ECOLAB INC. [ECL] Filings

10-Q 1 ecl-20240930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
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 No. 1-9328

ECOLAB INC.

(Exact name of registrant as specified in its charter)


Delaware		41-0231510
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1 Ecolab Place, St. Paul, Minnesota 55102

(Address of principal executive offices)(Zip Code)

1-800-232-6522

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

2.625% Euro Notes due 2025

ECL

ECL 25

New York Stock Exchange

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 ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧		Accelerated filer ◻
Non-accelerated filer ◻		Smaller reporting company ☐
		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. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

The number of shares of each of the registrant’s classes of Common Stock outstanding as of September 30, 2024: 283,161,817 shares, par value $1.00 per share.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

(millions, except per share amounts)

2024

2023

2024

2023

Product and equipment sales

$3,156.0

$3,170.9

$9,315.6

$9,152.0

Service and lease sales

842.5

787.2

2,420.6

2,229.8

Net sales

3,998.5

3,958.1

11,736.2

11,381.8

Product and equipment cost of sales

1,771.2

1,868.1

5,221.0

5,561.7

Service and lease cost of sales

490.3

462.4

1,409.6

1,308.8

Cost of sales (including special charges (a))

2,261.5

2,330.5

6,630.6

6,870.5

Selling, general and administrative expenses

1,024.8

1,024.9

3,178.2

3,026.8

Special (gains) and charges

(332.6)

36.7

(292.2)

82.2

Operating income

1,044.8

566.0

2,219.6

1,402.3

Other (income) expense

(12.9)

(14.5)

(38.1)

(42.0)

Interest expense, net

70.4

74.3

220.8

226.3

Income before income taxes

987.3

506.2

2,036.9

1,218.0

Provision for income taxes

246.5

96.8

384.5

235.8

Net income including noncontrolling interest

740.8

409.4

1,652.4

982.2

Net income attributable to noncontrolling interest

4.3

5.4

12.9

15.1

Net income attributable to Ecolab

$736.5

$404.0

$1,639.5

$967.1

Earnings attributable to Ecolab per common share

Basic

$2.60

$1.42

$5.76

$3.39

Diluted

$2.58

$1.41

$5.72

$3.38

Weighted-average common shares outstanding

Basic

283.6

285.1

284.6

284.9

Diluted

286.0

286.9

286.8

286.4

(a)	Cost of sales includes special (gains) and charges of $0.9 and $5.9 in the third quarter of 2024 and 2023, respectively, and $3.2 and $17.2 in the first nine months of 2024 and 2023, respectively, which is recorded in product and equipment cost of sales and service and lease cost of sales.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

(millions)

2024

2023

2024

2023

Net income including noncontrolling interest

$740.8

$409.4

$1,652.4

$982.2

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

Foreign currency translation

99.2

(27.7)

28.0

(13.6)

(Loss) gain on net investment hedges

(41.1)

(8.2)

(28.9)

(48.7)

Total foreign currency translation adjustments

58.1

(35.9)

(0.9)

(62.3)

Derivatives and hedging instruments

(8.2)

0.1

(0.9)

(6.1)

Pension and postretirement benefits

(1.4)

(3.2)

0.8

(7.3)

Subtotal

48.5

(39.0)

(1.0)

(75.7)

Total comprehensive income, including noncontrolling interest

789.3

370.4

1,651.4

906.5

Comprehensive income attributable to noncontrolling interest

7.2

6.0

15.3

14.2

Comprehensive income attributable to Ecolab

$782.1

$364.4

$1,636.1

$892.3

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS

(unaudited)



	September 30		December 31
(millions, except per share amounts)	2024		2023

ASSETS
Current assets
Cash and cash equivalents		$1,261.1		$919.5
Accounts receivable, net		2,883.0		2,834.2
Inventories		1,572.4		1,497.2
Other current assets		401.8		393.2
Total current assets		6,118.3		5,644.1
Property, plant and equipment, net		3,545.5		3,474.6
Goodwill		7,898.7		8,148.2
Other intangible assets, net		3,282.1		3,493.5
Operating lease assets		688.2		553.5
Other assets		568.8		532.7
Total assets		$22,101.6		$21,846.6

LIABILITIES AND EQUITY
Current liabilities
Short-term debt		$643.0		$630.4
Accounts payable		1,812.3		1,566.3
Compensation and benefits		604.9		655.5
Income taxes		235.1		158.7
Other current liabilities		1,413.8		1,334.9
Total current liabilities		4,709.1		4,345.8
Long-term debt		6,974.5		7,551.4
Pension and postretirement benefits		625.0		651.7
Deferred income taxes		264.6		418.2
Operating lease liabilities		551.4		425.5
Other liabilities		401.5		381.8
Total liabilities		13,526.1		13,774.4
Commitments and contingencies (Note 17)

Equity (a)
Common stock		367.6		365.7
Additional paid-in capital		7,108.2		6,766.7
Retained earnings		11,228.4		10,075.4
Accumulated other comprehensive loss		(1,853.8)		(1,850.4)
Treasury stock		(8,302.6)		(7,312.7)
Total Ecolab shareholders’ equity		8,547.8		8,044.7
Noncontrolling interest		27.7		27.5
Total equity		8,575.5		8,072.2
Total liabilities and equity		$22,101.6		$21,846.6

(a)	Common stock, 800.0 shares authorized, $1.00 par value per share, 283.2 shares outstanding as of September 30, 2024 and 285.4 shares outstanding as of December 31, 2023. Shares outstanding are net of treasury stock.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended
	September 30
(millions)	2024		2023

OPERATING ACTIVITIES
Net income including noncontrolling interest		$1,652.4		$982.2
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		473.7		463.3
Amortization		226.2		229.8
Deferred income taxes		(149.7)		(45.9)
Share-based compensation expense		109.5		73.4
Pension and postretirement plan contributions		(43.7)		(92.2)
Pension and postretirement plan expense (income), net		11.5		6.0
Restructuring charges, net of cash paid		(11.7)		(17.5)
Gain on sale of global surgical solutions business		(382.7)		-
Other, net		17.7		21.1
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(109.3)		(88.9)
Inventories		(163.6)		266.4
Other assets		(41.1)		25.2
Accounts payable		277.7		(245.7)
Other liabilities		180.3		(17.9)
Cash provided by operating activities		2,047.2		1,559.3

INVESTING ACTIVITIES
Capital expenditures		(634.8)		(512.2)
Property and other assets sold		3.3		9.5
Acquisitions and investments in affiliates, net of cash acquired		(56.4)		(106.8)
Divestiture of businesses, net of cash divested		889.7		-
Other, net		(8.1)		(32.6)
Cash provided by (used for) investing activities		193.7		(642.1)

FINANCING ACTIVITIES
Net issuances of commercial paper and notes payable		3.3		(0.3)
Long-term debt repayments		(630.4)		-
Reacquired shares		(983.7)		(11.7)
Dividends paid		(502.9)		(462.6)
Exercise of employee stock options		232.8		61.2
Hedge settlements		(0.6)		(53.4)
Other, net		(2.5)		(2.4)
Cash used for financing activities		(1,884.0)		(469.2)

Effect of exchange rate changes on cash and cash equivalents		(15.3)		(45.3)

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