of certain non-GAAP measures to GAAP results are available in our news release furnished as an exhibit to our current report on Form 8-K dated May 3, 2016 and other of our SEC filings.

3 Earnings: Adjusted EPS $0.77, -4% Reported EPS $0.77, flat versus last year Reported and adjusted include $0.11 (14%) unfavorable currency Sales: Fixed currency flat Reported sales -6%; acquisition adjusted fixed currency sales -2% Global Institutional, Global Industrial and Other segments +4% acquisition adjusted fixed currency sales, offset by lower Global Energy sales Strong new business growth and new product introductions offset soft economies Operating Margin: Continued expansion Adjusted fixed currency operating margin +60 bp Good volume growth, pricing and lower delivered product costs in our Global Institutional, Global Industrial and Other segments was partially offset by a decline in Global Energy sales volume and pricing Outlook: 2Q: $1.03 to $1.11, including an $0.08, or 7%, unfavorable impact from FX/Venezuelan deconsolidation 2016: $4.35 to $4.55, including a $0.25 to $0.30, or 6%, unfavorable impact from FX/Venezuelan deconsolidation 1Q 2016 Overview

4 1Q 2016 Results Operating income is adjusted for special gains and charges. Net income and diluted net income per share are adjusted for special gains and charges and discrete tax items. * First Quarter Ended March 31 (unaudited) Reported Adjusted* First Quarter % First Quarter % (Millions, except per share) 2016 2015 change 2016 2015 change Net Sales $3,097.4 $3,297.6 -6% $3,097.4 ####### -6% Operating Income 371.5 387.7 -4% 377.8 396.1 -5% Net Income Attributable to Ecolab 230.8 233.4 -1% 230.4 241.3 -5% Diluted Net Income Per Share $0.77 $0.77 0% $0.77 $0.80 -4% Fixed Currency % (Millions, except per share) 2016 2015 change Net Sales $3,075.4 $3,075.7 0% Adjusted Operating Income* 373.6 354.0 6%

5 1Q 2016 Sales Growth Detail Amounts in the tables above may reflect rounding. Acq./Div. Adj. excludes Venezuela results. Fixed Rate Acq./Div. Adj. Global Industrial % Change % Change Consolidated % Change F&B 4% 4% Volume & mix -2% Water 5% 2% Pricing 0% Paper 1% 1% Subtotal -2% Textile Care 4% 4% Acq./Div. 2% Total Global Industrial 4% 2% Fixed currency growth 0% Currency impact -6% Global Institutional Total -6% Institutional 10% 5% Specialty 6% 6% Healthcare 1% 1% Total Global Institutional 8% 4% Global Energy -15% -15% Other Pest Elimination 9% 9% Equipment Care 10% 10% Total Other 9% 9%

6 1Q 2016 Income Statement / Margins 2016 adjusted fixed currency margin was 12.1%, +60 bps vs. the 2015 adjusted margin of 11.5%. Good volume growth, pricing and lower delivered product costs in our Global Institutional, Global Industrial and Other segments was partially offset by a decline in Global Energy sales volume and pricing

7 1Q 2016 Balance Sheet / Cash Flow EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA is defined as the sum of operating income, depreciation and amortization. Adjusted EBITDA is defined as the sum of adjusted operating income, depreciation and amortization. The inputs to EBITDA reflect the trailing twelve months of activity for the period presented. * Summary Balance Sheet ECOLAB INC. March 31 March 31 CONSOLIDATED BALANCE SHEET ($ millions) 2016 2015 2016 2015 (unaudited) Cash and cash eq. $268.5 $237.9 Short-term debt $1,756.6 $1,797.2 Accounts receivable, net 2,248.8 2,546.9 Accounts payable 986.1 950.6 March 31 December 31 March 31 Inventories 1,386.1 1,503.0 Other current liabilities 1,416.8 1,372.9 (millions) 2016 2015 2015 Other current assets 291.5 634.0 Long-term debt 5,082.8 5,385.4 PP&E, net 3,227.0 3,115.1 Pension/Postretirement 1,112.4 1,140.8 Assets Goodwill and intangibles 10,506.0 10,855.7 Other liabilities 1,335.0 1,645.5 Current assets Other assets 413.9 335.8 Total equity 6,652.1 6,936.0 Cash and cash equivalents $ 268.5 $ 92.8 $ 237.9 Total assets $18,341.8 $19,228.4 Total liab. and equity $18,341.8 $19,228.4 Accounts receivable, net 2,248.8 2,390.2 2,546.9 Inventories 1,386.1 1,388.2 1,503.0 Deferred income taxes - 250.0 172.8 Selected Cash Flow items Three Months Ended Selected Balance Sheet measures Other current assets 291.5 326.3 461.2 March 31 March 31 Total current assets 4,194.9 4,447.5 4,921.8 ($ millions) 2016 2015 2016 2015 Cash from op. activities $472.5 $112.5 Total Debt/Total Capital 50.7% 50.9% Property, plant and equipment, net 3,227.0 3,228.3 3,115.1 Depreciation 139.6 142.1 Net Debt/Total Capital 49.7% 50.0% Goodwill 6,474.9 6,490.8 6,529.0 Amortization 72.6 75.1 Net Debt/EBITDA* 2.7 2.4 Other intangible assets, net 4,031.1 4,109.2 4,326.7 Capital expenditures 140.1 166.8 Net Debt/Adjusted EBITDA* 2.3 2.4 Other assets 413.9 365.9 335.8 Total assets $ 18,341.8 $ 18,641.7 ######## Liabilities and Equity Current liabilities Short-term debt $ 1,756.6 $ 2,205.3 $1,797.2 ($ millions) Accounts payable 986.1 1,049.6 950.6 Operating Activities 2008 Compensation and benefits 435.5 509.0 435.7 Net income $ 139.0 Income taxes 58.5 52.2 70.5 Depreciation and amortization 85.1 Other current liabilities 922.8 948.3 866.7 Other, net (12.3) Total current liabilities 4,159.5 4,764.4 4,120.7 Changes in op. assets and liab. (41.2) Cash provided by cont. ops. 170.6 Long-term debt 5,082.8 4,260.2 5,385.4 Postretirement health care and pension benefits 1,112.4 1,117.1 1,140.8 Investing Activities Deferred income taxes 1,106.4 1,281.2 1,424.5 Capital expenditures (85.9) Other liabilities 228.6 238.4 221.0 Capitalized software expen. (19.1) Total liabilities 11,689.7 11,661.3 12,292.4 Businesses acquired (3.2) Other, net 33.8 Equity Cash used for investing (74.4) Common stock 351.0 350.3 348.7 Additional paid-in capital 5,088.0 5,086.1 4,881.3 Financing Activities Retained earnings 6,288.3 6,160.3 5,690.4 Debt, net (71.2) Accumulated other comprehensive loss (1,536.1) (1,423.3) (1,187.4) Reacquired shares (1.6) Treasury stock (3,609.8) (3,263.5) (2,862.0) Dividends (32.1) Total Ecolab shareholders' equity 6,581.4 6,909.9 6,871.0 Other, net 7.0 Noncontrolling interest 70.7 70.5 65.0 Cash from (used for) financing $ (98.0) Total equity 6,652.1 6,980.4 6,936.0 Total liabilities and equity $ 18,341.8 $ 18,641.7 ######## - - - Note: During the first quarter of 2016, we early-adopted the accounting guidance issued in November 2015 that requires all deferred tax assets and liabilities to be classified as noncurrent on the Consolidated Balance Sheet, using the prospective application method. Prior periods have not been retrospectively adjusted for adoption of this guidance.

8 2016 Focus Remain disciplined in a very challenging environment Execute the Ecolab Model Drive growth through best product/best service to produce best results/lowest total use cost Leverage corporate account new business investments and momentum Expect continued mid-single digit growth in Global Institutional, Global Industrial and Other segments; Global Energy outperforms challenged industry Invest in the future Continued investments in critical areas Product innovation and new field technology Enterprise systems Improve cost efficiency and effectiveness Focused M&A Technologies, products/services, geographic expansion, opportunities in distressed markets

EX-99.3

Exhibit 99.3

ECOLAB FIRST QUARTER 2016

1Q 2016 Overview

· Earnings: Adjusted EPS $0.77, -4%

· Reported EPS $0.77, flat versus last year

· Reported and adjusted include $0.11 (14%) unfavorable currency

· Sales: Fixed currency flat

· Reported sales -6%; acquisition adjusted fixed currency sales -2%

· Global Institutional, Global Industrial and Other segments +4% acquisition adjusted fixed currency sales, offset by lower Global Energy sales

· Strong new business growth and new product introductions offset soft economies

· Operating Margin: Continued expansion

· Adjusted fixed currency operating margin +60 bp

· Good volume growth, pricing and lower delivered product costs in our Global Institutional, Global Industrial and Other segments was partially offset by a decline in Global Energy sales volume and pricing

· Outlook:

· 2Q: $1.03 to $1.11, including an $0.08, or 7%, unfavorable impact from FX/Venezuelan deconsolidation

· 2016: $4.35 to $4.55, including a $0.25 to $0.30, or 6%, unfavorable impact from FX/Venezuelan deconsolidation

SUMMARY

Continued attractive new account gains and new product introductions drove good fixed currency sales growth in our Global Institutional, Global Industrial and Other segments during the first quarter, nearly offsetting a decline in Global Energy sales. New business and ongoing cost efficiency work led the strong adjusted fixed currency operating margin expansion, more than offsetting the impact of soft economies, weak oil prices and currency headwinds. These, along with fewer shares outstanding, drove the adjusted earnings per share increase before currency translation.

While 2016 is proving to be a challenging year, we continue to focus on the same fundamental strategies that have successfully driven our strong

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growth record — providing the best products and service for our customers to give them the best results and lowest operating costs. They delivered again in the first quarter, and we expect them to deliver for the full year 2016.

Looking to the second quarter, we expect our Global Institutional, Global Industrial and Other segments to continue to show solid acquisition adjusted fixed currency growth, outpacing their markets and soft international economies as they leverage investments we have made to further improve sales and service force effectiveness and profitability, and more than offset lower results from our Global Energy business. We look for second quarter earnings per share to be in the $1.03 to $1.11 per share range, with that range including approximately $0.08 per share, or 7%, of unfavorable currency translation and impact from the Venezuela deconsolidation, as we continue to aggressively drive business growth.

For the full year, the Global Institutional, Global Industrial and Other segments are expected to continue to show solid fixed currency growth. Global Energy segment expectations have softened; Global Energy sales are expected to be in the lower part of our forecasted  range, down upper single digits versus last year. While the dollar has weakened somewhat, at this early point in the year we are maintaining our earnings per share forecast for 2016 to reflect the uncertain currency trends and business environment. Net, we continue to expect to outperform our markets in 2016 while also investing in the key drivers for future sustainable above average earnings

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growth. We expect our consolidated results to show improving comparisons in the second half, and continue to look for adjusted diluted earnings per share in the $4.35 to $4.55 range.

HIGHLIGHTS

· Reported first quarter earnings per share were $0.77.

· On an adjusted basis, excluding special gains and charges and discrete tax items from both years, first quarter 2016 adjusted earnings per share decreased 4% to $0.77, reflecting an $0.11, or 14%, currency headwind.

· The adjusted earnings per share growth was driven by delivered product and other cost savings, cost efficiencies and the lower share count.

· Our consolidated fixed currency acquisition adjusted sales were modestly lower as our Global Institutional, Global Industrial and Other segments grew 4% but were offset by lower Global Energy sales. Regional sales growth was led by Latin America and Europe.

· Adjusted fixed currency operating margins showed strong growth, expanding 60 basis points.

· In 2016’s difficult environment, we are focused on driving new business gains by helping customers to lower costs. We are using our industry-leading product innovation and service strengths to help customers achieve the best results and lowest operating costs, and through these, aggressively drive new account gains across all of our segments.

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· We expect second quarter adjusted earnings per share in the $1.03 to $1.11 range, reflecting a currency translation and Venezuela deconsolidation drag of approximately $0.08, or 7%.

· Consolidated results are expected to improve, with the second half outperforming the first half. We look for full year adjusted diluted earnings per share in the $4.35 to $4.55 per share range.

· In summary, despite a very challenging global economic and market environment, we expect to continue to deliver solid fundamental results in 2016. We remain confident in our business, our markets and our people, as well as our capacities to meet our aggressive growth objectives over the coming years.

VENEZUELA

As previously disclosed, Ecolab deconsolidated its Venezuela operations at year-end 2015. This change in accounting treatment, in which we stopped consolidating the results of our local Venezuelan operations in our 2016 financial statements, does not directly affect the local operations of our Venezuelan businesses. We continue to serve customers in Venezuela after the deconsolidation.

Also as previously disclosed, the earnings per share impact of currency on growth rates versus 2015 includes the $0.15 per share effect of the Venezuela bolivar devaluation during 2015. The combined impact of the Venezuela bolivar devaluation and deconsolidation on adjusted earnings per share represents a total year-on-year 2016 headwind of approximately

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$0.17 per share.

To provide useful period-to-period comparison of results, acquisition adjusted growth rates exclude the results of any acquired business from the first twelve months post-acquisition, exclude the results of divested businesses from the previous twelve months prior to divestiture, and exclude the Venezuelan results of operations from both the current period and comparable period of the prior year.

SEGMENT / SECTOR DISCUSSION

Consolidated sales	% Change
Volume & mix	-2	%
Pricing	0	%
Subtotal	-2	%
Acq./Div.	2	%
Fixed currency growth	0	%
Currency impact	-6	%
Total	-6	%

Amounts in the table above may reflect rounding.

Ecolab’s consolidated reported sales for the first quarter decreased 6%. Consolidated fixed currency sales for the quarter were flat. Acquisition adjusted fixed currency sales declined 2% when compared to the year ago period. Looking at the growth components, volume and mix decreased 2% versus last year while pricing was flat. Acquisitions and divestitures were 2% and currency was a negative 6%.

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GLOBAL INDUSTRIAL SEGMENT

	Fixed Rate		Acq./Div. Adj.
Global Industrial	% Change		% Change
Food & Beverage	4	%	4	%
Water	5	%	2	%
Paper	1	%	1	%
Textile Care	4	%	4	%
Total Global Industrial	4	%	2	%

FOOD & BEVERAGE

First quarter fixed currency Food & Beverage sales increased 4%. Strong corporate account and share gains more than offset generally flat industry trends. Globally, Food & Beverage enjoyed strong growth in our dairy, and food operations, good sales gains in our beverage business and lower sales in our agri operations. Regions enjoyed a good performance, with the strongest growth in Latin America and Asia Pacific, while North America and Europe recorded modest gains.

Food & Beverage continues to drive sales growth using its enterprise selling approach to customers, in which we combine Ecolab’s industry-leading cleaning, and sanitizing, water treatment and Pest Elimination capabilities to demonstrate value through delivery of improved food safety results, lower operating costs and enhanced product quality for customers. This has enabled us to win business with key global customers. We look to more than offset tough industry conditions with further customer penetration and new business capture, new market growth and leverage from our strong innovation pipeline which includes Synergex, a next

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generation sanitizer which produces improved quality, lowers total costs and creates production efficiencies while also offering 3DTrasar’s powerful operating information capabilities.

WATER

Fixed currency Water sales grew 5%. Acquisition adjusted fixed currency Water sales increased 2%. Our core water sales rose 6% excluding mining, with good gains in the light commercial and power markets. However, these gains were partially offset by a double-digit decline in mining. Regionally, we saw strong growth in Latin America, moderate growth in Europe and Asia Pacific, North America was flat and China was down.

In these challenging markets, we continue to drive penetration and share gains in all of our water markets, leveraging our innovative solutions to help customers optimize water usage, improve results and lower our customers’ total operating costs. We continue to invest in additional new water technologies to improve customers’ operating performance, lower their operating costs and improve safety. We will continue to leverage the momentum from recent launches such as 3D TRASAR Solids, new post-treatment dewatering applications and industrial paint treatment programs. New 2016 product launches, including our proprietary new product line for large cooling systems to improve scale and corrosion control as well as reduce water and energy consumption, should also provide good growth. We also plan to introduce new boiler treatment chemistry and monitoring technology in 2016 that will maintain and extend our leadership in this critical customer application.

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We remain focused on strengthening our corporate account and enterprise sales teams as well as growing our new business pipeline. We also continue to enhance our total water management solutions that deliver improved efficiency and decreased operating costs for our customers. We expect low single digit growth in the second quarter reflecting continued weak mining and China results, with improving growth in the second half of 2016 as market share gains in our heavy and light businesses and lapping comparisons on mining and China drive the sales acceleration.

PAPER

First quarter fixed currency Paper sales increased 1%. Strong growth in Latin America, driven by strong sales efforts and business wins, along with good gains elsewhere were largely offset by a decline in China.

We continue to focus on maximizing results for our customers through minimizing water and optimizing their total cost in the growth segments of board & packaging, tissue & towel, and pulp. Paper expects to show better growth in the second quarter and for the balance of the year through the globalization of best practices and the focus on delivering value through innovative solutions.

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GLOBAL INSTITUTIONAL SEGMENT

Global Institutional	Fixed Rate % Change		Acq./Div. Adj. % Change
Institutional	10	%	5	%
Specialty	6	%	6	%
Healthcare	1	%	1	%
Total Global Institutional	8	%	4	%

INSTITUTIONAL

Fixed currency sales growth for the Institutional business grew 10%. Adjusted for acquisitions, fixed currency sales for Institutional grew 5%. While our end markets remain subdued, Institutional continues to outperform the market. Sales growth in North America remained strong, Asia Pacific reported solid growth, Europe saw modest sales gains and Latin America sales declined slightly in the face of slow markets in the south. New business wins, along with demand for our leading innovation and appropriate pricing, led our results.

We remain focused on strengthening our execution and delivering increased customer value, with solutions that reduce their water, energy and labor costs. Growth continues to be driven by our robust innovation in key platforms including warewashing, laundry and housekeeping, as well as ongoing investments in sales and service force and corporate account team training. This training work, which includes best practices, improved sales fundamentals, and customized market training to better address local customer issues, has been important to our successful efforts to win new business. Looking ahead, the Swisher integration remains on plan, and we expect continued solid Institutional sales growth in the second quarter and

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for the full year.

SPECIALTY

First quarter sales for Specialty grew 6% in fixed currencies. Quickservice sales growth was strong as we continue to see growth in our large, global accounts and food safety becomes a greater investment area for our customers. New account growth, increased service coverage, additional solutions and the timing of new customer programs leveraged generally modest industry trends to drive growth. Regionally, quickservice sales grew in all regions, benefiting from new accounts and additional customer solutions.

The food retail business posted modest sales growth as continued new customer additions and product introductions compared against a very strong period last year.

New account wins have been solid, and with our ongoing investments in new products, the sales and service force and increased solutions for customers, we look for a good second quarter and full year in 2016 for Specialty.

HEALTHCARE

Fixed currency Healthcare sales rose 1% in the first quarter. Good environmental hygiene program sales gains were offset by lower sales in Europe and a decline in OEM drapes. We had strong new business success in the quarter as we continue to drive our integrated and

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comprehensive environmental hygiene solutions approach for acute healthcare facilities, focusing on the operating room, patient room and central sterile, and utilizing the Ecolab value proposition of innovative products and on-site service support to reduce healthcare acquired infections and improve operational efficiencies. Integrated programs for environmental hygiene and infection prevention are still a relatively new approach for the industry and are in line with the direction in which healthcare is moving. We look for second quarter 2016 Healthcare sales to show better growth, with further improvement in the second half as new business gains benefit results.

GLOBAL ENERGY SEGMENT

Global Energy	Fixed Rate % Change		Acq./Div. Adj. % Change
Energy	-15	%	-15	%

First quarter fixed currency Global Energy segment sales decreased 15% reflecting the very challenging operating environment and difficult comparison to the first quarter last year, when market conditions were more favorable. We continued to outperform declining energy industry activity during the quarter. Sales in downstream continued to show good growth led by strong international markets. Wellchem, our well stimulation business (representing approximately 10% of Energy segment sales), recorded a significant decline. Our upstream

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production businesses (which represent approximately 65% of Energy segment sales) also declined due to weaker global market conditions.

Looking ahead, we expect the continuing good growth in downstream to be offset by declines in Wellchem and our upstream production business in 2016. We look for full year acquisition adjusted sales to decline in the upper single digit range year-on-year reflecting continued weak energy market conditions, with the second half outperforming the first. We remain aggressive, using both our industry-leading product innovation and our outstanding sales and service team to drive sales and share growth, as well as strengthen our position for future gains.

OTHER SEGMENT

Other	Fixed Rate % Change		Acq./Div. Adj. % Change
Pest Elimination	9	%	9	%
Equipment Care	10	%	10	%
Total Other	9	%	9	%

PEST ELIMINATION

Fixed currency Pest Elimination sales increased 9% in the first quarter. Sales to food and beverage, hospitality and restaurant customers led the growth, which was strong in all regions. We continue to drive market penetration, with innovative service offerings and technologies, as well as make progress in globalizing our market-focused capabilities and field technologies. We expect Pest Elimination sales to show further strong growth in the second quarter and for the balance of the year, showing good gains in all markets.

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EQUIPMENT CARE

Equipment Care sales grew 10% in the first quarter. New customer additions continue at a solid rate, and productivity improvements from our technology investments and strong execution continues to pay off. We look for mid- to upper-single digit sales growth in the second quarter, and for the full year 2016.

MARGIN PERFORMANCE

($ millions)	2016		% sales		2015		% sales		% change
Gross Profit	$	1,466.0	47.3	%	$	1,532.3	46.5	%	-4.3	%

First quarter gross margins were 47.3% and rose 80 basis points above last year. The improvement resulted from lower delivered product costs, cost efficiencies and the decline in Global Energy (which on average has a lower gross profit margin).

($ millions)	2016		% sales		2015		% sales		% change
SG&A	$	1,088.2	35.1	%	$	1,136.8	34.5	%	-4.3	%

SG&A expenses represented 35.1% of first quarter sales. The 60 basis point increase reflected the decline in Global Energy (which on average has a lower SG&A ratio).

($ millions)	2016		% sales		2015		% sales		% change
Consolidated Op. Inc.	$	371.5	12.0	%	$	387.7	11.8	%	-4.2	%
Consolidated Fixed Currency Op. Inc. (adj.)	$	373.6	12.1	%	$	354.0	11.5	%	5.5	%

Consolidated operating income margins were 12.0%. Adjusted for special

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charges, fixed currency operating income margins were 12.1%, rising 60 basis points over last year’s comparable margin. Good volume growth, pricing and lower delivered product costs in our Global Institutional, Global Industrial and Other segments were partially offset by a decline in Global Energy sales volume and pricing.

($ millions - fixed currency)	2016		% sales		2015		% sales		% change
Global Industrial Op. Inc.	$	128.7	11.9	%	$	102.6	9.9	%	25.4	%

Fixed currency operating income for the Global Industrial segment increased 25%. Acquisition adjusted fixed currency operating income grew 23% and margins rose 200 basis points. Volume gains, pricing, cost savings initiatives and delivered product cost savings led the increase.

($ millions - fixed currency)	2016		% sales		2015		% sales		% change
Global Institutional Op. Inc.	$	196.1	18.7	%	$	166.3	17.1	%	17.9	%

Fixed currency operating income for the Global Institutional segment increased 18%. Acquisition adjusted fixed currency operating income grew 19% and margins rose 260 basis points. Results benefited from good volume gains, pricing and delivered product cost savings which more than offset business investments.

($ millions - fixed currency)	2016		% sales		2015		% sales		% change
Global Energy Op. Inc.	$	60.4	7.9	%	$	104.2	11.7	%	-42.0	%

Fixed currency Global Energy segment operating income decreased 42%. Acquisition adjusted fixed currency operating income declined 46%. Volume declines and lower pricing more than offset cost savings initiatives,

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synergies and lower delivered product costs.

($ millions - fixed currency)	2016		% sales		2015		% sales		% change
Other Op. Inc.	$	30.1	16.0	%	$	23.1	13.4	%	30.3	%

Fixed currency operating income for the Other segment increased 30% and margins expanded 260 basis points. Pricing and sales volume gains led the increase.

($ millions)	2016		2015
Corporate
Special Gains/(Ch.)	$	(6.3)	$	(8.4)
Corp. Expense		(41.7)		(42.2)
Total Corporate Exp.	$	(48.0)	$	(50.6)

The Corporate segment includes amortization expense of $42 million in both the first quarter of 2016 and 2015, related to the Nalco merger intangible assets. The Corporate segment also includes special gains and charges. Total special gains and charges for the first quarter of 2016 were a net charge of $6 million ($4 million after-tax). Special gains and charges for the first quarter 2015 were a net charge of $8 million ($5 million after-tax).

The reported income tax rate for the first quarter 2016 was 24.0%, compared with the reported rate of 27.6% in the first quarter 2015.  Excluding the tax rate impact of the special gains and charges and discrete tax items, the adjusted tax rate was 25.7% in the first quarter 2016, compared with 27.1% for the same period last year. The improved adjusted

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tax rate was primarily driven by the permanent enactment of the R&D tax credit and global tax planning strategies.

Ecolab reacquired 3.1 million shares of its common stock during the first quarter. The reacquired shares included 2.5 million shares acquired as part of an accelerated share repurchase undertaken during the quarter.

The net of this performance is that Ecolab reported first quarter diluted earnings per share of $0.77 compared with $0.77 reported a year ago.  When adjusted for special gains and charges and discrete tax items in both years, adjusted earnings decreased 4%, to $0.77, when compared with $0.80 earned a year ago.

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BALANCE SHEET, CASH FLOW AND LEVERAGE

1Q 2016 Balance Sheet / Cash Flow

Summary Balance Sheet

	March 31
($ millions)	2016		2015
Cash and cash eq.	$	268.5	$	237.9
Accounts receivable, net		2,248.8		2,546.9
Inventories		1,386.1		1,503.0
Other current assets		291.5		634.0
PP&E, net		3,227.0		3,115.1
Goodwill and intangibles		10,506.0		10,855.7
Other assets		413.9		335.8
Total assets	$	18,341.8	$	19,228.4

	March 31
	2016		2015
Short-term debt	$	1,756.6	$	1,797.2
Accounts payable		986.1		950.6
Other current liabilities		1,416.8		1,372.9
Long-term debt		5,082.8		5,385.4
Pension/Postretirement		1,112.4		1,140.8
Other liabilities		1,335.0		1,645.5
Total equity		6,652.1		6,936.0
Total liab. and equity	$	18,341.8	$	19,228.4

Selected Cash Flow items

	Three Months Ended
	March 31
($ millions)	2016		2015
Cash from op. activities	$	472.5	$	112.5
Depreciation		139.6		142.1
Amortization		72.6		75.1
Capital expenditures		140.1		166.8

Selected Balance Sheet measures

	March 31
	2016		2015
Total Debt/Total Capital	50.7	%	50.9	%
Net Debt/Total Capital	49.7	%	50.0	%
Net Debt/EBITDA*	2.7		2.4
Net Debt/Adjusted EBITDA*	2.3		2.4

*EBITDA and Adjusted EBITDA are non-GAAP measures.  EBITDA is defined as the sum of operating income, depreciation and amortization.  Adjusted EBITDA is defined as the sum of adjusted operating income, depreciation and amortization. The inputs to EBITDA reflect the trailing twelve months of activity for the period presented.

Net debt to total capital was 50%, with net debt to adjusted EBITDA ratio at 2.3 times. Cash from operations and free cash flow showed a very strong increase reflecting improved working capital metrics (accounts receivable, inventory and accounts payable).

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FORECAST

2016 Focus

· Remain disciplined in a very challenging environment

· Execute the Ecolab Model

· Drive growth through best product/best service to produce best results/lowest total use cost

· Leverage corporate account new business investments and momentum

· Expect continued mid-single digit growth in Global Institutional, Global Industrial and Other segments; Global Energy outperforms challenged industry

· Invest in the future

· Continued investments in critical areas

· Product innovation and new field technology

· Enterprise systems

· Improve cost efficiency and effectiveness

· Focused M&A

· Technologies, products/services, geographic expansion, opportunities in distressed markets

Looking ahead, we remain focused on our long term fundamentals: driving fixed currency organic growth through the effective implementation of our successful Ecolab model, which means offering the best products, backed by the best service, to yield the best results, at the lowest total use cost to the customer. We will use this model, along with our well-developed corporate accounts and independent customer approach, to drive superior fixed currency organic growth in the expected turbulent economic environment. While we will carefully watch our costs, we will continue to make key long term investments in our growth model and critical support systems to achieve short term benefits. We will also continue to invest in key acquisitions that improve our competitive set for the future.

As a result of this focus on our fundamentals, and as mentioned in the

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opening discussion, we look for our Global Institutional, Global Industrial and Other segments to continue to deliver solid acquisition adjusted fixed currency sales growth and offset lower Global Energy segment results. We expect foreign currency to have an unfavorable impact on sales of approximately 4 percentage points on second quarter sales and an unfavorable $0.08 per share, or approximately 7 percentage points, impact to earnings growth. As a result, we expect second quarter adjusted earnings to be in the $1.03 to $1.11 range compared with $1.08 earned last year. We expect to repurchase approximately $700 million of our shares in the first half of 2016, similar to 2015.

We continue to expect a strong operating performance for the full year 2016 reflecting our business balance and more than offsetting headwinds from significantly reduced energy market activity, slow international economies and currency translation. We look for continued mid-single digit fixed currency sales growth in our Global Institutional, Global Industrial and Other segments to combine with appropriate pricing and cost savings to more than offset lower Global Energy results. Net, we look for adjusted diluted earnings per share growth to improve in the second half versus the first half, and for the full year earnings to be in the $4.35 to $4.55 per share range.

SUMMARY

In summary, we once again delivered on our forecast in the first quarter, while offsetting market and currency challenges and investing in our future.  We will stay focused on driving fundamental growth in our businesses. We

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expect to realize good growth from our operations before still substantial currency headwinds in the second quarter, with improved growth in the second half, to deliver another year of superior earnings per share growth before the impact of currency and the Venezuela deconsolidation in 2016 while continuing to make the right investments to sustain our future growth.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This communication contains forward looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our future financial and business performance and prospects, including forecasted 2016 second quarter and full year, and 2016 business and financial results, energy market activity, sales growth, performance against the market, innovation, investments, pricing, cost savings, foreign currency, Venezuela deconsolidation impact, integration status, merger and acquisition opportunities and share repurchases. These statements are based on the current expectations of management of the Company. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are set forth under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015 and other public filings with the Securities and Exchange Commission (the “SEC”) and include the vitality of the markets we serve, including the markets served by our Global Energy segment; the impact of worldwide economic factors such as the worldwide economy, credit markets, interest rates and foreign currency risk; exposure

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to economic, political and legal risks related to our international operations; the costs and effects of complying with laws and regulations relating to our operations; the occurrence of litigation or claims; and other uncertainties or risks reported from time to time in our reports to the SEC. In light of these risks, uncertainties and factors, the forward-looking events discussed in this communication may not occur. We caution that undue reliance should not be placed on forward-looking statements, which speak only as of the date made. Ecolab does not undertake, and expressly disclaims, any duty to update any forward-looking statement except as required by law.

Non-GAAP Financial Information

This communication includes Company information that does not conform to generally accepted accounting principles (GAAP). Management believes that a presentation of this information is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. A reconciliation of reported diluted earnings per share to adjusted diluted earnings per share is provided in the table “Supplemental Diluted Earnings per Share Information” in this communication.

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SUPPLEMENTAL DILUTED EARNINGS PER SHARE INFORMATION

(unaudited)

The table below provides a reconciliation of diluted earnings per share, as reported, to the non-GAAP measure of adjusted diluted earnings per share.

	First		Second		Six		Third		Nine		Fourth
	Quarter		Quarter		Months		Quarter		Months		Quarter		Year
	Ended		Ended		Ended		Ended		Ended		Ended		Ended
	Mar. 31		June 30		June 30		Sept. 30		Sept. 30		Dec. 31		Dec. 31
	2015		2015		2015		2015		2015		2015		2015
Diluted earnings per share, as reported (U.S. GAAP)	$	0.77	$	1.00	$	1.77	$	0.86	$	2.63	$	0.69	$	3.32
Adjustments:
Special (gains) and charges (1)		0.02		0.20		0.22		0.48		0.70		0.55		1.25
Tax expense (benefits) (2)		0.01		(0.13)		(0.12)		(0.06)		(0.19)		(0.02)		(0.21)
Adjusted diluted earnings per share (Non-GAAP)	$	0.80	$	1.08	$	1.87	$	1.28	$	3.15	$	1.22	$	4.37
		First		Second		Six		Third		Nine		Fourth
		Quarter		Quarter		Months		Quarter		Months		Quarter		Year
		Ended		Ended		Ended		Ended		Ended		Ended		Ended
		Mar. 31		June 30		June 30		Sept. 30		Sept. 30		Dec. 31		Dec. 31
		2016		2016		2016		2016		2016		2016		2016
Diluted earnings per share, as reported (U.S. GAAP)	$	0.77
Adjustments:
Special (gains) and charges (3)		0.01
Tax expense (benefits) (4)		(0.02)
Adjusted diluted earnings per share (Non-GAAP)	$	0.77

Per share amounts do not necessarily sum due to changes in shares outstanding and rounding.

(1)Special (gains) and charges for 2015 include restructuring charges of $1.6 million, $14.6 million, $10.0 million and $49.3 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2015 also include $3.2 million, $2.8 million, $2.4 million and $2.3 million, net of tax, in the first, second, third and fourth quarters, respectively, related to Champion integration costs. Special (gains) and charges for 2015 also include $0.5 million, $0.1 million, $0.6 million and $0.1 million, net of tax, in the first, second, third and fourth quarters, respectively, related to Nalco integration costs. Special (gains) and charges for 2015 also include $30.2 million, $124.6 million and $80.9 million, net of tax, in the second, third and fourth quarters, respectively, related to Venezuelan charges. Special (gains) and charges for 2015 also include $15.4 million, net of tax, in the fourth quarter related to a fixed asset impairment. Special (gains) and charges for 2015 also include $13.4 million, $7.8 million and $17.1 million, net of tax, in the second, third and fourth quarters, respectively, primarily related to other litigation related charges, a loss on the sale of a portion our Ecovation business and the net impact of inventory reserve and inventory cost policy harmonization efforts.

(2)The first quarter 2015 discrete tax net expense of $2.6 million is driven primarily by a change to a deferred tax liability resulting from the Naperville facility transaction. The second quarter 2015 discrete tax net benefit of $39.4 million is driven primarily from our ability to recognize a worthless stock deduction for the tax basis in a wholly owned domestic subsidiary. The third quarter 2015 discrete tax net benefit of $19.2 million is driven primarily by a the release of valuation allowances on certain deferred taxes assets and a refund claim for taxes paid in a prior period resulting from updated IRS regulations, offset partially by recognizing adjustments from filing our 2014 U.S. federal tax return. The fourth quarter discrete tax net benefit of $7.3 million is driven primarily by the finalization of prior year IRS audits, valuation allowance releases and other statute of limitation tax reserve releases.

(3)Special (gains) and charges for 2016 include restructuring charges of $1.8 million, net of tax, in the first quarter. Special (gains) and charges for 2016 also include $2.6 million, net of tax, in the first quarter, related to other charges.

(4)The first quarter 2016 discrete tax net benefit of $4.8 million is driven primarily by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

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