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  1, 2018

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.)

1 Ecolab Place, 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 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.

On May 1, 2018, Ecolab Inc. (“Ecolab”) announced earnings for the first quarter ended March 31, 2018.  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.

Exhibit No.	Description	Method Of Filing
(99.1)	Ecolab Inc. News Release dated May 1, 2018.	Filed herewith electronically.
(99.2)	Supplemental Data for First Quarter dated May 1, 2018.	Filed herewith electronically.
(99.3)	Supplemental Discussion for First Quarter dated May 1, 2018.	Filed herewith electronically.

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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 1, 2018	By:	/s/ David F. Duvick
		David F. Duvick
		Assistant Secretary

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EX-99.1

Exhibit 99.1

News Release

Ecolab Inc.

1 Ecolab Place,

St. Paul, Minnesota  55102

FOR IMMEDIATE RELEASE

Michael J. Monahan     (651) 250-2809

Andrew C. Hedberg      (651) 250-2185

ECOLAB FIRST QUARTER REPORTED DILUTED EPS $0.84 

ADJUSTED DILUTED EPS $0.91, +14% 

RAISED FULL YEAR 2018 ADJUSTED DILUTED EPS FORECAST TO $5.30 TO $5.50 +13%-18%

FIRST QUARTER HIGHLIGHTS:

· Reported diluted EPS $0.84,  -2%.

· Adjusted diluted EPS $0.91, +14%, excluding special gains and charges and discrete tax items.

· Reported sales +10%. Acquisition adjusted fixed currency sales +6%  with solid growth in all segments.  

· Strong sales gains, pricing, new product innovation and cost savings offset higher delivered product costs. Lower taxes and interest expense also benefited the adjusted EPS gain.

2018 FORECAST:

· 2018 adjusted diluted EPS forecast increased to  $5.30 to $5.50, +13% to 18%, as improving volume and pricing growth in all segments are expected to more than offset higher delivered product costs to drive the strong earnings gain. The prior forecast was $5.25 to $5.45.

	First Quarter Ended March 31
	Reported				Adjusted *
(unaudited)	Public Currency Rates		%		Public Currency Rates		%
(millions, except per share)	2018	2017	Change		2018	2017	Change
Net sales	$ 3,470.9	$ 3,162.4	10	%	$ 3,470.9	$ 3,162.4	10	%
Operating income	354.3	357.2	(1)	%	380.3	364.9	4	%
Net income attributable to Ecolab	247.3	254.0	(3)	%	266.9	236.4	13	%
Diluted earnings per share	$ 0.84	$ 0.86	(2)	%	$ 0.91	$ 0.80	14	%
					Adjusted *
	Fixed Currency Rates *		%		Fixed Currency Rates		%
	2018	2017	Change		2018	2017	Change
Net sales	$ 3,503.9	$ 3,290.4	6	%	$ 3,503.9	$ 3,290.4	6	%
Operating income	357.5	369.7	(3)	%	383.5	377.4	2	%

* See “Non-GAAP Financial Information” section of this release for further discussion

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ST. PAUL, Minn., May 1, 2018:  New business gains, better pricing, product innovation and cost efficiencies offset higher delivered product costs, and along with a lower tax rate and interest expense,  yielded a 14% increase in first quarter 2018 adjusted diluted earnings per share. 

CEO comment

Commenting on the quarter,Douglas M. Baker, Jr., Ecolab’s chairman and chief executive officer said, "We are off to a strong start for the year, as we showed continued good sales momentum in the first quarter across all segments led by new business wins, new products and pricing.  These solid sales gains, along with cost efficiencies, offset higher delivered product costs and systems investments, and with a lower tax rate and interest expense, yielded the 14% adjusted earnings per share growth.

"We remain confident in our outlook for a  strong year in 2018.  We continue to expect improved sales and earnings performances in all our business segments to yield double-digit adjusted earnings per share growth through the balance of the year.  Business momentum has improved, while headwinds from higher delivered product costs remain significant and will throughout the year. However, we believe they peaked on a year-on-year basis in the first quarter, as did our system investment costs. Our pricing initiatives are expected to accelerate through the balance of the year providing margin expansion in the second half versus 2017.  Additionally, we are developing a comprehensive efficiency initiative leveraging our systems investments which will give us another important means of expanding margins.

"Our value proposition - the best results at the lowest total cost for our customers - continues to win new business and drive our success, and our increasing investments in digital technology are already strengthening our offering and our competitive advantage.  We are positioned well, and are excited about our opportunities, our strengthened capacities and the team we have to achieve them. We expect to once again deliver attractive returns for shareholders this year, as we also build our growth drivers for strong future growth.”

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Adoption of New Accounting Standards

Beginning in 2018, Ecolab adopted the new FASB revenue recognition standard. We reviewed our product and service offerings under the new standard and the SEC requirement for separation of them in our income statement.  As such, we now disclose product and service offerings separately in our income statement. We also reclassified certain costs, primarily compensation, from selling, general, and administrative (SG&A) expenses to cost of sales (COS), to align with the costs of providing newly classified service revenue. Adoption of the new revenue recognition standard reduced 2017 adjusted diluted earnings per share by $0.01 and is expected to have a $0.01 unfavorable impact on full year 2018 adjusted diluted earnings per share. We revised the 2016 and 2017 financial information to align with the new presentation, which was disclosed in our 8-K dated April 18, 2018.

Ecolab also adopted the new pension accounting standard beginning in 2018, recording the employee compensation cost of pension expense (the service component) in COS and SG&A, while all other non-service components of pension income are recorded below operating income in other (income)/expense.  We adopted the new standard retrospectively and revised the 2016 and 2017 financial information to reflect the adoption of the pension accounting standard in the 8-K mentioned above.

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First Quarter 2018 Consolidated Results

Ecolab's first quarter reported sales increased 10% and fixed currency sales increased 6%. Acquisition and divestiture adjusted fixed currency sales increased 6% when compared to the prior year. 

First quarter 2018 reported operating income decreased 1%, fixed currency operating income decreased 3%, and adjusted and acquisition adjusted fixed currency operating income both increased  2%.  Pricing,  volume growth and cost savings initiatives offset the impact of higher delivered product costs and investments in the business during the quarter.

Other income, which primarily consists of the return on pension assets and other costs of our pension obligations, increased 15% reflecting our expected return on increased pension assets.

Reported net interest expense decreased in the quarter primarily reflecting lower interest rate debt.

The reported income tax rate for the first quarter of 2018 was 21.8% compared with the reported rate of 17.4% in the first quarter of 2017.  Excluding special gains and charges and discrete tax items, the adjusted tax rate was 22.0% in the first quarter of 2018 compared with 24.9% for the same period last year. The decrease in our adjusted tax rate was primarily driven by changes in the U.S. tax law.

First quarter 2018 reported net income attributable to Ecolab decreased 3%. Excluding the impact of special gains and charges and discrete tax items, adjusted net income attributable to Ecolab increased 13%.

Diluted earnings per share decreased 2%. Adjusted diluted earnings per share rose 14% when compared against first quarter 2017. Currency translation had a $0.03 favorable impact on first quarter 2018 adjusted diluted earnings per share, and adoption of the new revenue recognition standard had a $0.01 favorable impact on first quarter adjusted diluted earnings per share.

Ecolab reacquired  1.6 million shares of its common stock during the first quarter of 2018.  

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First Quarter 2018 Segment Review

Global Industrial
(unaudited)	First Quarter Ended March 31						Acq. Adj.
(millions)	2018		2017		% Change		% Change
Fixed currency
Sales	$ 1,241.4		$ 1,178.3		5	%	3	%
Operating income	129.9		135.6		(4)	%	(5)	%
Operating income margin	10.5	%	11.5	%
Acq. adj. operating income margin	10.6	%	11.5	%
Public currency
Sales	$ 1,226.0		$ 1,114.2		10	%
Operating income	127.8		125.5		2	%

Global Industrial acquisition adjusted fixed currency sales rose 3% led by Water, Food & Beverage and Life Sciences. Latin America, North America and Europe led the Global Industrial regional sales growth. Acquisition adjusted fixed currency operating income decreased 5% as improved pricing and sales volume gains were more than offset by higher delivered product costs and investments in the business.

Global Institutional
(unaudited)	First Quarter Ended March 31						Acq. Adj.
(millions)	2018		2017		% Change		% Change
Fixed currency
Sales	$ 1,218.0		$ 1,114.6		9	%	5	%
Operating income	198.7		186.8		6	%	4	%
Operating income margin	16.3	%	16.8	%
Acq. adj. operating income margin	16.6	%	16.8	%
Public currency
Sales	$ 1,206.2		$ 1,074.5		12	%
Operating income	197.8		184.3		7	%

Global Institutional acquisition adjusted fixed currency sales grew 5% led by Specialty and Institutional. Sales for the segment showed good growth in North America and Asia Pacific. Acquisition adjusted fixed currency operating income rose 4% as pricing and sales volume gains more than offset new customer installation and innovation investments as well as higher delivered product costs.   

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Global Energy
(unaudited)	First Quarter Ended March 31						Acq. Adj.
(millions)	2018		2017		% Change		% Change
Fixed currency
Sales	$ 847.1		$ 775.7		9	%	10	%
Operating income	70.9		70.9		0	%	2	%
Operating income margin	8.4	%	9.1	%
Acq. adj. operating income margin	8.4	%	9.1	%
Public currency
Sales	$ 842.9		$ 757.9		11	%
Operating income	70.5		69.8		1	%

Global Energy acquisition adjusted fixed currency sales increased 10% reflecting strong growth in the well stimulation business and good gains in production and downstream. Acquisition adjusted fixed currency operating income increased 2% as volume gains and pricing more than offset higher delivered product costs and a rebuild of prior period compensation reductions. 

Other
(unaudited)	First Quarter Ended March 31						Acq. Adj.
(millions)	2018		2017		% Change		% Change
Fixed currency
Sales	$ 197.4		$ 221.8		(11)	%	8	%
Operating income	27.1		27.1		0	%	14	%
Operating income margin	13.7	%	12.2	%
Acq. adj. operating income margin	14.4	%	13.5	%
Public currency
Sales	$ 195.8		$ 215.8		(9)	%
Operating income	27.0		27.0		0	%

Colloidal Technologies, which was previously included as part of the Water business in the Global Industrial Reportable segment, is now included in the Other segment. Other segment acquisition adjusted fixed currency sales increased 8% as Pest Elimination enjoyed strong growth, led by North America and Europe. Acquisition and divestiture adjusted fixed currency operating income increased 14% as pricing and sales volume gains more than offset increased field-related costs. The Equipment Care business was sold on November 1, 2017. 

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Corporate

The corporate segment expense includes amortization expense of $43 million in both the first quarter of 2018 and 2017 related to the Nalco merger intangible assets. Corporate segment operating income also includes net special charges of $26  million ($20 million after tax) primarily related to a previously announced funding commitment to the Ecolab Foundation. 

Total special gains and charges for the first quarter of 2017 were a net charge of $8 million ($5 million after tax) associated with Anios and Swisher acquisition and integration costs.

Business Outlook

2018

Ecolab raised its forecast for full year 2018 adjusted diluted earnings per share to the $5.30 to $5.50 range, representing a  13% to 18% increase over 2017. The prior forecast range was $5.25 to $5.45. 

When compared with our 2017 performance, we expect improved acquisition adjusted fixed currency sales growth in all of our segments. Versus the comparable measures last year, we anticipate a higher adjusted gross margin as volume gains, pricing and cost efficiency actions more than offset higher delivered product costs, with a similar SG&A ratio to sales,  higher other income, and slightly higher interest expense and a lower adjusted tax rate versus 2017 reflecting the impact of the recently enacted U.S. Tax Cuts and Jobs Act and tax planning.  Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on full year adjusted diluted earnings per share.

We expect special charges in 2018 to be $0.12 to $0.15 per share principally related to a previously announced $25 million funding commitment to the Ecolab Foundation as well as integration of previously announced acquisitions.  In addition, the discrete tax item related to excess tax benefits on share-based compensation is expected to be favorable. Other than this discrete tax item and special gains and charges noted above, other such amounts are not currently quantifiable. 

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At current rates of exchange, we expect foreign currency translation to have an approximate $0.10 benefit to diluted earnings per share.

Our detailed outlook for the full year of 2018 (which reflects adoption of the new accounting standards) is as follows:

Adjusted Gross Margin, excluding special gains and charges	approx. 42%
SG&A % of Sales	27% to 28%
Other income and expense	approx. $80 million
Interest expense, net	approx. $240 million
Adjusted tax rate	21% to 22%
Noncontrolling interest	approx. $0.07
Adjusted EPS, excluding special gains and charges	$5.30 to $5.50
Diluted shares	approx. 292 million

Reported 2017 diluted earnings per share of $5.12 included special gains and charges and discrete tax items. Excluding these items, 2017 adjusted diluted earnings per share were $4.68.

2018 — Second Quarter

Ecolab expects second quarter 2018 adjusted diluted earnings per share in the $1.23 to $1.29 range, rising 10% to 15% compared with adjusted diluted earnings per share of $1.12 a year ago.

Versus the comparable measures last year, we expect year-on-year acquisition adjusted fixed currency sales growth in all our segments. Volume gains and higher pricing are expected to more than offset higher delivered product costs in the quarter.  We expect consolidated gross margins to be similar to last year, with a higher SG&A ratio to sales,  higher other income and an improved adjusted tax rate versus 2017 resulting from the new U.S. tax law referenced above and tax planning. Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on second quarter adjusted diluted earnings per share.

We expect special charges in the second quarter of 2018 to be $0.04 to $0.07 per share principally related to integration of previously announced acquisitions.  In addition, the discrete tax item related to excess tax benefits on share-based compensation is expected to be favorable. Other than this discrete tax item and special gains and charges noted above, other such expected amounts are not currently quantifiable.   

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At current rates of exchange, we expect foreign currency to be favorable $0.04 per share in the second quarter.

Our detailed outlook for the second quarter of 2018 (which reflects adoption of the new accounting standards) is as follows:

Adjusted Gross Margin, excluding special gains and charges	approx. 42%
SG&A % of Sales	approx. 28%
Other income and expense	approx. $20 million
Interest expense, net	approx. $60 million
Adjusted tax rate	20% to 21%
Noncontrolling interest	approx. $0.02
Adjusted EPS, excluding special gains and charges	$1.23 to $1.29
Diluted shares	approx. 293 million

Reported second quarter 2017 diluted earnings per share of $1.00 included special gains and charges and discrete tax items. Excluding these items, second quarter 2017 adjusted diluted earnings per share were $1.12.

About Ecolab

A trusted partner at nearly three million customer locations, Ecolab (ECL) is the global leader in water, hygiene and energy technologies and services that protect people and vital resources. With annual sales of $14 billion and 48,000 associates, Ecolab delivers comprehensive solutions, data-driven insights 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 another compatible streaming media player.

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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 2018 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, noncontrolling interest, adjusted diluted earnings per share and diluted shares outstanding, volume, pricing, delivered product costs, global economic environment, investments in digital technology and information technology systems, foreign currency, special gains and charges and quantifiable discrete tax items and actions and impact associated with adoption of new accounting standards. 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 execute key business initiatives, including upgrades to our information technology systems; potential information technology infrastructure failures and cybersecurity attacks; our ability to attract and retain high caliber

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management talent to lead our business; exposure to global economic, political and legal risks related to our international operations including trade sanctions; our ability to develop competitive advantages through innovation and to commercialize digital solutions; 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; difficulty in procuring raw materials or fluctuations in raw material costs; pressure on operations from consolidation of customers, vendors or competitors; the occurrence of litigation or claims, including related to the Deepwater Horizon oil spill; restraints on pricing flexibility due to contractual obligations; our ability to acquire complementary businesses and to effectively integrate such businesses; changes in tax law and unanticipated tax liabilities; potential loss of deferred tax assets or increase in deferred tax liabilities; our substantial indebtedness; public health epidemics; potential losses arising from the impairment of goodwill or other 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, 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 cost of sales

· adjusted gross margin

· fixed currency operating income

· fixed currency operating income margin

· adjusted operating income

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· adjusted fixed currency operating income

· adjusted fixed currency operating income margin

· acquisition adjusted fixed currency operating income

· acquisition adjusted fixed currency operating income margin

· adjusted tax rate

· adjusted net income attributable to Ecolab

· 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.

Our non-GAAP adjusted financial measures for cost of sales, gross margin,  operating income and interest expense exclude the impact of special (gains) and charges, and our non-GAAP measures for tax rate, net income attributable to Ecolab and diluted earnings per share further exclude the impact of discrete tax items. We include items within special (gains) and charges and discrete tax items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs associated with historical trends and future results. After tax special (gains) and charges are derived by applying the applicable local jurisdictional tax rate to the corresponding pre-tax special (gains) and charges.

We evaluate the performance of our international operations based on fixed currency rates of foreign exchange, which eliminate the translation impact of exchange rate fluctuations on our international results. 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 2018. We also provide our segment results based on public currency rates for informational purposes.

Acquisition adjusted growth rates 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

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months prior to divestiture. Acquisition adjusted growth rates also exclude sales to our Venezuelan deconsolidated subsidiaries 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. Reconciliations of our non-GAAP measures are included in the following "Supplemental Non-GAAP Reconciliations" and “Supplemental Diluted Earnings per Share Information” tables included in this news release.

We do not provide reconciliations for non-GAAP estimates on a forward-looking basis (including those contained in this report) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of various items that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact reported earnings per share and the reported tax rate, the most directly comparable forward-looking GAAP financial measures to adjusted earnings per share and the adjusted tax rate. For the same reasons, we are unable to address the probable significance of the unavailable information.

###

(ECL-E)

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ECOLAB INC.

CONSOLIDATED STATEMENT OF INCOME

(unaudited)

	First Quarter Ended
	March 31		%
(millions, except per share)	2018	2017	Change
Product and equipment sales	$ 2,847.2	$ 2,604.4
Service and lease sales	$ 623.7	$ 558.0
Net sales	$ 3,470.9	$ 3,162.4	10	%
Product and equipment cost of sales	1,696.6	1,500.7
Service and lease cost of sales	385.5	351.1
Cost of sales (1)	2,082.1	1,851.8	12	%
Selling, general and administrative expenses	1,008.5	947.2	6	%
Special (gains) and charges (1)	26.0	6.2	319	%
Operating income	354.3	357.2	(1)	%
Other (income) expense	(19.4)	(16.8)	15	%
Interest expense, net	56.4	62.5	(10)	%
Income before income taxes	317.3	311.5	2	%
Provision for income taxes	69.1	54.2	27	%
Net income including noncontrolling interest	248.2	257.3	(4)	%
Net income attributable to noncontrolling interest	0.9	3.3
Net income attributable to Ecolab	$ 247.3	$ 254.0	(3)	%
Earnings attributable to Ecolab per common share
Basic	$ 0.86	$ 0.87	(1)	%
Diluted	$ 0.84	$ 0.86	(2)	%
Weighted-average common shares outstanding
Basic	288.6	290.6	(1)	%
Diluted	292.7	295.0	(1)	%
(1) Special (gains) and charges in the Consolidated Statement of Income above include the following:
	First Quarter Ended
	March 31
(millions)	2018	2017
Cost of sales
Acquisition and integration costs (a)	-	1.5
Special (gains) and charges
Restructuring activities	0.3	(0.3)
Acquisition and integration costs	0.5	6.3
Other	25.2	0.2
Subtotal	26.0	6.2
Total special (gains) and charges	$26.0	$7.7
(a) Acquisition and integration costs of $1.5 million in the first quarter of 2017 were recorded in
product and equipment cost of sales

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ECOLAB INC.

REPORTABLE SEGMENT INFORMATION

(unaudited)

	First Quarter Ended March 31
	Fixed Currency Rates				Public Currency Rates
			%				%
(millions)	2018	2017	Change		2018	2017	Change
Net Sales
Global Industrial	$ 1,241.4	$ 1,178.3	5	%	$ 1,226.0	$ 1,114.2	10	%
Global Institutional	1,218.0	1,114.6	9	%	1,206.2	1,074.5	12	%
Global Energy	847.1	775.7	9	%	842.9	757.9	11	%
Other	197.4	221.8	(11)	%	195.8	215.8	(9)	%
Subtotal at fixed currency rates	3,503.9	3,290.4	6	%	3,470.9	3,162.4	10	%
Currency impact	(33.0)	(128.0)	*		-	-	*
Consolidated reported GAAP net sales	$ 3,470.9	$ 3,162.4	10	%	$ 3,470.9	$ 3,162.4	10	%
Operating Income
Global Industrial	$ 129.9	$ 135.6	(4)	%	$ 127.8	$ 125.5	2	%
Global Institutional	198.7	186.8	6	%	197.8	184.3	7	%
Global Energy	70.9	70.9	0	%	70.5	69.8	1	%
Other	27.1	27.1	0	%	27.0	27.0	0	%
Corporate	(69.1)	(50.7)	*		(68.8)	(49.4)	*
Subtotal at fixed currency rates	357.5	369.7	(3)	%	354.3	357.2	(1)	%
Currency impact	(3.2)	(12.5)	*		-	-	*
Consolidated reported GAAP operating income	$ 354.3	$ 357.2	(1)	%	$ 354.3	$ 357.2	(1)	%

* Not meaningful.

As shown in the “Fixed Currency Rates” tables 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. Amounts shown in the “Public Currency Rates” tables above reflect amounts translated at actual public average rates of exchange prevailing during the corresponding period, and are provided for informational purposes. The difference between the fixed currency exchange rates and the public currency exchange rates is reported as “Currency impact” in the “Fixed Currency Rates” tables above.

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. 

15

ECOLAB INC.

CONSOLIDATED BALANCE SHEET

(unaudited)

	March 31	December 31	March 31
(millions)	2018	2017	2017
Assets
Current assets
Cash and cash equivalents	$ 175.5	$ 211.4	$ 212.1
Accounts receivable, net	2,574.3	2,571.4	2,355.6
Inventories	1,541.8	1,446.5	1,428.9
Other current assets	305.2	365.0	308.9
Total current assets	4,596.8	4,594.3	4,305.5
Property, plant and equipment, net	3,779.9	3,707.1	3,424.9
Goodwill	7,303.0	7,167.1	6,947.8
Other intangible assets, net	4,012.2	4,017.6	4,086.0
Other assets	492.4	477.4	459.3
Total assets	$ 20,184.3	$ 19,963.5	$ 19,223.5
Liabilities and Equity
Current liabilities
Short-term debt	$ 1,017.8	$ 564.4	$ 1,699.4
Accounts payable	1,229.1	1,177.1	1,039.3
Compensation and benefits	497.0	549.4	463.4
Income taxes	170.0	183.6	95.2
Other current liabilities	1,068.9	1,000.7	947.2
Total current liabilities	3,982.8	3,475.2	4,244.5
Long-term debt	6,397.7	6,758.3	5,841.6
Postretirement health care and pension benefits	1,027.7	1,025.5	1,014.4
Deferred income taxes	652.8	635.4	1,067.0
Other liabilities	453.4	415.3	207.0
Total liabilities	12,514.4	12,309.7	12,374.5
Equity
Common stock	355.5	354.7	353.5
Additional paid-in capital	5,496.5	5,435.7	5,284.3
Retained earnings	8,097.0	8,011.6	7,093.8
Accumulated other comprehensive loss	(1,558.3)	(1,643.4)	(1,636.3)
Treasury stock	(4,789.7)	(4,575.0)	(4,315.4)
Total Ecolab shareholders’ equity	7,601.0	7,583.6	6,779.9
Noncontrolling interest	68.9	70.2	69.1
Total equity	7,669.9	7,653.8	6,849.0
Total liabilities and equity	$ 20,184.3	$ 19,963.5	$ 19,223.5

16

ECOLAB INC.

SUPPLEMENTAL NON-GAAP RECONCILIATIONS

(unaudited)

	First Quarter Ended
	March 31
(millions, except percent and per share)	2018		2017
Net sales
Reported GAAP net sales	$ 3,470.9		$ 3,162.4
Effect of foreign currency translation	33.0		128.0
Non-GAAP fixed currency sales	3,503.9		3,290.4
Effect of acquisitions and divestitures	(77.3)		(53.1)
Non-GAAP acquisition adjusted fixed currency sales	$ 3,426.6		$ 3,237.3
Cost of sales
Reported GAAP cost of sales	$ 2,082.1		$ 1,851.8
Special (gains) and charges	-		1.5
Non-GAAP cost of sales	$ 2,082.1		$ 1,850.3
Gross margin
Reported GAAP gross margin	40.0	%	41.4	%
Non-GAAP adjusted gross margin	40.0	%	41.5	%
Operating income
Reported GAAP operating income	$ 354.3		$ 357.2
Effect of foreign currency translation	3.2		12.5
Non-GAAP fixed currency operating income	357.5		369.7
Special (gains) and charges	26.0		7.7
Non-GAAP adjusted fixed currency operating income	383.5		377.4
Effect of acquisitions and divestitures	(3.7)		(4.2)
Non-GAAP acquisition adjusted fixed currency operating income	$ 379.8		$ 373.2
Operating income margin
Reported GAAP operating income margin	10.2	%	11.3	%
Non-GAAP adjusted fixed currency operating income margin	10.9	%	11.5	%

17

ECOLAB INC.

SUPPLEMENTAL NON-GAAP RECONCILIATIONS

(unaudited)

	First Quarter Ended
	March 31
(millions, except percent and per share)	2018		2017
Net Income Attributable to Ecolab
Reported GAAP net income attributable to Ecolab	$ 247.3		$ 254.0
Special (gains) and charges, after tax	19.7		5.2
Discrete tax net expense (benefit)	(0.1)		(22.8)
Non-GAAP adjusted net income attributable to Ecolab	$ 266.9		$ 236.4
Diluted Earnings per Share Attributable to Ecolab ("EPS")
Reported GAAP diluted EPS	$ 0.84		$ 0.86
Special (gains) and charges, after tax	0.07		0.02
Discrete tax net expense (benefit)	0.00		(0.08)
Non-GAAP adjusted diluted EPS	$ 0.91		$ 0.80
Provision for Income Taxes
Reported GAAP tax rate	21.8	%	17.4	%
Special gains and charges	0.2		0.3
Discrete tax items	0.0		7.2
Non-GAAP adjusted tax rate	22.0	%	24.9	%

18

ECOLAB INC.

SUPPLEMENTAL NON-GAAP RECONCILIATIONS

(unaudited)

	First Quarter Ended March 31
	2018			2017
(millions)	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted
Net Sales
Global Industrial	$ 1,241.4	($23.9)	$ 1,217.5	$ 1,178.3	($1.6)	$ 1,176.7
Global Institutional	1,218.0	(45.0)	1,173.0	1,114.6	(0.1)	1,114.5
Global Energy	847.1	(0.3)	846.8	775.7	(5.3)	770.4
Other	197.4	(8.1)	189.3	221.8	(46.1)	175.7
Subtotal at fixed currency rates	3,503.9	(77.3)	3,426.6	3,290.4	(53.1)	3,237.3
Currency impact	(33.0)			(128.0)
Consolidated reported GAAP net sales	$ 3,470.9			$ 3,162.4
Operating Income
Global Industrial	$ 129.9	($0.9)	$ 129.0	$ 135.6	($0.3)	$ 135.3
Global Institutional	198.7	(3.6)	195.1	186.8	0.1	186.9
Global Energy	70.9	0.7	71.6	70.9	(0.7)	70.2
Other	27.1	0.1	27.2	27.1	(3.3)	23.8
Corporate	(43.1)	-	(43.1)	(43.0)	-	(43.0)
Adjusted at fixed currency rates	383.5	(3.7)	379.8	377.4	(4.2)	373.2
Special (gains) and charges	26.0			7.7
Reported OI at fixed currency rates	357.5			369.7
Currency impact	(3.2)			(12.5)
Consolidated reported GAAP operating income	$ 354.3			$ 357.2

19

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
	2017	2017	2017	2017	2017	2017	2017
Diluted earnings per share, as reported (U.S. GAAP)	$ 0.86	$ 1.00	$ 1.86	$ 1.34	$ 3.20	$ 1.92	$ 5.12
Adjustments:
Special (gains) and charges (1)	0.02	0.16	0.17	0.01	0.18	0.01	0.19
Discrete tax expense (benefits) (2)	(0.08)	(0.03)	(0.11)	0.03	(0.08)	0.54	(0.63)
Adjusted diluted earnings per share (Non-GAAP)	$ 0.80	$ 1.12	$ 1.92	$ 1.38	$ 3.30	$ 1.38	$ 4.68

	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
	2018	2018	2018	2018	2018	2018	2018
Diluted earnings per share, as reported (U.S. GAAP)	$ 0.84
Adjustments:
Special (gains) and charges (3)	0.07
Discrete tax expense (benefits) (4)	0.00
Adjusted diluted earnings per share (Non-GAAP)	$ 0.91

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

(1) Special (gains) and charges for 2017 included acquisition and integration costs of $5.3 million, $10.0 million, $1.4 million, and $1.8 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2017 also included restructuring gains of $0.2 million, and charges of $24.5 million, $1.7 million and $6.4 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2017 also included a gain of $3.3 million, $2.0 million and $1.9 million, net of tax, during the second, third and fourth quarters, respectively, related to the recovery of previously written off Venezuelan intercompany receivables. Special (gains) and charges for 2017 also included charges of $14.4 million, net of tax, related to a Global Energy vendor contract termination and litigation charges in the second quarter, litigation charges of $1.4 million, net of tax, in the third quarter, and $3.1 million, net of tax, primarily related to impairment of plant assets, litigation charges and settlement in the fourth quarter. The fourth quarter 2017 special (gains) and charges also included a gain on sale of Equipment Care of $12.4 million, net of tax, and the charges on exchanged and extinguished debt of $13.6 million, net of tax, which were partially offset by tax benefits on the repatriation of cash to the U.S. of $7.8 million, net of tax.

(2) Discrete tax expense (benefits) were primarily driven by $16.0 million, $10.8 million, $2.4 million and $10.4 million of tax benefits associated with stock compensation excess tax benefits in the first, second, third and fourth quarters, respectively.  The remaining $6.8 million discrete tax benefits in the first quarter were driven primarily by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.   The second quarter 2017 discrete tax expense of $1.1 million was driven primarily by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions. The third quarter 2017 discrete tax expense of $10.7M was driven primarily by recognizing adjustments from filing our 2016 U.S. federal income tax return. The fourth quarter discrete tax benefits were driven primarily by $319.0 million benefit for repricing of U.S. deferred tax positions to the U.S. tax reform rate along with the stock compensation excess tax benefits, partially offset by $160.1 million expense for the U.S. tax reform one time repatriation tax on foreign earnings.

(3) Special (gains) and charges for 2018 primarily includes a commitment to the Ecolab Foundation of $18.9 million, net of tax, along with restructuring activities of $0.3 million, net of tax, acquisition and integration costs and $0.3 million, net of tax, and other litigation charges of $0.3 million, net of tax, in the first quarter.

(4) Discrete tax expense (benefits) were primarily driven by $6.8 million of tax benefits associated with stock compensation excess tax benefits, the U.S. tax reform one time repatriation tax expense of $11.3 million, and $4.6 million of other tax benefits in the first quarter.

20

EX-99.2

Exhibit 99.2

First Quarter 2018
Teleconference
Supplemental Data

Cautionary Statement

Forward-Looking Information    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 2018 second quarter and full year business and financial results, sales growth drivers, gross margins, pricing, delivered product costs, investments and business acquisitions. These statements are based on the current expectations of management of Ecolab Inc. (“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 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 execute key business initiatives, including upgrades to our information technology systems; potential information technology infrastructure failures and cybersecurity attacks; our ability to attract and retain high caliber management talent to lead our business; exposure to economic, political and legal risks related to our international operations including trade sanctions; our ability to develop competitive advantages through innovation and to commercialize digital solutions; the costs and effects of complying with laws and regulations relating to our operations; 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 our non-GAAP measures included within this presentation are included in the “Non-GAAP Financial Measures” section of this presentation.

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 2

1Q 2018 Overview

◢Sales:

§ Reported sales +10%; fixed currency and acquisition adjusted fixed currency sales +6%.

§ New business growth, share gains, pricing and new product introductions drove acquisition adjusted fixed currency sales increases across all business segments. 

◢Operating Income:

§ Reported operating margin -110 bps; adjusted fixed currency operating margin -60 bps. 

§ Reported operating income -1% with adjusted operating income +4%; adjusted fixed currency operating income +2%.

§ Pricing, volume growth and cost saving initiatives offset higher delivered product costs and investments in the business during the quarter.    

◢Earnings:

§ Reported diluted EPS $0.84,  -2% versus last year.  

§ Adjusted diluted EPS $0.91, +14% versus last year. 

§ Adjusted EPS growth also benefited from lower interest expense and a  lower tax rate.

◢Outlook:

§ 2018: Adjusted diluted EPS forecast raised to  $5.30 to  $5.50, +13% to 18%. The prior forecast was $5.25 to $5.45.

§ 2Q 2018:  Adjusted diluted EPS of $1.23 to $1.29, +10% to 15%.

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 3

1Q 2018 Results

	First Quarter Ended March 31
	Reported				Adjusted *
(unaudited)	Public Currency Rates		%		Public Currency Rates		%
(millions, except per share)	2018	2017	Change		2018	2017	Change
Net sales	$ 3,470.9	$ 3,162.4	10	%	$ 3,470.9	$ 3,162.4	10	%
Operating income	354.3	357.2	(1)	%	380.3	364.9	4	%
Net income attributable to Ecolab	247.3	254.0	(3)	%	266.9	236.4	13	%
Diluted earnings per share	$ 0.84	$ 0.86	(2)	%	$ 0.91	$ 0.80	14	%
					Adjusted *
	Fixed Currency Rates *		%		Fixed Currency Rates		%
	2018	2017	Change		2018	2017	Change
Net sales	$ 3,503.9	$ 3,290.4	6	%	$ 3,503.9	$ 3,290.4	6	%
Operating income	357.5	369.7	(3)	%	383.5	377.4	2	%

*See “Non-GAAP Financial Measures” section of this presentation for corresponding reconciliations.

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 4

1Q 2018 Sales Growth Detail

	Fixed Rate	Acq./Div. Adj.
Global Industrial	% Change	% Change	Consolidated	% Change
Food & Beverage	4%	4%	Volume & mix	5%
Water	7%	5%	Pricing	1%
Paper	5%	0%	Subtotal	6%
Life Sciences	24%	14%	Acq./Div.	1%
Textile Care	-2%	-2%	Fixed currency growth	6%
Total Global Industrial	5%	3%	Currency impact	3%
			Total	10%
Global Institutional			Amounts reflect rounding.
Institutional	6%	5%
Specialty	10%	10%
Healthcare	25%	0%
Total Global Institutional	9%	5%
Global Energy	9%	10%
Other
Pest Elimination	14%	8%
Colloidal Technologies	2%	2%
Total Other**	-11%	8%
**Equipment Care was sold on November 1, 2017

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 5

1Q 2018 Income Statement / Margins

($millions, unaudited)	2018	%sales	2017	%sales	%change		Comments*
Gross Profit	$ 1,388.8	40.0%	$ 1,310.6	41.4%	6	%	The 140 bps decline from the year-ago level was driven by higher delivered product costs and the impact of growth within Global Energy (which on average has lower gross margin) that more than offset increased pricing and cost savings.
SG&A	1,008.5	29.1%	947.2	30.0%	6	%	The 90 bps improvement was driven by sales volume leverage and the 2017 restructuring and cost savings actions, which more than offset investments in the business.
Operating Income (fixed FX)
Global Industrial	129.9	10.5%	135.6	11.5%	(4)	%	2018 acquisition adjusted fixed currency margins were 10.6% vs. 11.5% in 2017. Margins decreased 90 bps as improved pricing and sales volume gains were more than offset by higher delivered product costs and investments in the business.
Global Institutional	198.7	16.3%	186.8	16.8%	6	%	2018 acquisition adjusted fixed currency margins were 16.6% vs. 16.8% in 2017. Margins decreased 20 bps as pricing and sales volume gains were more than offset by new customer installation and innovation investments as well as higher delivered product costs.
Global Energy	70.9	8.4%	70.9	9.1%	0	%	2018 acquisition adjusted fixed currency margins were 8.4% vs. 9.1% in 2017. Margins decreased 70 bps as volume gains and pricing were more than offset by higher delivered product costs and a rebuild of prior period compensation reductions.
Other	27.1	13.7%	27.1	12.2%	0	%	2018 acquisition adjusted fixed currency margins were 14.4% vs. 13.5% in 2017. The 90 bps increase reflected pricing and sales volume gains which more than offset increased field-related costs.
Subtotal at fixed FX	426.6	12.2%	420.4	12.8%	1	%
Corporate
Corp. Expense	(43.1)		(43.0)				Nalco intangible amortization
Special Gains/(Ch.)	(26.0)		(7.7)				2018: Primarily the $25M Ecolab Foundation funding commitment. 2017: Primarily Anios and Swisher acquisition and integration charges.
Total Corporate Exp.	(69.1)		(50.7)
FX	(3.2)		(12.5)
Consolidated Op. Inc.	$ 354.3	10.2%	$ 357.2	11.3%	(1)	%	2018 adjusted fixed currency operating margin was 10.9%, a 60 bps decrease vs. the equivalent 2017 margin of 11.5%. The margin decline reflected pricing, volume growth and cost savings initiatives that were more than offset by higher delivered product costs and investments in the business during the quarter. Operating income reflects the impact of new pension accounting standards in both 2017 and 2018.

*See “Non-GAAP Financial Measures” section of this presentation for corresponding reconciliations.

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 6

1Q 2018 Balance Sheet / Cash Flow

SummaryBalanceSheet
	March 31			March 31
(millions, unaudited)	2018	2017	(millions, unaudited)	2018	2017
Cash and cash eq.	$ 175.5	$ 212.1	Short-term debt	$ 1,017.8	$ 1,699.4
Accounts receivable, net	2,574.3	2,355.6	Accounts payable	1,229.1	1,039.3
Inventories	1,541.8	1,428.9	Other current liabilities	1,735.9	1,505.8
Other current assets	305.2	308.9	Long-term debt	6,397.7	5,841.6
PP&E, net	3,779.9	3,424.9	Pension/Postretirement	1,027.7	1,014.4
Goodwill and intangibles	11,315.2	11,033.8	Other liabilities	1,106.2	1,274.0
Other assets	492.4	459.3	Total equity	7,669.9	6,849.0
Total assets	$ 20,184.3	$ 19,223.5	Total liab. and equity	$ 20,184.3	$ 19,223.5
SelectedCashFlowitems			SelectedBalanceSheetmeasures
	Three Months Ended
	March 31			March 31
(millions, unaudited)	2018	2017	(unaudited)	2018	2017
Cash from op. activities	$ 487.2	$ 425.7	Total Debt/Total Capital	49.2%	52.4%
Depreciation	150.9	142.2	Net Debt/Total Capital	48.6%	51.7%
Amortization	80.2	73.8	Net Debt/EBITDA(*)	2.5	2.6
Capital expenditures	203.3	167.5	Net Debt/Adjusted EBITDA(*)	2.4	2.5

(*) 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. See “Non-GAAP Financial Measures” section of this presentation corresponding reconciliations. 

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 7

Appendix

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 8

Non-GAAP Financial Measures

	First Quarter Ended
(unaudited)	March 31
(millions, except percent)	2018		2017
Net sales
Reported GAAP net sales	$ 3,470.9		$ 3,162.4
Effect of foreign currency translation	33.0		128.0
Non-GAAP fixed currency sales	3,503.9		3,290.4
Effect of acquisitions and divestitures	(77.3)		(53.1)
Non-GAAP acquisition adjusted fixed currency sales	$ 3,426.6		$ 3,237.3
Cost of Sales
Reported GAAP cost of sales	$ 2,082.1		$ 1,851.8
Special (gains) and charges	-		1.5
Non-GAAP adjusted cost of sales	$ 2,082.1		$ 1,850.3
Gross Margin
Reported gross margin	40.0	%	41.4	%
Non-GAAP adjusted gross margin	40.0	%	41.5	%
Operating income
Reported GAAP operating income	$ 354.3		$ 357.2
Effect of foreign currency translation	3.2		12.5
Non-GAAP fixed currency operating income	357.5		369.7
Special (gains) and charges	26.0		7.7
Non-GAAP adjusted fixed currency operating income	383.5		377.4
Effect of acquisitions and divestitures	(3.7)		(4.2)
Non-GAAP acquisition adjusted fixed currency operating income	$ 379.8		$ 373.2
Operating Income Margin
Reported GAAP operating income margin	10.2	%	11.3	%
Non-GAAP adjusted fixed currency operating income margin	10.9	%	11.5	%

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 9

Non-GAAP Financial Measures

	First Quarter Ended
(unaudited)	March 31
(millions, except percent and per share)	2018		2017
Net Income Attributable to Ecolab
Reported GAAP net income attributable to Ecolab	$ 247.3		$ 254.0
Special (gains) and charges, after tax	19.7		5.2
Discrete tax net expense (benefit)	(0.1)		(22.8)
Non-GAAP adjusted net income attributable to Ecolab	$ 266.9		$ 236.4
Diluted Earnings per Share Attributable to Ecolab ("EPS")
Reported GAAP diluted EPS	$ 0.84		$ 0.86
Special (gains) and charges, after tax	0.07		0.02
Discrete tax net expense (benefit)	0.00		(0.08)
Non-GAAP adjusted diluted EPS	$ 0.91		$ 0.80
Provision for Income Taxes
Reported GAAP tax rate	21.8	%	17.4	%
Special gains and charges	0.2		0.3
Discrete tax items	0.0		7.2
Non-GAAP adjusted tax rate	22.0	%	24.9	%
EBITDA (trailing twelve months ended)
Net income including non-controlling interest	$ 1,509.5		$ 1,270.7
Provision for income taxes	258.7		383.3
Interest expense, net	248.9		261.0
Depreciation	594.4		571.7
Amortization	314.0		287.2
EBITDA	$ 2,925.5		$ 2,773.9
Special (gains) and charges impacting EBITDA	58.6		106.9
Adjusted EBITDA	$ 2,984.1		$ 2,880.8

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 10

Non-GAAP Financial Measures

	First Quarter Ended March 31
	2018			2017
(millions)	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted
Net Sales
Global Industrial	$ 1,241.4	($23.9)	$ 1,217.5	$ 1,178.3	($1.6)	$ 1,176.7
Global Institutional	1,218.0	(45.0)	1,173.0	1,114.6	(0.1)	1,114.5
Global Energy	847.1	(0.3)	846.8	775.7	(5.3)	770.4
Other	197.4	(8.1)	189.3	221.8	(46.1)	175.7
Subtotal at fixed currency rates	3,503.9	(77.3)	3,426.6	3,290.4	(53.1)	3,237.3
Currency impact	(33.0)			(128.0)
Consolidated reported GAAP net sales	$ 3,470.9			$ 3,162.4
Operating Income
Global Industrial	$ 129.9	($0.9)	$ 129.0	$ 135.6	($0.3)	$ 135.3
Global Institutional	198.7	(3.6)	195.1	186.8	0.1	186.9
Global Energy	70.9	0.7	71.6	70.9	(0.7)	70.2
Other	27.1	0.1	27.2	27.1	(3.3)	23.8
Corporate	(43.1)	-	(43.1)	(43.0)	-	(43.0)
Adjusted at fixed currency rates	383.5	(3.7)	379.8	377.4	(4.2)	373.2
Special (gains) and charges	26.0			7.7
Reported OI at fixed currency rates	357.5			369.7
Currency impact	(3.2)			(12.5)
Consolidated reported GAAP operating income	$ 354.3			$ 357.2

Please see Ecolab’s news release dated May 1, 2018 for additional information, including additional discussion on use of Non-GAAP financial measures. 11

EX-99.3

Exhibit 99.3

ECOLAB FIRST QUARTER 2018

1Q 2018 Overview

◢Sales:

§ Reported sales +10% and fixed currency and acquisition adjusted fixed currency sales +6%.

§ New business growth, share gains, pricing and new product introductions drove acquisition adjusted fixed currency sales increases across all business segments.

◢Operating Income:

§ Reported operating margin -110 bps; adjusted fixed currency operating margin -60 bps.

§ Reported operating income -1% with adjusted operating income +4%; adjusted fixed currency operating income +2%.

§ Pricing, volume growth and cost saving initiatives offset higher delivered product costs and investments in the business during the quarter.

◢Earnings:

§ Reported diluted EPS $0.84, -2% versus last year.

§ Adjusted diluted EPS $0.91, +14% versus last year.

§ Adjusted EPS growth also benefited from lower interest expense and a lower tax rate.

◢Outlook:

§ 2018: Adjusted diluted EPS forecast raised to $5.30 to $5.50, +13% to 18%. The prior forecast was $5.25 to $5.45.

§ 2Q 2018: Adjusted EPS of $1.23 to $1.29,  +10% to 15%.

SUMMARY

Ecolab’s strong growth momentum continued in the first quarter.  Further new business gains, pricing and product innovation drove strong first quarter acquisition adjusted fixed currency sales growth in all of our business segments.  That solid top line growth, along with cost efficiency, lower interest

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expense and a reduced tax rate, yielded the first quarter’s 14% adjusted earnings per share increase. 

We expect 2018 will also be a strong year, with the attractive first half earnings growth accelerating in the second half. We look for better year-on-year acquisition adjusted fixed currency sales growth in all our business segments in 2018 as we once again work aggressively to outpace our markets, and as we benefit from new business gains and investments we have made to further improve sales and service force effectiveness and profitability. We look for accelerated pricing to further exceed delivered product cost headwinds, and along with our product innovation, cost efficiency work and lower interest expense and tax rate, yield strong income growth. We raised our forecast for 2018 adjusted diluted earnings per share, and now expect it to increase 13% to 18% to the $5.30 to $5.50 range, excluding special gains and charges and discrete tax items, with second half earnings growth outpacing the first half.  The prior forecast was $5.25 to $5.45.  Currency translation is expected to be a $0.10 benefit to full year earnings.  Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on full year adjusted diluted earnings per share.   

We also expect solid sales and pricing growth in the second quarter, along with a lower tax rate and fewer shares, to more than offset higher delivered product costs and yield double-digit earnings growth.  We look for second quarter adjusted diluted earnings per share to be in a $1.23 to $1.29 per share range, increasing 10% to 15% over the prior year.  Currency translation is expected to have a favorable impact of approximately $0.04 per share in the

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second quarter.  Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on second quarter adjusted diluted earnings per share.    

HIGHLIGHTS

· First quarter diluted earnings per share were $0.84.

· On an adjusted basis, excluding special gains and charges and discrete tax items from both years, first quarter 2018 adjusted diluted earnings per share increased 14% to $0.91. This compared with adjusted diluted earnings per share of $0.80 a year ago.  

· Consolidated sales rose 10%.  Acquisition adjusted fixed currency sales increased 6%, with strong growth in all of our business segments. Regionally, acquisition adjusted fixed currency sales growth was led by North America and Asia Pacific.

· Reported operating margins decreased 110 basis points. Adjusted fixed currency operating margins decreased 60 basis points as price and volume increases were more than offset by rising delivered product costs in the quarter.  Adjusted fixed currency operating income rose 2%.

· The adjusted operating income gain, along with lower interest expense and a lower tax rate, yielded the 14% increase in first quarter 2018 adjusted diluted earnings per share.  Adoption of the new revenue recognition standard had a $0.01 favorable impact on first quarter adjusted diluted earnings per share.

· We continue to work aggressively to drive growth, winning new business through our innovative new products and sales and service expertise, as well as driving pricing and cost efficiencies to grow our top and bottom

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lines at improved rates.  We also see continued good underlying sales volume and pricing across our business segments and look for that to more than offset continued delivered product cost headwinds and yield stronger income growth.

· We now expect 2018 adjusted earnings per share to rise 13% to 18% to the $5.30 to $5.50 range, excluding special gains and charges and discrete tax items, with second half earnings growth outpacing the first half, as volume and price gains increasingly offset the expected impact of higher delivered product costs and systems investments that will have a greater impact in the first half.  

· We expect strong second quarter fixed currency acquisition adjusted sales growth with lower operating margins as improved sales momentum and accelerated pricing are more than offset by higher delivered product costs and systems investments. Adjusted diluted earnings per share are expected to be in the $1.23 to $1.29 range, up 10% to 15%.  

· In summary, we saw continued strong momentum in our business as we began 2018 and expect further improvement over the balance of the year to deliver our forecasted 13% to 18% adjusted diluted earnings per share growth.   

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SALES DISCUSSION

Consolidated sales	% Change
Volume & mix	5%
Pricing	1%
Subtotal	6%
Acq./Div.	1%
Fixed currency growth	6%
Currency impact	3%
Total	10%

Amounts in the table above reflect rounding

Ecolab’s first quarter reported sales increased 10% when compared to the year ago period.  Fixed currency sales grew 6%, and acquisition adjusted fixed currency sales increased 6%.  Looking at the growth components, volume and mix rose 5% and pricing increased 1%. Acquisitions and divestitures added 1% and currency added 3% to sales growth. 

GLOBAL INDUSTRIAL SEGMENT

	Fixed Rate	Acq./Div. Adj.
Global Industrial	% Change	% Change
Food & Beverage	4%	4%
Water	7%	5%
Paper	5%	0%
Life Sciences	24%	14%
Textile Care	-2%	-2%
Total Global Industrial	5%	3%

FOOD & BEVERAGE

First quarter fixed currency Food & Beverage sales rose 4% as corporate account wins, share gains and pricing more than offset generally flat industry trends. Globally, we saw strong growth in our food business, good growth in dairy processing operations, moderate gains in protein and beverage, and soft dairy farm sales.  Regionally, fixed currency sales growth was strong in Latin America and Europe, with modest gains in North America and Asia Pacific. 

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Food & Beverage continues to drive 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 our value through the delivery of improved food safety results, lower operating costs and enhanced product quality for customers.  New business wins are more than offsetting continued challenging industry conditions in the food and beverage industry, and we are realizing further customer penetration, new business capture and leverage from our strong innovation portfolio.  We expect to show continued good growth in the second quarter.

WATER

Water sales continued to show strong momentum in the first quarter as fixed currency sales increased 7%, with acquisition adjusted fixed currency sales rising 5%.  All major businesses showed good growth.  Light industry water treatment sales were led by its innovative technology and service offerings. Heavy industry sales benefited from sales force investments and improved market conditions. Mining gains were led by new business wins. Sales increased in all regions.  

We remain focused on strengthening our corporate account and enterprise sales teams, the further development of innovative new products, growing our new accounts pipeline and continuing to invest in growth areas for the light, heavy and mining industries.  We expect continued good growth in the second quarter from further share gains in light, heavy and mining.     

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PAPER

First quarter fixed currency Paper sales increased 5%; acquisition adjusted fixed currency sales were flat.  Modest gains in the other regions were offset by soft sales in Asia Pacific.

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 over the balance of 2018 through continued globalization of best practices, price increases, and a focus on delivering value through innovative solutions.       

LIFE SCIENCES

Life Sciences first quarter fixed currency sales increased 24%.  Adjusted for acquisitions, fixed currency sales were strong, increasing 14% as we saw good growth from recent business wins and pricing execution. Growth was led by strong sales in cleaning and disinfection programs in both the pharmaceutical and personal care markets.

Our sales and service team continues to strengthen, product innovation is developing well and our new business pipeline looks solid. We expect continued strong growth from Life Sciences in 2018. 

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GLOBAL INSTITUTIONAL SEGMENT

	Fixed Rate	Acq./Div. Adj.
Global Institutional	% Change	% Change
Institutional	6%	5%
Specialty	10%	10%
Healthcare	25%	0%
Total Global Institutional	9%	5%

INSTITUTIONAL

Fixed currency sales for the Institutional business were up 6% in the first quarter.  Adjusted for acquisitions, fixed currency sales for Institutional rose 5%, with some benefit from increased distributor inventory; net of that activity, acquisition adjusted sales grew 4%.  Global lodging demand continued to show moderate growth while global full-service restaurant industry foot traffic remained soft, particularly in North America. Looking at Institutional’s regional fixed currency sales, North America and Asia Pacific were strong, Latin America rose moderately, and Europe sales, adjusted for acquisitions, grew modestly.  All regions showed improved sales trends in the first quarter as we continue using our strong value proposition to aggressively drive sales and win new business, increase share in existing units, develop emerging chain relationships, improve pricing and enhance our service delivery to customers. 

With a continued emphasis on driving business wins across all regions and customers, a strong line of new innovation that improves customer results and reduces their water, energy and labor costs, and continued pricing, we expect to continue to build on our industry leadership position and yield improved Institutional sales growth and a solid performance for the full year 2018.

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SPECIALTY

First quarter Specialty sales grew a very strong 10% in fixed currencies, benefiting from strong ongoing business and the rollout of new account wins. We continue to drive growth in our global quickservice accounts, leveraging generally modest industry trends.  New business gains remain robust, driven by improved service coverage, new product innovation, additional customer solutions and a continued focus among our customers on food safety as fresh products become more prevalent and require more cleaning. The food retail business also posted strong growth reflecting continued new customer additions and product introductions.

Momentum is good in the Specialty business.  With a strong new business pipeline, our ongoing investments in new products and digital offerings, increased solutions for customers and an expanded sales and service force, we expect a good second quarter and another year of attractive growth for Specialty in 2018.   

HEALTHCARE

Fixed currency Healthcare sales rose 25% in the first quarter. Acquisition adjusted fixed currency Healthcare sales were flat in the quarter.  Strong first quarter sales of environmental hygiene programs were offset by slow sales in Europe and flat sales of non-program and deemphasized non-core products. 

Program sales of our environmental hygiene offering continue to show very good growth as we execute the Ecolab value proposition, offering our combined innovative products and premium on-site service programs that

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work together to help reduce healthcare acquired infections and increase operational efficiencies, and thereby deliver improved outcomes in hospital operating rooms, patient rooms and central sterile areas. Customer results from our program approach have proven successful, and interest levels remain very attractive, making us confident in the long-term growth potential for our business.

We expect Healthcare to show similar results in the second quarter and improvement over the balance of the year.  

GLOBAL ENERGY SEGMENT

	Fixed Rate	Acq./Div. Adj.
Global Energy	% Change	% Change
Energy	9%	10%

First quarter fixed currency Energy segment sales were strong, increasing 9%.  Adjusted for acquisitions, fixed currency sales were up 10% as Energy benefited from improving energy markets, pricing, share gains and the timing of some shipments that will moderate second quarter growth. Within our upstream business, the well stimulation business again recorded very strong growth.  The production business delivered a strong increase, primarily driven by increased North American activity and some shipment timing which more than offset continued soft international trends. Downstream sales also showed solid growth driven by international sales.

We expect second quarter 2018 Energy segment sales growth will be in the mid-single digits led by still strong but moderating growth in well stimulation, modest gains in production and continued good downstream growth. With

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industry conditions improved, we continue to look for better Energy growth and profitability in 2018 as new business wins develop through our innovative products, our high value service offering and strong customer relationships.

OTHER SEGMENT

	Fixed Rate	Acq./Div. Adj.
Other	% Change	% Change
Pest Elimination	14%	8%
Colloidal Technologies	2%	2%
Total Other	-11%	8%
Note: Equipment Care was sold November 1, 2017

PEST ELIMINATION

Fixed currency Pest Elimination sales increased 14% in the first quarter.  Acquisition adjusted fixed currency sales growth remained strong, increasing 8%, led by strong sales growth in food & beverage and hospitality, as well as good growth in restaurants.   Regionally, North America, Europe and Asia Pacific all delivered double digit growth in the first quarter, while Latin America had more moderate gains. 

We continue to drive market penetration through innovative service offerings and new technologies to address key customer and global trends.  Additionally, we continue to make progress in globalizing our market-focused capabilities and field technologies. We expect Pest Elimination sales to show continued good growth in the second quarter led by gains in all markets.

ADOPTION OF NEW ACCOUNTING STANDARDS

Beginning in 2018, Ecolab adopted the new FASB revenue recognition standard. We reviewed our product and service offerings under the new

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standard and the SEC requirement for separation of them in our income statement.  As such, we now disclose product and service offerings separately in our income statement. We also reclassified certain costs, primarily compensation, from selling, general and administrative (SG&A) expenses to cost of sales (COS) to align with the costs of providing newly classified service revenue. Adoption of the new revenue recognition standard reduced 2017 earnings per share by $0.01 and is expected to have a $0.01 unfavorable impact on full year 2018 adjusted diluted earnings per share.  We disclosed revised 2016 and 2017 financial information aligned with the new presentation in our 8-K dated April 18, 2018.   

Ecolab has also adopted the new pension accounting standard beginning in 2018, recording the employee compensation cost of pension expense (the service component) in COS and SG&A, while all other non-service components of pension income are recorded below operating income in other (income)/expense.  We adopted the new standard retrospectively and revised the 2016 and 2017 financial information to reflect the adoption of the pension accounting standard in the 8-K mentioned above. 

CONSOLIDATED MARGIN PERFORMANCE

($ millions, unaudited)	2018	% sales	2017	% sales	% change
Gross Profit	$ 1,388.8	40.0%	$ 1,310.6	41.4%	6%

First quarter gross margins were 40.0%, declining 140 basis points from the year-ago level. The decline was driven by higher delivered product costs and the impact of growth within Global Energy (which on average has a lower

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gross margin) that more than offset the impact from increased pricing and cost savings.

($ millions, unaudited)	2018	% sales	2017	% sales	% change
SG&A	$ 1,008.5	29.1%	$ 947.2	30.0%	6%

SG&A expenses represented 29.1% of first quarter sales and the ratio to sales declined 90 basis points from last year as sales volume leverage and the 2017 restructuring and cost savings actions more than offset investments in the business.

($ millions, unaudited)	2018	% sales	2017	% sales	% change
Consolidated Op. Inc.	$ 354.3	10.2%	$ 357.2	11.3%	-1%
Consolidated Fixed
Currency Op. Inc. (adj.)	$ 383.5	10.9%	$ 377.4	11.5%	2%

Consolidated operating margins were 10.2%.  Adjusted for special charges, fixed currency operating income margins were 10.9%, declining 60 basis points from last year’s comparable margin.  Adjusted fixed currency operating income increased 2%.  Pricing, volume growth and cost savings initiatives offset the impact of higher delivered product costs and investments in the business during the quarter. 

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SEGMENT MARGIN PERFORMANCE

($ millions - fixed currency, unaudited)	2018	% sales	2017	% sales	% change
Global Industrial Op. Inc.	$129.9	10.5%	$135.6	11.5%	-4%

Fixed currency operating income for the Global Industrial segment decreased 4%. Fixed currency acquisition adjusted operating income for the Global Industrial segment decreased 5% and margins declined 90 basis points to 10.6%.  Pricing, sales volume gains and cost savings were more than offset by higher delivered product costs and investments in the business. 

($ millions - fixed currency, unaudited)	2018	% sales	2017	% sales	% change
Global Institutional Op. Inc.	$198.7	16.3%	$186.8	16.8%	6%

Fixed currency operating income for the Global Institutional segment increased 6%. Acquisition adjusted fixed currency operating income grew 4% while margins declined 20 basis points to 16.6%. Pricing and sales volume gains were more than offset by new customer installation and innovation investments as well as higher delivered product costs.

($ millions - fixed currency, unaudited)	2018	% sales	2017	% sales	% change
Global Energy Op. Inc.	$70.9	8.4%	$70.9	9.1%	0%

Fixed currency Global Energy segment operating income was flat. Acquisition adjusted fixed currency operating income increased 2% while margins declined 70 basis points to 8.4%.  Volume and pricing gains were more than offset by higher delivered product costs and a rebuild of prior period compensation reductions. 

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($ millions - fixed currency, unaudited)	2018	% sales	2017	% sales	% change
Other Op. Inc.	$27.1	13.7%	$27.1	12.2%	0%

Acquisition and divestiture adjusted fixed currency operating income for the Other segment increased 14% and margins increased 90 basis points to 14.4% reflecting pricing and sales volume gains which more than offset increased field-related costs. The Equipment Care business was sold on November 1, 2017.

($ millions, unaudited)	2018	2017
Corporate
Corp. Expense	($43.1)	($43.0)
Special Gains/(Charges)	(26.0)	(7.7)
Total Corporate Expense	($69.1)	($50.7)

The corporate segment expense includes amortization expense of $43 million in both the first quarter of 2018 and 2017 related to the Nalco merger intangible assets. Corporate segment operating income also includes net special charges of $26 million ($20 million after tax) primarily related to a previously announced funding commitment to the Ecolab Foundation.

Total special gains and charges for the first quarter of 2017 were a net charge of $8 million ($5 million after tax) associated with Anios and Swisher acquisition and integration costs.

TAX RATE, SHARES AND CONSOLIDATED INCOME

The reported income tax rate for the first quarter of 2018 was 21.8% compared with the reported rate of 17.4% in the first quarter of 2017.  Excluding special gains and charges and discrete tax items, the adjusted tax

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rate was 22.0% in the first quarter of 2018 compared with 24.9% for the same period last year. The decrease in our adjusted tax rate was primarily driven by changes in the U.S. tax law.

Ecolab reacquired 1.6 million shares of its common stock during the first quarter of 2018.  

The net of this performance is that Ecolab reported first quarter diluted earnings per share of $0.84 compared with $0.86 reported a year ago.  When adjusted for special gains and charges and discrete tax items in both years, first quarter adjusted diluted earnings per share were $0.91 compared with $0.80 last year.  Currency translation had a $0.03 favorable impact on first quarter 2018 adjusted diluted earnings per share, and adoption of the new revenue recognition standard had a $0.01 favorable impact on first quarter adjusted diluted earnings per share.

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SUMMARY BALANCE SHEET AND

SELECTED BALANCE SHEET MEASURES

(unaudited)	March 31
($ millions)	2018	2017
Cash and cash eq.	$ 175.5	$ 212.1
Accounts receivable, net	2,574.3	2,355.6
Inventories	1,541.8	1,428.9
Other current assets	305.2	308.9
PP&E, net	3,779.9	3,424.9
Goodwill and intangibles	11,315.2	11,033.8
Other assets	492.4	459.3
Total assets	$ 20,184.3	$ 19,223.5
Short-term debt	$ 1,017.8	$ 1,699.4
Accounts payable	1,229.1	1,039.3
Other current liabilities	1,735.9	1,505.8
Long-term debt	6,397.7	5,841.6
Pension/Postretirement	1,027.7	1,014.4
Other liabilities	1,106.2	1,274.0
Total equity	7,669.9	6,849.0
Total liab. and equity	$ 20,184.3	$ 19,223.5

	March 31
(unaudited)	2018	2017
Total Debt/Total Capital	49.2%	52.4%
Net Debt/Total Capital	48.6%	51.7%
Net Debt/EBITDA	2.5	2.6
Net Debt/Adjusted EBITDA	2.4	2.5
The inputs to EBITDA reflect the trailing twelve months of activity for the period presented.

Net debt to total capital was 49% at March 31, 2018, with the net debt to adjusted EBITDA ratio at 2.4 times. 

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SELECTED CASH FLOW ITEMS

	Three Months Ended
(unaudited)	March 31
($ millions)	2018	2017
Cash from op. activities	$ 487.2	$ 425.7
Depreciation	150.9	142.2
Amortization	80.2	73.8
Capital expenditures	203.3	167.5

FORECAST

We expect the strong business momentum to continue and yield strong gains for the full year 2018. Sales growth has increased across all of our segments, new product launches are adding to growth and enhancing our leadership positions, and pricing has accelerated.  We expect consolidated gross margins for 2018 to increase, with a similar selling, general and administrative ratio to sales, higher other income and lower interest expense and tax rate.  Ecolab expects 2018 adjusted diluted earnings per share to rise approximately 13% to 18% to the $5.30 to $5.50 range, excluding special gains and charges and discrete tax items, with second half earnings growth outpacing the first half, reflecting the expected improvement in volume growth and accelerated pricing, which should more than offset the impact of significantly higher delivered product costs and increased systems investments, both of which are expected to have an outsized impact on the first half.  Our full year forecast earnings per share range includes the loss of Equipment Care income which will reduce earnings per share by an expected $0.03 per share.  At current rates of exchange, we expect foreign currency translation to represent a $0.10 per share benefit to earnings per share.  Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on full year adjusted diluted earnings per share. 

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We look for second quarter adjusted diluted earnings per share to be in the $1.23 to $1.29 range, up 10% to 15% compared with $1.12 earned last year.  We look for solid acquisition adjusted fixed currency sales growth in all our segments. Pricing should again exceed delivered product cost increases in the quarter as we continue our work to improve margins.  Our second quarter forecast earnings per share range includes the loss of Equipment Care income which will reduce earnings per share by an expected $0.01 per share.  We expect consolidated gross margins to be similar to last year, with a slightly higher selling, general and administrative ratio to sales, higher other income and an improved adjusted tax rate versus 2017.  At current rates of exchange, we expect foreign currency to have a favorable $0.04 impact on second quarter diluted earnings per share.  Adoption of the new revenue recognition standard is expected to have a $0.01 unfavorable impact on second quarter adjusted diluted earnings per share.

SUMMARY

In summary, we continue to see strong business momentum, and along with accelerated pricing and cost efficiency, we are more than offsetting delivered product costs.  When combined with our continued product innovation and improved cost efficiency, we expect strong earnings per share growth in 2018, rising 13% to 18%.  We will stay focused on driving fundamental growth in our businesses using new business wins, new products, pricing and cost efficiency.  We expect improving volume growth and pricing across all our business segments to overcome delivered product cost headwinds and deliver

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attractive earnings per share growth in 2018, while we continue to make the right investments to drive our future growth.

CAUTIONARY STATEMENT 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 2018 second quarter and full-year financial and business results, sales and earnings growth, adjusted gross margin, SG&A ratios to sales, interest expense, tax rate, shares outstanding, margins, delivered product costs, energy market forecast, new business, innovation, investments, volume, pricing, cost savings, currency translation, the impact of M&A transactions and actions and impacts associated with the adoption of new accounting standards. 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,

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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 execute key business initiatives, including upgrades to our information technology systems; potential information technology infrastructure failures and cybersecurity attacks; our ability to attract and retain high caliber management talent to lead our business; exposure to global economic, political and legal risks related to our international operations including trade sanctions; our ability to develop competitive advantages through innovation and to commercialize digital solutions; 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; difficulty in procuring raw materials or fluctuations in raw material costs; pressure on operations from consolidation of customers, vendors or competitors; the

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occurrence of litigation or claims, including related to the Deepwater Horizon oil spill; restraints on pricing flexibility due to contractual obligations; our ability to acquire complementary businesses and to effectively integrate such businesses; changes in tax law and unanticipated tax liabilities; potential loss of deferred tax assets or increase in deferred tax liabilities; our substantial indebtedness; public health epidemics; potential losses arising from the impairment of goodwill or other 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, 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 discussion 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

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•adjusted cost of sales

•adjusted gross margin

•fixed currency operating income

•fixed currency operating income margin

•adjusted operating income

•adjusted fixed currency operating income

•adjusted fixed currency operating income margin

•acquisition adjusted fixed currency operating income

•acquisition adjusted fixed currency operating income margin

•EBITDA

•adjusted EBITDA

•adjusted tax rate

•adjusted net income attributable to Ecolab

•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.

Our non-GAAP financial measures for cost of sales, gross margin and operating income exclude the impact of special (gains) and charges, and our non-GAAP measures for tax rate, net income attributable to Ecolab and

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diluted earnings per share further exclude the impact of discrete tax items. We include items within special (gains) and charges and discrete tax items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results. After tax special (gains) and charges are derived by applying the applicable local jurisdictional tax rate to the corresponding pre-tax special (gains) and charges.

EBITDA is defined as the sum of net income including non-controlling interest, provision for income taxes, net interest expense, depreciation and amortization. Adjusted EBITDA is defined as the sum of EBITDA and special (gains) and charges impacting EBITDA. EBITDA and adjusted EBITDA are used as inputs to our net debt to EBITDA and net debt to adjusted EBITDA ratios. We view these ratios as important indicators of the operational and financial health of our organization.

We evaluate the performance of our international operations based on fixed currency rates of foreign exchange, which eliminate the translation impact of exchange rate fluctuations on our international results. Fixed currency amounts included in this supplemental discussion are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of 2018. We also provide our segment results based on public currency rates for information purposes.

Acquisition adjusted growth rates exclude the results of any acquired business from the first twelve months post acquisition and exclude the results of

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divested businesses from the previous twelve months prior to divestiture. Acquisition adjusted growth rates also exclude sales to our Venezuelan deconsolidated subsidiaries 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 supplemental discussion. Reconciliations of our non-GAAP measures are included in the following "Supplemental Non-GAAP Reconciliations" and “Supplemental Diluted Earnings per Share Information” tables included in the first quarter 2018 supplemental discussion.

We do not provide reconciliations for non-GAAP estimates on a forward-looking basis (including those contained in this discussion) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of various items that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact reported earnings per share and the reported tax rate, the most directly comparable forward-looking GAAP financial measures to adjusted earnings per share and the adjusted tax rate. For the same reasons, we are unable to address the probable significance of the unavailable information.

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SUPPLEMENTAL NON-GAAP RECONCILIATIONS

	First Quarter Ended
(unaudited)	March 31
(millions, except percent)	2018		2017
Net sales
Reported GAAP net sales	$ 3,470.9		$ 3,162.4
Effect of foreign currency translation	33.0		128.0
Non-GAAP fixed currency sales	3,503.9		3,290.4
Effect of acquisitions and divestitures	(77.3)		(53.1)
Non-GAAP acquisition adjusted fixed currency sales	$ 3,426.6		$ 3,237.3
Cost of Sales
Reported GAAP cost of sales	$ 2,082.1		$ 1,851.8
Special (gains) and charges	-		1.5
Non-GAAP adjusted cost of sales	$ 2,082.1		$ 1,850.3
Gross Margin
Reported gross margin	40.0	%	41.4	%
Non-GAAP adjusted gross margin	40.0	%	41.5	%
Operating income
Reported GAAP operating income	$ 354.3		$ 357.2
Effect of foreign currency translation	3.2		12.5
Non-GAAP fixed currency operating income	357.5		369.7
Special (gains) and charges	26.0		7.7
Non-GAAP adjusted fixed currency operating income	383.5		377.4
Effect of acquisitions and divestitures	(3.7)		(4.2)
Non-GAAP acquisition adjusted fixed currency operating income	$ 379.8		$ 373.2
Operating Income Margin
Reported GAAP operating income margin	10.2	%	11.3	%
Non-GAAP adjusted fixed currency operating income margin	10.9	%	11.5	%

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SUPPLEMENTAL NON-GAAP RECONCILIATIONS

	First Quarter Ended
(unaudited)	March 31
(millions, except percent and per share)	2018		2017
Net Income Attributable to Ecolab
Reported GAAP net income attributable to Ecolab	$ 247.3		$ 254.0
Special (gains) and charges, after tax	19.7		5.2
Discrete tax net expense (benefit)	(0.1)		(22.8)
Non-GAAP adjusted net income attributable to Ecolab	$ 266.9		$ 236.4
Diluted Earnings per Share Attributable to Ecolab ("EPS")
Reported GAAP diluted EPS	$ 0.84		$ 0.86
Special (gains) and charges, after tax	0.07		0.02
Discrete tax net expense (benefit)	0.00		(0.08)
Non-GAAP adjusted diluted EPS	$ 0.91		$ 0.80
Provision for Income Taxes
Reported GAAP tax rate	21.8	%	17.4	%
Special gains and charges	0.2		0.3
Discrete tax items	0.0		7.2
Non-GAAP adjusted tax rate	22.0	%	24.9	%
EBITDA (trailing twelve months ended)
Net income including non-controlling interest	$ 1,509.5		$ 1,270.7
Provision for income taxes	258.7		383.3
Interest expense, net	248.9		261.0
Depreciation	594.4		571.7
Amortization	314.0		287.2
EBITDA	$ 2,925.5		$ 2,773.9
Special (gains) and charges impacting EBITDA	58.6		106.9
Adjusted EBITDA	$ 2,984.1		$ 2,880.8

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SUPPLEMENTAL NON-GAAP RECONCILIATIONS

	First Quarter Ended March 31
	2018			2017
(millions)	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted
Net Sales
Global Industrial	$ 1,241.4	($23.9)	$ 1,217.5	$ 1,178.3	($1.6)	$ 1,176.7
Global Institutional	1,218.0	(45.0)	1,173.0	1,114.6	(0.1)	1,114.5
Global Energy	847.1	(0.3)	846.8	775.7	(5.3)	770.4
Other	197.4	(8.1)	189.3	221.8	(46.1)	175.7
Subtotal at fixed currency rates	3,503.9	(77.3)	3,426.6	3,290.4	(53.1)	3,237.3
Currency impact	(33.0)			(128.0)
Consolidated reported GAAP net sales	$ 3,470.9			$ 3,162.4
Operating Income
Global Industrial	$ 129.9	($0.9)	$ 129.0	$ 135.6	($0.3)	$ 135.3
Global Institutional	198.7	(3.6)	195.1	186.8	0.1	186.9
Global Energy	70.9	0.7	71.6	70.9	(0.7)	70.2
Other	27.1	0.1	27.2	27.1	(3.3)	23.8
Corporate	(43.1)	-	(43.1)	(43.0)	-	(43.0)
Adjusted at fixed currency rates	383.5	(3.7)	379.8	377.4	(4.2)	373.2
Special (gains) and charges	26.0			7.7
Reported OI at fixed currency rates	357.5			369.7
Currency impact	(3.2)			(12.5)
Consolidated reported GAAP operating income	$ 354.3			$ 357.2

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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
	2017	2017	2017	2017	2017	2017	2017
Diluted earnings per share, as reported (U.S. GAAP)	$ 0.86	$ 1.00	$ 1.86	$ 1.34	$ 3.20	$ 1.92	$ 5.12
Adjustments:
Special (gains) and charges (1)	0.02	0.16	0.17	0.01	0.18	0.01	0.19
Discrete tax expense (benefits) (2)	(0.08)	(0.03)	(0.11)	0.03	(0.08)	0.54	(0.63)
Adjusted diluted earnings per share (Non-GAAP)	$ 0.80	$ 1.12	$ 1.92	$ 1.38	$ 3.30	$ 1.38	$ 4.68

	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
	2018	2018	2018	2018	2018	2018	2018
Diluted earnings per share, as reported (U.S. GAAP)	$ 0.84
Adjustments:
Special (gains) and charges (3)	0.07
Discrete tax expense (benefits) (4)	0.00
Adjusted diluted earnings per share (Non-GAAP)	$ 0.91

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

(1) Special (gains) and charges for 2017 included acquisition and integration costs of $5.3 million, $10.0 million, $1.4 million, and $1.8 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2017 also included restructuring gains of $0.2 million, and charges of $24.5 million, $1.7 million and $6.4 million, net of tax, in the first, second, third and fourth quarters, respectively. Special (gains) and charges for 2017 also included a gain of $3.3 million, $2.0 million and $1.9 million, net of tax, during the second, third and fourth quarters, respectively, related to the recovery of previously written off Venezuelan intercompany receivables. Special (gains) and charges for 2017 also included charges of $14.4 million, net of tax, related to a Global Energy vendor contract termination and litigation charges in the second quarter, litigation charges of $1.4 million, net of tax, in the third quarter, and $3.1 million, net of tax, primarily related to impairment of plant assets, litigation charges and settlement in the fourth quarter. The fourth quarter 2017 special (gains) and charges also included a gain on sale of Equipment Care of $12.4 million, net of tax, and the charges on exchanged and extinguished debt of $13.6 million, net of tax, which were partially offset by tax benefits on the repatriation of cash to the U.S. of $7.8 million, net of tax.

(2) Discrete tax expense (benefits) were primarily driven by $16.0 million, $10.8 million, $2.4 million and $10.4 million of tax benefits associated with stock compensation excess tax benefits in the first, second, third and fourth quarters, respectively.  The remaining $6.8 million discrete tax benefits in the first quarter were driven primarily by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.   The second quarter 2017 discrete tax expense of $1.1 million was driven primarily by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions. The third quarter 2017 discrete tax expense of $10.7M was driven primarily by recognizing adjustments from filing our 2016 U.S. federal income tax return. The fourth quarter discrete tax benefits were driven primarily by $319.0 million benefit for repricing of U.S. deferred tax positions to the U.S. tax reform rate along with the stock compensation excess tax benefits, partially offset by $160.1 million expense for the U.S. tax reform one time repatriation tax on foreign earnings.

(3) Special (gains) and charges for 2018 primarily includes a commitment to the Ecolab Foundation of $18.9 million, net of tax, along with restructuring activities of $0.3 million, net of tax, acquisition and integration costs and $0.3 million, net of tax, and other litigation charges of $0.3 million, net of tax, in the first quarter.

(4) Discrete tax expense (benefits) were primarily driven by $6.8 million of tax benefits associated with stock compensation excess tax benefits, the U.S. tax reform one time repatriation tax expense of $11.3 million, and $4.6 million of other tax benefits in the first quarter.

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