Ecolab Delivers Strong Fourth Quarter

  Ecolab Delivers Strong Fourth Quarter

            Reported diluted EPS $0.77; adjusted EPS +27% to $0.89

                  Full year 2012 adjusted EPS +17% to $2.98

 2013 adjusted EPS forecast range remains $3.38-$3.48, +13% to 17%, excluding
           expected accretion from the pending Champion acquisition

Business Wire

ST. PAUL, Minn. -- February 26, 2013

Ecolab Inc. (NYSE: ECL):

2012 FOURTH QUARTER HIGHLIGHTS:

  *Record sales of $3.0 billion, +65%, including the impact of Nalco.
  *Fixed currency sales +7% compared with fourth quarter 2011 pro forma
    adjusted fixed currency sales including Nalco operations.
  *Reported diluted EPS $0.77.
  *Record adjusted EPS $0.89, +27%, excluding special gains and charges and
    discrete tax items. Results led by strong gains in Global Energy, Latin
    America and worldwide Kay operations.

                                                                           
                 Fourth Quarter Ended December 31
                 (unaudited)
                 Reported                             Adjusted*
                 Fourth Quarter              %          Fourth Quarter              %
(Millions,
except per       2012        2011          change     2012          2011          change
share)
                                                                                    
Net Sales        $ 3,045.8     $ 1,845.3     65   %     $ 3,045.8     $ 1,681.5     81  %
Operating          395.8         164.2       141  %       442.1         246.6       79  %
Income
Net Income
Attributable      231.4        88.7        161  %      265.9        163.4       63  %
to Ecolab
                                                                                    
Diluted Net
Income Per       $ 0.77        $ 0.34        126  %     $ 0.89        $ 0.70        27  %
Share
                                                                                        

* These non-GAAP measures are adjusted for special gains and charges and
discrete tax items; 2011 excludes the Nalco merger impact.

Ecolab delivered strong fourth quarter sales and earnings results, as adjusted
earnings per share increased 27% over last year. Results were led by strong
growth in its Global Energy, Latin America and worldwide Kay business.

CEO comment
Commenting on the quarter, Douglas M. Baker, Jr., Ecolab’s chairman and chief
executive officer said, “Fourth quarter results were strong as our team
performed very well in 2012’s challenging environment, driving strong sales
growth in otherwise mixed end markets and economies. We continued to leverage
our innovative products and industry-leading customer service to drive new
business and increase our solutions within our current account base. The
fourth quarter segment earnings also benefited from comparison to a softer
period last year for the Water, Paper and Energy Services businesses, when
profits were impacted by a sharp run-up in raw material costs in that period.

“We continue to perform well despite difficult end-use markets. Our new
business and customer retention metrics continue to trend well in all major
businesses. We continue to build competitive advantage in both field service
capabilities and technology solutions. As a result, even though we do not
expect a material improvement in the global macroeconomic environment, we
remain bullish regarding our 2013 prospects.

“Our formula for 2013 is familiar: utilize our competitive advantages to drive
growth to overcome sluggish economies and cost headwinds. We expect modest raw
material inflation early in the year which we believe will abate. We also
expect another year of higher pension costs due to the extremely low interest
rate environment. However, and more importantly, we see significant new
business opportunities and further cost efficiency and synergy improvements.

“Net, we believe 2013 will deliver another year of double-digit adjusted
earnings growth. We expect solid double-digit adjusted earnings gains in the
first quarter as well, as we work to overcome a difficult comparison and raw
material and outsized pension cost impacts, with continued double-digit growth
over the remainder of the year. We have excellent market positions and
customer relationships, as well as the innovative technology and sales and
service teams to serve them as we believe no one else can. We are confident
this will be another year of superior growth for our company.”

Quarter overview
In order to provide a meaningful comparison of the results of operations,
where applicable, results for the fourth quarter of 2012 are compared against
pro forma results for the fourth quarter of 2011. The pro forma 2011 results
are based on the historical consolidated financial statements of Ecolab and
Nalco and were prepared to illustrate the effects of the merger with Nalco. In
addition, beginning in first quarter 2012, adjustments were made to move
certain water treatment-related business from the U.S. Cleaning and Sanitizing
and International Cleaning, Sanitizing and Other Services segments to the
Global Water segment, consistent with how these businesses are now managed.
This supplemental pro forma financial information is located on our website at
www.ecolab.com/investor and in Ecolab’s report on Form 8-K filed April 27,
2012.

            
               Fourth Quarter Ended December 31
               (unaudited)
                                                                       
               Reported                    %          Adjusted Fixed Currency     %
(Millions,
except per     2012        2011        Change     2012        2011*       Change
share)
Net Sales      $ 3,045.8     $ 1,845.3     65   %     $ 3,035.2     $ 2,847.4     7   %
Operating        395.8         164.2       141  %       439.7         331.6       33  %
Income
                                                                                      

*Amounts represent the pro forma equivalent to the 2012 amounts presented.

Ecolab's reported sales rose 65% to a record $3 billion in the fourth quarter
of 2012. Fourth quarter 2011 pro forma results include special gains and
charges. Excluding special gains and charges, fourth quarter 2012 sales rose
5% when compared with fourth quarter 2011 pro forma adjusted sales. Excluding
special gains and charges and when measured at fixed currency rates, fourth
quarter 2012 fixed currency sales rose 7% compared with fourth quarter 2011
pro forma adjusted fixed currency sales.

Fourth quarter 2012 reported operating income increased 141% to $396 million.
Both fourth quarter 2012 reported and fourth quarter 2011 pro forma results
include special gains and charges and discrete tax items. Excluding special
gains and charges, fourth quarter 2012 adjusted operating income of $442
million increased 32% compared with fourth quarter 2011 pro forma adjusted
operating income. Excluding special gains and charges and at fixed currency
rates, fourth quarter 2012 adjusted fixed currency operating income of $440
million increased 33% when compared with fourth quarter 2011 pro forma
adjusted fixed currency operating income.

Fourth quarter 2012 reported net income attributable to Ecolab increased 161%
to $231 million, representing $0.77 per diluted share, and included special
gains and charges.

Fourth quarter 2012 adjusted net income attributable to Ecolab rose 63% to
$266 million, and adjusted diluted earnings per share increased 27% to $0.89,
when compared with fourth quarter 2011 adjusted diluted earnings per share of
$0.70. Currency translation had no significant effect on reported and adjusted
diluted earnings per share in the fourth quarter of 2012.

Segment review
Fourth quarter 2012 sales for U.S. Cleaning & Sanitizing operations rose 2% to
$749 million. Adjusted for the transfer of certain water treatment-related
business from the U.S. Cleaning and Sanitizing segment to the Global Water
segment and the sale of Vehicle Care in the fourth quarter 2012, sales
increased 6% when compared with fourth quarter 2011 pro forma sales.
Institutional and Kay led the growth. U.S. Cleaning & Sanitizing operating
income increased 17% to $169 million compared with the year ago period; U.S.
Cleaning & Sanitizing operating income increased 15% when compared with fourth
quarter 2011 pro forma operating income.

U.S. Other Services sales increased 3% to $118 million in the fourth quarter.
Operating income declined 7% to $17 million, reflecting investments made in
the field sales organization.

Sales for International Cleaning, Sanitizing and Other Services operations,
when measured at fixed currency rates, grew 3% to $833 million in the fourth
quarter. Adjusted for the transfer of certain water treatment-related business
from the International Cleaning, Sanitizing and Other Services segment to the
Global Water segment, sales increased 5% in fixed currencies when compared
with fourth quarter 2011 pro forma fixed currency sales, led by strong growth
in Latin America operations, good gains in Asia Pacific and Canada, and modest
growth in Europe. International Cleaning, Sanitizing and Other Services fixed
currency operating income increased 32% to $114 million in the fourth quarter
when compared with a year ago; fixed currency operating income increased 35%
when compared with fourth quarter 2011 pro forma fixed currency operating
income, with strong growth in all regions, led by EMEA. When measured at
public currency rates, International Cleaning, Sanitizing and Other Services
sales were $842 million and operating income was $116 million.

Global Water sales, when measured at fixed currency rates, were $536 million,
increasing 3% when compared with fourth quarter 2011 pro forma fixed currency
sales. Sales showed moderate gains across the regions, as good food and
beverage and power sales offset soft mining results. Fixed currency operating
income was $68 million in the fourth quarter, representing a 37% increase when
compared with fourth quarter 2011 pro forma fixed currency operating income,
benefiting from pricing and the comparison to last year which included a sharp
run-up in raw material costs. When measured at public currency rates, Global
Water sales were $537 million and operating income was $68 million.

Global Paper sales, when measured at fixed currency rates, rose 1% to $203
million in the fourth quarter when compared with fourth quarter 2011 pro forma
fixed currency sales. Strong growth in Latin America and moderate gains in
Europe and Asia Pacific were offset by soft North America sales, which
primarily reflected the strategic elimination of certain low margin business.
Fixed currency operating income increased 72% to $26 million in the fourth
quarter when compared with fourth quarter 2011 pro forma fixed currency
operating income; adjusted for the low margin business elimination, operating
income rose 57%, benefiting from pricing and comparison to last year which
included a sharp run-up in raw material costs. When measured at public
currency rates, Global Paper sales were $204 million and operating income was
$26 million.

Global Energy sales, when measured at fixed currency rates, grew 18% to $596
million in the fourth quarter when compared with fourth quarter 2011 pro forma
fixed currency sales, with strong growth in all business segments. Fixed
currency operating income increased 49% to $103 million in the fourth quarter
when compared with fourth quarter 2011 pro forma fixed currency operating
income. Comparisons also benefited from a sharp run-up in raw material costs
last year. When measured at public currency rates, Global Energy sales were
$596 million and operating income was $103 million.

The Corporate segment includes amortization from the Nalco merger intangible
assets, merger integration costs, investments in the development of business
systems and other corporate investments made as part of Ecolab’s ongoing
efforts to improve our efficiency and returns. The Corporate segment also
includes special gains and charges. Special gains and charges for the fourth
quarter 2012 were a net charge of $47 million ($42 million after-tax). Special
gains and charges for the fourth quarter 2011 were a net charge of $98 million
($64 million after-tax).

The reported income tax rate for the fourth quarter 2012 was 29.6% and
compared with the reported rate of 31.6% in the fourth quarter 2011. Excluding
the tax rate impact of special gains and charges and discrete tax items, the
adjusted effective income tax rate was 29.3% in the fourth quarter for both
2012 and 2011.

Business Outlook
With the exception of certain Champion acquisition costs included in special
gains and charges, the following forecasts exclude the impact of the pending
Champion acquisition.

2013
Ecolab continues to expect 2013 full-year adjusted earnings per share –
excluding expected accretion from the Champion acquisition – in a $3.38 to
$3.48 range, representing a 13% to 17% increase over the prior year. When
compared with the 2012 performance, we look for further solid fixed currency
sales growth, improved adjusted gross margin and SG&A ratios to sales, and a
lower adjusted effective tax rate to drive a double-digit adjusted earnings
per share performance.

Special gains and charges for the full year 2013 are expected to be
approximately a $0.35 per share net charge, primarily driven by restructuring
charges, Nalco integration costs and Champion acquisition related costs.
Future amounts related to discrete tax items for 2013, if any, are not
currently quantifiable. This forecast does not include Champion
acquisition-related costs that are contingent on the transaction closing.

2013 – First Quarter
Ecolab expects first quarter adjusted earnings per share in the $0.56 to $0.60
range, representing a 12% to 20% increase, compared with adjusted earnings per
share of $0.50 a year ago. The first quarter 2013 will reflect an approximate
$0.02 per share headwind from pension costs, $0.01 per share impact from the
sale of the Vehicle Care business, and comparison against unusually strong
results in the Energy sector in first quarter 2012. When compared with the
first quarter 2012 performance, we look for the first quarter 2013 to show
moderate consolidated fixed currency sales growth. However, we expect improved
adjusted operating income and a lower adjusted effective tax rate to yield
double-digit adjusted earnings per share growth in the first quarter.

Our detailed outlook for the first quarter 2013 is as follows:

                                                        
Adjusted Gross Margins, excluding special gains and        approx. 46%
charges
SG&A % of Sales                                            34% to 35%
Interest expense, net                                      approx. $65 million
Adjusted effective tax rate                                28% - 29%
Adjusted EPS, excluding special gains and charges          $0.56 - $0.60
Diluted shares                                             approx. 300 million
                                                           

We expect first quarter 2013 special gains and charges, including
restructuring charges, Nalco integration costs, Champion acquisition related
costs and the impact on our balance sheet of the Venezuelan currency
devaluation to be a net charge of approximately $0.20 per share.

Reported first quarter 2012 diluted earnings per share of $0.17 included
special gains and charges and discrete tax items. Excluding these items, first
quarter 2012 adjusted diluted earnings per share were $0.50.

Champion Transaction Update
Ecolab continues to expect the closing of the Champion acquisition to occur in
the first quarter, subject to regulatory clearance, including clearance under
the Hart-Scott Rodino Antitrust Improvements Act (“HSR”), and other customary
closing conditions. Ecolab and Champion remain in active and ongoing
discussions with the U.S. Department of Justice regarding its review of our
HSR filing relating to the acquisition. Discussions have continued to
progress. While we believe that we are close to resolving the Department of
Justice’s remaining issues, it remains possible that the Champion acquisition
will not be completed in the targeted time frame, or at all.

About Ecolab
A trusted partner at more than one million customer locations, Ecolab (ECL) is
the global leader in water, hygiene and energy technologies and services that
protect people and vital resources. With 41,000 associates and 2012 sales of
$12 billion, Ecolab delivers comprehensive solutions and on-site service to
ensure 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 fourth quarter earnings
announcement and earnings guidance today at 1:00 p.m. Eastern Time. The
webcast, along with related presentation slides, will be available to the
public on Ecolab's website at www.ecolab.com/investor. A replay of the webcast
and related materials will be available at that site. Listening to the webcast
requires Internet access, the Windows Media Player or other compatible
streaming media player.

Cautionary Statements Regarding Forward-Looking Information
This communication contains certain statements relating to future events and
our intentions, beliefs, expectations and predictions for the future which are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Words or phrases such as “will likely result,”
“are expected to,” “will continue,” “is anticipated,” “we believe,” “we
expect,” “estimate,” “project,” “may,” “will,” “intend,” “plan,” “believe,”
“target,” “forecast” (including the negative or variations thereof) or similar
terminology used in connection with any discussion of future plans, actions or
events generally identify forward-looking statements. These forward-looking
statements include, but are not limited to, statements regarding our financial
and business prospects, including forecasted 2013 first quarter and full year
business results, including sales, adjusted gross margin, SG&A ratios to
sales, interest expense, adjusted effective tax rate, special gains and
charges, including restructuring charges, Nalco integration costs and Champion
acquisition-related costs, impact of the Venezuela currency devaluation,
adjusted operating income, and adjusted diluted earnings per share; shares
outstanding; expected accretion from the pending Champion acquisition; the
Champion closing; economic and market conditions; raw material costs; pension
expense and interest rates; sales growth; new accounts; new product
introductions; product and service solutions; cost savings and acquisition
synergies; and margin improvement. 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. In addition, as it relates to the Champion acquisition,
these risks and uncertainties include (i) the risk that the regulatory
approvals or clearances required for the acquisition may not be obtained, or
that required regulatory approvals may delay the acquisition or result in the
imposition of conditions that could have a material adverse effect on the
company or cause the company to abandon the acquisition, (ii) the risk that
the conditions to the closing of the acquisition may not be satisfied, (iii)
the risk that a material adverse change, event or occurrence may affect the
company or Champion prior to the closing of the acquisition and may delay the
acquisition or cause the company to abandon the acquisition, (iv) problems
that may arise in successfully integrating the businesses of the company and
Champion, which may result in the combined business not operating as
effectively and efficiently as expected, (v) the possibility that the
acquisition may involve unexpected costs, unexpected liabilities or unexpected
delays, (vi) the risk that the credit ratings of the company may be different
from what the company currently expects, (vii) the risk that the businesses of
the company or Champion may suffer as a result of uncertainty surrounding the
acquisition and (viii) the risk that disruptions from the transaction will
harm relationships with customers, employees and suppliers.

Additional risks and uncertainties that may affect operating results and
business performance are set forth under Item 1A of our most recent Form 10-Q,
our current report on Form 8-K filed October 12, 2012 and the company’s other
public filings with the Securities and Exchange Commission (the “SEC”) and
include our ability to integrate Nalco and realize the anticipated benefits of
the merger as well as to close and integrate the proposed acquisition of
Champion; our ability to attract and retain high caliber management talent to
lead our business; difficulty in procuring raw materials or fluctuations in
raw material costs; our ability to execute key business initiatives; vitality
of the markets we serve; the impact of worldwide economic factors such as the
worldwide economy, credit markets, interest rates and foreign currency risk;
exposure to economic, political and legal risks related to our international
operations; the costs and effects of complying with laws and regulations
relating to the environment and to the manufacture, storage, distribution,
sale and use of our products; changes in laws, regulations or accounting
standards; our ability to develop competitive advantages through innovation;
our substantial indebtedness; information technology systems failures; the
ability to acquire complementary businesses and to effectively integrate such
businesses; restraints on pricing flexibility due to contractual obligations;
pressure on operations from consolidation of customers, vendors or
competitors; public health epidemics; potential losses arising from the
impairment of goodwill or other assets; potential loss of deferred tax assets;
the occurrence of litigation or claims, including related to the Deepwater
Horizon oil spill; acts of war, terrorism, severe weather or natural or
man-made disasters; the loss or insolvency of a major customer, supplier or
distributor; and other uncertainties or risks reported from time to time in
our reports to the Securities and Exchange Commission. 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-Solicitation
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction.

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, pro forma sales, pro forma adjusted
sales, pro forma fixed currency sales, pro forma adjusted fixed currency
sales, adjusted gross margins, fixed currency operating income, pro forma
operating income, pro forma fixed currency operating income, adjusted
operating income, pro forma adjusted operating income, adjusted effective tax
rate, adjusted net income attributable to Ecolab and adjusted diluted earnings
per share. We provide these measures as additional information regarding our
operating results. We use these non-GAAP measures internally to evaluate our
performance and in making financial and operational decisions, including with
respect to incentive compensation. We believe that our presentation of these
measures provides investors with greater transparency with respect to our
results of operations and that these measures are useful for period-to-period
comparison of results.

We include in special gains and charges items that are unusual in nature,
significant in amount and important to an understanding of underlying business
performance. In order to better allow investors to compare underlying business
performance period-to-period, we provide adjusted sales, adjusted gross
margin, adjusted operating income, adjusted net income attributable to Ecolab
and adjusted diluted earnings per share (and, where applicable, 2011 pro forma
equivalents), which excludes special gains and charges and discrete tax items.

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

We evaluate the performance of our international operations based on fixed
currency rates of foreign exchange. Fixed currency sales and fixed currency
operating income measures (and the applicable 2011 pro forma equivalent for
each) eliminate the impact of exchange rate fluctuations on our international
sales and operating income, respectively, and promote a better understanding
of our sales and operating income trends from underlying business performance.
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 2012.

In order to provide a meaningful comparison of our results of operations,
where applicable, we have supplemented our 2011 historical financial data with
discussion and analysis that compares reported and adjusted results for 2012
against the 2011 pro forma amounts. The unaudited pro forma results are based
on the historical consolidated results of operations of both Ecolab and Nalco
and were prepared to illustrate the effects of our merger with Nalco, assuming
the merger had been consummated on January 1, 2010. The unaudited pro forma
and adjusted pro forma results are not necessarily indicative of the results
of operations that would have actually occurred had the merger been completed
as of the date indicated, nor are they indicative of future operating results
of the combined company.

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

(ECL-E)



ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
FOURTH QUARTER & TWELVE MONTHS ENDED DECEMBER 31
(unaudited)
                                                                              
                     Fourth Quarter Ended                  Twelve Months Ended
                     December 31                %          December 31                   %
(millions,
except per           2012          2011         Change     2012             2011         Change
share)
                                                                                         
Net sales (1)        $ 3,045.8     $ 1,845.3    65   %     $ 11,838.7       $ 6,798.5    74   %
                                                                                         
Cost of sales          1,644.2       966.5      70   %       6,483.5          3,475.6    87   %
(1)
Selling, general
and                    971.1         651.6      49   %       3,920.2          2,438.1    61   %
administrative
expenses
Special (gains)       34.7         63.0                   145.7          131.0
and charges (1)
Operating income       395.8         164.2      141  %       1,289.3          753.8      71   %
Interest              62.5         34.4       82   %      276.7          74.2       273  %
expense, net (1)
Income before          333.3         129.8      157  %       1,012.6          679.6      49   %
income taxes
Provision for         98.8         41.0       141  %      311.3          216.3      44   %
income taxes
Net income
including              234.5         88.8       164  %       701.3            463.3      51   %
noncontrolling
interest
Less: NI (loss)
attrib. to            3.1          0.1                    (2.3     )      0.8
noncontrolling
interest (1)
Net income
attributable to      $ 231.4       $ 88.7       161  %     $ 703.6         $ 462.5      52   %
Ecolab
                                                                                         
Earnings
attributable to
Ecolab per
common share
Basic                $ 0.79        $ 0.35       126  %     $ 2.41           $ 1.95       24   %
Diluted              $ 0.77        $ 0.34       126  %     $ 2.35           $ 1.91       23   %
                                                                                         
Weighted-average
common shares
outstanding
Basic                  293.8         252.2      16   %       292.5            236.9      23   %
Diluted                299.9         257.5      16   %       298.9            242.1      23   %
                                                                                              

                         
(1) Special gains and charges in the Consolidated Statement of Income above
include the following:
                                                             
    (millions)              2012          2011           2012          2011
                                                                       
    Net sales
    Customer agreement      $ -          $ 29.6        $ -          $ 29.6
    modification
    Subtotal net sales        -             29.6           -             29.6
                                                                       
    Cost of sales
    Restructuring             13.1          -              22.7          5.3
    Recognition of
    Nalco inventory          (1.5  )      3.6          71.2        3.6
    fair value step-up
    Subtotal cost of          11.6          3.6            93.9          8.9
    sales
                                                                       
    Special (gains) and
    charges
    Restructuring             43.4          16.2           116.6         69.0
    Champion                  14.5          -              18.3          -
    acquisition costs
    Nalco merger and          23.9          47.4           70.9          57.7
    integration costs
    Gain on sale of
    businesses,              (47.1 )      (0.6 )        (60.1 )      4.3
    litigation related
    expense & other
    Subtotal special          34.7          63.0           145.7         131.0
    (gains) and charges
                                                                    
    Operating income         46.3        96.2         239.6       169.5
    subtotal
                                                                       
    Interest expense,
    net
    Nalco debt
    extinguishment            -             -              18.2          -
    costs
    Merger &
    acquisition debt         1.1         1.5          1.1         1.5
    costs
    Subtotal interest         1.1           1.5            19.3          1.5
    expense, net
                                                                       
    Net income
    attributable to
    noncontrolling
    interest
    Recognition of
    Nalco inventory           -             -              (4.5  )       -
    fair value step-up
                                                                    
    Total                   $ 47.4       $ 97.7        $ 254.4      $ 171.0
                                                                         


ECOLAB INC.
OPERATING SEGMENT INFORMATION
FOURTH QUARTER & TWELVE MONTHS ENDED DECEMBER 31
(unaudited)
                                                                                                                         
                 Fourth Quarter Ended                                         Twelve Months Ended
                 December 31                                                  December 31
                 Reported      Reported      Pro forma     % Change           Reported       Reported     Pro forma     % Change
(millions)       2012          2011          2011          Reported  Pro     2012           2011         2011          Reported  Pro
                                                                      forma                                                        forma
                                                                                                                                   
Net Sales
U.S.
Cleaning &       $ 749.0       $ 733.3       $ 712.3       2     %    5   %   $ 2,992.9      $ 2,930.3    $ 2,839.0     2    %     5   %
Sanitizing
U.S. Other         117.5         113.8         113.8       3     %    3   %     474.6          457.1        457.1       4    %     4   %
Services
Int'l
Cleaning,
Sanitizing &       833.1         806.4         793.0       3     %    5   %     3,175.8        3,075.1      3,027.4     3    %     5   %
Other
Services
Global Water       536.2         67.2          520.3                  3   %     2,087.4        67.2         2,014.0                4   %
Global Paper       203.2         33.9          201.9                  1   %     805.4          33.9         811.8                  -1  %
Global             596.2         92.3          506.2                  18  %     2,268.0        92.3         1,873.4                21  %
Energy
Corporate         -           (29.6   )    (29.6   )                       -            (29.6   )   (29.6    )
Subtotal at
fixed              3,035.2       1,817.3       2,817.9     67    %    8   %     11,804.1       6,626.3      10,993.1    78   %     7   %
currency
rates
Effect of
foreign           10.6        28.0        46.4                           34.6         172.2      290.8    
currency
translation
Consolidated     $ 3,045.8    $ 1,845.3    $ 2,864.3    65    %    6   %   $ 11,838.7    $ 6,798.5   $ 11,283.9   74   %     5   %
                                                                                                                                   
Operating
Income
U.S.
Cleaning &       $ 168.8       $ 144.1       $ 146.7       17    %    15  %   $ 651.4        $ 556.7      $ 568.5       17   %     15  %
Sanitizing
U.S. Other         16.9          18.2          18.2        -7    %    -7  %     70.8           69.7         69.7        2    %     2   %
Services
Int'l
Cleaning,
Sanitizing &       113.5         86.3          84.3        32    %    35  %     340.8          285.8        280.3       19   %     22  %
Other
Services
Global Water       68.3          11.0          49.9                   37  %     235.9          11.0         196.7                  20  %
Global Paper       25.6          6.2           14.9                   72  %     86.3           6.2          75.9                   14  %
Global             102.7         17.7          69.1                   49  %     360.1          17.7         264.0                  36  %
Energy
Corporate         (102.4  )    (121.9  )    (128.2  )                       (459.9   )    (211.6  )   (226.6   )
Subtotal at
fixed              393.4         161.6         254.9       143   %    54  %     1,285.4        735.5        1,228.5     75   %     5   %
currency
rates
Effect of
foreign           2.4         2.6         4.0                            3.9          18.3       28.2     
currency
translation
Consolidated     $ 395.8      $ 164.2      $ 258.9      141   %    53  %   $ 1,289.3     $ 753.8     $ 1,256.7    71   %     3   %
                                                                                                                                       

Note: The Corporate segment includes amortization from the Nalco merger's
intangible assets, merger integration costs, investments in the development of
business systems and other corporate investments made as part of Ecolab's
ongoing efforts to improve efficiency and returns. The Corporate segment also
includes special (gains) and charges reported on the Consolidated Statement of
Income.

Pro forma amounts for 2011 reflect the impact of the Nalco merger as if the
transaction had been completed as of January 1, 2010, as well as the movement
of certain water treatment related business to better align with internal
management of those businesses.



ECOLAB INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
                                                              
                                                 December 31      December 31
(millions)                                       2012             2011
                                                                  
Assets
Current assets
Cash and cash equivalents                        $ 1,157.8        $ 1,843.6
Accounts receivable, net                           2,225.1          2,095.3
Inventories                                        1,088.1          1,069.6
Deferred income taxes                              205.2            164.0
Other current assets                              215.8          223.5    
Total current assets                               4,892.0          5,396.0
                                                                  
Property, plant and equipment, net                 2,409.1          2,295.4
Goodwill                                           5,920.5          5,855.3
Other intangible assets, net                       4,044.1          4,275.2
Other assets                                      306.6          362.8    
                                                                  
Total assets                                     $ 17,572.3      $ 18,184.7 
                                                                  
Liabilities and Equity
Current liabilities
Short-term debt                                  $ 805.8          $ 1,023.0
Accounts payable                                   879.7            815.7
Compensation and benefits                          518.8            497.2
Income taxes                                       77.4             81.7
Other current liabilities                         771.0          748.7    
Total current liabilities                          3,052.7          3,166.3
                                                                  
Long-term debt                                     5,736.1          6,613.2
Postretirement health care and pension             1,220.5          1,173.4
benefits
Other liabilities                                 1,402.9        1,490.7  
Total liabilities                                  11,412.2         12,443.6
                                                                  
Equity
Common stock                                       342.1            336.1
Additional paid-in capital                         4,249.1          3,980.8
Retained earnings                                  4,020.6          3,559.9
Accumulated other comprehensive loss               (459.7   )       (344.9   )
Treasury stock                                    (2,075.1 )      (1,865.2 )
Total Ecolab shareholders' equity                  6,077.0          5,666.7
Noncontrolling interest                           83.1           74.4     
Total equity                                       6,160.1          5,741.1
                                                                  
Total liabilities and equity                     $ 17,572.3      $ 18,184.7 
                                                                             


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
               2011      2011        2011        2011        2011        2011        2011
Diluted
earnings per
share, as      $  0.40   $ 0.53      $ 0.93      $ 0.65      $ 1.58      $ 0.34      $ 1.91
reported
(U.S. GAAP)
                                                                                     
Adjustments:
Special
(gains) and       0.05     0.11        0.16        0.10        0.26        0.25        0.52
charges (1)
Tax expense
(benefits)        0.00     (0.01 )     (0.00 )     (0.00 )     (0.01 )     0.03        0.03
(2)
Nalco merger                                                               0.07        0.08
impact (3)
                                                                              
Adjusted
diluted
earnings per   $  0.45   $ 0.64     $ 1.09     $ 0.75     $ 1.84     $ 0.70     $ 2.54  
share
(Non-GAAP)
                                                                                     
                                                                                     
               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
               2012      2012        2012        2012        2012        2012        2012
Diluted
earnings per
share, as      $  0.17   $ 0.62      $ 0.79      $ 0.80      $ 1.58      $ 0.77      $ 2.35
reported
(U.S. GAAP)
                                                                                     
Adjustments:
Special
(gains) and       0.33     0.11        0.44        0.07        0.51        0.14        0.65
charges (4)
Tax expense
(benefits)        0.00     (0.01 )     (0.00 )     (0.00 )     (0.01 )     (0.02 )     (0.03 )
(5)
                                                                              
Adjusted
diluted
earnings per   $  0.50   $ 0.72     $ 1.22     $ 0.87     $ 2.09     $ 0.89     $ 2.98  
share
(Non-GAAP)


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

(1) Special (gains) and charges for 2011 include restructuring charges of $9.0
million, $25.2 million, $14.8 million and $8.9 million, net of tax, in the
first, second, third and fourth quarters, respectively. Special (gains) and
charges for 2011 also include $8.5 million and $37.1 million, net of tax, in
the third and fourth quarters, respectively for Nalco merger and integration
costs. Special (gains) and charges also include $18.4 million, net of tax, in
the fourth quarter related to the modification of a customer agreement and
Cleantec acquisition and integration costs of $2.9 million, net of tax,
recorded in the first quarter, as well as other items, net of tax.

(2) First quarter 2011 discrete tax expense primarily includes the impact of a
change in our blended U.S. state tax rate, partially offset by a discrete tax
benefit related to a state refund claim. Second quarter 2011 discrete tax
benefits primarily include discrete tax impacts of recognizing settlements and
adjustments related to prior year tax returns. Third quarter 2011 discrete tax
benefits primarily relate to net benefits from filing our 2010 U.S. federal
and other International income tax returns and settlements and adjustments
related to prior year tax returns. Fourth quarter discrete tax expense
primarily includes a charge related to the realizability of foreign net
operating loss carryforwards.

(3) The Nalco merger impact primarily relates to shares issued as
consideration for the equity portion of the merger.

(4) Special (gains) and charges for 2012 include restructuring charges of
$21.4 million, $23.8 million, $14.7 million and $40.4 million, net of tax in
the first, second, third and fourth quarters, respectively. Special (gains)
and charges for 2012 also include $10.0 million, $8.8 million, $11.7 million
and $15.5 million, net of tax, in the first, second, third and fourth
quarters, respectively related to Nalco merger and integration costs. Special
gains and charges for 2012 also include $56.3 million, net of tax, in first
quarter, for the recognition of Nalco inventory fair value step-up. Special
(gains) and charges for 2012 also include debt extinguishment costs of $11.4
million, net of tax, in the first quarter. Special (gains) and charges for
2012 also include $3.3 million and $12.7 million, net of tax in the third and
fourth quarters, respectively, related to Champion acquisition costs. Special
(gains) and charges for 2012, also include a net of tax gain of $8.1 million
in the third quarter related to the sale of an investment in a U.S. business,
originally sold prior to 2012. Special (gains) and charges for 2012 also
include a net gain of $27.6 million, net of tax in the fourth quarter related
to the sale of our Vehicle Care division offset partially by litigation
related charges.

(5) First quarter 2012 tax expense includes various individually insignificant
items, which net to total discrete tax expense of $1.4 million. Second quarter
2012 discrete tax net benefits of $2.6 million primarily include the impact of
remeasurement of foreign deferred tax assets and liabilities due to the impact
of tax rate changes resulting from a change in tax jurisdiction, offset
partially by foreign audit settlements and adjustments. Third quarter 2012
discrete tax net benefits of $0.9 million primarily include net benefits from
filing our 2011 U.S. federal tax return and a release of a valuation allowance
related to a capital loss carryforward, partially offset by the remeasurement
of certain deferred tax assets and liabilities resulting from changes in local
country tax rates. Fourth quarter 2012 discrete tax net benefits of $7.1
million primarily include the remeasurment of deferred tax assets and
liabilities due to the impact of tax rate changes resulting from a change in
tax jurisdiction, as well as other various individually insignificant items.

Contact:

Ecolab Inc.
Michael J. Monahan, 651-293-2809
or
Lisa L. Curran, 651-293-2185
 
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