-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RPMZMzlcqhjuhS+aoEV2bhpH/Tt4IUHSypSlC7Vb1JslrHuUMeFmeG75z3uQQk0d AcrTzTzPWvUjSIgzxqXzdw== 0000069598-97-000021.txt : 19970814 0000069598-97-000021.hdr.sgml : 19970814 ACCESSION NUMBER: 0000069598-97-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NALCO CHEMICAL CO CENTRAL INDEX KEY: 0000069598 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 361520480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04957 FILM NUMBER: 97657868 BUSINESS ADDRESS: STREET 1: ONE NALCO CTR CITY: NAPERVILLE STATE: IL ZIP: 60563 BUSINESS PHONE: 7083051000 MAIL ADDRESS: STREET 1: ONE NALCO CENTER CITY: NAPERVILLE STATE: IL ZIP: 60563-1198 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-4957 NALCO CHEMICAL COMPANY Incorporated in the State of Delaware Employer Identification No. 36-1520480 One Nalco Center, Naperville, Illinois 60563-1198 Telephone 630-305-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 1997 was 66,817,271 shares common stock - par value $.1875 a share. NALCO CHEMICAL COMPANY INDEX
Page No. Part I. Financial Information: Item 1. Financial Statements Condensed Consolidated Statements of Financial Condition - June 30, 1997 (Unaudited) and December 31, 1996.........................................2 Condensed Consolidated Statements of Earnings (Unaudited) - Three Months and Six Months Ended June 30, 1997 and 1996...................................3 Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months and Six Months Ended June 30, 1997 and 1996...................................4 Notes to Condensed Consolidated Financial Statements (Unaudited)....................................................5 Report of Independent Accountants on Review of Interim Financial Information...................................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................................8 Part II. Other Information: Item 6. Exhibits and Reports on Form 8-K...............................................11 Exhibit (11) - Statement Re: Computation of Earnings Per Share................................................12 Exhibit (15) - Awareness Letter of Independent Accountants..........................................................14 Exhibit (27) - Financial Data Schedule.......................................................15 Signatures...................................................................................16
- 2 - PART I. FINANCIAL INFORMATION NALCO CHEMICAL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31, 1997 1996 (Dollars in millions) (Unaudited) (Note) ASSETS Current assets Cash and cash equivalents $ 47.1 $ 38.8 Accounts receivable, less allowances of $5.0 and $4.9, respectively 249.0 233.4 Inventories Finished products 62.7 61.4 Materials and work in process 27.7 29.4 -------- -------- 90.4 90.8 Prepaid expenses, taxes and other current assets 17.4 22.2 -------- -------- Total current assets 403.9 385.2 Investment in and advances to partnership 132.4 126.0 Goodwill and other intangibles, less accumulated amortization of $27.2 and $24.7, respectively 228.9 202.5 Other assets 160.9 158.8 Property, plant and equipment 1,151.2 1,169.4 Less allowances for depreciation (649.9) (647.4) -------- -------- 501.3 522.0 -------- -------- $1,427.4 $1,394.5 ======== ======== LIABILITIES/SHAREHOLDERS' EQUITY Current liabilities Short-term debt $ 73.4 $ 31.3 Accounts payable 105.4 114.6 Other current liabilities 125.5 143.8 -------- -------- Total current liabilities 304.3 289.7 Long-term debt 248.5 252.6 Deferred income taxes 43.3 42.9 Accrued postretirement benefits 99.8 98.5 Other liabilities 57.5 56.3 Shareholders' equity 674.0 654.5 -------- -------- $1,427.4 $1,394.5 ======== ========
Note: The Statement of Financial Condition at December 31, 1996 has been derived from the audited financial statements at that date. See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited). - 16 - NALCO CHEMICAL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended Six Months Ended (Amounts in millions, June 30 June 30 except per share data) 1997 1996 1997 1996 ------- ----- ------ ----- Net sales $354.4 $318.6 $689.0 $620.5 Operating costs and expenses Cost of products sold 152.6 139.6 297.4 274.6 Operating expenses 142.4 127.8 278.8 250.9 ------ ------ ------ ------ 295.0 267.4 576.2 525.5 ------ ------ ------ ------ Operating earnings 59.4 51.2 112.8 95.0 Other income (expense) Interest and other income 0.4 (0.3) 1.2 0.2 Interest expense(3.8) (3.3) (7.4) (7.0) Equity in earnings of partnership 7.4 6.6 13.2 13.0 ------ ------ ------ ------ Earnings from continuing operations before income taxes 63.4 54.2 119.8 101.2 Income taxes 23.3 19.7 43.9 36.7 ------ ------ ------ ------ Earnings from continuing operations 40.1 34.5 75.9 64.5 Discontinued operations, net of income taxes - 2.5 - 4.3 ------ ------ ------ ------ Net earnings $ 40.1 $ 37.0 $ 75.9 $ 68.8 ====== ====== ====== ====== Per common share - Primary Earnings from continuing operations $ 0.55 $ 0.47 $ 1.04 $ 0.87 Discontinued operations, net of income taxes - 0.03 - 0.06 ------ ------ ------ ------ Net earnings $ 0.55 $ 0.50 $ 1.04 $ 0.93 ====== ====== ====== ====== Per common share - Fully diluted Earnings from continuing operations $ 0.51 $ 0.44 $ 0.97 $ 0.82 Discontinued operations, net of income taxes - 0.03 - 0.05 ------ ------ ------ ------ Net earnings $ 0.51 $ 0.47 $ 0.97 $ 0.87 ====== ====== ====== ====== Per common share - Cash dividends $ 0.25 $ 0.25 $ 0.50 $ 0.50 ====== ====== ====== ====== Average primary shares outstanding (in thousands) 67,280 67,633 67,401 67,574 Average fully diluted shares outstanding (in thousands) 75,283 75,586 75,396 75,546
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited). NALCO CHEMICAL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended Six Months Ended June 30 June 30 (Dollars in millions) 1997 1996 1997 1996 -------- ------- -------- ------ Cash provided by (used for) operating activities Net earnings $ 40.1 $ 37.0 $ 75.9 $ 68.8 Adjustments not affecting cash Depreciation and amortization 25.7 23.7 49.5 47.8 Other, net (0.8) 0.8 (3.2) (3.0) Changes in current assets and liabilities (1.3) (16.5) (24.2) (33.4) ------ ------ ------ ------ Net cash provided by operations 63.7 45.0 98.0 80.2 ------ ------ ------ ------ Investing activities Additions to property, plant and equipment (22.2) (21.3) (38.6) (48.6) Business purchases (7.6) (81.8) (39.8) (81.8) Other (11.0) 4.0 (5.2) 7.3 ------ ------ ------ ------ Net cash used for investing activities (40.8) (99.1) (83.6) (123.1) ------ ------ ------ ------- Financing activities Cash dividends (19.6) (19.7) (39.2) (39.4) Changes in short-term debt (4.9) (25.8) 41.9 (19.3) Changes in long-term debt 7.6 98.4 6.3 96.5 Common stock reacquired (4.0) - (22.0) - Other 3.8 0.9 7.9 3.7 ------ ------ ------ ------ Net cash provided by (used for) financing activities (17.1) 53.8 (5.1) 41.5 ------ ------ ------ ------ Effects of foreign exchange rate changes 0.3 0.3 (1.0) 1.0 ------ ------ -------- ------ Increase (decrease) in cash and cash equivalents $ 6.1 $ - $ 8.3 $ (0.4) ====== ====== ====== ======
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited). NALCO CHEMICAL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1997 NOTE A -- BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared, without audit, in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Financial information as of December 31 has been derived from the audited financial statements of the Company, but does not include all disclosures required by generally accepted accounting principles. It is the opinion of management that the unaudited condensed consolidated financial statements include all adjustments necessary to fairly state the results of operations for the three month and six month periods ended June 30, 1997 and 1996. The results of interim periods are not necessarily indicative of results to be expected for the year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1996. The unaudited condensed consolidated financial statements and the related notes have been reviewed by Nalco's independent accountants, Price Waterhouse LLP. The Independent Accountants' Review Report is included on page 7. NOTE B -- EFFECT OF CHANGING ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings per Share." SFAS 128 establishes standards for computing and presenting earnings per share (EPS) and simplifies the standards for computing earnings per share previously found in APB Opinion No. 15 (APB 15), "Earnings per Share." It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed similarly to fully diluted EPS pursuant to APB 15. SFAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods; earlier application is not permitted. SFAS 128 requires restatement of all prior-period EPS data presented. Adoption of SFAS 128 is expected to have little or no impact on the Company's future and previously reported EPS. NOTE C -- SHAREHOLDERS' EQUITY Shareholders' equity may be further detailed as follows:
June 30, December 31, (Dollars in millions, 1997 1996 ----------- -------- except per share figures) Preferred stock par value $1.00 per share; authorized 2,000,000 shares; Series B ESOP Convertible Preferred Stock - 388,210 shares at June 30, 1997 and 392,851 shares at December 31, 1996 $ 0.4 $ 0.4 Series C Junior Participating Preferred Stock - none issued - - Capital in excess of par value of shares 186.4 188.6 Unearned ESOP compensation (151.1) (162.6) ------- ------- 35.7 26.4 Common stock - par value $.1875 per share; authorized 200,000,000 shares; issued 80,287,568 shares 15.1 15.1 Capital in excess of par value of shares 33.5 31.2 Retained earnings 1,028.7 992.0 Minimum pension liability adjustment (6.1) (6.1) Foreign currency translation adjustments (54.5) (39.9) Common stock reacquired - at cost 13,470,297 shares at June 30, 1997 and 13,263,648 shares at December 31, 1996 (378.4) (364.2) ------- ------- Total shareholders' equity $ 674.0 $ 654.5 ======= =======
NOTE D - ACQUISITIONS In January 1997, the Company acquired the stock of International Water Consultants Beheer B.V. (IWC) and the assets of Nutmeg Technologies, Inc. (Nutmeg). IWC serves the water treatment needs of customers in the Netherlands, Belgium, Germany and the Commonwealth of Independent States and Nutmeg is a water treatment company which serves markets mainly in the Northeast United States. They had 1996 sales of just under $30 million. In May 1997, the Company acquired the pulp and paper enzyme business of Ciba Specialty Chemicals, Inc. The enzyme technology which was acquired is used in paper mills to enhance fiber quality and water drainage during the paper making process. Also in May 1997, the Company increased its investment in Taiwan Nalco Chemical Co. Ltd. from 55 percent to 79 percent. The purchase price of these businesses was approximately $40 million. The Company is in the process of evaluating the assets that were purchased and the liabilities that were assumed in these acquisitions and accordingly will make any necessary adjustments to the recorded value of the acquired assets and liabilities. REPORT OF INDEPENDENT ACCOUNTANTS ON REVIEW OF INTERIM FINANCIAL INFORMATION To the Board of Directors and Shareholders of Nalco Chemical Company We have reviewed the accompanying interim financial information of Nalco Chemical Company and consolidated subsidiaries as of June 30, 1997, and for the three month and six month periods then ended. This interim financial information is the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial information for it to be in conformity with generally accepted accounting principles. We previously audited in accordance with generally accepted auditing standards, the statement of consolidated financial condition as of December 31, 1996, and the related statements of consolidated earnings, of cash flows and of common shareholders' equity for the year then ended (not presented herein), and in our report dated February 3, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial condition as of December 31, 1996, is fairly stated in all material respects in relation to the statement of consolidated financial condition from which it has been derived. Price Waterhouse LLP By: Robert R. Ross Engagement Partner July 31, 1997 Chicago, Illinois Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Second Quarter 1997 Operations Compared to Second Quarter 1996 Sales increased by 11% over last year with four of the five divisions reporting improved results and the Pacific Division reporting comparable sales to last year.
Second Quarter (Dollars in millions) 1997 1996 Increase -------- -------- -------- Water and Waste Treatment $115.0 $ 98.7 17% Process Chemicals 91.2 85.9 6% Europe 82.1 70.8 16% Latin America 29.2 26.3 11% Pacific 36.9 36.9 -% ------- ------- Total $354.4 $318.6 11% ======= =======
The Water and Waste Treatment Division reported a gain of 17 percent over last year, which included sales by Diversey Water Technologies (DWT) a middle market water treatment business acquired by the Company in mid-1996. Solid improvement were also posted by the Waste Treatment Chemicals and WATERGY(R) Groups. Within the Process Chemicals Division, the Paper Chemicals Group led with a near double-digit increase. Sales by IWC, which was acquired in January 1997, and the European operations of DWT along with strong growth by Basic Industries - North Europe, UNISOLV(R) and Pulp and Paper contributed to the 16 percent increase in Europe Division sales. These gains were moderated by the strengthening of the U.S. dollar compared to most European currencies. Colombia, Mexico, Chile and Venezuela posted double-digit sales increases that contributed to the sales improvement in Latin America. In the Pacific Division, local currency sales increases were offset by the impact of the stronger U.S. dollar compared to most Pacific Rim currencies. The gross margin of 56.9 percent for the second quarter of 1997 was up over last year's rate of 56.2 percent. This increase was mainly attributable to higher margins of the newly acquired DWT. Improved margins in North America, Latin America and the Pacific offset a slight decline in Europe margins. Operating expenses (selling, service, research, etc.) were up $14.6 million over the second quarter of last year. Expenses of DWT and IWC account for over half of this increase. Interest and other income increased by $0.7 million over a year ago, primarily due to a gain on sale of assets and an increase in interest income. Interest expense increased by $0.5 million over the second quarter of last year and reflects the cost of financing acquisitions less the effect of a lower average borrowing rate mix compared to last year. Nalco's equity in Nalco/Exxon for the second quarter of 1997 was $7.4 million, an increase of $0.8 million over the second quarter of 1996. The effective income tax rate for the second quarter of 1997 was 36.8 percent compared to the 36.3 percent that was reported for the second quarter of 1996. Fully diluted earnings per share from continuing operations for the second quarter 1997 was 51 cents compared to the 44 cents for the second quarter 1996. Net earnings per share on a fully diluted basis for the second quarter 1997 was 51 cents compared to 47 cents for the second quarter 1996 which included the results of the discontinued superabsorbent chemical business. First Six Months 1997 Operations Compared to First Six Months 1996 Sales increased 11 percent with all five divisions reporting improvements.
Six Months (Dollars in millions) 1997 1996 Increase -------- -------- -------- Water and Waste Treatment $223.5 $187.9 19% Process Chemicals 178.5 169.0 6% Europe 158.2 141.9 11% Latin America 55.6 52.1 7% Pacific 73.2 69.6 5% ------- ------- Total $689.0 $620.5 11% ======= =======
The Water and Waste Treatment Division sales gain of 19 percent for the first six months of 1997 included sales by DWT, along with a near double-digit improvement by the Watergy Group and more modest increases by the other three groups in the Division. The 6 percent sales increase reported by the Process Chemicals Division included solid growth by the Paper Chemicals Group. The 11 percent sales improvement by the Europe Division included sales by IWC and the European operations of DWT. Strong increases in local currencies by most other operations in the Division were partly offset by the translation effects of the stronger U.S. dollar compared to a year ago. Double-digit improvements reported by Chile, Colombia, Mexico and Venezuela contributed to the 7 percent increase in Latin America sales for the first half of 1997. The Pacific Division sales increase of 5 percent benefited from double-digit sales improvements posted by China, Japan, Korea, Singapore/Malaysia, and Thailand. These gains were moderated by the impact of the stronger U.S. dollar compared to most Pacific Rim currencies. The gross margin for the first six months of 1997 improved to 56.8 percent compared to last year's rate of 55.7 percent, which was primarily attributable to higher margins of the newly acquired DWT. In addition, improved margins in North America offset slight declines in margins reported in the Europe and Latin America Divisions. Operating expenses (selling, service, research, etc.) were up $27.9 million, with DWT and IWC operations accounting for well over half of the increase. Interest and other income increased by $1.0 million for the first six months of 1997 compared to last year. Higher interest income and a gain on sale of assets contributed to the improvement. Interest expense increased by $0.4 million for the first half of 1997 compared to last year which reflects costs related to financing acquisitions partly offset by a favorable blend of average financing rates compared to last year. Nalco's equity in Nalco/Exxon for the first six months of 1997 rose slightly to $13.2 million compared to last year's reported amount of $13.0 million. The effective tax rate was 36.6 percent for the first six months of 1997 compared to 36.3 percent for the first six months of 1996. Fully diluted earnings per share from continuing operations was 97 cents per share compared to 82 cents per share for the first six months of 1996. Net earnings per share on a fully diluted basis for the first six months of 1997 was 97 cents per share compared to 87 cents per share a year ago, which included the results of the discontinued superabsorbent chemical business. Changes in Financial Condition Cash and cash equivalents increased by $8.3 million during the first six months as detailed in the Unaudited Condensed Consolidated Statement of Cash Flows. Days sales outstanding were 64 days at June 30, 1997, comparable to the 64 days outstanding at December 31, 1996. Working capital at June 30, 1997 totaled $99.6 million, a $4.1 million increase over the $95.5 million at December 31, 1996. The ratio of current assets to current liabilities was 1.3 to 1 at June 30, 1997. The $26.4 million increase in goodwill is mainly attributable to the acquisitions of IWC and Nutmeg during the first quarter of 1997, the May 1997 purchase of the pulp and paper enzyme business of Ciba Specialty Chemicals, Inc., and the additional investment in Taiwan Nalco Chemical Co. Ltd. These acquisitions were financed primarily by the issuance of commercial paper, which accounted for most of the increase in short-term debt. Capital investments totaled $38.6 million for the first six months of 1997. Major expenditures were for additional PORTA-FEED(R) units and automobiles for the sales force. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are included herein: (11) Statement Re: Computation of Earnings Per Share (15) Awareness Letter of Independent Accountants (27) Financial Data Schedule (b) The Registrant did not file any reports on Form 8-K during the three months ended June 30, 1997. SIGNATURES 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 thereunto duly authorized. NALCO CHEMICAL COMPANY (Registrant) Date: August 13, 1997 W. E. BUCHHOLZ ---------------------- W. E. Buchholz - Vice President, Chief Financial Officer Date: August 13, 1997 S. J. GIOIMO -------------------- S. J. Gioimo - Secretary EX-11 2 EXHIBIT 11 EXHIBIT (11) STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE NALCO CHEMICAL COMPANY AND SUBSIDIARIES
Three Months Ended Six Months Ended (Amounts in thousands, June 30 June 30 except per share data) 1997 1996 1997 1996 ------ ------ ------ ----- Primary Average shares outstanding 66,749 67,360 66,823 67,287 Net effect of dilutive stock options and shares contingently issuable-based on the treasury stock method using average market price 531 273 578 287 ------- ------- ------- ------- TOTALS 67,280 67,633 67,401 67,574 ======= ======= ======= ======= Earnings from continuing operations $ 40,064 $ 34,470 $ 75,895 $ 64,478 Earnings discontinued operations, net of income taxes - 2,514 - 4,279 -------- -------- -------- -------- Net earnings 40,064 36,984 75,895 68,757 Preferred stock dividends, net of income taxes (2,875) (2,842) (5,753) (5,697) -------- -------- -------- -------- Net earnings to common shareholders $ 37,189 $ 34,142 $ 70,142 $ 63,060 ======== ======== ======== ======== Per share amounts Earnings from continuing operations $ 0.55 $ 0.47 $ 1.04 $ 0.87 Earnings from discontinued operations, net of income taxes - 0.03 - 0.06 ------- ------- ------- ------- Net earnings to common shareholders $ 0.55 $ 0.50 $ 1.04 $ 0.93 ======= ======= ======= =======
EXHIBIT (11) STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE NALCO CHEMICAL COMPANY AND SUBSIDIARIES
Three Months Ended Six Months Ended (Amounts in thousands, June 30 June 30 except per share data) 1997 1996 1997 1996 ------ ------ ------ ----- Fully Diluted Average shares outstanding 66,749 67,360 66,823 67,287 Average dilutive effect of assumed conversion of ESOP convertible Preferred shares 7,784 7,948 7,808 7,965 Additional shares assuming exercise of dilutive stock options and shares contingently issuable-based on the treasury stock method using the quarter-end market price, if higher than average market price 750 278 765 294 -------- -------- -------- -------- TOTALS 75,283 75,586 75,396 75,546 ======== ======== ======== ======== Earnings from continuing operations $ 40,064 $ 34,470 $ 75,895 $ 64,478 Earnings from discontinued operations, net of income taxes - 2,514 - 4,279 -------- -------- -------- -------- Net earnings 40,064 36,984 75,895 68,757 Additional ESOP contribution resulting from assumed conversion, net of income taxes (1,122) (1,132) (2,245) (2,273) Tax adjustment on assumed common dividends (261) (231) (522) (461) -------- -------- -------- -------- Net earnings to common shareholders $ 38,681 $ 35,621 $ 73,128 $ 66,023 ======== ======== ======== ======== Per share amounts: Earnings from continuing operations $ 0.51 $ 0.44 $ 0.97 $ 0.82 Earnings from discontinued operations, net of income taxes - 0.03 - 0.05 ------- ------- ------- ------- Net earnings to common shareholders $ 0.51 $ 0.47 $ 0.97 $ 0.87 ======= ======= ======= =======
EX-15 3 EXHIBIT 15 EXHIBIT (15) AWARENESS LETTER OF INDEPENDENT ACCOUNTANTS Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Sirs: We are aware that Nalco Chemical Company has included our report dated July 31, 1997 (issued pursuant to the provisions of Statement on Auditing Standards No. 71) in the Prospectuses constituting part of its Registration Statements on Form S-3 (Nos. 33-57363, 33-53111, 33-9934, and 2-97721) and Form S-8 (Nos. 333-06955, 333-06963, 33-54377, 33-38033, 33-38032, 33-29149, 2-97721, 2-97131 and 2-82642). We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, Price Waterhouse LLP By: Robert R. Ross Engagement Partner August 13, 1997 Chicago, Illinois EX-27 4 FDS --
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION AT JUNE 30, 1997 AND THE CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 1997 OF NALCO CHEMICAL COMPANY AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1997 JUN-30-1997 47,100,000 0 254,000,000 (5,000,000) 90,400,000 403,900,000 1,151,200,000 (649,900,000) 1,427,400,000 304,300,000 248,500,000 0 400,000 15,100,000 658,500,000 1,427,400,000 689,000,000 689,000,000 297,400,000 297,400,000 278,800,000 0 7,400,000 119,800,000 43,900,000 75,900,000 0 0 0 75,900,000 1.04 0.97
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