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, 2017

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)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post 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   ☐(Do not check if a smaller reporting company)	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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of September 30, 2017.

288,914,305 shares of common stock, par value $1.00 per share.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED STATEMENT OF INCOME

(unaudited)

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions, except per share amounts)	2017		2016		2017		2016
Net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7
Operating expenses
Cost of sales (including special charges (a))		1,891.3		1,737.2		5,454.4		5,153.8
Selling, general and administrative expenses		1,087.3		1,071.6		3,293.2		3,253.1
Special (gains) and charges		4.9		3.2		47.9		35.7
Operating income		579.8		574.1		1,392.1		1,358.1
Interest expense, net		55.1		64.9		177.2		196.3
Income before income taxes		524.7		509.2		1,214.9		1,161.8
Provision for income taxes		128.9		129.7		264.2		286.7
Net income including noncontrolling interest		395.8		379.5		950.7		875.1
Net income attributable to noncontrolling interest		3.4		5.4		8.2		11.8
Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3
Earnings attributable to Ecolab per common share
Basic		$ 1.36		$ 1.28		$ 3.25		$ 2.95
Diluted		$ 1.34		$ 1.27		$ 3.20		$ 2.91
Dividends declared per common share		$0.370		$0.350		$1.110		$1.050
Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8
Diluted		293.4		295.7		294.2		297.1

(a) Cost of sales includes special charges of $0.3 million in the third quarter of 2017, and $26.2 million and $61.9 million in the first nine months of 2017 and 2016, respectively.

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

2

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Net income including noncontrolling interest		$395.8		$379.5		$950.7		$875.1
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments
Foreign currency translation		150.6		17.2		275.8		(1.3)
Loss on net investment hedges		(50.9)		(1.2)		(103.7)		(29.1)
		99.7		16.0		172.1		(30.4)
Derivatives and hedging instruments		(20.8)		(9.5)		(29.1)		(40.2)
Pension and postretirement benefits
Amortization of net actuarial loss and prior service costs included in
net periodic pension and postretirement costs		1.3		5.6		8.2		16.7
Postretirement benefits changes		-		30.9				30.9
		1.3		36.5		8.2		47.6
Subtotal		80.2		43.0		151.2		(23.0)
Total comprehensive income, including noncontrolling interest		476.0		422.5		1,101.9		852.1
Comprehensive income attributable to noncontrolling interest		4.0		8.0		10.8		17.8
Comprehensive income attributable to Ecolab		$472.0		$414.5		$1,091.1		$834.3

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

3

CONSOLIDATED BALANCE SHEET

(unaudited)

	September 30		December 31
(millions, except shares and per share amounts)	2017		2016
ASSETS
Current assets
Cash and cash equivalents		$209.1		$327.4
Accounts receivable, net		2,533.2		2,341.2
Inventories		1,509.0		1,319.4
Other current assets		363.2		291.4
Total current assets		4,614.5		4,279.4
Property, plant and equipment, net		3,617.2		3,365.0
Goodwill		7,154.4		6,383.0
Other intangible assets, net		4,039.6		3,817.8
Other assets		431.0		485.0
Total assets		$19,856.7		$18,330.2
LIABILITIES AND EQUITY
Current liabilities
Short-term debt		$1,073.0		$541.3
Accounts payable		1,115.9		983.2
Compensation and benefits		509.8		516.3
Income taxes		51.7		87.4
Other current liabilities		1,006.2		891.2
Total current liabilities		3,756.6		3,019.4
Long-term debt		6,484.5		6,145.7
Postretirement health care and pension benefits		983.7		1,019.2
Deferred income taxes		1,030.2		970.2
Other liabilities		302.5		204.8
Total liabilities		12,557.5		11,359.3
Equity (a)
Common stock		354.2		352.6
Additional paid-in capital		5,397.5		5,270.8
Retained earnings		7,598.0		6,975.0
Accumulated other comprehensive loss		(1,564.3)		(1,712.9)
Treasury stock		(4,563.1)		(3,984.4)
Total Ecolab shareholders’ equity		7,222.3		6,901.1
Noncontrolling interest		76.9		69.8
Total equity		7,299.2		6,970.9
Total liabilities and equity		$19,856.7		$18,330.2

(a) Common stock, 800.0 million shares authorized, $1.00 par value per share, 288.9 million shares outstanding at September 30, 2017 and 291.8 million shares outstanding at December 31, 2016. Shares outstanding are net of treasury stock.

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

4

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	Nine Months Ended
	September 30
(millions)	2017		2016
OPERATING ACTIVITIES
Net income including noncontrolling interest		$950.7		$875.1
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		437.0		420.9
Amortization		228.5		217.2
Deferred income taxes		10.4		(55.3)
Share-based compensation expense		71.8		67.7
Excess tax benefits from share-based payment arrangements		-		(39.5)
Pension and postretirement plan contributions		(131.0)		(207.0)
Pension and postretirement plan expense		26.5		43.1
Restructuring charges, net of cash paid		13.3		(48.1)
Asset charges and write-downs		-		50.9
Other, net		19.9		11.9
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(23.5)		37.8
Inventories		(116.9)		34.6
Other assets		8.4		(14.0)
Accounts payable		57.0		(37.6)
Other liabilities		(107.2)		134.0
Cash provided by operating activities		1,444.9		1,491.7
INVESTING ACTIVITIES
Capital expenditures		(538.2)		(478.6)
Capitalized software expenditures		(55.8)		(32.2)
Property and other assets sold		4.1		29.6
Acquisitions and investments in affiliates, net of cash acquired		(831.2)		(44.7)
Deposit into acquisition related escrow		(0.8)		-
Restricted cash activity		53.8		(55.9)
Cash used for investing activities		(1,368.1)		(581.8)
FINANCING ACTIVITIES
Net issuances (repayments) of commercial paper and notes payable		187.8		(522.4)
Long-term debt borrowings		495.0		793.8
Long-term debt repayments		(20.1)		(130.5)
Reacquired shares		(587.7)		(737.8)
Dividends paid		(330.3)		(324.5)
Exercise of employee stock options		63.0		62.3
Excess tax benefits from share-based payment arrangements		-		39.5
Acquisition related liabilities and contingent consideration		(8.2)		(3.8)
Cash provided by (used for) financing activities		(200.5)		(823.4)
Effect of exchange rate changes on cash and cash equivalents		5.4		1.3
Increase (decrease) in cash and cash equivalents		(118.3)		87.8
Cash and cash equivalents, beginning of period		327.4		92.8
Cash and cash equivalents, end of period		$209.1		$180.6

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

5

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. CONSOLIDATED FINANCIAL INFORMATION

The unaudited consolidated financial information for the third quarter and nine months ended September 30, 2017 and 2016 reflect, in the opinion of company management, all adjustments necessary for a fair statement of the financial position, results of operations, comprehensive income (loss) and cash flows of Ecolab Inc. ("Ecolab" or "the Company") for the interim periods presented. Any adjustments consist of normal recurring items.

The financial results for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet data as of December 31, 2016 was derived from the audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

During the first quarter of 2017, the Company adopted the accounting guidance issued in March 2016 that amends certain aspects of share-based compensation for employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classifications on the Consolidated Statement of Cash Flows. Under the new guidance, all excess tax benefits or deficiencies are to be recognized prospectively as discrete income tax items on the Consolidated Statement of Income, while previous guidance required realized excess tax benefits or deficiencies to be recognized in additional paid-in capital. The Company recorded $2.4 million and $29.2 million of excess tax benefits during the third quarter and first nine months of 2017, respectively. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. Adoption of the accounting standard also eliminated the requirement that excess tax benefits be realized before they can be recognized, and as a result, the Company recorded a $1.9 million cumulative-effect adjustment for previously unrecognized excess tax benefits. 

The Company’s adoption also resulted in associated excess tax benefits being classified as an operating activity in the statement of cash flows prospectively beginning January 1, 2017 with no changes to the prior year. Based on the adoption methodology applied, employee taxes paid remain classified as a financing activity on the statement of cash flows, and the statement of cash flows classification of prior periods has not changed.  With regards to forfeitures, the new guidance allows companies either to continue to estimate the number of awards that will be forfeited or to account for forfeitures as they occur. The Company has elected to continue to estimate the number of awards that will be forfeited based on an estimate of the number of outstanding awards expected to vest. 

With respect to the unaudited financial information of the Company for the third quarter and nine months ended September 30, 2017 and 2016 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. Their separate report dated November 2, 2017 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (the "Act"), for their report on the unaudited financial information because that report is not a "report" or a "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

6

2. SPECIAL (GAINS) AND CHARGES

Special (gains) and charges reported on the Consolidated Statement of Income include the following:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Other		-		-		11.1		10.0
Subtotal		0.3		-		26.2		61.9
Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Other		2.2		9.2		9.1		32.7
Subtotal		4.9		3.2		47.9		35.7
Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6

For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with the Company’s internal management reporting.

Restructuring activities

The Company’s restructuring activities are associated with plans to enhance its efficiency and effectiveness and sharpen its competitiveness. Restructuring plans include net costs associated with significant actions involving employee-related severance charges, contract termination costs and asset write-downs and disposals. Employee termination costs are largely based on policies and severance plans, and include personnel reductions and related costs for severance, benefits and outplacement services. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract terminations. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Restructuring activities have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income. Restructuring liabilities have been classified as a component of both other current and other noncurrent liabilities on the Consolidated Balance Sheet.

During the second quarter of 2017, the Company commenced restructuring and other cost-saving actions in order to streamline its operations. These actions include a reduction of the Company’s global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions, the Company expects to incur $40  to $45 million ($30 to $35 million after tax) of restructuring charges, the majority of which is expected to be incurred during 2017. The Company recorded restructuring charges of $3.6 million ($1.3 million after tax) and $36.6 million ($26.2 million after tax) during the third quarter and first nine months of 2017, respectively, related primarily to employee termination costs. As of September 30, 2017, the restructuring liability balance related to these actions was $28.2 million. The Company anticipates the majority of the pretax charges will represent net cash expenditures which are expected to be paid over a period of a few months to several quarters and will be funded from operating activities. Cash payments during the third quarter and first nine months of 2017 were $4.3 million and $4.9 million, respectively.

Net restructuring charges related to the Company’s Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) and $5.9 million ($7.3 million after tax), respectively. The restructuring liability balance was $23.1 million and $39.6 million as of September 30, 2017 and December 31, 2016, respectively. The reduction in liability was driven primarily by severance and other cash payments. The remaining accrual is expected to be paid over a period of a few months to several quarters and continues to be funded from operating activities.

7

Acquisition and integration related costs

Acquisition and integration costs reported in cost of sales on the Consolidated Statement of Income include $0.3 million ($0.2 million after tax) in the third quarter of 2017 related to disposal of excess inventory and $12.9 million ($8.2 million after tax) during the first nine months of 2017 related primarily to recognition of accelerated rent expense upon the closure of Swisher Hygiene Inc. (“Swisher”) plants and disposal of excess inventory. The first nine months of 2017 also include amounts related to recognition of fair value step-up in the Laboratoires Anios (“Anios”) inventory.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $1.8 million ($1.2 million after tax) and $12.7 million ($8.5 million after tax) of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

During the third quarter and first nine months of 2016, the Company incurred acquisition and integration charges of $1.7 million ($1.0 million after tax) and $5.0 million ($3.1 million after tax), respectively. Further information related to the Company’s acquisitions is included in Note 3.

Energy related charges

Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration and production investments in the energy industry, particularly in North America. As a result of these conditions and their corresponding impact on the Company’s business outlook, the Company recorded total charges of $63.6 million ($42.9 million after tax) during the first nine months of 2016, comprised of inventory write downs and related disposal costs, fixed asset charges, headcount reductions and other charges. No such charges were incurred in 2017.

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of the Company’s North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of 2017, the Company had $3.2 million of corresponding severance remaining to be paid, which is expected to be paid in the next several months and be funded from operating activities.

The charges discussed above have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

Venezuela related gain

Effective as of the end of the fourth quarter of 2015, the Company deconsolidated its Venezuelan subsidiaries. The Company recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2 million ($2.0 million after tax) during the third quarter of 2017 and $8.5 million ($5.3 million after tax) during the first nine months of 2017. In 2016, the Company recorded no such gains during the third quarter and $7.8 million ($4.9 million after tax) during the first nine months.

Other

During the third quarter of 2017, the Company recorded charges of $2.2 million ($1.4 million after tax) related to litigation. During the first nine months of 2017, the Company recorded charges of $20.2 million ($15.9 million after tax) related to litigation and a Global Energy vendor contract termination. These charges have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

During the first nine months of 2016, the Company recorded a charge of $10.0 million ($6.3 million after tax) related to a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

Additionally, during the third quarter and first nine months of 2016, the Company recorded charges of $9.2 million ($5.6 million after tax) and $32.7 million ($20.7 million after tax), respectively, primarily consisting of litigation related charges. These charges have been included as a component of special (gains) and charges on the Consolidated Statement of Income.

8

3. ACQUISITIONS AND DISPOSITIONS

Acquisitions

The Company makes acquisitions that align with its strategic business objectives. The assets and liabilities of the acquired entities have been recorded as of the acquisition date, at their respective fair values, and are included in the Consolidated Balance Sheet and results of the Company from the date of acquisition. The purchase price allocation is based on estimates of the fair value of assets acquired and liabilities assumed. The aggregate purchase price of acquisitions has been reduced for any cash or cash equivalents acquired with the acquisition. Acquisitions during the first nine months of 2017 and 2016 were not material to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented.

Anios Acquisition

On February 1, 2017, the Company acquired Anios for total consideration of $798.3 million, including satisfaction of outstanding debt. Anios is a leading European manufacturer and marketer of hygiene and disinfection products for the healthcare, food service, and food and beverage processing industries. Anios provides an innovative product line that expands the solutions the Company is able to offer while also providing a complementary geographic footprint within the healthcare market. With pre-acquisition annual sales of approximately $245 million, the acquired business became part of the Company’s Global Institutional reportable segment during the first quarter of 2017. During 2016, the Company deposited €50 million in an escrow account that was released back to the Company upon closing of the transaction in February 2017. As shown within Note 4, this was recorded as restricted cash within other assets on the Consolidated Balance Sheet as of December 31, 2016.

The Company incurred certain acquisition and integration costs associated with the transaction that were expensed and are reflected in the Consolidated Statement of Income. See Note 2 for additional information related to the Company’s special gains and charges related to such activities.

The Anios acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. Certain estimated values are not yet finalized and are subject to change. Amounts for certain deferred tax assets and liabilities, environmental reserves, certain tangible and intangible assets, income tax uncertainties, and goodwill remain subject to change, as information necessary to complete the analysis is obtained. The Company expects to finalize these by the filing of the 2017 Form 10-K.

The following table summarizes the preliminary value of Anios assets acquired and liabilities assumed as of the acquisition date.

(millions)
Tangible assets	$142.7
Identifiable intangible assets:
Customer relationships	252.0
Trademarks	65.7
Other technology	16.1
Total assets acquired	476.5
Total liabilities assumed	184.7
Goodwill	506.5
Total consideration transferred	798.3
Long-term debt repaid upon close	192.8
Net consideration transferred to sellers	$605.5

Net tangible assets are primarily comprised of accounts receivable of $66.2 million, property, plant and equipment of $25.6 million and inventory of $29.7 million.

Customer relationships, trademarks, and other technology are being amortized over weighted average lives of 20, 17, and 11 years, respectively.

Goodwill of $506.5 million arising from the acquisition consists largely of the synergies and economies of scale expected through adding complementary geographies and innovative products to the Company’s healthcare portfolio. The goodwill was initially assigned to the Healthcare operating segment within the Global Institutional reportable segment and will be allocated to other operating segments within the purchase accounting window. None of the goodwill recognized is expected to be deductible for income tax purposes.

9

Other Acquisitions

Excluding the Anios acquisition, during the first nine months of 2017, the Company paid $32.6 million for acquisitions, of which $18.4 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 12 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

During the first nine months of 2016, the Company paid $48.5 million for acquisitions, of which $2.5 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 5 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

Subsequent Event Activity

The Company entered into various purchase agreements which are expected to close in the fourth quarter of 2017. None of the agreements are material to the consolidated financial statements, individually or in the aggregate.

Dispositions

There were no business dispositions during the first nine months of 2017 or 2016.

Subsequent Event Activity

In October 2017, the Company entered into an agreement to sell its Equipment Care business which subsequently closed on November 1, 2017. The disposition is not expected to be material to the consolidated financial statements. 

10

4. BALANCE SHEET INFORMATION

	September 30		December 31
(millions)	2017		2016
Accounts receivable, net
Accounts receivable		$2,606.4		$2,408.8
Allowance for doubtful accounts		(73.2)		(67.6)
Total		$2,533.2		$2,341.2
Inventories
Finished goods		$1,004.8		$860.0
Raw materials and parts		461.0		408.4
Inventories at FIFO cost		1,465.8		1,268.4
FIFO cost to LIFO cost difference		43.2		51.0
Total		$1,509.0		$1,319.4
Other current assets
Prepaid assets		$128.2		$98.3
Taxes receivable		155.9		105.0
Derivative assets		29.0		46.3
Other		50.1		41.8
Total		$363.2		$291.4
Property, plant and equipment, net
Land		$227.4		$211.0
Buildings and leasehold improvements		1,174.5		1,121.2
Machinery and equipment		2,219.3		2,035.8
Merchandising and customer equipment		2,396.6		2,199.4
Capitalized software		583.0		531.1
Construction in progress		422.0		344.1
		7,022.8		6,442.6
Accumulated depreciation		(3,405.6)		(3,077.6)
Total		$3,617.2		$3,365.0
Other intangible assets, net
Intangible assets not subject to amortization
Trade names		$1,230.0		$1,230.0
Intangible assets subject to amortization
Customer relationships		$3,588.2		$3,206.1
Trademarks		378.8		303.3
Patents		459.7		446.5
Other technology		229.1		210.5
		4,655.8		4,166.4
Accumulated amortization
Customer relationships		(1,356.1)		(1,148.2)
Trademarks		(144.6)		(125.2)
Patents		(179.0)		(157.3)
Other technology		(166.5)		(147.9)
		(1,846.2)		(1,578.6)
Net intangible assets subject to amortization		2,809.6		2,587.8
Total		$4,039.6		$3,817.8
Other assets
Deferred income taxes		$105.3		$92.3
Pension		35.6		27.2
Derivative assets		-		21.5
Restricted cash		-		53.0
Other		290.1		291.0
Total		$431.0		$485.0

11

	September 30		December 31
(millions)	2017		2016
Other current liabilities
Discounts and rebates		$318.3		$275.2
Dividends payable		106.9		108.0
Interest payable		70.4		37.3
Taxes payable, other than income		117.0		103.7
Derivative liabilities		86.6		24.6
Restructuring		45.7		30.5
Other		261.3		311.9
Total		$1,006.2		$891.2
Accumulated other comprehensive loss
Unrealized loss on derivative financial instruments, net of tax		$(37.6)		$(8.5)
Unrecognized pension and postretirement benefit expense, net of tax		(527.2)		(511.4)
Cumulative translation, net of tax		(999.5)		(1,193.0)
Total		$(1,564.3)		$(1,712.9)

5. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations as of September 30, 2017 and December 31, 2016.

	September 30		December 31
(millions)	2017		2016
Short-term debt
Commercial paper		$238.0		$-
Notes payable		24.2		29.9
Long-term debt, current maturities		810.8		511.4
Total		$1,073.0		$541.3

Line of Credit

As of September 30, 2017, the Company had in place a $2.0 billion multi-year credit facility which expires in December 2019. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of either September 30, 2017 or December 31, 2016.

Commercial Paper

The Company’s commercial paper program is used as a potential source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion.

As of September 30, 2017, the Company had $238.0 million (€200 million) of commercial paper outstanding under its Euro program and no commercial paper outstanding under its U.S. program. As of December 31, 2016, the Company had no commercial paper outstanding under either program.

12

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of September 30, 2017 and December 31, 2016.

	Maturity	September 30		December 31
(millions)	by Year	2017		2016
Long-term debt
Public notes (2017 principal amount)
Five year 2012 senior notes ($500 million)	2017		$499.6		$498.9
Three year 2015 senior notes ($300 million)	2018		299.5		298.9
Three year 2016 senior notes ($400 million)	2019		396.6		395.9
Five year 2015 senior notes ($300 million)	2020		298.9		298.6
Ten year 2011 senior notes ($1.25 billion)	2021		1,245.6		1,244.8
Five year 2017 senior notes ($500 million)	2022		496.0		-
Seven year 2016 senior notes ($400 million)	2023		397.4		397.0
Seven year 2016 senior notes (€575 million)	2024		676.5		608.4
Ten year 2015 senior notes (€575 million)	2025		679.5		604.3
Ten year 2016 senior notes ($750 million)	2026		742.7		742.1
Thirty year 2011 senior notes ($750 million)	2041		739.1		738.7
Thirty year 2016 senior notes ($250 million)	2046		245.9		245.9
Private notes (2017 principal amount)
Series A private placement senior notes ($250 million)	2018		248.8		248.9
Series B private placement senior notes ($250 million)	2023		249.3		249.2
Capital lease obligations			4.9		5.2
Other			75.0		80.3
Total debt			7,295.3		6,657.1
Long-term debt, current maturities			(810.8)		(511.4)
Total long-term debt			$6,484.5		$6,145.7

Public Notes

In August 2017, the Company issued a $500 million aggregate principal five year fixed rate note with a coupon rate of 2.375%. The proceeds were used to repay a portion of the Company’s outstanding commercial paper and for general corporate purposes.

The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the public notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company.

Private Notes

The Company’s private notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of specified changes of control involving the Company, the Company would be required to offer to repurchase the private notes at a price equal to 100% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. Additionally, the Company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the Company, when accompanied by a downgrade of the private notes below investment grade rating, within a specified time period. The private notes are unsecured senior obligations of the Company and rank equal in right of payment with all other senior indebtedness of the Company. The private notes shall be unconditionally guaranteed by subsidiaries of the Company in certain circumstances, as described in the note purchase agreement as amended.

Covenants

The Company is in compliance with its debt covenants as of September 30, 2017.

13

Net Interest Expense

Interest expense and interest income recognized during the third quarter and the first nine months of 2017 and 2016 were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Interest expense		$60.7		$69.0		$191.0		$209.4
Interest income		(5.6)		(4.1)		(13.8)		(13.1)
Interest expense, net		$55.1		$64.9		$177.2		$196.3

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. The Company’s reporting units are its operating segments.

During the second quarter of 2017, the Company completed its annual assessment for goodwill impairment across its eleven reporting units through a quantitative analysis, utilizing a discounted cash flow approach, which incorporates assumptions regarding future growth rates, terminal values, and discount rates. The two-step quantitative process involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of impairment loss to be recorded, if any. The Company’s goodwill impairment assessment for 2017 indicated the estimated fair value of each of its reporting units exceeded its carrying amount by a significant margin.

If circumstances change significantly, the Company would also test a reporting unit’s goodwill for impairment during interim periods between its annual tests. There has been no impairment of goodwill in any of the years presented.

The changes in the carrying amount of goodwill for each of the Company's reportable segments during the nine months ended September 30, 2017 were as follows:

	Global		Global		Global
(millions)	Industrial		Institutional		Energy		Other		Total
December 31, 2016		$2,522.3		$653.4		$3,093.6		$113.7		$6,383.0
Reclassifications (a)		62.7		(62.7)		-		-		-
December 31, 2016 revised		$2,585.0		$590.7		$3,093.6		$113.7		$6,383.0
Current year business combinations (b)		4.1		506.5		-		-		510.6
Prior year business combinations (c)		-		-		0.3		-		0.3
Effect of foreign currency translation		97.9		41.6		116.8		4.2		260.5
September 30, 2017		$2,687.0		$1,138.8		$3,210.7		$117.9		$7,154.4

(a) Relates to establishment of the Life Sciences reporting unit, and goodwill being allocated to Life Sciences based on fair value allocation of goodwill. The Life Sciences reporting unit is included in the Industrial reportable segment and is comprised of operations previously recorded in the Food & Beverage and Healthcare reporting units, which are aggregated and reported in the Global Industrial and Global Institutional reportable segments, respectively. See Note 14 for further information.

(b) Represents goodwill associated with current year acquisitions. Of the goodwill acquired, the Company expects $4.1 million of the goodwill related to businesses acquired to be tax deductible.

(c) Represents purchase price allocation adjustments for 2016 acquisitions deemed preliminary as of December 31, 2016.

Other Intangible Assets

The Nalco trade name is the Company’s principal indefinite life intangible asset. During the second quarter of 2017, the Company completed its annual test for indefinite life intangible asset impairment using a relief from royalty method of assessment, which incorporates assumptions regarding future sales projections and discount rates. Based on this testing, the estimated fair value of the asset exceeded its carrying value by a significant margin; therefore, no adjustment to the $1.2 billion carrying value of this asset was necessary. There has been no impairment of the Nalco trade name intangible asset since it was acquired.

The Company’s intangible assets subject to amortization primarily include customer relationships, trademarks, patents and other technology. The fair value of identifiable intangible assets is estimated based upon discounted future cash flow projections and other acceptable valuation methods. Other intangible assets are amortized on a straight-line basis over their estimated economic lives. Total amortization expense related to other intangible assets during the third quarter of 2017 and 2016 was $77.6 million and $71.9 million, respectively. Total amortization expense related to other intangible assets during the first nine months of 2017 and 2016 was $228.5 million and $217.2 million, respectively. Estimated amortization for the remaining three month period of 2017 related to other amortizable intangible assets is expected to be approximately $84 million.

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7. FAIR VALUE MEASUREMENTS

The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, accounts payable, commercial paper, notes payable, foreign currency forward contracts, interest rate swap agreements and long-term debt.

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 - Inputs include observable inputs other than quoted prices in active markets.

Level 3 - Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis were:

	September 30, 2017
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$52.1		$-		$52.1		$-
Liabilities
Foreign currency forward contracts		209.2		-		209.2		-
Interest rate swap agreements		3.6		-		3.6		-

	December 31, 2016
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$ 93.4		$ -		$ 93.4		$ -
Liabilities
Foreign currency forward contracts		46.7		-		46.7		-
Interest rate swap agreements		3.5		-		3.5		-

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date, and is classified within Level 2. The carrying value of interest rate swap contracts is at fair value, which is determined based on current interest rates and forward interest rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See further discussion of gross versus net presentation of the Company's derivatives within Note 8.

The carrying values of accounts receivable, accounts payable, cash and cash equivalents, restricted cash, commercial paper and notes payable approximate fair value because of their short maturities, and as such are classified within Level 1.

The fair value of long-term debt is based on quoted market prices for the same or similar debt instruments classified as Level 2. The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:

	September 30				December 31
(millions)	2017				2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Long-term debt, including current maturities		$7,295.3		$7,707.6		$6,657.1		$6,963.9

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8. DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts, interest rate swap agreements and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. The Company records derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. The Company monitors its exposure to credit risk by using credit approvals and credit limits and by selecting major global banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table no cash collateral had been received or pledged related to the underlying derivatives.

The respective net amounts are included in other current assets, other non-current assets, other current liabilities and other liabilities on the Consolidated Balance Sheet.

The following table summarizes the gross fair value and the net value of the Company’s outstanding derivatives.

	Asset Derivatives				Liability Derivatives
	September 30		December 31		September 30		December 31
(millions)	2017		2016		2017		2016
Derivatives designated as hedging instruments
Foreign currency forward contracts		$30.2		$73.4		$156.7		$19.8
Interest rate swap agreements		-		-		3.6		3.5
Derivatives not designated as hedging instruments
Foreign currency forward contracts		21.9		20.0		52.5		26.9
Gross value of derivatives		52.1		93.4		212.8		50.2
Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)		(23.1)		(25.7)
Net value of derivatives		$29.0		$67.7		$189.7		$24.5

The following table summarizes the notional values of the Company’s outstanding derivatives.

	Notional Values
	September 30		December 31
(millions)	2017		2016
Foreign currency forward contracts (a)		$ 5,617		$ 4,317
Interest rate agreements		$ 1,450		$ 1,450

(a) Includes net investment hedge forward contracts of €40 million and €0 million as of September 30, 2017 and December 31, 2016, respectively.

16

Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, including inventory purchases and intercompany royalty, management fee and other payments. These forward contracts are designated as cash flow hedges. The effective portions of the changes in fair value of these contracts are recorded in accumulated other comprehensive income (“AOCI”) until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the Consolidated Statement of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next five years.

The Company occasionally enters into treasury lock and forward starting interest rate swap agreements to manage interest rate exposure. During 2016, 2015, and 2014 the Company entered into and subsequently closed a series of treasury lock and forward starting interest rate swap agreements, in conjunction with its public debt issuances. The agreements were designated and effective as cash flow hedges of the expected interest payments related to the anticipated future debt issuances. Amounts recorded in AOCI are recognized as part of interest expense over the remaining life of the notes as the forecasted interest transactions occur.

The effective portion of gains and losses recognized into AOCI and earnings from derivative contracts that qualified as cash flow hedges was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Unrealized gain (loss) recognized into AOCI
Foreign currency forward contracts	AOCI (equity)		$(118.8)		$(12.9)		$(192.4)		$(40.4)
Interest rate swap agreements	AOCI (equity)		-		1.4		-		(11.5)
	Total		(118.8)		(11.5)		(192.4)		(51.9)
Gain (loss) recognized in income
Foreign currency forward contracts	Cost of sales		(0.9)		5.0		(11.7)		26.6
	SG&A		(99.5)		(0.7)		(157.3)		(20.3)
	Interest expense, net		7.4		-		16.1		2.9
	Subtotal		(93.0)		4.3		(152.9)		9.2
Interest rate swap agreements	Interest expense, net		(1.8)		(1.6)		(5.4)		(4.8)
	Total		$(94.8)		$2.7		$(158.3)		$4.4

Gains and losses recognized in income related to the ineffective portion of the Company’s cash flow hedges were insignificant during the first nine months of 2017 and 2016.

Fair Value Hedges

The Company manages interest expense using a mix of fixed and floating rate debt. To help manage exposure to interest rate movements and to reduce borrowing costs, the Company may enter into interest rate swaps under which the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective and thus, there is no impact on earnings due to hedge ineffectiveness.

In January 2016, the Company entered into an interest rate swap agreement that converted its $400 million 2.00% debt from a fixed interest rate to a floating interest rate. In January 2015, the Company entered into interest rate swap agreements that converted its $300 million 1.55% debt and its $250 million 3.69% debt from fixed interest rates to floating interest rates. In May 2014, the Company entered into an interest rate swap agreement that converted its $500 million 1.45% debt from a fixed rate to a floating interest rate.

The interest rate swaps referenced above were designated as fair value hedges.

The impact on earnings from derivative contracts that qualified as fair value hedges was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) on derivative recognized income
Interest rate swap	Interestexpense, net		$0.3		$(7.6)		$(0.1)		$6.1
Gain (loss) on hedged item recognized income
Interest rate swap	Interest expense, net		$(0.3)		$7.6		$0.1		$(6.1)

17

Net Investment Hedges

The Company designates its outstanding €1,150 million ($1,356 million at the end of the third quarter of 2017) senior notes (“euronotes”) and €200 million ($238 million at the end of the third quarter of 2017) Euro commercial paper and related accrued interest as hedges of existing foreign currency exposures related to investments the Company has in certain euro denominated functional currency subsidiaries.

The revaluation gains and losses on the euronotes and Euro commercial paper, which are designated and effective as hedges of the Company’s net investments, have been included as a component of the cumulative translation adjustment account and were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Revaluation gains (losses), net of tax		$(50.9)		$(1.2)		$(103.7)		$(29.1)

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

The impact on earnings from derivative contracts that are not designated as hedging instruments was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) recognized in income
Foreign currency forward contracts	SG&A		$(29.4)		$(12.0)		$(38.1)		$(27.3)
	Interestexpense, net		(0.2)		1.0		(3.5)		(2.1)
	Total		$(29.6)		$(11.0)		$(41.6)		$(29.4)

The amounts recognized in SG&A above offset the earnings impact of the related foreign currency denominated assets and liabilities. The amounts recognized in interest expense above represent the component of the hedging gains (losses) attributable to the difference between the spot and forward rates of the hedges as a result of interest rate differentials. The losses recognized in 2017 primarily relate to movements in the Euro rates.

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9. OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

Other comprehensive income (loss) includes net income, foreign currency translation adjustments, unrecognized gains and losses on securities, defined benefit pension and postretirement plan adjustments, gains and losses on derivative instruments designated and effective as cash flow hedges and non-derivative instruments designated and effective as foreign currency net investment hedges that are charged or credited to the accumulated other comprehensive loss account in shareholders’ equity.

The following tables provide other comprehensive income information related to the Company’s derivatives and hedging instruments and pension and postretirement benefits. See Note 8 for additional information related to the Company’s derivatives and hedging transactions. See Note 13 for additional information related to the Company’s pension and postretirement benefits activity.

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Derivative and Hedging Instruments
Unrealized gains (losses) on derivative & hedging instruments
Amount recognized in AOCI		$(118.8)		$(11.5)		$(192.4)		$(51.9)
(Gains) losses reclassified from AOCI into income
Cost of sales		0.9		(5.0)		11.7		(26.6)
SG&A		99.5		0.7		157.3		20.3
Interest (income) expense, net		(5.6)		1.6		(10.7)		1.9
		94.8		(2.7)		158.3		(4.4)
Other activity		(0.6)		0.1		(0.1)		0.1
Tax impact		3.8		4.6		5.1		16.0
Net of tax		$(20.8)		$(9.5)		$(29.1)		$(40.2)
Pension and Postretirement Benefits
Amount reclassified from AOCI into income
Actuarial losses		11.3		10.8		33.3		32.6
Prior service costs		(6.1)		(2.0)		(18.1)		(6.0)
Postretirement benefits changes		-		50.0		-		50.0
		5.2		58.8		15.2		76.6
Tax impact		(3.9)		(22.3)		(7.0)		(29.0)
Net of tax		$1.3		$36.5		$8.2		$47.6

The following table summarizes the derivative and pension and postretirement benefit amounts reclassified from AOCI into income.

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
	2017		2016		2017		2016
(millions)
Derivative losses (gains) reclassified from AOCI into income, net of tax		$72.7		$(2.0)		$120.3	$	(3.5)
Pension and postretirement benefits net actuarial losses
and prior services costs reclassified from AOCI into income, net of tax		$1.3		$5.6		$8.2	$	16.7

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10. SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

In February 2015, the Company’s Board of Directors authorized the repurchase of up to 20 million shares of its common stock, including shares to be repurchased under Rule 10b5–1. As of September 30, 2017, 12,358,110 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions.

Accelerated Stock Repurchase (“ASR”) Agreements

In February 2017, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,077,224 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. In connection with the final settlement of the ASR agreement in June 2017, the Company received an additional 286,620 shares of common stock.

In February 2016, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,459,490 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. Upon final settlement of the ASR agreement in May 2016, the Company received an additional 232,012 shares of common stock.

The final per share purchase price and the total number of shares to be repurchased under both 2017 and 2016 ASR agreements generally were based on the volume-weighted average price of the Company’s common stock during the term of the agreements.

All shares acquired under the ASR agreements were recorded as treasury stock.

During their respective open periods in 2017 and 2016, neither of the ASRs was dilutive to the Company’s earnings per share calculations, nor did they trigger the two-class earnings per share methodology. Additionally, the unsettled portion of ASRs during their respective open periods met the criteria to be accounted for as a forward contract indexed to the Company’s stock and qualified as equity transactions.

The initial delivery of shares, as well as the additional receipt of shares at settlement resulted in a reduction to the Company’s common stock outstanding used to calculate earnings per share.

Share Repurchases

During the first nine months of 2017, the Company reacquired 4,614,646 shares of its common stock, of which 4,414,416 related to share repurchases through open market or private purchases, including the February 2017 ASR discussed above, and 200,230 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

During 2016, the Company reacquired 6,483,198 shares of its common stock, of which 6,126,033 related to share repurchases through open market or private purchases, including the February 2016 ASR discussed above, and 357,165 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

20

11. EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE (“EPS”)

The difference in the weighted average common shares outstanding for calculating basic and diluted EPS is a result of the dilution associated with the Company’s equity compensation plans. As noted in the table below, certain stock options and units outstanding under these equity compensation plans were not included in the computation of diluted EPS because they would not have had a dilutive effect.

The computations of the basic and diluted EPS amounts were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions, except per share)	2017		2016		2017		2016
Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3
Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8
Effect of dilutive stock options and units		4.4		4.1		4.4		4.3
Diluted		293.4		295.7		294.2		297.1
Basic EPS		$ 1.36		$ 1.28		$ 3.25		$ 2.95
Diluted EPS		$ 1.34		$ 1.27		$ 3.20		$ 2.91
Anti-dilutive securities excluded from the computation of EPS		0.1		1.7		1.7		1.7

The Company’s diluted EPS for 2017 was impacted by the adoption of the new accounting guidance that amends the calculation of diluted EPS for share-based payments to exclude excess tax benefits or deficiencies from assumed proceeds during application of the treasury stock method.

12. INCOME TAXES

The Company’s tax rate was 24.6% and 25.5% for the third quarter of 2017 and 2016, respectively, and 21.7% and 24.7% for the first nine months of 2017 and 2016, respectively. The change in the Company’s tax rate for the third quarter of 2017 compared to the third quarter of 2016 was primarily driven by global tax planning strategies and geographic mix. The change in the Company’s tax rate for the first nine months of 2017 compared to first nine months of 2016 was primarily driven by the tax rate impact of discrete tax items with lesser impacts from global tax planning strategies and geographic mix.

The Company recognized net expenses related to discrete tax items of $8.3 million and net tax benefits related to discrete tax items of $24.2 million during the third quarter and first nine months of 2017, respectively. The third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2016 U.S. federal income tax return and international adjustments due to changes in estimates, partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters. Net benefits for the first nine months of 2017 was also impacted by the recognition of $29.2 million of share-based compensation excess tax benefits related to employee share-based payments (resulting from the adoption of a new accounting standard as discussed in Note 1).

The Company recognized net expenses related to discrete tax items of $4.5 million and $3.6 million during the third quarter and first nine months of 2016, respectively. Third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2015 U.S. federal income tax return, partially offset by settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in an international jurisdiction. Net expense related to discrete tax items for the first nine months of 2016 was also impacted by adjustments to deferred tax asset and liability positions and the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

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13. PENSION AND POSTRETIREMENT PLANS

The Company has a non-contributory qualified defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory non-qualified defined benefit plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The Company provides postretirement health care benefits to certain U.S. employees and retirees.

The components of net periodic pension and postretirement health care benefit costs for the third quarter ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$17.5		$16.8		$7.7		$7.0		$0.7		$0.8
Interest cost on benefit obligation		20.9		20.4		7.0		8.0		1.5		2.0
Expected return on plan assets		(37.4)		(35.9)		(13.9)		(13.3)		(0.1)		(0.2)
Recognition of net actuarial (gain) loss		7.2		7.7		4.5		3.6		(0.6)		(0.4)
Amortization of prior service
cost (benefit)		(1.7)		(1.7)		(0.2)		(0.2)		(4.2)		(0.1)
Total expense (benefit)		$6.5		$7.3		$5.1		$5.1		$(2.7)		$2.1

The components of net periodic pension and postretirement health care benefit costs for the nine months ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$52.6		$50.3		$23.0		$20.9		$2.0		$2.3
Interest cost on benefit obligation		62.6		61.2		21.1		24.0		4.4		6.1
Expected return on plan assets		(112.3)		(107.7)		(41.7)		(40.0)		(0.4)		(0.6)
Recognition of net actuarial (gain) loss		21.5		23.1		13.6		10.7		(1.8)		(1.2)
Amortization of prior service
cost (benefit)		(5.1)		(5.2)		(0.5)		(0.6)		(12.5)		(0.2)
Total expense (benefit)		$19.3		$21.7		$15.5		$15.0		$(8.3)		$6.4

As of September 30, 2017, the Company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. In September 2017, the Company made an $80 million voluntary contribution to its non-contributory qualified U.S. pension plan. During the first nine months of 2017, the Company made payments of $6 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will make additional payments of approximately $1 million to such plans during the remainder of 2017.

The Company contributed $33 million to its international pension benefit plans during the first nine months of 2017. The Company estimates it will contribute approximately an additional $9 million to such plans during the remainder of 2017.

During the first nine months of 2017, the Company made payments of $12 million to its U.S. postretirement health care benefit plans and estimates it will make additional payments of approximately $4 million to such plans during the remainder of 2017.

The Company’s U.S. postretirement health care costs decreased in 2017 relative to the costs incurred in the comparable period of the prior year as a result of moving the U.S. postretirement healthcare plans to a Retiree Exchange approach for post-65 retiree medical coverage beginning in 2018 and the merger of Nalco U.S. postretirement health care plan with the Ecolab U.S. postretirement plan.

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14. OPERATING SEGMENTS

The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level.

The Company’s operating segments that share similar economic characteristics and future prospects, nature of the products and production processes, end-use markets, channels of distribution and regulatory environment have been aggregated into three reportable segments: Global Industrial, Global Institutional and Global Energy. The Company’s operating segments that do not meet the quantitative criteria to be separately reported have been combined into the Other segment. The Company provides similar information for the Other segment as the Company considers the information regarding its underlying operating segments as useful in understanding its consolidated results.

Comparability of Reportable Segments

The Company evaluates the performance of its non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on its international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. Fixed currency rates are generally based on existing market rates at the time they are established. The “Fixed Currency Rate Change” column shown in the following table reflects the impact on previously reported values related to fixed currency exchange rates established by management at the beginning of 2017.

Effective in the first quarter of 2017, the Company established the Life Sciences operating segment, to align with the strategy for growth in the pharmaceutical and personal care manufacturing operations. Life Sciences is comprised of operations previously recorded in the Food & Beverage and Healthcare operating segments and has been aggregated into the Global Industrial reportable segment.  The Company also made immaterial changes to its reportable segments, including the movement of certain customers and cost allocations between reportable segments. These changes are presented in "Segment Change" column of the table below.

The impact of the preceding changes on previously reported full year 2016 reportable segment net sales and operating income is summarized as follows:

	December 31, 2016
			Fixed
	Values at		Currency		Segment	Values at
(millions)	2016 Rates		Rate Change		Change	2017 Rates
Net Sales
Global Industrial		$ 4,617.1		$ 6.9	$ 63.2	$ 4,687.2
Global Institutional		4,495.6		7.7	(63.2)	4,440.1
Global Energy		3,035.8		40.0	-	3,075.8
Other		806.5		(4.8)	-	801.7
Subtotal at fixed currency rates		12,955.0		49.8	-	13,004.8
Effect of foreign currency translation		197.8		(49.8)	-	148.0
Consolidated reported GAAP net sales		$ 13,152.8		$ -	$ -	$ 13,152.8
Operating Income
Global Industrial		$ 703.0		$ (0.9)	$ 17.9	$ 720.0
Global Institutional		966.7		3.0	(19.2)	950.5
Global Energy		337.1		7.9	1.7	346.7
Other		148.1		(2.5)	(0.4)	145.2
Corporate		(272.1)		(0.5)	-	(272.6)
Subtotal at fixed currency rates		1,882.8		7.0	-	1,889.8
Effect of foreign currency translation		32.2		(7.0)	-	25.2
Consolidated reported GAAP operating income		$ 1,915.0		$ -	$ -	$ 1,915.0

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Reportable Segment Information

Financial information for each of the Company’s reportable segments, including the impact of all preceding segment structure changes, is as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Net Sales
Global Industrial		$1,248.1		$1,202.1		$3,586.5		$3,468.4
Global Institutional		1,225.1		1,149.2		3,524.3		3,315.0
Global Energy		796.7		771.2		2,346.1		2,305.6
Other		221.7		209.2		633.8		598.1
Subtotal at fixed currency rates		3,491.6		3,331.7		10,090.7		9,687.1
Effect of foreign currency translation		71.7		54.4		96.9		113.6
Consolidated reported GAAP net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7
Operating Income
Global Industrial		$207.4		$204.1		$501.9		$510.1
Global Institutional		274.2		262.1		726.1		697.8
Global Energy		89.7		102.6		236.1		244.9
Other		44.0		40.4		110.9		108.2
Corporate		(46.9)		(45.0)		(198.9)		(222.9)
Subtotal at fixed currency rates		568.4		564.2		1,376.1		1,338.1
Effect of foreign currency translation		11.4		9.9		16.0		20.0
Consolidated reported GAAP operating income		$579.8		$574.1		$1,392.1		$1,358.1

The profitability of the Company’s operating segments is evaluated by management based on operating income. The Company has no intersegment revenues.

Consistent with the Company’s internal management reporting, Corporate amounts in the table above include amortization specifically from the Nalco merger and special (gains) and charges, as discussed in Note 2, that are not allocated to the Company’s reportable segments.

15. COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters and lawsuits. The Company also has contractual obligations related to lease commitments.

Insurance

Globally, the Company has insurance policies with varying deductible levels for property and casualty losses. The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The Company determines its liabilities for claims on an actuarial basis.

Litigation and Environmental Matters

The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include, from time to time, antitrust, commercial, patent infringement, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The Company has established accruals for certain lawsuits, claims and environmental matters. The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position.

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Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 45 locations, excluding recently acquired Anios locations which are currently under review. The majority of these locations are in the U.S. Environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities.

Matters Related to Deepwater Horizon Incident Response

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after a catastrophic explosion and fire that began on April 20, 2010. A massive oil spill resulted. Approximately one week following the incident, subsidiaries of BP plc, under the authorization of the responding federal agencies, formally requested Nalco Company, now an indirect subsidiary of Ecolab, to supply large quantities of COREXIT® 9500, a Nalco oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule. Nalco Company responded immediately by providing available COREXIT and increasing production to supply the product to BP’s subsidiaries for use, as authorized and directed by agencies of the federal government throughout the incident. Prior to the incident, Nalco and its subsidiaries had not provided products or services or otherwise had any involvement with the Deepwater Horizon platform. On July 15, 2010, BP announced that it had capped the leaking well, and the application of dispersants by the responding parties ceased shortly thereafter.

On May 1, 2010, the President appointed retired U.S. Coast Guard Commandant Admiral Thad Allen to serve as the National Incident Commander in charge of the coordination of the response to the incident at the national level. The EPA directed numerous tests of all the dispersants on the National Contingency Plan Product Schedule, including those provided by Nalco Company, “to ensure decisions about ongoing dispersant use in the Gulf of Mexico are grounded in the best available science.” Nalco Company cooperated with this testing process and continued to supply COREXIT, as requested by BP and government authorities. The use of dispersants by the responding parties was one tool used by the government and BP to avoid and reduce damage to the Gulf area from the spill.

In connection with its provision of COREXIT, Nalco Company has been named in several lawsuits as described below.

Cases arising out of the Deepwater Horizon accident were administratively transferred for pre-trial purposes to a judge in the United States District Court for the Eastern District of Louisiana with other related cases under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (“MDL 2179”). Nalco Company was named, along with other unaffiliated defendants, in six putative class action complaints related to the Deepwater Horizon oil spill and 21 complaints filed by individuals.  Those complaints were consolidated in MDL 2179.  The complaints generally allege, among other things, strict liability and negligence relating to the use of our Corexit dispersant in connection with the Deepwater Horizon oil spill.

Pursuant to orders issued by the Court in MDL 2179, the claims were consolidated in several master complaints, including one naming Nalco Company and others who responded to the Gulf Oil Spill (known as the “B3 Master Complaint”). On May 18, 2012, Nalco filed a motion for summary judgment against the claims in the B3 Master Complaint, on the grounds that: (i) Plaintiffs’ claims are preempted by the comprehensive oil spill response scheme set forth in the Clean Water Act and National Contingency Plan; and (ii) Nalco is entitled to derivative immunity from suit. On November 28, 2012, the Court granted Nalco’s motion and dismissed with prejudice the claims in the “B3” Master Complaint asserted against Nalco. The Court held that such claims were preempted by the Clean Water Act and National Contingency Plan. Because claims in the “B3” Master Complaint remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Under Federal Rule of Appellate Procedure 4(a), plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision.

In December 2012 and January 2013, the MDL 2179 court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. Pursuant to the proposed settlements, class members agree to release claims against BP and other released parties, including Nalco Company and its related entities.

Nalco Company, the incident defendants and the other responder defendants have been named as first party defendants by Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against Nalco Company and other unaffiliated cross defendants. The Cross Claimants generally allege, among other things, that if they are found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, they are entitled to indemnity or contribution from the cross defendants.

In April and June 2011, in support of its defense of the claims against it, Nalco Company filed counterclaims against the Cross Claimants. In its counterclaims, Nalco Company generally alleges that if it is found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, it is entitled to contribution or indemnity from the Cross Claimants.

In May 2016, Nalco was named in nine additional complaints filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.  In April 2017, Nalco was named in two additional complaints filed by individuals seeking, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.  The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These actions have been consolidated in the MDL and the Company expects they will be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.

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On February 22, 2017, the Court dismissed the “B3” Master Complaint and ordered that Plaintiffs who had previously filed a claim that fell within the scope of the “B3” Master Complaint and who had “opted out” of and not released their claims under the Medical Benefits Class Action Settlement either: (1) complete a sworn statement indicating, among other things, that they opted out of the Medical Benefits Class Action Settlement (to be completed by Plaintiffs who previously filed an individual complaint); or (2) file an individual lawsuit attaching the sworn statement as an exhibit, by a deadline date set by the Court. The Court will then determine which “B3” Plaintiffs are entitled to pursue their claims and the procedures for addressing those claims.

The Company believes the claims asserted against Nalco Company are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, the Company cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

16. NEW ACCOUNTING PRONOUNCEMENTS

			Required
	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that are not yet adopted:
ASU 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	August 2017	Amends the hedge accounting recognition and presentation requirements in ASC 815. Simplifies the guidance on the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item.	January 1, 2019	The Company is currently evaluating the impact of adoption, and certain transition elections provided for by the ASU.
ASU 2017-09 - Compensation - Stock Compensation (Topic 718):  Scope of Modification Accounting	August 2017	Clarifies the definition of what's considered a substantive modification related to a change in terms or conditions of a share-based payment award and when it's appropriate to apply modification accounting.  The current definition of "modification" is too broad, resulting in diverse interpretations of what's considered a substantive modification.	January 1, 2018	This ASU must be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of adoption.
ASU 2017-07 - Compensation - Retirement Benefits (Topic 715):  Improving the Presentation of Net Periodic Pension Cost and the Net Periodic Postretirement Benefit Cost	March 2017	Amends the requirements related to income statement presentation of the components of net periodic benefit costs. New requirements include (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components") and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented.	January 1, 2018	Upon adoption of the standard, the Company will record only the service cost component with compensation cost in Cost of Sales and Selling, General, and Administrative costs. The other components of net period benefit cost will be presented below operating income. The Company is currently evaluating the impact of adoption.
ASU 2017-05 - Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20):  Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	February 2017	Clarifies the scope of guidance on nonfinancial asset derecognition (ASC 610-20) including the accounting for partial sales of nonfinancial assets. The ASU defines "in-substance nonfinancial asset".  Also clarifies the derecognition of all businesses should be accounted for in accordance with derecognition and deconsolidation guidance in 810-10.	January 1, 2018	The Company is required to apply this ASU on a retrospective basis. The Company is currently evaluating the impact of adoption.
ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	January 2017	Simplifies subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.	January 1, 2020	The ASU must be applied on a prospective basis upon adoption. The Company is currently evaluating the impact of adoption.
ASU 2017-01--Business Combinations (Topic 805): Clarifying the Definition of a Business	January 2017	Clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.	January 1, 2018	The ASU must be applied prospectively on or after the effective date, and no disclosures are required at transition. The Company is currently evaluating the impact of adoption.

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ASU 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash	November 2016	Clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows.	January 1, 2018	Presentation impact only related to restricted cash. The Company does not expect the updated guidance to have a significant impact on future financial statements.
ASU 2016-16 - Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	October 2016	Simplifies the guidance on the accounting for the income tax consequences of intra-entity transfers of assets other than inventory (e.g. intellectual property).	January 1, 2018	This ASU must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adoption.
ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	August 2016	The guidance's objective is to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flow.	January 1, 2018	Presentation impact only related to eight specific cash flow items. The Company is currently evaluating the impact of adoption.
ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	June 2016	Addresses the recognition, measurement, presentation and disclosure of credit losses on trade and reinsurance receivables, loans, debt securities, net investments in leases, off-balance-sheet credit exposures and certain other instruments. Amends guidance on reporting credit losses from an incurred model to an expected model for assets held at amortized cost, such as accounts receivable, loans and held-to-maturity debt securities. Additional disclosures will also be required.	January 1, 2020	Adoption of the standard will change how the allowance for trade and other receivables is calculated. The Company is currently evaluating the impact of adoption.
ASU 2016-02 - Leases (Topic 842)	February 2016	Introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance.	January 1, 2019	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (a).
Revenue Recognition ASUs: 2014-09 - Revenue from Contracts with Customers 2015-14 - Deferral of the Effective Date 2016-08 - Principal Versus Agent Considerations 2016-10 - Identifying Performance Obligations and Licensing 2016-11 - Revenue Recognition and Derivatives and Hedging 2016-12 - Narrow-Scope Improvements & Practical Expedients 2016-20 - Technical Corrections and Improvements	Various	Recognition standard contains principles for entities to apply to determine the measurement of revenue and timing of when the revenue is recognized. The underlying principle of the updated guidance will have entities recognize revenue to depict the transfer of goods or services to customers at an amount that is expected to be received in exchange for those goods or services.	January 1, 2018	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (b).

(a) As part of implementing the new standard, the Company is in process of reviewing current accounting policies, developing future policies, and assessing the practical expedients allowed under the new accounting guidance. In addition, the project team is defining future processes to identify, accumulate, and report on the Company’s various leases. The Company expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption and is currently evaluating other impacts on the consolidated financial statements. The standard requires a modified retrospective transition to be applied at the beginning of the earliest comparative period presented in the year of adoption.

(b) The Company has reached conclusions on certain key accounting assessments related to the standard and is finalizing the related accounting policies. The Company’s focus on the identification and evaluation of performance obligations within certain contracts has identified additional performance obligations within contracts which relate to providing services to customers. These additional performance obligations, when aggregated with the service revenue that is currently reported, represent more than 10% of consolidated net sales. Upon adoption of the new standard, service revenues are expected to be reported separately from product revenues. Additionally, the Company anticipates certain costs currently classified in Selling, General, and Administrative expenses will be reclassified as Cost of Sales as they are tied to satisfaction of a service performance obligation. In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the consolidated financial statements. The Company currently intends to adopt the new standard using the full retrospective method on January 1, 2018, which is dependent upon the completion of the analysis of information necessary to restate prior period financial statements.

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	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that were adopted:
ASU 2015-11 - Inventory (Topic 330): Simplifying the Measurement of Inventory	July 2015	The amendment requires entities to measure inventory under the FIFO or average cost methods at the lower of cost or net realizable value.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-01 - Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	January 2016	The amendment revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-05 - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships	March 2016	The amendment clarifies language related to hedge accounting criteria that a change in the counterparty is not in and of itself considered a termination of the derivative or critical term of the hedging relationship.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-07 - Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting	March 2016	Simplifies the transition to equity method accounting for entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	March 2016	The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements.	January 1, 2017	The Company included appropriate disclosures within this 10-Q to adhere to this new ASU.
ASU 2017-03 - Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323)	January 2017	Amends the disclosure requirements associated with certain recently issued Accounting Standards and how they will have an impact on the Financial Statements of a registrant when such standards are adopted in a future period. It applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and any subsequent amendments to these ASU's.	Effective Immediately	The Company included appropriate disclosure requirements within this 10-Q to adhere to this new ASU.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Ecolab Inc.:

We have reviewed the accompanying consolidated balance sheet of Ecolab Inc. and its subsidiaries as of September 30, 2017, and the related consolidated statements of income and comprehensive income for the three-month and nine-month periods ended September 30, 2017 and 2016 and the consolidated statement of cash flows for the nine-month periods ended September 30, 2017 and 2016. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), 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 consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income, comprehensive income, equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Minneapolis, Minnesota

November 2, 2017

29

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management discussion and analysis (“MD&A”) provides information we believe is useful in understanding our operating results, cash flows and financial condition. We provide quantitative information about the material sales drivers including the impact of changes in volume and pricing and the effect of acquisitions and changes in foreign currency at the corporate and segment level. We also provide quantitative information regarding special (gains) and charges, discrete tax items and other significant factors we believe are useful for understanding our results. Such quantitative drivers are supported by comments meant to be qualitative in nature. Qualitative factors are generally ordered based on estimated significance.

The MD&A should be read in conjunction with both the unaudited consolidated financial information and related notes included in this Form 10-Q, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2016. This discussion contains various “Non-GAAP Financial Measures” and also contains various “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We refer readers to the statements entitled “Non-GAAP Financial Measures” and “Forward-Looking Statements” located at the end of Part I of this report.

Comparability of Results

Fixed Currency Foreign Exchange Rates

Management evaluates the sales and operating income performance of our non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on our international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. Fixed currency exchange rates are generally based on existing market rates at the time they are established.

Comparability of Reportable Segments

Effective in the first quarter of 2017, in order to align with the strategy for growth specifically in the pharmaceutical and personal care manufacturing operations, we established the Life Sciences operating segment. Life Sciences is comprised of customers and accounts that were previously included in our Food & Beverage and Healthcare operating segments, which were related to manufacturing in the following industries: pharmaceutical, animal health and medicine, biologic products, cosmetics and medical device. The Life Sciences operating segment is included in our Global Industrial reportable segment. All comparisons and discussion throughout the MD&A are based on the new operating segment structure effective in the first quarter of 2017.

Impact of Acquisitions and Divestitures

Acquisition adjusted growth rates exclude the results of our acquired businesses from the first twelve months post acquisition, exclude the results of our divested businesses from the twelve months prior to divestiture, and exclude sales to our deconsolidated Venezuelan subsidiaries from both the current period and comparable period of the prior year.

OVERVIEW OF THE THIRD QUARTER ENDED SEPTEMBER 30, 2017

Sales Performance

When comparing third quarter 2017 against third quarter 2016, sales performance was as follows:

· Reported net sales increased 5% to $3,563 million, fixed currency sales and acquisition adjusted fixed currency sales increased 5% and 3%, respectively. Hurricanes Harvey, Irma, and Maria are estimated to have had a negative 1% impact on fixed currency sales growth.

· Fixed currency sales for our Global Industrial segment increased 4% to $1,248 million, led by Water and Food and Beverage.

· Fixed currency sales for our Global Institutional segment increased 7% to $1,225 million, acquisition adjusted fixed currency sales increased 2%, led by growth in Specialty.

· Fixed currency sales for our Global Energy segment increased 3% to $797 million, acquisition adjusted fixed currency sales increased 4%, as strong growth in the well stimulation business and modest gains in the downstream business were offset by a decline in our production business.

· Fixed currency sales for our Other segment sales increased 6% to $222 million, driven by sales growth in Pest Elimination.

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Financial Performance

When comparing third quarter 2017 against third quarter 2016, our financial performance was as follows:

· Reported operating income increased 1% to $580 million. Excluding the impact of special (gains) and charges from both 2017 and 2016 reported results, adjusted operating income also increased 1% and our adjusted fixed currency operating income also increased 1%. Hurricanes are estimated to have negatively impacted adjusted fixed currency operating income growth by 3%.

· Net income attributable to Ecolab increased 5% to $392 million. Excluding the impact of special (gains) and charges and discrete tax items from both 2017 and 2016 reported results, our adjusted net income attributable to Ecolab increased 7%.

· Diluted EPS of $1.34 increased 6%. Excluding the impact of special (gains) and charges and discrete tax items from both 2017 and 2016 reported results, adjusted diluted EPS increased 7% to $1.37 in the third quarter of 2017.

· Our reported tax rate was 24.6% during the third quarter of 2017, compared to 25.5% during the third quarter of 2016. Excluding the tax rate impact of special (gains) and charges and discrete tax items from both 2017 and 2016 results, our adjusted tax rate was 23.3% and 25.2% during the third quarter of 2017 and 2016, respectively.

RESULTS OF OPERATIONS

Net Sales

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2017		2016		Change		2017		2016		Change
Reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%
Effect of foreign currency translation		(71.7)		(54.4)				(96.9)		(113.6)
Non-GAAP fixed currency sales		$3,491.6		$3,331.7	5	%		$10,090.7		$9,687.1	4	%

The percentage components of the period-over-period 2017 sales change are shown below:

	Third Quarter Ended	Nine Months Ended
	September 30	September 30
(percent)	2017	2017
Volume	2%	2%
Price changes	1	1
Acquisition adjusted fixed currency sales change	3	3
Acquisitions and divestitures	2	1
Fixed currency sales change	5	4
Foreign currency translation	0	0
Reported GAAP net sales change	5%	4%

Cost of Sales (“COS”) and Gross Profit Margin

	Third Quarter Ended								Nine Months Ended
	September 30								September 30
	2017				2016				2017				2016
			Gross				Gross				Gross				Gross
(millions/percent)	COS		Margin		COS		Margin		COS		Margin		COS		Margin
Reported GAAP COS and gross margin		$1,891.3	46.9	%		$1,737.2	48.7	%		$5,454.4	46.5	%		$5,153.8	47.4	%
Special (gains) and charges		0.3	0.0			-	-			26.2	0.2			61.9	0.6
Non-GAAP adjusted COS and gross margin		$1,891.0	46.9	%		$1,737.2	48.7	%		$5,428.2	46.7	%		$5,091.9	48.0	%

Our COS and corresponding gross profit margin (“gross margin”) are shown in the table above. Our gross margin is defined as sales less cost of sales divided by sales.

Our reported gross margin was 46.9% and 48.7% for the third quarter of 2017 and 2016, respectively. Our reported gross margin for the first nine months of 2017 and 2016 was 46.5% and 47.4%, respectively.

Excluding the impact of special (gains) and charges within COS, our third quarter 2017 adjusted gross margin was 46.9% and our adjusted gross margin for the first nine months of 2017 was 46.7%. These percentages compared against a third quarter 2016 adjusted gross margin of 48.7% and an adjusted gross margin of 48.0% for the first nine months of 2016.

Our adjusted gross margin decrease when comparing the third quarter of 2017 against the third quarter of 2016 and the comparable periods for the first nine months of 2017 and 2016 was driven primarily by higher delivered product costs and an increase in Global Energy, which more than offset pricing and cost savings.

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Selling, General and Administrative Expense

Selling, general and administrative (“SG&A”) expenses as a percentage of sales were 30.5% for the third quarter of 2017 compared to 31.6% in 2016. For the nine month period, SG&A expenses were 32.3% of sales in 2017 compared to 33.2% in 2016.The decreased SG&A ratio to sales across the periods was driven primarily by sales volume leverage and cost savings, which more than offset investments in the business.

Special (Gains) and Charges

Special (gains) and charges reported on the Consolidated Statement of Income include the following items:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Other		-		-		11.1		10.0
Subtotal		0.3		-		26.2		61.9
Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Other		2.2		9.2		9.1		32.7
Subtotal		4.9		3.2		47.9		35.7
Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6

Restructuring activities

Restructuring activities have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income. Restructuring liabilities have been classified as a component of both other current and other noncurrent liabilities on the Consolidated Balance Sheet.

During the second quarter of 2017, we commenced restructuring and other cost-saving actions in order to streamline our operations. These actions include a reduction of our global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions, we expect to incur approximately $40 to $45 million ($30 to $35 million after tax) of restructuring charges, the majority of which is expected to be incurred during 2017. We recorded restructuring charges of $3.6 million ($1.3 million after tax) or less than $0.01 per diluted share, and $36.6 million ($26.2 million after tax) or $0.09 per diluted share, during the third quarter and first nine months of 2017, respectively, related primarily to employee termination costs. As of September 30, 2017, the restructuring liability balance related to these activities was $28.2 million. We anticipate the majority of the pretax charges will represent net cash expenditures which are expected to be paid over a period of a few months to several quarters and will be funded from operating activities. Cash payments during the third quarter and first nine months of 2017 were $4.3 million and $4.9 million, respectively.

Net restructuring charges related to our Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) or $0.02 per diluted share and $5.9 million ($7.3 million gain after tax) or $0.03 per diluted share, respectively. The restructuring liability balance was $23.1 million and $39.6 million as of September 30, 2017 and December 31, 2016, respectively. The reduction in liability was driven primarily by severance and other cash payments. The remaining accrual is expected to be paid over a period of a few months to several quarters and continues to be funded from operating activities.

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Acquisition and integration related costs

Acquisition and integration costs reported in cost of sales on the Consolidated Statement of Income include $0.3 million ($0.2 million after tax) or less than $0.01 per diluted share in the third quarter of 2017 related to disposal of excess inventory and $12.9 million ($8.2 million) or $0.03 per diluted share during the first nine months of 2017 related primarily to recognition of accelerated rent expense upon the closure of Swisher plants and disposal of excess inventory. The first nine months of 2017 also include amounts related to recognition of fair value step-up in the Anios inventory.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $1.8 million ($1.2 million after tax) or less than $0.01 per diluted share and $12.7 million ($8.5 million after tax) or $0.03 per diluted share of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

During the third quarter and first nine months of 2016, we incurred acquisition and integration charges of $1.7 million ($1.0 million after tax) or less than $0.01 per diluted share and $5.0 million ($3.1 million after tax) or $0.01 per diluted share, respectively. Further information related to our acquisitions is included in Note 3.

Energy related charges

Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration and production investments in the energy industry, particularly in North America. As a result of these conditions and their corresponding impact on our business outlook, we recorded total charges of $63.6 million ($42.9 million after tax) or $0.14 per diluted share during the first nine months of 2016, comprised of inventory write downs and related disposal costs, fixed asset charges, headcount reductions and other charges. No such charges were incurred in 2017.

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of our North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of 2017, we had $3.2 million of corresponding severance remaining to be paid, which is expected to paid in the next several months and be funded from operating activities.

The charges discussed above have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

Venezuela related gain

Effective as of the end of the fourth quarter of 2015, we deconsolidated our Venezuelan subsidiaries. We recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2 million ($2.0 million after tax) or $0.01 per diluted share during the third quarter of 2017 and $8.5 million ($5.3 million after tax) or $0.02 per diluted share during the first nine months of 2017. In 2016, the Company recorded no such gains during the third quarter and $7.8 million ($4.9 million after tax) or $0.02 per diluted share during the first nine months.

Other

During the third quarter of 2017, we recorded charges of $2.2 million ($1.4 million after tax) or less than $0.01 per diluted share related to litigation. During the first nine months of 2017, we recorded charges of $20.2 million ($15.9 million after tax) or $0.05 per diluted share, related to litigation and a Global Energy vendor contract termination. These charges have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

During the first nine months of 2016, we recorded a charge of $10.0 million ($6.3 million after tax) or $0.02 per diluted share related to a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

Additionally, during the third quarter and first nine months of 2016, we recorded charges of $9.2 million ($5.6 million after tax) or $0.02 per diluted share and $32.7 million ($20.7 million after tax) or $0.07 per diluted share, respectively, primarily consisting of litigation related charges. These charges have been included as a component of special (gains) and charges on the Consolidated Statement of Income.

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Operating Income and Operating Income Margin

	Third Quarter Ended								Nine Months Ended
	September 30								September 30
(millions)	2017			2016			Change		2017			2016			Change
Reported GAAP operating income		$579.8			$574.1		1	%		$1,392.1			$1,358.1		3	%
Special (gains) and charges		5.2			3.2					74.1			97.6
Non-GAAP adjusted operating income		585.0			577.3		1			1,466.2			1,455.7		1
Effect of foreign currency translation		(11.4)			(9.9)					(16.0)			(20.0)
Non-GAAP adjusted fixed currency operating income		$573.6			$567.4		1	%		$1,450.2			$1,435.7		1	%
	Third Quarter Ended								Nine Months Ended
	September 30								September 30
(percent)	2017			2016					2017			2016
Reported GAAP operating income margin		16.3	%		17.0	%				13.7	%		13.9	%
Non-GAAP adjusted operating income margin		16.4	%		17.0	%				14.4	%		14.9	%
Non-GAAP adjusted fixed currency operating income margin		16.4	%		17.0	%				14.4	%		14.8	%

Our operating income and corresponding operating income margin are shown in the previous tables. Operating income margin is defined as operating income divided by sales.

Reported operating income increased 1% and 3% in the third quarter and first nine months of 2017, respectively, versus the comparable periods of 2016. Excluding the impact of special (gains) and charges from 2017 and 2016 reported results, our adjusted operating income increased 1% in both the third quarter and the first nine months of 2017.

Adjusted fixed currency operating income increased 1% in both the third quarter and the first nine months of 2017, when compared against the third quarter and first nine months of 2016. The net impact of acquisitions and divestitures added approximately 1 and 3 percentage points, respectively, to our third quarter and first nine months of 2017 adjusted fixed currency operating income growth rates.

Our third quarter and first nine months of 2017 adjusted fixed currency operating income increase was driven by pricing, volume growth and cost savings in our Global Institutional, Global Industrial and Other segments, which more than offset higher delivered product costs, hurricane impacts, investments in the business, and the impact of Global Energy.

Interest Expense, Net

Net interest expense was $55.1 million and $64.9 million in the third quarter of 2017 and 2016, respectively. Net interest expense in the first nine months of 2017 and 2016 was $177.2 million and $196.3 million, respectively. The decrease in net interest expense when comparing 2017 against 2016 was driven primarily by an increased mix of lower cost Euro interest and lower interest rates on refinanced debt.

Provision for Income Taxes

The following table provides a summary of our tax rate:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(percent)	2017		2016		2017		2016
Reported GAAP tax rate	24.6	%	25.5	%	21.7	%	24.7	%
Tax rate impact of:
Special gains and charges	0.3		0.6		0.4		1.0
Discrete tax items	(1.6)		(0.9)		1.9		(0.3)
Non-GAAP adjusted tax rate	23.3	%	25.2	%	24.0	%	25.4	%

Our reported tax rate for 2017 and 2016 includes the tax rate impact of special gains and charges and discrete tax items, which have impacted the comparability of our historical reported tax rates, as amounts included in our special gains and charges are derived from tax jurisdictions with rates that vary from our overall non-GAAP adjusted tax rate, and discrete tax items are not necessarily consistent across periods.  The tax impact of special gains and charges and discrete tax items will likely continue to impact comparability of our reported tax rate in the future.

Our third quarter 2017 reported tax expense included $2.8 million of net tax benefits on special gains and charges and net expense of $8.3 million associated with discrete tax items. For the first nine months of 2017, our reported tax expense included $20.9 million of net tax benefits on special gains and charges and net benefits of $24.2 million associated with discrete tax items.

34

Our third quarter and first nine months of 2017 reported tax expense was lower than the comparable periods of 2016 primarily due to $2.4 million and $29.2 million of excess tax benefits recorded in the third quarter and first nine months of 2017, respectively, resulting from the adoption of accounting changes regarding the treatment of tax benefits on share-based compensation. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. We expect excess tax benefits to impact the rate by approximately 2% to 3% for the full year of 2017.

The remaining discrete tax benefits in the third quarter of 2017 were driven primarily by recognizing adjustments from filing our 2016 U.S. federal income tax return and international adjustments due to changes in estimates, partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters. The corresponding impact of these items on the reported tax rate is shown in the previous table.

Our third quarter 2016 reported tax expense included $3.8 million of net tax benefits on special gains and charges and net expense of $4.5 million associated with discrete tax items. For the first nine months of 2016, our reported tax expense included $36.8 million of net tax benefits on special gains and charges and net expense of $3.6 million associated with discrete tax items. The corresponding impact of these items on the reported tax rate is shown in the previous table.

Third quarter 2016 discrete tax items net expense was driven primarily by recognizing adjustments from filing our 2015 U.S. federal income tax return, partially offset by the settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in an international jurisdiction. Net expense related to discrete tax items for the first nine months of 2016 was also impacted by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

The change in the 2017 adjusted tax rate compared to 2016 was primarily driven by global tax planning strategies and geographic mix.

Net Income Attributable to Ecolab

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2017		2016		Change		2017		2016		Change
Reported GAAP net income attributable to Ecolab		$392.4		$374.1	5	%		$942.5		$863.3	9	%
Adjustments:
Special (gains) and charges, after tax		2.4		(0.6)				53.2		60.8
Discrete tax net expense (benefit)		8.3		4.5				(24.2)		3.6
Non-GAAP adjusted net income attributable to Ecolab		$403.1		$378.0	7	%		$971.5		$927.7	5	%

Diluted EPS

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(dollars)	2017		2016		Change		2017		2016		Change
Reported GAAP diluted EPS		$1.34		$ 1.27	6	%		$ 3.20		$ 2.91	10	%
Adjustments:
Special (gains) and charges		0.01		-				0.18		0.20
Discrete tax net expense (benefit)		0.03		0.02				(0.08)		0.01
Non-GAAP adjusted diluted EPS		$1.37		$ 1.28	7	%		$ 3.30		$ 3.12	6	%

Per share amounts in the above tables do not necessary sum due to rounding.

Currency translation had minimal impact on diluted EPS for both the third quarter and first nine months of 2017, when compared to the third quarter and first nine months of 2016.

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SEGMENT PERFORMANCE

Fixed currency sales and operating income for the third quarter and first nine months of 2017 and 2016 for each of our reportable segments were as follows:

Net Sales	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2017		2016		Change		2017		2016		Change
Global Industrial		$1,248.1		$1,202.1	4	%		$3,586.5		$3,468.4	3	%
Global Institutional		1,225.1		1,149.2	7			3,524.3		3,315.0	6
Global Energy		796.7		771.2	3			2,346.1		2,305.6	2
Other		221.7		209.2	6			633.8		598.1	6
Subtotal at fixed currency		3,491.6		3,331.7	5			10,090.7		9,687.1	4
Effect of foreign currency translation		71.7		54.4				96.9		113.6
Consolidated reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%
Operating Income	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2017		2016		Change		2017		2016		Change
Global Industrial		$207.4		$204.1	2	%		$501.9		$510.1	(2)	%
Global Institutional		274.2		262.1	5			726.1		697.8	4
Global Energy		89.7		102.6	(13)			236.1		244.9	(4)
Other		44.0		40.4	9			110.9		108.2	2
Corporate		(46.9)		(45.0)				(198.9)		(222.9)
Subtotal at fixed currency		568.4		564.2	1			1,376.1		1,338.1	3
Effect of foreign currency translation		11.4		9.9				16.0		20.0
Consolidated reported GAAP operating income		$579.8		$574.1	1	%		$1,392.1		$1,358.1	3	%

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Unless otherwise noted, the following segment performance commentary compares the third quarter and first nine months of 2017 against the third quarter and first nine months of 2016.

Global Industrial

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016
Sales at fixed currency (millions)		$1,248.1			$1,202.1			$3,586.5			$3,468.4
Sales at public currency (millions)		1,284.3			1,230.2			3,636.8			3,527.6
Volume		2	%					2	%
Price changes		1	%					1	%
Acquisition adjusted fixed currency sales change		3	%					3	%
Acquisitions and divestitures		1	%					0	%
Fixed currency sales change		4	%					3	%
Foreign currency translation		1	%					(0)	%
Public currency sales change		4	%					3	%
Operating income at fixed currency (millions)		$207.4			$204.1			$501.9			$510.1
Operating income at public currency (millions)		214.1			209.7			511.6			521.6
Fixed currency operating income change		2	%					(2)	%
Fixed currency operating income margin		16.6	%		17.0	%		14.0	%		14.7	%
Acquisition adjusted fixed currency operating income change		2	%					(2)	%
Acquisition adjusted fixed currency operating income margin		16.7	%		17.0	%		14.1	%		14.7	%
Public currency operating income change		2	%					(2)	%

Percentages in the above table do not necessary sum due to rounding.

Net Sales

Fixed currency sales for Global Industrial increased in the third quarter and first nine months of 2017, benefitting from volume gains and pricing. At a regional level, both the third quarter and first nine months sales showed good growth in Greater China, North America and Latin America.

At an operating segment level, Water fixed currency sales increased 4% (3% acquisition adjusted) in the third quarter of 2017 and 4% (2% acquisition adjusted) in the first nine months of 2017. Light industry sales growth was led by innovative technology and service offerings. Heavy industry sales declined modestly in the quarter impacted by hurricanes and exit of low margin business. Mining sales were strong as new business wins led the growth. Food & Beverage fixed currency sales increased 5% in the third quarter of 2017 and 4% in the first nine months of 2017, benefiting from new business wins and pricing, which more than offset generally flat industry trends. Growth was led by the food, beverage and brew markets. Paper fixed currency sales were flat in the third quarter of 2017 reflecting the impact of hurricanes and increased 2% in the first nine months of 2017, benefiting from strong sales efforts and business wins, which more than offset challenging market conditions in China and Europe. Textile Care fixed currency sales increased 1% in the third quarter of 2017 and 2% in the first nine months of 2017, benefiting from new customer accounts in Europe. Life Sciences fixed currency sales increased 9% in the third quarter of 2017 and 7% in the first nine months of 2017. Good growth from business wins and pricing execution, led by strong sales of cleaning and disinfection programs in the pharmaceutical market and better program penetration in the personal care market.

Operating Income

Fixed currency operating income for Global Industrial increased in the third quarter of 2017, and decreased in the first nine months of 2017. Fixed currency operating income margins decreased in both the third quarter and first nine months of 2017. Acquisitions had minimal impact on both the fixed currency operating income growth and fixed currency operating income margins.

Acquisition adjusted fixed currency operating income margins decreased 0.3 and 0.6 percentage points during the third quarter and first nine months of 2017, respectively, negatively impacted by approximately 2.3 and 2.0 percentage points for the respective periods, related to higher delivered product costs and investments in the business. Favorable impact of sales volume gains and pricing, and cost savings initiatives, added approximately 1.7 and 1.4 percentage points during the third quarter and first nine months of 2017. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

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Global Institutional

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016
Sales at fixed currency (millions)		$1,225.1			$1,149.2			$3,524.3			$3,315.0
Sales at public currency (millions)		1,248.0			1,164.1			3,551.4			3,349.4
Volume		1	%					1	%
Price changes		2	%					1	%
Acquisition adjusted fixed currency sales change		2	%					3	%
Acquisitions and divestitures		5	%					3	%
Fixed currency sales change		7	%					6	%
Foreign currency translation		1	%					(0)	%
Public currency sales change		7	%					6	%
Operating income at fixed currency (millions)		$274.2			$262.1			$726.1			$697.8
Operating income at public currency (millions)		277.4			264.6			729.6			703.2
Fixed currency operating income change		5	%					4	%
Fixed currency operating income margin		22.4	%		22.8	%		20.6	%		21.0	%
Acquisition adjusted fixed currency operating income change		2	%					1	%
Acquisition adjusted fixed currency operating income margin		22.9	%		23.0	%		20.9	%		21.2	%
Public currency operating income change		5	%					4	%

Percentages in the above table do not necessary sum due to rounding.

Net Sales

Fixed currency sales for Global Institutional increased in the third quarter and first nine months of 2017, driven by volume growth, acquisitions and pricing gains. At a regional level, both the third quarter and first nine months sales increase was led by good growth in Latin America and North America.

At an operating segment level, Institutional fixed currency sales were flat in the third quarter of 2017 and increased 1% in the first nine months of 2017. Acquisition adjusted fixed currency sales increased 1% in the third quarter and 2% in the first nine months of 2017, when adjusting for the divestiture of the restroom cleaning business initially acquired through the Swisher transaction. Global lodging demand continued to show moderate growth while global full service restaurant industry foot traffic remained weak, particularly in North America. Sales also include an estimated impact from the hurricanes. Specialty fixed currency sales increased 6% in the third quarter of 2017 and 7% in the first nine months of 2017, led primarily by new account wins and growth in global quick service accounts, leveraging generally modest industry trends. New business gains remain strong, driven by increased service coverage, new product innovations, additional customer solutions and a continued focus among our customers on food safety. Healthcare fixed currency sales increased 45% in the third quarter of 2017 and 40% in the first nine months of 2017. Fixed currency sales increased 1% in the third quarter and 4% in the first nine months of 2017, when adjusted for the Anios acquisition, with modest growth for Healthcare in North America and Europe in the quarter.

Operating Income

Fixed currency operating income for our Global Institutional segment increased in both the third quarter and first nine months of 2017. Fixed currency operating income margins decreased in both the third quarter and first nine months of 2017. Acquisitions had a positive impact on fixed currency operating income growth and minimal impact on fixed currency operating income margins.

Acquisition adjusted fixed currency operating income margins decreased by 0.1 percentage points and 0.3 percentage points during the third quarter and first nine months of 2017, respectively, negatively impacted by approximately 1.7 percentage points in both respective periods, related to innovation and customer investments and higher delivered product costs. Sales volume and pricing gains favorably impacted acquisition adjusted fixed currency operating income margins by adding approximately 1.6 and 1.5  percentage points in the third quarter and first nine months of 2017, respectively. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

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Global Energy

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016
Sales at fixed currency (millions)		$796.7			$771.2			$2,346.1			$2,305.6
Sales at public currency (millions)		806.5			780.2			2,361.8			2,318.6
Volume		5	%					3	%
Price changes		-	%					(1)	%
Acquisition adjusted fixed currency sales change		4	%					3	%
Acquisitions and divestitures		(1)	%					(1)	%
Fixed currency sales change		3	%					2	%
Foreign currency translation		0	%					0	%
Public currency sales change		3	%					2	%
Operating income at fixed currency (millions)		$89.7			$102.6			$236.1			$244.9
Operating income at public currency (millions)		91.3			104.3			238.9			247.4
Fixed currency operating income change		(13)	%					(4)	%
Fixed currency operating income margin		11.3	%		13.3	%		10.1	%		10.6	%
Acquisition adjusted fixed currency operating income change		(11)	%					0	%
Acquisition adjusted fixed currency operating income margin		11.2	%		13.1	%		10.0	%		10.3	%
Public currency operating income change		(12)	%					(3)	%

Percentages in the above table do not necessary sum due to rounding.

Net Sales

Fixed currency sales for Global Energy had a strong growth in the well stimulation business, while the production business showed a modest decline, as growth in North America was offset by international markets. Sales in our downstream business rose moderately, impacted by the hurricanes.

Operating Income

Fixed currency operating income and fixed currency operating income margins for Global Energy decreased during the third quarter and first nine months of 2017. Acquisitions had a negative impact on the fixed currency operating income and minimal impact on the fixed currency operating income margins during the third quarter and first nine months of 2017.

Acquisition adjusted fixed currency operating income margins for our Global Energy segment decreased 1.9 percentage points and 0.3 percentage points in the third quarter and first nine months of 2017, respectively. Higher delivered product costs, a rebuild of compensation reductions made in 2016 and reduced sales, pricing, and volume, negatively impacted margins by approximately 2.6 percentage points in both the third quarter and first nine months of 2017. Cost reduction actions and a favorable legal cost recovery impacted the margins by approximately 2.2 and 1.4 percentage points for the respective periods. Hurricanes had an estimated negative 0.6 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

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Other

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016
Sales at fixed currency (millions)		$221.7			$209.2			$633.8			$598.1
Sales at public currency (millions)		224.5			211.6			637.6			605.1
Volume		4	%					4	%
Price changes		2	%					2	%
Acquisition adjusted fixed currency sales change		6	%					6	%
Acquisitions and divestitures		(0)	%					(0)	%
Fixed currency sales change		6	%					6	%
Foreign currency translation		0	%					(1)	%
Public currency sales change		6	%					5	%
Operating income at fixed currency (millions)		$44.0			$40.4			$110.9			$108.2
Operating income at public currency (millions)		44.5			40.9			111.6			109.9
Fixed currency operating income change		9	%					2	%
Fixed currency operating income margin		19.8	%		19.3	%		17.5	%		18.1	%
Acquisition adjusted fixed currency operating income change		9	%					2	%
Acquisition adjusted fixed currency operating income margin		19.8	%		19.3	%		17.5	%		18.1	%
Public currency operating income change		9	%					2	%

Percentages in the above table do not necessary sum due to rounding.

Net Sales

Fixed currency sales for Other increased in both the third quarter and first nine months of 2017, driven by both volume and pricing gains. At a regional level, both the third quarter and first nine months sales results showed good growth in North America.

At an operating segment level, Pest Elimination fixed currency sales increased 8% and 7% in the third quarter and first nine months of 2017, respectively. Sales to food beverage and hospitality, and good growth in restaurants led the growth. Equipment Care sales decreased 2% and increased 1% in the third quarter and first nine months of 2017, respectively.

Operating Income

Fixed currency operating income margins for Other segment increased 0.5 and decreased 0.6 percentage points during the third quarter and first nine months of 2017. The favorable impact of sales volume and pricing increases added 1.2 percentage points in the third quarter and 1.3 percentage points for the first nine months of 2017. Field investments negatively impacted comparable margins by approximately 0.4 percentage points in the third quarter and 1.8 percentage points for the first nine months of 2017. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

Corporate

Consistent with our internal management reporting, Corporate amounts in the table on page 36 include intangible asset amortization specifically from the Nalco merger and special (gains) and charges that are not allocated to our reportable segments. Items included within special (gains) and charges are shown in the table on page 32.

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FINANCIAL POSITION, CASH FLOWS AND LIQUIDITY

Financial Position

Total assets were $19.9 billion and $18.3 billion as of September 30, 2017 and December 31, 2016, respectively. The increase in assets was driven primarily by the impact of the Anios acquisition and the positive impact of foreign currency exchange rates on the value of our foreign assets translated into U.S. dollars. Total liabilities were $12.6 billion as of September 30, 2017 and $11.4 billion as of December 31, 2016. Total debt was $7.6 billion as of September 30, 2017 and $6.7 billion as of December 31, 2016.

Our net debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net debt to adjusted EBITDA are shown in the following table. EBITDA and adjusted EBITDA are non-GAAP measures, which are discussed further in the “Non-GAAP Financial Measures” section of this MD&A.

The inputs to EBITDA reflect the trailing twelve months of activity for the period presented.

	2017		2016
(ratio)
Net debt to EBITDA		2.6		2.6
Net debt to adjusted EBITDA		2.5		2.3
(millions)
Total debt		$7,557.5		$6,662.6
Cash		209.1		180.6
Net debt		$7,348.4		$6,482.0
Net income including non-controlling interest		$1,322.7		$1,098.0
Provision for income taxes		380.8		324.3
Interest expense, net		245.5		258.6
Depreciation		585.2		557.7
Amortization		297.3		292.8
EBITDA		2,831.5		2,531.4
Special (gains) and charges impacting EBITDA		82.0		341.5
Adjusted EBITDA		$2,913.5		$2,872.9

Cash Flows

Operating Activities

	Nine Months Ended
	September 30
(millions)	2017		2016		Change
Cash provided by operating activities		$1,444.9		$1,491.7		$(46.8)

Year-over-year comparability was negatively impacted by an increase in comparable income tax payments and changes in working capital (accounts receivable, inventory and accounts payable) metrics, partially offset by a decrease in comparable pension contributions. We continue to generate strong cash flow from operations which has allowed us to fund our ongoing operations, debt repayments, investments in the business, acquisitions and pension obligations, and return cash to shareholders through share repurchases and dividend payments.

Investing Activities

	Nine Months Ended
	September 30
(millions)	2017		2016		Change
Cash used for investing activities		$(1,368.1)		$(581.8)		$(786.3)

Year-over-year comparability in our investing activities was impacted primarily by the Anios acquisition in the first quarter of 2017. See Note 3 for further information. We also continue to make investments in our business, including capital expenditures. 

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Financing Activities

	Nine Months Ended
	September 30
(millions)	2017		2016		Change
Cash provided by (used for) financing activities		$(200.5)		$(823.4)		$622.9

During the first nine months of 2017, we issued $500 million 2.375% senior notes. We also had net issuances of commercial paper and notes payable of $188 million. We repurchased $588 million of shares, including $300 million shares through an ASR program initiated in February 2017. Refer to Note 10 for further discussion on our ASRs. We distributed $330 million of dividends.

During the first nine months of 2016, we issued $400 million 2.00% and $400 million 3.25% senior notes and repaid the remaining $125 million of our term loan borrowings. We had net repayments of commercial paper and notes payable of $522 million. We repurchased $738 million of shares, including $300 million shares through an ASR program initiated in February 2016, and distributed $325 million of dividends.

Liquidity and Capital Resources

We currently expect to fund all of the cash requirements which are reasonably foreseeable for the next twelve months, including scheduled debt repayments, new investments in the business, share repurchases, dividend payments, possible business acquisitions and pension and postretirement contributions with cash from operating activities and additional short-term and/or long-term borrowings. We continue to expect our operating cash flow to remain strong.

As of September 30, 2017, we had $209.1 million of cash and cash equivalents on hand, of which $171.7 million was held outside of the U.S.

As of September 30, 2017, we had in place a $2.0 billion multi-year credit facility which expires in December 2019. The credit facility has been established with a diverse syndicate of banks and supports our $2.0 billion U.S. commercial paper program and our $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued under our U.S. commercial paper program and our Euro commercial paper program may not exceed $2.0 billion. At the end of the third quarter of 2017, we had $238 million (€200 million) in outstanding Euro commercial paper with an average annual interest rate of less than 1% and no commercial paper outstanding under the U.S. program. As of September 30, 2017, both programs were rated A-2 by Standard & Poor’s and P-2 by Moody’s.

Our long-term debt issuance and repayment activity through the first nine months of 2017 and 2016 is discussed in the Cash Flows – Financing Activities section of this MD&A.

We are in compliance with our debt covenants and believe we have sufficient borrowing capacity to meet our foreseeable operating needs.

As of September 30, 2017, Standard & Poor’s and Moody’s rated our long-term credit at A- (stable outlook) and Baa1 (stable outlook), respectively.

The schedule of contractual obligations included in the Financial Position and Liquidity section of our Form 10-K for the year ended December 31, 2016 disclosed total notes payable and long-term debt due within one year of $0.5 billion. As of September 30, 2017, the total notes payable and long-term debt due within one year increased to $1.1 billion. The increase primarily reflected commercial paper borrowings during the first nine months of 2017 and reclassification of obligations due within one year to current.

Our gross liability for uncertain tax positions was $71 million as of September 30, 2017 and $76 million as of December 31, 2016. We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect significant payments related to these obligations within the next year.

GLOBAL ECONOMIC ENVIRONMENT

Energy Markets

Approximately 23% of our sales are generated from our Global Energy segment, the results of which, as noted further below, are subject to volatility in the oil and gas commodity markets.

Oil industry activity has been gradually recovering from 2016’s lows during the first nine months of 2017, with strong gains in drilling activity over the past year and recovering capital expenditure trends in 2017.

Global demand for oil and overall energy consumption has shown modest growth over this period. Oil prices have risen from their lows in early 2016.

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Our global footprint and broad business portfolio within the Global Energy segment, as well as our strong execution capabilities are expected to provide the required resilience to outperform in the current market. As such, we continue to remain confident in the long-term growth prospects of the segment.

As petroleum derived materials are key inputs to many of our chemical products, lower oil prices will continue to provide benefits across our segments in the form of lower raw material costs.

Global Economies

Approximately half of our sales are outside of the U.S. Our international operations subject us to changes in economic conditions and foreign currency exchange rates as well as political uncertainty in some countries which could impact future operating results.

Brexit

On March 29, 2017, the United Kingdom (“U.K.”) government gave formal notice to the European Union (“EU”) to begin the process of negotiating the U.K.’s exit (“Brexit”) from the EU. The effects of Brexit will depend on any agreements the U.K. makes to retain access to the EU markets either during a transitional period or more permanently. The negotiations might also impact various tax reliefs and exemptions that apply to transactions between the U.K. and EU. In the longer term, any impact from Brexit on our U.K. operations will depend, in part, on the outcome of tariff, trade, regulatory, and other negotiations. We will continue to monitor the status of tax law changes and tax treaty negotiations at the U.K. and EU.

For the nine months ended September 30, 2017, net sales of our U.K. operations were approximately 2% of our consolidated net sales.

NEW ACCOUNTING PRONOUNCEMENTS

For information on new accounting pronouncements, see Note 16 to the Consolidated Financial Statements.

SUBSEQUENT EVENTS

In October 2017, we entered into an agreement to sell the Equipment Care business which subsequently closed on November 1, 2017. The disposition is not expected to be material to the consolidated financial statements.

We have entered into various purchase agreements which are expected to close in the fourth quarter of 2017. None of the agreements are material to the consolidated financial statements, individually or in the aggregate.

NON-GAAP FINANCIAL MEASURES

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 2, contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP 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

· Adjusted operating income margin

· 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 EPS

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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 diluted EPS 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 Form 10-Q are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of 2017.

Acquisition adjusted growth rates exclude the results of our acquired businesses from the first twelve months post acquisition, exclude the results of our divested businesses from the twelve months prior to divestiture, and exclude sales to our deconsolidated Venezuelan subsidiaries from both the current period and comparable period of the prior year.

These non-GAAP measures are not in accordance with, or an alternative to U.S. 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 U.S. GAAP measures included in this MD&A and we have provided reconciliations of reported U.S. GAAP amounts to the non-GAAP amounts.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include expectations concerning our payments and contributions to pension and postretirement health care benefit plans; tax deductibility of goodwill; amortization expense; share repurchases; actions and impact associated with adoption of new accounting standards; the impact of lawsuits, claims and environmental matters; payments related to uncertain tax positions; timing of hedged transactions; timing and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; timing and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; borrowing capacity; impact of oil price fluctuations regarding sales, performance compared to market and future prospects; global foreign currency markets; global credit or market risk; future cash flow; cash requirements and sources of funding; nonperformance of financial counterparties; closing of Equipment Care divestiture; implementation of ERP system; and doing business in Iran.

Without limiting the foregoing, words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project” (including the negative or variations thereof) or similar terminology, generally identify forward-looking statements. Forward-looking statements may also represent challenging goals for us. These statements, which represent our expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such forward-looking statements. In particular, the ultimate results of any restructuring 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. We caution that undue reliance should not be placed on such forward-looking statements, which speak only as of the date made.

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Some of the factors which could cause results to differ from those expressed in any forward-looking statements are set forth under Item 1A, entitled Risk Factors, of our Form 10-K for the year ended December 31, 2016, 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, foreign currency risk and reduced sales and earnings in our international operations resulting from the weakening of local currencies versus the U.S. dollar; our ability to attract and retain high caliber management talent to lead our business; our ability to execute key business initiatives; potential information technology infrastructure failures or breaches in data security; exposure to global economic, political and legal risks related to our international operations including with respect to our operations in Russia; the costs and effects of complying with laws and regulations, including those relating to the environment and to the manufacture, storage, distribution, sale and use of our products; the occurrence of litigation or claims, including related to the Deepwater Horizon oil spill; our ability to develop competitive advantages through innovation; difficulty in procuring raw materials or fluctuations in raw material costs; our substantial indebtedness; our ability to acquire complementary businesses and to effectively integrate such businesses; restraints on pricing flexibility due to contractual obligations; pressure on operations from consolidation of customers, vendors or competitors; public health epidemics; potential losses arising from the impairment of goodwill or other assets; potential loss of deferred tax assets; changes in tax law and unanticipated tax liabilities; 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. There can be no assurances that our earnings levels will meet investors’ expectations. Except as may be required under applicable law, we do not undertake, and expressly disclaim, any duty to update our Forward-Looking Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We use foreign currency forward contracts, interest rate swap agreements and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in our foreign operations. We do not hold derivative financial instruments of a speculative nature or for trading purposes. For a more detailed discussion of derivative instruments, refer to Note 8, entitled “Derivatives and Hedging Transactions”, of the consolidated financial statements located under Part I, Item 1 of this quarterly report on Form 10-Q.

Item 4. Controls and Procedures

As of September 30, 2017, we carried out an evaluation, under the supervision and with the participation of our management, including the Chairman of the Board and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chairman of the Board and Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures are effective.

During the period July 1 through September 30, 2017, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are implementing an enterprise resource planning (“ERP”) system upgrade, which is expected to occur in phases over the next several years beginning in 2018. This upgrade, which includes supply chain and certain finance functions, is expected to improve the efficiency of certain financial and related transactional processes. The upgrade of the ERP system will affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Note 15, entitled “Commitments and Contingencies” located under Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

In our report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on February 24, 2017, we identify under Item 1A important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. See the section entitled Forward-Looking Statements located on page 44 of this Form 10-Q. We may also refer to such disclosure to identify factors that may cause results to differ from those expressed in other forward-looking statements made in oral presentations, including telephone conferences and/or webcasts open to the public.

The discussion below should be read together with the full list of risk factors set forth in the aforementioned Form 10-K. The first two risk factors appearing in this discussion include new updates and additions to such risk factors since the Form 10-K, while the other two risk

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factors are unchanged from as they were previously updated in our Form 10-Q for the quarterly period ended March 31, 2017, and repeated in our Form 10-Q for the quarterly period ended June 30, 2017.There have been no other changes to our risk factors.

If we are unsuccessful in executing on key business initiatives, including our ERP system upgrade, our business could be adversely affected. 

We continue to execute key business initiatives, including investments to develop business systems and restructurings such as those discussed under Note 2 entitled “Special Gains and Charges” of this Form 10-Q, as part of our ongoing efforts to improve our efficiency and returns. In particular, we are implementing an ERP system upgrade, which is expected to occur in phases over the next several years.  This upgrade, which includes supply chain and certain finance functions, is expected to improve the efficiency of certain financial and related transactional processes. The upgrade involves complex business processdesign and a breakdown in certain of these processes could result in business disruption. If the projects in which we are investing or the initiatives which we are pursuing are not successfully executed, our consolidated results of operations, financial position or cash flows could be adversely affected.

We may be subject to information technology system failures, network disruptions and breaches in data security.

We rely to a large extent upon information technology systems and infrastructure to operate our business. The size and complexity of our information technology systems make them potentially vulnerable to breakdown, malicious intrusion and random attack. Recent acquisitions, including the Nalco and Champion transactions, have resulted in further de-centralization of systems and additional complexity in our systems infrastructure. Likewise, data privacy breaches by employees and others with permitted access to our systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. While we have invested in protection of data and information technology, there can be no assurance that our efforts will prevent breakdowns, cybersecurity attacks or breaches in our systems that could cause reputational damage, business disruption and legal and regulatory costs; could result in third-party claims; could result in compromise or misappropriation of our intellectual property, trade secrets and sensitive information; or could otherwise adversely affect our business. There may be other challenges and risks as we continue to invest in our ERP system.

Our business depends on our ability to comply with laws and governmental regulations, and we may be adversely affected by changes in laws and regulations. 

Our business is subject to numerous laws and regulations relating to the environment, including evolving climate change standards, and to the manufacture, storage, distribution, sale and use of our products as well as to the conduct of our business generally, including employment and labor laws. Compliance with these laws and regulations exposes us to potential financial liability and increases our operating costs. Regulation of our products and operations continues to increase with more stringent standards, causing increased costs of operations and potential for liability if a violation occurs. The potential cost to us relating to environmental and product registration laws and regulations is uncertain due to factors such as the unknown magnitude and type of possible contamination and clean-up costs, the complexity and evolving nature of laws and regulations, and the timing and expense of compliance. Changes to current laws (including tax laws), regulations and policies could impose new restrictions, costs or prohibitions on our current practices which would adversely affect our consolidated results of operations, financial position or cash flows.

Our subsidiaries are defendants in pending lawsuits alleging negligence and injury resulting from the use of our COREXIT dispersant in response to the Deepwater Horizon oil spill, which could expose us to monetary damages or settlement costs.

Our subsidiaries were named as defendants in pending lawsuits alleging negligence and injury resulting from the use of our COREXIT dispersant in response to the Deepwater Horizon oil spill, which could expose us to monetary damages or settlement costs. On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after a catastrophic explosion and fire that began on April 20, 2010. A massive oil spill resulted. Approximately one week following the incident, subsidiaries of BP plc, under the authorization of the responding federal agencies, formally requested our indirect subsidiary, Nalco Company, to supply large quantities of COREXIT 9500, a Nalco oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule.  Nalco Company responded immediately by providing available COREXIT and increasing production to supply the product to BP’s subsidiaries for use, as authorized and directed by agencies of the federal government.

Nalco Company and certain affiliates (collectively “Nalco”) were named as a defendant in a series of class action and individual plaintiff lawsuits arising from this event. The plaintiffs in these matters claimed damages under products liability, tort and other theories.  Nalco was also named as a third party defendant in certain matters.  Nalco was indemnified in these matters by another of the defendants.

These cases were administratively transferred to a judge in the United States District Court for the Eastern District of Louisiana with other related cases under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (the “MDL”).

Nalco Company, the incident defendants and the other responder defendants have been named as third party defendants by Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against Nalco Company and other unaffiliated cross defendants. The Cross Claimants generally allege, among other things, that if they are found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, they are entitled to indemnity or contribution from the cross defendants.

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On November 28, 2012, the Federal Court in the MDL entered an order dismissing all claims against Nalco. Because claims remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision. We cannot predict whether there will be an appeal of the dismissal, the involvement we might have in these matters in the future or the potential for future litigation. However, if an appeal by plaintiffs in these lawsuits is brought and won, these suits could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

In December 2012 and January 2013, the MDL court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. Pursuant to the proposed settlements, class members agree to release claims against BP and other released parties, including Nalco Company and its related entities.

Nalco was named in nine additional complaints in May 2016, and two additional complaints in April 2017, filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill. The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs.  These actions have been consolidated in the MDL and we expect they will be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.

On February 22, 2017, the Federal Court in the MDL ordered that plaintiffs who had previously filed a claim and who had “opted out” of and not released their claims under the Medical Benefits Class Action Settlement either: (1) complete a sworn statement indicating, among other things, that they opted out of the Medical Benefits Class Action Settlement (to be completed by plaintiffs who previously filed an individual complaint); or (2) file an individual lawsuit attaching the sworn statement as an exhibit, by a deadline date set by the Court.  The Court will then determine which plaintiffs are entitled to pursue their claims and the procedures for addressing those claims.

Nalco continues to sell the COREXIT oil dispersant product and could be exposed to future lawsuits from the use of such product. We cannot predict the potential for future litigation with respect to such sales. However, if one or more of such lawsuits are brought and won, these suits could have a material adverse impact on our financial results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities

			(c)	(d)
	(a)		Number of shares	Maximum number of
	Total	(b)	purchased as part	shares that may
	number of	Average price	of publicly	yet be purchased
	shares	paid per	announced plans	under the plans
Period	purchased(1)	share(2)	or programs(3)	or programs(3)
July 1-31, 2017	302,196	132.5193	301,703	12,698,468
August 1-31, 2017	343,534	131.2854	340,358	12,358,110
September 1-30, 2017	11,084	131.3123	-	12,358,110
Total	656,814	131.8536	642,061	12,358,110

(1) Includes 14,753 shares reacquired from employees and/or directors as swaps for the cost of stock options, or shares surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) The average price paid per share includes brokerage commissions associated with publicly announced plan purchases plus the value of such other reacquired shares.

(3) As announced on February 24, 2015, our Board of Directors authorized the repurchase of up to 20,000,000 shares. Subject to market conditions, we expect to repurchase all shares under the open authorizations, for which no expiration date has been established, in open market or privately negotiated transactions, including pursuant to Rule 10b5-1 and accelerated share repurchase programs.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

Iran Threat Reduction and Syria Human Rights Act of 2012

Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Securities Exchange Act of 1934, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with entities or individuals designated pursuant to certain Executive Orders. Disclosure is required even where the activities are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and even if the activities are not covered or prohibited by U.S. law. In connection with the easing of certain sanctions by the United States against Iran in January 2016 and in compliance with the economic sanctions regulations administered by U.S. Treasury’s Office of Foreign Assets Control (OFAC) and U.S. export control laws, a wholly-owned non-U.S. subsidiary of the Company completed the following sales related to businesses in our Energy operating segment pursuant to and in compliance with the terms and conditions of OFAC’s General License H: sales of products used for process and water treatment applications in (i) upstream oil and gas production and (ii) petrochemical plants totaling $1,019,000 during the subsidiary’s third quarter ended August 31, 2017, and additional sales of such products totaling $552,000 during September 2017, were made to a distributor in Dubai and two distributors in Iran. The net profit before taxes associated with these sales is estimated to be $256,000 and $130,000, respectively. Our non-U.S. subsidiary intends to continue doing business in Iran under General License H in compliance with U.S. economic sanctions and export control laws, which sales may require additional disclosure pursuant to the abovementioned statute.

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Item 6. Exhibits

Exhibit No.	Document	Method of Filing:
(a)	The following documents are filed as exhibits to this report:
(4.1)	Form of Common Stock Certificate effective October 2, 2017.	Filed herewith electronically.
(4.2)	Sixth Supplemental Indenture, dated August 10, 2017, between the Company and Wells Fargo Bank, National Association.	Incorporated by reference to Exhibit 4.2 of our Form 8-K dated August 7, 2017. (File No. 01-9328)
(4.3)	Form of 2.375% Notes due 2022.	Included in Exhibit 4.2 above.
(10.1)	Documents related to U.S. $2,000,000,000 Commercial Paper Program:
(10.1a)	Commercial Paper Issuing and Paying Agency Agreement dated as of September 18, 2017 between Ecolab Inc. and MUFG Union Bank, N.A. as Issuing and Paying Agent.	Filed herewith electronically.
(10.1b)	Corporate Commercial Paper — Master Note dated September 18, 2017, together with Annex thereto.	Filed herewith electronically.
(15.1)	Letter regarding unaudited interim financial information.	Filed herewith electronically.
(31.1)	Rule 13a - 14(a) CEO Certification.	Filed herewith electronically.
(31.2)	Rule 13a - 14(a) CFO Certification.	Filed herewith electronically.
(32.1)	Section 1350 CEO and CFO Certifications.	Filed herewith electronically.
(101.1)	Interactive Data File.	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 thereunto duly authorized.

	ECOLAB INC.
Date:  November 2, 2017	By:	/s/ Bruno Lavandier
		Bruno Lavandier
		Senior Vice President and Corporate Controller
		(duly authorized officer and
		Chief Accounting Officer)

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EX-4.1

Exhibit 4.1

EX-10.1(A)

Exhibit 10.1(a)

ISSUING AND PAYING AGENCY AGREEMENT

This Issuing and Paying Agency Agreement (the “Agreement”) is made as of September 18, 2017 by and between Ecolab Inc. (the “Issuer”) and MUFG Union Bank, N.A., as issuing and paying agent (the “Agent”).

WHEREAS, the Issuer has previously entered into that certain Commercial Paper Issuing and Paying Agent Agreement dated as of September 22, 2014 with Deutsche Bank Trust Company Americas (as successor to JPMorgan Chase Bank, National Association) (the “Prior IPA Agreement”);

WHEREAS, the Issuer has advised that the Prior IPA Agreement will be terminated effective as of the date of this Agreement;

WHEREAS, the Issuer proposes to continue to incur debt by issuing Notes, as defined below, in the commercial paper market pursuant to its existing commercial paper program and any additional commercial paper programs established by the Issuer (each, inclusive of Issuer’s existing commercial paper program, a “Commercial Paper Program”).

WHEREAS, at Issuer’s request, the Agent has agreed to act as successor issuing and paying agent for Issuer as of the date hereof as specified herein in connection with the Notes (as defined below) issued pursuant to the Prior IPA Agreement in connection with the Issuer’s existing commercial paper program and pursuant this Agreement in connection with any additional Commercial Paper Programs established by the Issuer from time to time; and

WHEREAS, the parties hereto desire to enter into this Agreement to memorialize the terms and conditions pursuant to which the Agent shall act as issuing and paying agent for the Issuer in connection with such Commercial Paper Programs.

NOW THEREFORE, in consideration of the foregoing and the terms and conditions provided for in this Agreement, the parties hereto agree as follows:

SECTION 1.APPOINTMENT AND ACCEPTANCE.

The Issuer hereby appoints Agent as its issuing and paying agent in connection with the issuance from time to time and payment of certain short-term promissory notes of the Issuer (the “Notes”) in connection with Commercial Paper Programs established by the Issuer, as more fully described herein, and Agent agrees to act as such issuing and paying agent upon the terms and conditions contained in this Agreement. The Issuer may establish one or more commercial paper programs under this agreement by delivering a completed program schedule in the form of Exhibit A hereto (the “Program Schedule”) with respect to each such program to the Agent. The Agent has given the Issuer a copy of the initial form of Program Schedule and the Issuer shall

complete and return such initial Program Schedule to the Agent prior to or simultaneously with the execution of this Agreement. If any of the information provided in, or attached to, a Program Schedule shall change, the Issuer shall promptly inform the Agent of such change in writing.

SECTION 2.NOTES.

a.All Notes issued by the Issuer pursuant to a Commercial Paper Program shall be promissory notes and shall be exempt from the registration or qualification requirements of the federal securities laws, including but not limited to the Securities Act of 1933, as amended, and from applicable state securities laws. The Notes may be placed by dealers (the “Dealers”), pursuant to Section 3 hereof. All Notes shall be denominated in United States Dollars.

b.Except in accordance with Section 2(e) of this Agreement, the Notes shall not be issued in physical form, but their aggregate face amount shall be represented by a master note (the “Master Note”) in the form of Exhibit B executed by the Issuer pursuant to the book-entry commercial paper program of The Depository Trust Company (“DTC”). Agent shall maintain the Master Note in accordance with its customary practices, on behalf of Cede & Co., the registered owner thereof and nominee of DTC. As long as Cede & Co. is the registered owner of the Master Note, the beneficial ownership interest therein shall be shown on, and the transfer of ownership thereof shall be effected through, entries on the books maintained by DTC and the books of its direct and indirect participants.

c.The Master Note and the Notes shall be subject to DTC’s rules and procedures, as amended from time to time. Agent shall not be liable or responsible for sending transaction statements of any kind to DTC’s participants or the beneficial owners of the Notes, or for maintaining, supervising or reviewing the records of DTC or its participants with respect to such Notes.

d.In connection with DTC’s commercial paper program, the Issuer understands that as one of the conditions of its participation therein it shall be necessary for the Issuer and Agent to enter into a Letter of Representations, in the form of Exhibit C hereto, and for DTC to receive and accept such Letter of Representations. In accordance with DTC’s program, the Agent, for the account and at the expense of the Issuer shall obtain from the CUSIP Service Bureau a written list of CUSIP numbers for the Notes, and shall deliver such list to DTC and the Issuer. The CUSIP Service Bureau shall bill the Issuer directly for the fee or fees payable for the list of CUSIP numbers for the Notes.

e.Notwithstanding Section 2(b) of this Agreement, if the Issuer notifies the Agent in writing that DTC is no longer willing or able to properly discharge its responsibilities with respect to the Notes, Issuer may, if it is unable to locate a qualified successor depositary, issue certificated notes (“Certificated Notes”). If and when the Issuer issues such Certificated Notes, the Issuer and the Agent shall agree on the format of such Certificated Notes. Thereafter, the Issuer shall from time to time deliver to the Agent adequate supplies of Certificated Notes which will be in bearer form, serially numbered and shall be executed by the manual or facsimile signature of an Authorized Representative. The Agent will acknowledge receipt of any such supply of Certificated Notes received from the Issuer, noting any exceptions to the shipping

manifest or transmittal letter (if any) and will hold the Certificated Notes in safekeeping for the Issuer in accordance with the Agent’s customary practices. The Agent shall not have any responsibility or liability to determine whether any facsimile or manual signature is genuine, if such facsimile or manual signature resembles the specimen signature attached to the Issuer’s certificate of incumbency with respect to such Authorized Representative. Any Certificated Note bearing the manual or facsimile signature of a person who was an Authorized Representative on the date such signature was affixed shall bind the Issuer after completion by the Agent, notwithstanding that such person shall have ceased to hold his or her office on the date such Note is countersigned or delivered by the Agent.

SECTION 3.CERTIFICATE OF AUTHORIZED REPRESENTATIVES AND LIST OF DELEGATES.

a.The Issuer has delivered to the Agent (i) a certified copy of the duly adopted resolution from Issuer’s Board of Directors (or other governing body) authorizing the issuance of Notes under each commercial paper program established pursuant to this Agreement and (ii) a Certificate of Incumbency attached hereto as Exhibit D, with specimen signatures attached, for those officers of the Issuer authorized to take actions with respect to the Notes (each such person in hereinafter referred to as an “Authorized Representative”). Until the Agent receives any subsequent incumbency certificates of the Issuer, the Agent shall be entitled to rely on the last incumbency certificate delivered to it for the purposes of determining the identity of all Authorized Representatives.

b.The Issuer represents and warrants that each Authorized Representative may appoint other officers, employees and agents of the Issuer (the “Delegates”), including without limitation any dealers, to issue Instructions, as hereinafter defined, to the Agent under this Agreement, and take other actions on the Issuer’s behalf hereunder, provided that notice of the appointment of each Delegate is delivered to the Agent in writing (including through the delivery of a certificate of the type contemplated by Section 3(c) of this Agreement). Each such appointment shall remain in effect unless and until revoked by the Issuer in a written notice to the Agent.

c.The Issuer has delivered to the Agent a certificate, a copy of which is appended hereto as Exhibit E, containing the name, title, contact details, and true signature of each Delegate duly authorized to take action on behalf of the Issuer with respect to the Notes. The Issuer agrees to promptly provide a revised Certificate of Incumbency and a revised list of Delegates to the Agent in the event that the Authorized Representatives or Delegates change.

d.The Issuer agrees that the Agent shall not be liable for the Agent’s action or inaction in reliance on the Certificate of Incumbency or list of Delegates at any time, including any inaccurate Certificate of Incumbency or list of Delegates for which a copy of an accurate replacement Certificate of Incumbency or list of Delegates has not been provided to Agent.

SECTION 4.INSTRUCTIONS.

a.Agent shall provide Issuer through Issuer’s Authorized Representatives and Delegates access to Agent’s issuing and paying agency system or other electronic means (collectively, the “System”), following completion of the IPA Port and Online Trust & Custody Enrollment Application in the form of Exhibit F hereto, in order that Agent may receive Instructions for the issuance of Notes and which Instructions shall constitute the giving of a duly authorized written and signed instruction which Agent may act upon in accordance with Section 5(e). The term “Instructions” shall mean a communication, purporting to be from an Authorized Representative or Delegate, via the System, in accordance with the Program Schedule as completed and executed by the Issuer. If the System is inoperable or inaccessible at any time, an Authorized Representative or Delegate may deliver written, faxed, oral, or electronically transmitted communications to the Agent, and in such event, the term “Instructions” shall mean such communication, purporting to be from an Authorized Representative or Delegate, which instructions shall be verified in accordance with any security procedures agreed upon by the parties or, in accordance with the following sent by unsecured email or provided telephonically. Agent may in its absolute discretion accept oral Instructions transmitted telephonically provided Agent believes in good faith that the Instructions are genuine. If oral Instructions are received, the Authorized Representative or Delegate shall promptly, and within no more than 24 hours, confirm such Instructions in writing or by other means permitted hereunder. Agent shall have no liability and Issuer will hold Agent harmless for failure of an Authorized Representative or Delegate to send such confirmation or the failure of such confirmation to conform to the telephone Instructions received. Issuer consents to the recording of any telephone communications with Agent, and agrees that Agent need not solicit such consent or remind the caller of such recording at each such communication.

b.Agent must receive all instructions by 1.30 p.m. New York time on any day that the Agent is open for business (a “Business Day”) at the address set forth in Section 15 hereof. If any Instructions are received after 1.30 p.m. New York time on any Business Day, or if they are received on other than a Business Day, the Instructions will be operative, as appropriate, on the next succeeding Business Day. If the Agent, in its sole discretion, acts upon Instructions transmitted after 1.30 p.m. New York time on the day on which the Instructions are to be operative, the Issuer or any Dealer understands and agrees that (i) such Instructions shall be acted upon, on a reasonable efforts basis, by the Agent pursuant to the custom and practice of the commercial paper market, and (ii) the Agent makes no representations or warranties that the issuance and delivery of any Note shall be completed prior to the close of business on the issue date specified in the applicable Instructions.

SECTION 5.ISSUANCE.

a.The Agent’s sole duties in connection with the issuance of the book-entry obligations represented by the Notes shall be as follows:

(i)Upon receipt of Instructions from an Authorized Representative or Delegate, the Agent shall transmit such Instructions to DTC and direct DTC to cause

appropriate entries of the Notes to be made in accordance with DTC’s applicable rules, regulations and procedures for book-entry commercial paper programs.

(ii)The Agent shall assign CUSIP numbers obtained by the Issuer to each Note.

(iii)Promptly following DTC’s established settlement time on each issuance date, the Agent shall access DTC’s system to verify whether settlement has occurred with respect to each Note issued on such issuance date.

(iv)Prior to the close of business on any settlement date, the Agent shall deposit immediately available funds in the amount of the proceeds due the Issuer (if any) to the account of the Issuer at the Agent as described in the Program Schedule (the “Account”), provided that the Agent has received DTC’s confirmation that each Note issued on such issuance date has settled in accordance with DTC’s applicable rules, regulations and procedures.

b.Issuer acknowledges that (i) the delivery of any Note against payment (i.e. the principal amount of the Note less the discount specified in the Instructions or the principal amount of any interest bearing obligation) and the actual receipt of payment thereof are not simultaneous transactions and (ii) the purchaser of a Note is obligated to settle its purchase of such Note in immediately available funds on the settlement date for such Note. In no circumstances shall the Agent bear the risk of any such purchaser’s failure to remit the proceeds of the sale of a Note. The Agent shall have no liability whatsoever to the Issuer if any DTC participant purchasing a Note fails to settle or delays in settling its balance with DTC or if DTC or any DTC participant fails to perform in any respect.

c.Agent shall have no duty or responsibility to transfer to the Issuer any amounts from the sale of any Note, unless and until (i) the Agent actually receives the proceeds of the sale of such Note and (ii) the Agent’s receipt of such proceeds is not subject to reversal or cancelation. Agent may as a matter of bookkeeping convenience or by separate agreement with the Issuer, credit the Account with the proceeds from the sale prior to Agent’s actual receipt of final payment; therefore, all such credits shall be conditional until the Agent’s actual receipt of final payment and may be reversed by Agent to the extent that final payment is not received. The Agent shall have no duty or responsibility to advance to the Issuer any monies or otherwise provide any credit to the Issuer with respect to such proceeds or transfers.

d.Funds received by the Agent in accordance with the issuance of Notes or payments on the Notes shall be held pursuant to this Agreement until such time as such funds are transferred in accordance with the relevant Instructions or this Agreement. The Issuer may direct the Agent to invest funds in an interest bearing deposit product equivalent that the Agent makes available to its customers. Except as set forth in the preceding sentence, the Agent shall not be liable for interest on any funds received, or held by, it hereunder. The Agent shall not be obligated to credit the Account unless and until the Agent receives payment of the purchase of each Note. From time to time the Agent, in its sole discretion, may permit the Issuer to have the use of funds payable with respect to a Note prior to the Agent’s receipt of the sales proceeds of

such Note. If the Agent makes a deposit, payment or transfer of funds on behalf of the Issuer before the Agent receives payment for any Note, such deposit, payment or transfer of funds shall represent an advance by the Agent to the Issuer to be repaid promptly, and under all circumstances on the same day as it is made, from the proceeds of the sale of such Note, or by the Issuer if the Agent does not receive such proceeds. Such an advance may be referred to herein as an ‘overdraft’ whether on an intraday or longer basis.

e.The Agent shall have no liability for acting on any Instruction it has relied upon in good faith. The Agent shall have no obligation to verify the validity, truth, or accuracy of any Instruction received by it. The Agent shall have no liability to the Issuer or any Dealer whatsoever if any DTC participant purchasing a Note fails to settle or delays in settling its balance with DTC or if DTC fails to perform in any respect.

f.Neither the Agent nor its directors, officers, employees or agents shall be required to ascertain whether any issuance or sale of any Notes (or any amendment or termination of this Agreement) has been duly authorized or is in compliance with any other agreement to which the Issuer is a party (whether or not the Agent or the Bank is also a party to such agreement).

SECTION 6.PAYMENT.

a.The Agent’s sole duty in connection with payment of the Notes at maturity shall be to pay the discounted principal amount of the Note or principal plus interest of an interest-at- maturity Note.

b.The Agent shall not make a payment with respect to any maturing Note or any Periodic Interest Payment of the amount referred to in this Section unless immediately available funds in the amount to be paid in respect of such Note have been received by the Agent prior to 1:00 p.m. New York Time on or before the applicable maturity date or interest payment date, in accordance with directions in the Program Schedule. The Agent shall have no obligation under this Agreement to make any payment for which there is not sufficient, available and collected funds in the Account and Agent may, without liability to the Issuer, refuse to pay any Note or make any interest payment that would result in an overdraft to the Account. The Issuer hereby gives blanket authority for the Agent to debit or credit the Account in accordance with this Agreement. The Agent will so debit or credit the Account, at such time and in such amounts as required from time to time for the purpose of funding any net amounts outstanding due to account trading activity.

c.As described in Section 5(d) hereof, an overdraft will exist in the Account if the Agent in its sole discretion (i) permits an advance to be made, notwithstanding the provisions of the Section 5(c) or if a provisional credit is reversed pursuant to Section 5(c) hereof and such overdraft is not repaid in full on the same day as it occurs, or (ii) pays a Note in excess of the available collected balance in the Account. Overdrafts in the Account shall be subject to all of Agent’s related fees and charges. Agent shall also have the right to utilize any cash in the Account in order to obtain reimbursement hereunder and to set off Agent’s obligations with respect to any deposits or credit balances in the Account against any obligation of Issuer hereunder. The Issuer shall repay any such overdraft including related fees and charges no later

than the next Business Day, together with any interest on the overdraft at the rate established by the Agent for the Account, computed from and including the date the overdraft occurred to the date of repayment.

SECTION 7.REPRESENTATIONS AND WARRANTIES.

The Issuer represents and warrants that:

(a)It will comply with all of its obligations and duties under this Agreement.

(b)This Agreement, the Master Note, and the Notes have been duly authorized and this Agreement is, and the Master Note and the Notes (when issued in accordance with Instructions) will be, valid, legal and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles (regardless of whether enforcement is sought in a proceeding in equity or law).

(c)Each Note issued under this Agreement will be exempt from Registration under the Securities Act of 1933, as amended.

(d)Each Instruction provided by the Issuer or related Authorized Representative or Delegate to issue Notes under this Agreement shall be deemed a representation and warranty by the Issuer as of the date thereof that the representations and warranties herein are true and correct as if made on and as of such date.

SECTION 8.COMPENSATION.

The Issuer agrees to pay such compensation for the Agent’s issuing and paying agent services pursuant to this Agreement in accordance with the Agent’s schedule of fees in effect as of the date hereof, as amended from time to time and executed by the Issuer. The obligation of the Issuer in this Section to pay the Agent fees for services provided under this Agreement shall survive any termination of this Agreement and the issuance and payment of the Notes. The Issuer shall also reimburse the Agent for any fees or charges imposed by DTC with respect to services provided in connection with the Notes.

SECTION 9.CERTAIN RIGHTS OF THE AGENT.

a. The Agent shall have no obligations under this Agreement towards, or any relationship of agency or trust with, or any fiduciary obligations to, the Issuer, any Dealer, any purchaser of a Note, or any other third-party, and shall only be obligated to perform the duties of the Agent set out specifically in this Agreement. No implied covenants, duties or obligations shall be read into this Agreement against the Agent.

b.No provision of this Agreement shall require the Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

c.The Agent shall not be bound to make any investigation into the facts or matters stated in any document, instrument, instruction or other delivery furnished to the Agent under this Agreement.

d.Any entity into which Agent may be merged or with which the Agent may be consolidated, or any entity resulting from any merger or consolidation to which the Agent shall be a party, or any entity succeeding to all or substantially all its issuing and paying agent business, shall succeed to all of its rights, obligations and immunities hereunder without the execution or filing of any document or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. The Agent shall give notice of any such merger, consolidation or succession to the Issuer.

e.the Agent may consult with counsel and the written advice of such counsel or any opinion of counsel rendered thereby shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

f.The Agent, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not acting hereunder.

SECTION 10.LIABILITY; INDEMNIFICATION.

a.The Issuer agrees that, except in the case of gross negligence or willful misconduct by the Agent, the Agent shall not be liable for any losses, damages, liabilities or costs suffered or incurred by the Issuer, Dealer, or any third-party in relation to this Agreement or any Instruction received by it. The Agent shall not be liable for any error of judgement made except the case of negligence or willful misconduct. The Agent shall have no responsibility or liability if DTC fails to perform in any respect.

b.The Issuer, in the absence of, gross negligence or willful misconduct by the Agent, agrees to indemnify the Agent, its directors, officers, employees or agents, and hold them harmless from and against any and all actions, claims (groundless or otherwise) suits, losses, fines, damages, costs, expenses (including, without limitation, reasonable legal fees and disbursements), liabilities, or penalties arising out of the Agent’s having executed this Agreement or otherwise having performed any of its obligations hereunder, or due to any breach of this Agreement by the Issuer.

c.The obligations of the Issuer in this Section 10 shall survive any termination of this Agreement and the issuance and payment of the Notes.

d.NOTWITHSTANDING ANY CONTRARY PROVISION HEREIN, IN NO EVENT SHALL THE AGENT, ITS DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS, BE LIABLE FOR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER (INCLUDING BUT NOT

LIMITED TO LOST PROFITS), EVEN IF THE AGENT HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION. This provision applies without limitation to any damages, or injury arising from any failure of performance, error, omission, interruption, deletion, defect, delay in operation or transmission, computer virus, line system failure, file corruption, network or system outage or loss, use or modification of content or data, even if advised of the possibility of such damages. No third party, including but not limited to any Authorized Representative or Delegate, shall have any right or claim for damages, compensation, or indemnification from the Agent under this Agreement.

e.In no event shall the Agent be liable for any failure or delay in the performance of its obligations hereunder because circumstances beyond the Agent’s control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, power outages and other utility failures, riot, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement.

SECTION 11.TERMINATION.

a.This Agreement shall terminate on the date that is the earlier of the date on which the Agent or the Issuer has terminated this Agreement in accordance with this section.

b.The Agent may terminate this Agreement at any time with not less than ten (10) days’ prior written notice to the Issuer. The Issuer may terminate this Agreement at any time by not less than ten (10) days’ prior written notice to the Agent. The Issuer shall bear any reasonable costs related to the transfer or completion of the Agent’s responsibilities hereunder.

c.No termination of this Agreement shall affect the rights and obligations of the Issuer and the Agent which have accrued under this Agreement prior to termination. In the event of termination of this Agreement for any reason, the Agent agrees it shall cooperate with the Issuer or its designee for the orderly transition of services hereunder until such time as a replacement for the Agent is appointed by the Issuer. If no successor is appointed within 30 days of the Agent’s resignation or removal, the Agent shall have the right to petition a court of competent jurisdiction to appoint a successor.

SECTION 12.OPINION OF COUNSEL.

The Issuer shall deliver to the Agent all documents it may reasonably request, including, without limitation, an opinion of counsel substantially in the form of Exhibit G hereto.

SECTION 13.PATRIOT ACT.

In order to comply with its duties under the U.S.A. Patriot Act, the Agent shall obtain and verify certain information and documentation from the Issuer, including, but not limited to, the Issuer’s name, address and other identifying information.

SECTION 14.INFORMATION FURNISHED BY THE AGENT.

Upon the reasonable request of the Issuer, the Agent shall provide the Issuer with information with respect to any Note issued and paid hereunder, provided, that the Issuer delivers such request in writing and, to the extent applicable, includes the serial number or note number, principal amount, payee, date of issue, maturity date, amount of interest (if any) and place of payment of such Note.

SECTION 15.NOTICE.

All notices, confirmations and other communications hereunder shall (except to the extent otherwise expressly provided) be in writing and shall be sent by first-class mail, postage prepaid, by facsimile, by email with a portable document format or similar attachment or by hand, addressed as follows, or to such other address as the party receiving such notice shall have previously specified to the party sending such notice.

If to the Issuer:

Ecolab Inc.

1 Ecolab Place

St. Paul, Minnesota 55102

Attention: Assistant Treasurer

Tel: (651) 250-4195

Email:

With a copy to:

Ecolab Inc.

1 Ecolab Place

St. Paul, Minnesota 55102

Attention: General Counsel

Email:

If to the Agent:

MUFG Union Bank N.A.

Issuing & Paying Agent Services

222 W Adams St #1850 VO

Chicago, IL 60606

Per Section 4, if the System is inoperable or inaccessible:

Tel: (312) 601-2145 or (312) 601-3959

Fax: (312) 601-3955

Email: IPA@unionbank.com

SECTION 16.CHOICE OF LAW; JURISDICTION; WAIVER OF JURY TRIAL.

a.This Agreement and the Notes shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to the conflict of laws provisions thereof.

b.The Issuer and the Agent irrevocably agree that the courts of the United States federal courts or the courts of the State of New York sitting in the Borough of Manhattan are to have non-exclusive jurisdiction to settle disputes or determine any proceedings which may arise out of or in connection with this Agreement, any Instructions or any Notes and that accordingly any proceeding or dispute so arising may be brought in such courts. Each of the Issuer and the Agent irrevocably and unconditionally waives and agrees not to raise any objections which it may have now or subsequently to the laying of the venue of any disputes or proceedings in the courts of New York and any claim that any disputes or proceedings have been brought in an inconvenient forum and further irrevocably and unconditionally agrees that a judgment in any disputes and proceedings brought in the courts of New York shall be conclusive and binding upon the Issuer and the Agent and may be enforced in the courts of any other jurisdiction. Nothing in this clause shall limit any right to take disputes or proceedings in one or more jurisdictions or preclude the taking of disputes and proceedings against the Issuer in any other jurisdiction, whether concurrently or not.

THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

SECTION 17.ASSIGNMENT; AMENDMENT.

This Agreement may not be assigned by the Issuer and may not be modified, or amended or supplemented except by a writing or writings duly executed by the duly authorized representatives of the Issuer and the Agent.

SECTION 18.NO PUBLICATION.

Neither the Issuer nor the Agent will use the other’s name or refer to the other party, directly or indirectly, in any solicitation, marketing material, advertisement, news release or other release to any publication without receiving the other parties’ specific prior written approval for each such use or release.

SECTION 19.NO WAIVER.

No failure or delay on the part of any party in exercising any power or right under this Agreement shall operate as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise of any other power or right. Any such waiver shall be effective only in the specific instance and for the purpose for which it is given.

SECTION 20.CONFIDENTIALITY.

All non-public information provided by Issuer shall be treated as confidential and will not be disclosed to third parties unless required by law, except Agent may disclose (a) the identity of Issuer as a client or client reference of Agent; (b) any information to any government regulator of Agent or its affiliated entities and (c) any information to Agent’s affiliated entities and product and service providers to the extent necessary to provide the services under this Agreement.

SECTION 21.BINDING EFFECT; ENTIRE AGREEMENT.

This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement, together with the exhibits attached hereto, constitutes the entire agreement between the Agent and the Issuer with respect to the subject matter hereof and supersedes in all respects all prior proposals, negotiations, communications, discussions and agreements between the parties concerning the subject matter of this Agreement.

SECTION 22.PLURAL TERMS; HEADINGS.

With respect to all references herein to nouns, insofar as the context requires, the singular form shall be deemed to include the plural, and the plural form shall be deemed to include the singular. Titles to Sections of this Agreement are included for convenience or reference only and shall be disregarded in construing the language contained in this Agreement.

SECTION 23. COUNTERPARTS; SEVERABILITY.

This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement, signed and transmitted by facsimile or Portable Document Format (PDF), is to be treated as an original document and the signature of any party hereon, if so transmitted, is to be considered as an original signature, and the document so transmitted is to be considered to have the same binding effect as a manual executed original.

In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

SECTION 24. BENEFIT OF AGREEMENT.

This Agreement is solely for the benefit of the parties hereto and no other person shall acquire or have any right under or by virtue hereof.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

ECOLAB INC., as Issuer
By:	/s/ Kristen L. Bettmann
	Name:	Kristen L. Bettmann
	Title:	Assistant Treasurer
MUFG UNION BANK, N.A., as Agent
By:	/s/ Richard Benjamin
	Name:	Richard Benjamin
	Title:	Director

EX-10.1(B)

Exhibit 10.1(b)

The Depository Trust Company

A subsidiary of The Depository Trust & Clearing Corporation

CORPORATE COMMERCIAL PAPER – MASTER NOTE

September 18, 2017

(Date of Issuance)

Ecolab Inc. (“Issuer”), for value received, hereby promises to pay to Cede & Co., as nominee of The Depository Trust Company, or to registered assigns: (i) the principal amount, together with unpaid accrued interest thereon, if any, on the maturity date of each obligation identified on the records of Issuer (the “Underlying Records”) as being evidenced by this Master Note, which Underlying Records are maintained by MUFG Union Bank, N.A. (“Paying Agent”); (ii) interest on the principal amount of each such obligation that is payable in installments, if any, on the due date of each installment, as specified on the Underlying Records; and (iii) the principal amount of each such obligation that is payable in installments, if any, on the due date of each installment, as specified on the Underlying Records. Interest shall be calculated at the rate and according to the calculation convention specified on the Underlying Records. Payments shall be made by wire transfer to the registered owner from Paying Agent without the necessity of presentation and surrender of this Master Note.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF.

This Master Note is a valid and binding obligation of Issuer.

Not Valid Unless Countersigned for Authentication by Paying Agent.

MUFG Union Bank, N.A.		Ecolab Inc.
(Paying Agent)		(Issuer)
By:	/s/ Richard Benjamin	By:	/s/ Kristen Bettmann
	(Authorized Countersignature)		(Authorized Signature)
			(Guarantor)
		By:
			(Authorized Signature)

(Reverse Side of Note)

At the request of the registered owner, Issuer shall promptly issue and deliver one or more separate note certificates evidencing each obligation evidenced by this Master Note. As of the date any such note certificate or certificates are issued, the obligations which are evidenced thereby shall no longer be evidenced by this Master Note.

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto

(Name, Address, and Taxpayer Identification Number of Assignee)

the Master Note and all rights thereunder, hereby irrevocably constituting and appointing

, attorney to transfer said Master Note on the

books of Issuer with full power of substitution in the premises.

Dated:
	(Signature)
Signature(s) Guaranteed:
	Notice: The signature on this assignment must correspond with the name as written upon the face of this Master Note, in every particular, without alteration or enlargement or any change whatsoever.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

Ecolab Inc.

Annex to Corporate Commercial Paper – Master Note dated September 18, 2017

Statement of Terms for Interest – Bearing Commercial Paper Notes of Ecolab Inc.

THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE “SUPPLEMENT”) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.

1.    General. (a) The obligations of the Issuer to which these terms apply (each a “Note”) are represented by one or more Master Notes (each, a “Master Note”) issued in the name of (or of a nominee for) The Depository Trust Company (“DTC”), which Master Note includes the terms and provisions for the Issuer's Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note.

(b) “Business Day” means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. “London Business Day” means a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

2.    Interest. (a) Each Note will bear interest at a fixed rate (a “Fixed Rate Note”) or at a floating rate (a “Floating Rate Note”).

(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the “Issue Date”); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. “Original Issue Discount Note” means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an “Original Issue Discount Note”.

(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an “Interest Payment Date” for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.

If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a “Base Rate”) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the “Spread”), if any, and/or multiplied by a certain percentage (the

“Spread Multiplier”), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a “CD Rate Note”), (b) the Commercial Paper Rate (a “Commercial Paper Rate Note”), (c) the Federal Funds Rate (a “Federal Funds Rate Note”), (d) LIBOR (a “LIBOR Note”), (e) the Prime Rate (a “Prime Rate Note”), (f) the Treasury Rate (a “Treasury Rate Note”) or (g) such other Base Rate as may be specified in such Supplement.

The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the “Interest Reset Period”). The date or dates on which interest will be reset (each an “Interest Reset Date”) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the “Interest Payment Period”) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an “Interest Payment Date” for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.

If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.

Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as

2

defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.

The “Interest Determination Date” where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.

The “Index Maturity” is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.

The “Calculation Date,” where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.

All times referred to herein reflect New York City time, unless otherwise specified.

The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the “Calculation Agent”) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.

All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).

CD Rate Notes

“CD Rate” means the rate on any Interest Determination Date for negotiable U.S. dollar certificates of deposit having the Index Maturity as published in the source specified in the Supplement.

If the above rate is not published by 3:00 p.m., New York City time, on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date published under the caption specified in the Supplement in another recognized electronic source used for the purpose of displaying the applicable rate.

If such rate is not published in either the source specified on the Supplement or another recognized electronic source by 3:00 p.m., New York City time, on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such Interest

3

Determination Date of three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.

If fewer than the three dealers selected by the Calculation Agent are quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.

Commercial Paper Rate Notes

“Commercial Paper Rate” means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading “Commercial Paper-Nonfinancial”.

If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading “Commercial Paper-Nonfinancial”.

If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest

Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is “AA,” or the equivalent, from a nationally recognized statistical rating organization.

If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.

“Money Market Yield” will be a yield calculated in accordance with the following formula:

D x 360

Money Market Yield =  --------------------- x 100

360 - (D x M)

where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and “M” refers to the actual number of days in the interest period for which interest is being calculated.

Federal Funds Rate Notes

“Federal Funds Rate” means the rate on any Interest Determination Date for federal funds set forth on Bloomberg Screen MMR21 4 (or any other page as may replace the specified page on Bloomberg).

If the above rate does not appear on Bloomberg Screen MMR21 4 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate

¹ Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer.

4

on such Interest Determination Date as published in H.15 Daily Update under the heading “Federal Funds/(Effective)”.

If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.

If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.

LIBOR Notes

The London Interbank offered rate (“LIBOR”) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.

If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agent’s judgment is representative for a single transaction in U.S. dollars in such market at such time (a “Representative Amount”). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.

“Designated LIBOR Page” means the display designated under the heading “LIBOR Fix” on Bloomberg Screen BTMM (or such other page as may replace such page on Bloomberg) for the purposes of displaying the London interbank rates of major banks.

Prime Rate Notes

“Prime Rate” means the rate on any Interest Determination Date as published in H.15(519) under the heading “Bank Prime Loan”.

If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption “Bank Prime Loan”.

If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such bank’s prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.

If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the

5

arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.

If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.

“Reuters Screen US PRIME1 Page” means the display designated as page “US PRIME1” on the Reuters Monitor Money Rates Service (or such other page as may replace the US PRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks).

Treasury Rate Note

“Treasury Rate” means:

(1) the rate from the auction held on the Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified in the Supplement on Bloomberg Screen TBILIN 3M INDEX (or any other page as may replace that page on Bloomberg), or

(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Auction High”, or

(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or

(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or

(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.

6

“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:

D x N

Bond Equivalent Yield = -------------------------- x 100

360 - (D x M)

where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Reset Period.

3. Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable.

4. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.2  

5. Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed.

6. Supplement. Any term contained in the Supplement shall supersede any conflicting term contained herein.

² Unlike single payment notes, where a default arises only at the stated maturity, interest -bearing notes with multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment.

7

EX-15.1

Exhibit (15.1)

November 2, 2017

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

RE: Ecolab Inc. Registration Statements on Form S-8 (Registration Nos. 2-90702; 33-18202; 33-55986; 33-56101; 333-95043; 333-109890; 33-34000; 33-56151; 333-18627; 333-109891; 33-39228; 33-56125; 333-70835; 33-60266; 333-95041; 333-40239; 333-95037; 333-50969; 333-58360; 333-97927; 333-115567; 333-129427; 333-129428; 333-140988; 333-115568; 333-132139; 333-147148; 333-163837; 333-163838; 333-165130; 333-165132; 333-166646; 333-174028; 333-176601; 333-178300; 333-178302; 333-184650; 333-190317; 333-199729; 333-199730; and 333-199732) and Form S-3 (Registration No. 333-201445).

Commissioners:

We are aware that our report dated November 2, 2017 on our review of interim financial information of Ecolab Inc. (the “Company”), which is included in the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2017, is incorporated by reference in its Registration Statements listed above.

Yours very truly,

/s/ PricewaterhouseCoopers LLP

PRICEWATERHOUSECOOPERS LLP

Minneapolis, Minnesota

EX-31.1

Exhibit (31.1)

CERTIFICATION

I, Douglas M. Baker, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2017 of Ecolab Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2017

/s/ Douglas M. Baker, Jr.

Douglas M. Baker, Jr.

Chairman of the Board and

Chief Executive Officer

EX-31.2

Exhibit (31.2)

CERTIFICATION

I, Daniel J. Schmechel, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2017 of Ecolab Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2017

/s/ Daniel J. Schmechel

Daniel J. Schmechel

Chief Financial Officer

EX-32.1

Exhibit (32.1)

Section 1350 Certifications

Pursuant to 18 U.S.C. Section 1350, each of the undersigned officers of Ecolab Inc. does hereby certify that:

(a)the Quarterly Report on Form 10-Q of Ecolab Inc. for the quarter ended September 30, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Ecolab Inc.

Dated: November 2, 2017	/s/ Douglas M. Baker, Jr.
	Douglas M. Baker, Jr.
	Chairman of the Board and Chief Executive Officer
Dated: November 2, 2017
	/s/ Daniel J. Schmechel
	Daniel J. Schmechel
	Chief Financial Officer

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2017 shares
Document and Entity Information
Entity Registrant Name	ECOLAB INC.
Entity Central Index Key	0000031462
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	288,914,305
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML

CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
CONSOLIDATED STATEMENT OF INCOME
Net sales	$ 3,563.3	$ 3,386.1	$ 10,187.6	$ 9,800.7
Cost of sales (including special charges of (a))	1,891.3	1,737.2	5,454.4	5,153.8
Selling, general and administrative expenses	1,087.3	1,071.6	3,293.2	3,253.1
Special (gains) and charges	4.9	3.2	47.9	35.7
Operating income	579.8	574.1	1,392.1	1,358.1
Interest expense, net	55.1	64.9	177.2	196.3
Income before income taxes	524.7	509.2	1,214.9	1,161.8
Provision for income taxes	128.9	129.7	264.2	286.7
Net income including noncontrolling interest	395.8	379.5	950.7	875.1
Net income attributable to noncontrolling interest	3.4	5.4	8.2	11.8
Net income attributable to Ecolab	$ 392.4	$ 374.1	$ 942.5	$ 863.3
Earnings attributable to Ecolab per common share
Basic (in dollars per share)	$ 1.36	$ 1.28	$ 3.25	$ 2.95
Diluted (in dollars per share)	1.34	1.27	3.20	2.91
Dividends declared per common share (in dollars per share)	$ 0.370	$ 0.350	$ 1.110	$ 1.050
Weighted-average common shares outstanding
Basic (in shares)	289.0	291.6	289.8	292.8
Diluted (in shares)	293.4	295.7	294.2	297.1

XML

CONSOLIDATED STATEMENT OF INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Special charges	$ 4.9	$ 3.2	$ 47.9	$ 35.7
Cost of sales
Special charges	$ 0.3		$ 26.2	$ 61.9

XML

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income including noncontrolling interest	$ 395.8	$ 379.5	$ 950.7	$ 875.1
Foreign currency translation adjustments
Foreign currency translation	150.6	17.2	275.8	(1.3)
Loss on net investment hedges	(50.9)	(1.2)	(103.7)	(29.1)
Total foreign currency translation adjustments	99.7	16.0	172.1	(30.4)
Derivatives and hedging instruments	(20.8)	(9.5)	(29.1)	(40.2)
Pension and postretirement benefits
Amortization of net actuarial loss and prior service cost included in net periodic pension and postretirement costs	1.3	5.6	8.2	16.7
Postretirement benefit changes		30.9		30.9
Total pension and postretirement benefits	1.3	36.5	8.2	47.6
Subtotal	80.2	43.0	151.2	(23.0)
Total comprehensive income, including noncontrolling interest	476.0	422.5	1,101.9	852.1
Comprehensive income attributable to noncontrolling interest	4.0	8.0	10.8	17.8
Comprehensive income attributable to Ecolab	$ 472.0	$ 414.5	$ 1,091.1	$ 834.3

XML

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 209.1	$ 327.4
Accounts receivable, net	2,533.2	2,341.2
Inventories	1,509.0	1,319.4
Other current assets	363.2	291.4
Total current assets	4,614.5	4,279.4
Property, plant and equipment, net	3,617.2	3,365.0
Goodwill	7,154.4	6,383.0
Other intangible assets, net	4,039.6	3,817.8
Other assets	431.0	485.0
Total assets	19,856.7	18,330.2
Current liabilities
Short-term debt	1,073.0	541.3
Accounts payable	1,115.9	983.2
Compensation and benefits	509.8	516.3
Income taxes	51.7	87.4
Other current liabilities	1,006.2	891.2
Total current liabilities	3,756.6	3,019.4
Long-term debt	6,484.5	6,145.7
Postretirement health care and pension benefits	983.7	1,019.2
Deferred income taxes	1,030.2	970.2
Other liabilities	302.5	204.8
Total liabilities	12,557.5	11,359.3
Equity
Common stock	354.2	352.6
Additional paid-in capital	5,397.5	5,270.8
Retained earnings	7,598.0	6,975.0
Accumulated other comprehensive loss	(1,564.3)	(1,712.9)
Treasury stock	(4,563.1)	(3,984.4)
Total Ecolab shareholders' equity	7,222.3	6,901.1
Noncontrolling interest	76.9	69.8
Total equity	7,299.2	6,970.9
Total liabilities and equity	$ 19,856.7	$ 18,330.2

XML

CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares shares in Millions	Sep. 30, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEET
Common stock, shares authorized	800.0	800.0
Common stock, par value per share (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares outstanding	288.9	291.8

XML

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
OPERATING ACTIVITIES
Net income including noncontrolling interest	$ 950.7	$ 875.1
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	437.0	420.9
Amortization	228.5	217.2
Deferred income taxes	10.4	(55.3)
Share-based compensation expense	71.8	67.7
Excess tax benefits from share-based payment arrangements		(39.5)
Pension and postretirement plan contributions	(131.0)	(207.0)
Pension and postretirement plan expense	26.5	43.1
Restructuring charges, net of cash paid	13.3	(48.1)
Asset charges and write-downs		50.9
Other, net	19.9	11.9
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(23.5)	37.8
Inventories	(116.9)	34.6
Other assets	8.4	(14.0)
Accounts payable	57.0	(37.6)
Other liabilities	(107.2)	134.0
Cash provided by operating activities	1,444.9	1,491.7
INVESTING ACTIVITIES
Capital expenditures	(538.2)	(478.6)
Capitalized software expenditures	(55.8)	(32.2)
Property and other assets sold	4.1	29.6
Acquisitions and investments in affiliates, net of cash acquired	(831.2)	(44.7)
Deposit into acquisition related escrow	(0.8)
Restricted cash activity	53.8	(55.9)
Cash used for investing activities	(1,368.1)	(581.8)
FINANCING ACTIVITIES
Net issuances (repayments) of commercial paper and notes payable	187.8	(522.4)
Long-term debt borrowings	495.0	793.8
Long-term debt repayments	(20.1)	(130.5)
Reacquired shares	(587.7)	(737.8)
Dividends paid	(330.3)	(324.5)
Exercise of employee stock options	63.0	62.3
Excess tax benefits from share-based payment arrangements		39.5
Acquisition related liabilities and contingent consideration	(8.2)	(3.8)
Cash provided by (used for) financing activities	(200.5)	(823.4)
Effect of exchange rate changes on cash and cash equivalents	5.4	1.3
Increase (decrease) in cash and cash equivalents	(118.3)	87.8
Cash and cash equivalents, beginning of period	327.4	92.8
Cash and cash equivalents, end of period	$ 209.1	$ 180.6

XML

CONSOLIDATED FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2017

CONSOLIDATED FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL INFORMATION

1. CONSOLIDATED FINANCIAL INFORMATION

The unaudited consolidated financial information for the third quarter and nine months ended September 30, 2017 and 2016 reflect, in the opinion of company management, all adjustments necessary for a fair statement of the financial position, results of operations, comprehensive income (loss) and cash flows of Ecolab Inc. ("Ecolab" or "the Company") for the interim periods presented. Any adjustments consist of normal recurring items.

The financial results for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet data as of December 31, 2016 was derived from the audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

During the first quarter of 2017, the Company adopted the accounting guidance issued in March 2016 that amends certain aspects of share-based compensation for employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classifications on the Consolidated Statement of Cash Flows. Under the new guidance, all excess tax benefits or deficiencies are to be recognized prospectively as discrete income tax items on the Consolidated Statement of Income, while previous guidance required realized excess tax benefits or deficiencies to be recognized in additional paid-in capital. The Company recorded $2.4 million and $29.2 million of excess tax benefits during the third quarter and first nine months of 2017, respectively. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. Adoption of the accounting standard also eliminated the requirement that excess tax benefits be realized before they can be recognized, and as a result, the Company recorded a $1.9 million cumulative-effect adjustment for previously unrecognized excess tax benefits. 

The Company’s adoption also resulted in associated excess tax benefits being classified as an operating activity in the statement of cash flows prospectively beginning January 1, 2017 with no changes to the prior year. Based on the adoption methodology applied, employee taxes paid remain classified as a financing activity on the statement of cash flows, and the statement of cash flows classification of prior periods has not changed.  With regards to forfeitures, the new guidance allows companies either to continue to estimate the number of awards that will be forfeited or to account for forfeitures as they occur. The Company has elected to continue to estimate the number of awards that will be forfeited based on an estimate of the number of outstanding awards expected to vest. 

With respect to the unaudited financial information of the Company for the third quarter and nine months ended September 30, 2017 and 2016 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. Their separate report dated November 2, 2017 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (the "Act"), for their report on the unaudited financial information because that report is not a "report" or a "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

XML

SPECIAL (GAINS) AND CHARGES

9 Months Ended

Sep. 30, 2017

SPECIAL (GAINS) AND CHARGES

SPECIAL (GAINS) AND CHARGES

2. SPECIAL (GAINS) AND CHARGES

Special (gains) and charges reported on the Consolidated Statement of Income include the following:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Other		-		-		11.1		10.0
Subtotal		0.3		-		26.2		61.9
Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Other		2.2		9.2		9.1		32.7
Subtotal		4.9		3.2		47.9		35.7
Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6

For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with the Company’s internal management reporting.

Restructuring activities

The Company’s restructuring activities are associated with plans to enhance its efficiency and effectiveness and sharpen its competitiveness. Restructuring plans include net costs associated with significant actions involving employee-related severance charges, contract termination costs and asset write-downs and disposals. Employee termination costs are largely based on policies and severance plans, and include personnel reductions and related costs for severance, benefits and outplacement services. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract terminations. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Restructuring activities have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income. Restructuring liabilities have been classified as a component of both other current and other noncurrent liabilities on the Consolidated Balance Sheet.

During the second quarter of 2017, the Company commenced restructuring and other cost-saving actions in order to streamline its operations. These actions include a reduction of the Company’s global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions, the Company expects to incur $40  to $45 million ($30 to $35 million after tax) of restructuring charges, the majority of which is expected to be incurred during 2017. The Company recorded restructuring charges of $3.6 million ($1.3 million after tax) and $36.6 million ($26.2 million after tax) during the third quarter and first nine months of 2017, respectively, related primarily to employee termination costs. As of September 30, 2017, the restructuring liability balance related to these actions was $28.2 million. The Company anticipates the majority of the pretax charges will represent net cash expenditures which are expected to be paid over a period of a few months to several quarters and will be funded from operating activities. Cash payments during the third quarter and first nine months of 2017 were $4.3 million and $4.9 million, respectively.

Net restructuring charges related to the Company’s Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) and $5.9 million ($7.3 million after tax), respectively. The restructuring liability balance was $23.1 million and $39.6 million as of September 30, 2017 and December 31, 2016, respectively. The reduction in liability was driven primarily by severance and other cash payments. The remaining accrual is expected to be paid over a period of a few months to several quarters and continues to be funded from operating activities.

Acquisition and integration related costs

Acquisition and integration costs reported in cost of sales on the Consolidated Statement of Income include $0.3 million ($0.2 million after tax) in the third quarter of 2017 related to disposal of excess inventory and $12.9 million ($8.2 million after tax) during the first nine months of 2017 related primarily to recognition of accelerated rent expense upon the closure of Swisher Hygiene Inc. (“Swisher”) plants and disposal of excess inventory. The first nine months of 2017 also include amounts related to recognition of fair value step-up in the Laboratoires Anios (“Anios”) inventory.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $1.8 million ($1.2 million after tax) and $12.7 million ($8.5 million after tax) of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

During the third quarter and first nine months of 2016, the Company incurred acquisition and integration charges of $1.7 million ($1.0 million after tax) and $5.0 million ($3.1 million after tax), respectively. Further information related to the Company’s acquisitions is included in Note 3.

Energy related charges

Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration and production investments in the energy industry, particularly in North America. As a result of these conditions and their corresponding impact on the Company’s business outlook, the Company recorded total charges of $63.6 million ($42.9 million after tax) during the first nine months of 2016, comprised of inventory write downs and related disposal costs, fixed asset charges, headcount reductions and other charges. No such charges were incurred in 2017.

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of the Company’s North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of 2017, the Company had $3.2 million of corresponding severance remaining to be paid, which is expected to be paid in the next several months and be funded from operating activities.

The charges discussed above have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

Venezuela related gain

Effective as of the end of the fourth quarter of 2015, the Company deconsolidated its Venezuelan subsidiaries. The Company recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2 million ($2.0 million after tax) during the third quarter of 2017 and $8.5 million ($5.3 million after tax) during the first nine months of 2017. In 2016, the Company recorded no such gains during the third quarter and $7.8 million ($4.9 million after tax) during the first nine months.

Other

During the third quarter of 2017, the Company recorded charges of $2.2 million ($1.4 million after tax) related to litigation. During the first nine months of 2017, the Company recorded charges of $20.2 million ($15.9 million after tax) related to litigation and a Global Energy vendor contract termination. These charges have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

During the first nine months of 2016, the Company recorded a charge of $10.0 million ($6.3 million after tax) related to a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

Additionally, during the third quarter and first nine months of 2016, the Company recorded charges of $9.2 million ($5.6 million after tax) and $32.7 million ($20.7 million after tax), respectively, primarily consisting of litigation related charges. These charges have been included as a component of special (gains) and charges on the Consolidated Statement of Income.

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ACQUISITIONS AND DISPOSITIONS

9 Months Ended

Sep. 30, 2017

ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS AND DISPOSITIONS

3. ACQUISITIONS AND DISPOSITIONS

Acquisitions

The Company makes acquisitions that align with its strategic business objectives. The assets and liabilities of the acquired entities have been recorded as of the acquisition date, at their respective fair values, and are included in the Consolidated Balance Sheet and results of the Company from the date of acquisition. The purchase price allocation is based on estimates of the fair value of assets acquired and liabilities assumed. The aggregate purchase price of acquisitions has been reduced for any cash or cash equivalents acquired with the acquisition. Acquisitions during the first nine months of 2017 and 2016 were not material to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented.

Anios Acquisition

On February 1, 2017, the Company acquired Anios for total consideration of $798.3 million, including satisfaction of outstanding debt. Anios is a leading European manufacturer and marketer of hygiene and disinfection products for the healthcare, food service, and food and beverage processing industries. Anios provides an innovative product line that expands the solutions the Company is able to offer while also providing a complementary geographic footprint within the healthcare market. With pre-acquisition annual sales of approximately $245 million, the acquired business became part of the Company’s Global Institutional reportable segment during the first quarter of 2017. During 2016, the Company deposited €50 million in an escrow account that was released back to the Company upon closing of the transaction in February 2017. As shown within Note 4, this was recorded as restricted cash within other assets on the Consolidated Balance Sheet as of December 31, 2016.

The Company incurred certain acquisition and integration costs associated with the transaction that were expensed and are reflected in the Consolidated Statement of Income. See Note 2 for additional information related to the Company’s special gains and charges related to such activities.

The Anios acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. Certain estimated values are not yet finalized and are subject to change. Amounts for certain deferred tax assets and liabilities, environmental reserves, certain tangible and intangible assets, income tax uncertainties, and goodwill remain subject to change, as information necessary to complete the analysis is obtained. The Company expects to finalize these by the filing of the 2017 Form 10-K.

The following table summarizes the preliminary value of Anios assets acquired and liabilities assumed as of the acquisition date.

(millions)
Tangible assets	$142.7
Identifiable intangible assets:
Customer relationships	252.0
Trademarks	65.7
Other technology	16.1
Total assets acquired	476.5
Total liabilities assumed	184.7
Goodwill	506.5
Total consideration transferred	798.3
Long-term debt repaid upon close	192.8
Net consideration transferred to sellers	$605.5

Net tangible assets are primarily comprised of accounts receivable of $66.2 million, property, plant and equipment of $25.6 million and inventory of $29.7 million.

Customer relationships, trademarks, and other technology are being amortized over weighted average lives of 20,  17, and 11 years, respectively.

Goodwill of $506.5 million arising from the acquisition consists largely of the synergies and economies of scale expected through adding complementary geographies and innovative products to the Company’s healthcare portfolio. The goodwill was initially assigned to the Healthcare operating segment within the Global Institutional reportable segment and will be allocated to other operating segments within the purchase accounting window. None of the goodwill recognized is expected to be deductible for income tax purposes.

Other Acquisitions

Excluding the Anios acquisition, during the first nine months of 2017, the Company paid $32.6 million for acquisitions, of which $18.4 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 12 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

During the first nine months of 2016, the Company paid $48.5 million for acquisitions, of which $2.5 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 5 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

Subsequent Event Activity

The Company entered into various purchase agreements which are expected to close in the fourth quarter of 2017. None of the agreements are material to the consolidated financial statements, individually or in the aggregate.

Dispositions

There were no business dispositions during the first nine months of 2017 or 2016.

Subsequent Event Activity

In October 2017, the Company entered into an agreement to sell its Equipment Care business which subsequently closed on November 1, 2017. The disposition is not expected to be material to the consolidated financial statements. 

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BALANCE SHEET INFORMATION

9 Months Ended

Sep. 30, 2017

BALANCE SHEET INFORMATION

BALANCE SHEET INFORMATION

4. BALANCE SHEET INFORMATION

	September 30		December 31
(millions)	2017		2016
Accounts receivable, net
Accounts receivable		$2,606.4		$2,408.8
Allowance for doubtful accounts		(73.2)		(67.6)
Total		$2,533.2		$2,341.2
Inventories
Finished goods		$1,004.8		$860.0
Raw materials and parts		461.0		408.4
Inventories at FIFO cost		1,465.8		1,268.4
FIFO cost to LIFO cost difference		43.2		51.0
Total		$1,509.0		$1,319.4
Other current assets
Prepaid assets		$128.2		$98.3
Taxes receivable		155.9		105.0
Derivative assets		29.0		46.3
Other		50.1		41.8
Total		$363.2		$291.4
Property, plant and equipment, net
Land		$227.4		$211.0
Buildings and leasehold improvements		1,174.5		1,121.2
Machinery and equipment		2,219.3		2,035.8
Merchandising and customer equipment		2,396.6		2,199.4
Capitalized software		583.0		531.1
Construction in progress		422.0		344.1
		7,022.8		6,442.6
Accumulated depreciation		(3,405.6)		(3,077.6)
Total		$3,617.2		$3,365.0
Other intangible assets, net
Intangible assets not subject to amortization
Trade names		$1,230.0		$1,230.0
Intangible assets subject to amortization
Customer relationships		$3,588.2		$3,206.1
Trademarks		378.8		303.3
Patents		459.7		446.5
Other technology		229.1		210.5
		4,655.8		4,166.4
Accumulated amortization
Customer relationships		(1,356.1)		(1,148.2)
Trademarks		(144.6)		(125.2)
Patents		(179.0)		(157.3)
Other technology		(166.5)		(147.9)
		(1,846.2)		(1,578.6)
Net intangible assets subject to amortization		2,809.6		2,587.8
Total		$4,039.6		$3,817.8
Other assets
Deferred income taxes		$105.3		$92.3
Pension		35.6		27.2
Derivative assets		-		21.5
Restricted cash		-		53.0
Other		290.1		291.0
Total		$431.0		$485.0

	September 30		December 31
(millions)	2017		2016
Other current liabilities
Discounts and rebates		$318.3		$275.2
Dividends payable		106.9		108.0
Interest payable		70.4		37.3
Taxes payable, other than income		117.0		103.7
Derivative liabilities		86.6		24.6
Restructuring		45.7		30.5
Other		261.3		311.9
Total		$1,006.2		$891.2
Accumulated other comprehensive loss
Unrealized loss on derivative financial instruments, net of tax		$(37.6)		$(8.5)
Unrecognized pension and postretirement benefit expense, net of tax		(527.2)		(511.4)
Cumulative translation, net of tax		(999.5)		(1,193.0)
Total		$(1,564.3)		$(1,712.9)

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DEBT AND INTEREST

9 Months Ended

Sep. 30, 2017

DEBT AND INTEREST

DEBT AND INTEREST

5. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations as of September 30, 2017 and December 31, 2016.

	September 30		December 31
(millions)	2017		2016
Short-term debt
Commercial paper		$238.0		$-
Notes payable		24.2		29.9
Long-term debt, current maturities		810.8		511.4
Total		$1,073.0		$541.3

Line of Credit

As of September 30, 2017, the Company had in place a $2.0 billion multi-year credit facility which expires in December 2019. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of either September 30, 2017 or December 31, 2016.

Commercial Paper

The Company’s commercial paper program is used as a potential source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion.

As of September 30, 2017, the Company had $238.0 million (€200 million) of commercial paper outstanding under its Euro program and no commercial paper outstanding under its U.S. program. As of December 31, 2016, the Company had no commercial paper outstanding under either program.

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of September 30, 2017 and December 31, 2016.

	Maturity	September 30		December 31
(millions)	by Year	2017		2016
Long-term debt
Public notes (2017 principal amount)
Five year 2012 senior notes ($500 million)	2017		$499.6		$498.9
Three year 2015 senior notes ($300 million)	2018		299.5		298.9
Three year 2016 senior notes ($400 million)	2019		396.6		395.9
Five year 2015 senior notes ($300 million)	2020		298.9		298.6
Ten year 2011 senior notes ($1.25 billion)	2021		1,245.6		1,244.8
Five year 2017 senior notes ($500 million)	2022		496.0		-
Seven year 2016 senior notes ($400 million)	2023		397.4		397.0
Seven year 2016 senior notes (€575 million)	2024		676.5		608.4
Ten year 2015 senior notes (€575 million)	2025		679.5		604.3
Ten year 2016 senior notes ($750 million)	2026		742.7		742.1
Thirty year 2011 senior notes ($750 million)	2041		739.1		738.7
Thirty year 2016 senior notes ($250 million)	2046		245.9		245.9
Private notes (2017 principal amount)
Series A private placement senior notes ($250 million)	2018		248.8		248.9
Series B private placement senior notes ($250 million)	2023		249.3		249.2
Capital lease obligations			4.9		5.2
Other			75.0		80.3
Total debt			7,295.3		6,657.1
Long-term debt, current maturities			(810.8)		(511.4)
Total long-term debt			$6,484.5		$6,145.7

Public Notes

In August 2017, the Company issued a $500 million aggregate principal five year fixed rate note with a coupon rate of 2.375%. The proceeds were used to repay a portion of the Company’s outstanding commercial paper and for general corporate purposes.

The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the public notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company.

Private Notes

The Company’s private notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of specified changes of control involving the Company, the Company would be required to offer to repurchase the private notes at a price equal to 100% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. Additionally, the Company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the Company, when accompanied by a downgrade of the private notes below investment grade rating, within a specified time period. The private notes are unsecured senior obligations of the Company and rank equal in right of payment with all other senior indebtedness of the Company. The private notes shall be unconditionally guaranteed by subsidiaries of the Company in certain circumstances, as described in the note purchase agreement as amended.

Covenants

The Company is in compliance with its debt covenants as of September 30, 2017.

Net Interest Expense

Interest expense and interest income recognized during the third quarter and the first nine months of 2017 and 2016 were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Interest expense		$60.7		$69.0		$191.0		$209.4
Interest income		(5.6)		(4.1)		(13.8)		(13.1)
Interest expense, net		$55.1		$64.9		$177.2		$196.3

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. The Company’s reporting units are its operating segments.

During the second quarter of 2017, the Company completed its annual assessment for goodwill impairment across its eleven reporting units through a quantitative analysis, utilizing a discounted cash flow approach, which incorporates assumptions regarding future growth rates, terminal values, and discount rates. The two-step quantitative process involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of impairment loss to be recorded, if any. The Company’s goodwill impairment assessment for 2017 indicated the estimated fair value of each of its reporting units exceeded its carrying amount by a significant margin.

If circumstances change significantly, the Company would also test a reporting unit’s goodwill for impairment during interim periods between its annual tests. There has been no impairment of goodwill in any of the years presented.

The changes in the carrying amount of goodwill for each of the Company's reportable segments during the nine months ended September 30, 2017 were as follows:

	Global		Global		Global
(millions)	Industrial		Institutional		Energy		Other		Total
December 31, 2016		$2,522.3		$653.4		$3,093.6		$113.7		$6,383.0
Reclassifications (a)		62.7		(62.7)		-		-		-
December 31, 2016 revised		$2,585.0		$590.7		$3,093.6		$113.7		$6,383.0
Current year business combinations (b)		4.1		506.5		-		-		510.6
Prior year business combinations (c)		-		-		0.3		-		0.3
Effect of foreign currency translation		97.9		41.6		116.8		4.2		260.5
September 30, 2017		$2,687.0		$1,138.8		$3,210.7		$117.9		$7,154.4

(a) Relates to establishment of the Life Sciences reporting unit, and goodwill being allocated to Life Sciences based on fair value allocation of goodwill. The Life Sciences reporting unit is included in the Industrial reportable segment and is comprised of operations previously recorded in the Food & Beverage and Healthcare reporting units, which are aggregated and reported in the Global Industrial and Global Institutional reportable segments, respectively. See Note 14 for further information.

(b) Represents goodwill associated with current year acquisitions. Of the goodwill acquired, the Company expects $4.1 million of the goodwill related to businesses acquired to be tax deductible.

(c) Represents purchase price allocation adjustments for 2016 acquisitions deemed preliminary as of December 31, 2016.

Other Intangible Assets

The Nalco trade name is the Company’s principal indefinite life intangible asset. During the second quarter of 2017, the Company completed its annual test for indefinite life intangible asset impairment using a relief from royalty method of assessment, which incorporates assumptions regarding future sales projections and discount rates. Based on this testing, the estimated fair value of the asset exceeded its carrying value by a significant margin; therefore, no adjustment to the $1.2 billion carrying value of this asset was necessary. There has been no impairment of the Nalco trade name intangible asset since it was acquired.

The Company’s intangible assets subject to amortization primarily include customer relationships, trademarks, patents and other technology. The fair value of identifiable intangible assets is estimated based upon discounted future cash flow projections and other acceptable valuation methods. Other intangible assets are amortized on a straight-line basis over their estimated economic lives. Total amortization expense related to other intangible assets during the third quarter of 2017 and 2016 was $77.6 million and $71.9 million, respectively. Total amortization expense related to other intangible assets during the first nine months of 2017 and 2016 was $228.5 million and $217.2 million, respectively. Estimated amortization for the remaining three month period of 2017 related to other amortizable intangible assets is expected to be approximately $84 million.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

7. FAIR VALUE MEASUREMENTS

The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, accounts payable, commercial paper, notes payable, foreign currency forward contracts, interest rate swap agreements and long-term debt.

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 - Inputs include observable inputs other than quoted prices in active markets.

Level 3 - Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis were:

	September 30, 2017
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$52.1		$-		$52.1		$-
Liabilities
Foreign currency forward contracts		209.2		-		209.2		-
Interest rate swap agreements		3.6		-		3.6		-

	December 31, 2016
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$ 93.4		$ -		$ 93.4		$ -
Liabilities
Foreign currency forward contracts		46.7		-		46.7		-
Interest rate swap agreements		3.5		-		3.5		-

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date, and is classified within Level 2. The carrying value of interest rate swap contracts is at fair value, which is determined based on current interest rates and forward interest rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See further discussion of gross versus net presentation of the Company's derivatives within Note 8.

The carrying values of accounts receivable, accounts payable, cash and cash equivalents, restricted cash, commercial paper and notes payable approximate fair value because of their short maturities, and as such are classified within Level 1.

The fair value of long-term debt is based on quoted market prices for the same or similar debt instruments classified as Level 2. The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:

	September 30				December 31
(millions)	2017				2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Long-term debt, including current maturities		$7,295.3		$7,707.6		$6,657.1		$6,963.9

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DERIVATIVES AND HEDGING TRANSACTIONS

9 Months Ended

Sep. 30, 2017

DERIVATIVES AND HEDGING TRANSACTIONS

DERIVATIVES AND HEDGING TRANSACTIONS

8. DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts, interest rate swap agreements and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. The Company records derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. The Company monitors its exposure to credit risk by using credit approvals and credit limits and by selecting major global banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table no cash collateral had been received or pledged related to the underlying derivatives.

The respective net amounts are included in other current assets, other non-current assets, other current liabilities and other liabilities on the Consolidated Balance Sheet.

The following table summarizes the gross fair value and the net value of the Company’s outstanding derivatives.

	Asset Derivatives				Liability Derivatives
	September 30		December 31		September 30		December 31
(millions)	2017		2016		2017		2016
Derivatives designated as hedging instruments
Foreign currency forward contracts		$30.2		$73.4		$156.7		$19.8
Interest rate swap agreements		-		-		3.6		3.5
Derivatives not designated as hedging instruments
Foreign currency forward contracts		21.9		20.0		52.5		26.9
Gross value of derivatives		52.1		93.4		212.8		50.2
Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)		(23.1)		(25.7)
Net value of derivatives		$29.0		$67.7		$189.7		$24.5

The following table summarizes the notional values of the Company’s outstanding derivatives.

	Notional Values
	September 30		December 31
(millions)	2017		2016
Foreign currency forward contracts (a)		$ 5,617		$ 4,317
Interest rate agreements		$ 1,450		$ 1,450

(a) Includes net investment hedge forward contracts of €40 million and €0 million as of September 30, 2017 and December 31, 2016, respectively.

Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, including inventory purchases and intercompany royalty, management fee and other payments. These forward contracts are designated as cash flow hedges. The effective portions of the changes in fair value of these contracts are recorded in accumulated other comprehensive income (“AOCI”) until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the Consolidated Statement of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next five years.

The Company occasionally enters into treasury lock and forward starting interest rate swap agreements to manage interest rate exposure. During 2016, 2015, and 2014 the Company entered into and subsequently closed a series of treasury lock and forward starting interest rate swap agreements, in conjunction with its public debt issuances. The agreements were designated and effective as cash flow hedges of the expected interest payments related to the anticipated future debt issuances. Amounts recorded in AOCI are recognized as part of interest expense over the remaining life of the notes as the forecasted interest transactions occur.

The effective portion of gains and losses recognized into AOCI and earnings from derivative contracts that qualified as cash flow hedges was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Unrealized gain (loss) recognized into AOCI
Foreign currency forward contracts	AOCI (equity)		$(118.8)		$(12.9)		$(192.4)		$(40.4)
Interest rate swap agreements	AOCI (equity)		-		1.4		-		(11.5)
	Total		(118.8)		(11.5)		(192.4)		(51.9)
Gain (loss) recognized in income
Foreign currency forward contracts	Cost of sales		(0.9)		5.0		(11.7)		26.6
	SG&A		(99.5)		(0.7)		(157.3)		(20.3)
	Interest expense, net		7.4		-		16.1		2.9
	Subtotal		(93.0)		4.3		(152.9)		9.2
Interest rate swap agreements	Interest expense, net		(1.8)		(1.6)		(5.4)		(4.8)
	Total		$(94.8)		$2.7		$(158.3)		$4.4

Gains and losses recognized in income related to the ineffective portion of the Company’s cash flow hedges were insignificant during the first nine months of 2017 and 2016.

Fair Value Hedges

The Company manages interest expense using a mix of fixed and floating rate debt. To help manage exposure to interest rate movements and to reduce borrowing costs, the Company may enter into interest rate swaps under which the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective and thus, there is no impact on earnings due to hedge ineffectiveness.

In January 2016, the Company entered into an interest rate swap agreement that converted its $400 million 2.00% debt from a fixed interest rate to a floating interest rate. In January 2015, the Company entered into interest rate swap agreements that converted its $300 million 1.55% debt and its $250 million 3.69% debt from fixed interest rates to floating interest rates. In May 2014, the Company entered into an interest rate swap agreement that converted its $500 million 1.45% debt from a fixed rate to a floating interest rate.

The interest rate swaps referenced above were designated as fair value hedges.

The impact on earnings from derivative contracts that qualified as fair value hedges was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) on derivative recognized income
Interest rate swap	Interestexpense, net		$0.3		$(7.6)		$(0.1)		$6.1
Gain (loss) on hedged item recognized income
Interest rate swap	Interest expense, net		$(0.3)		$7.6		$0.1		$(6.1)

Net Investment Hedges

The Company designates its outstanding €1,150 million ($1,356 million at the end of the third quarter of 2017) senior notes (“euronotes”) and €200 million ($238 million at the end of the third quarter of 2017) Euro commercial paper and related accrued interest as hedges of existing foreign currency exposures related to investments the Company has in certain euro denominated functional currency subsidiaries.

The revaluation gains and losses on the euronotes and Euro commercial paper, which are designated and effective as hedges of the Company’s net investments, have been included as a component of the cumulative translation adjustment account and were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Revaluation gains (losses), net of tax		$(50.9)		$(1.2)		$(103.7)		$(29.1)

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

The impact on earnings from derivative contracts that are not designated as hedging instruments was as follows:

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) recognized in income
Foreign currency forward contracts	SG&A		$(29.4)		$(12.0)		$(38.1)		$(27.3)
	Interestexpense, net		(0.2)		1.0		(3.5)		(2.1)
	Total		$(29.6)		$(11.0)		$(41.6)		$(29.4)

The amounts recognized in SG&A above offset the earnings impact of the related foreign currency denominated assets and liabilities. The amounts recognized in interest expense above represent the component of the hedging gains (losses) attributable to the difference between the spot and forward rates of the hedges as a result of interest rate differentials. The losses recognized in 2017 primarily relate to movements in the Euro rates.

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OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

9 Months Ended

Sep. 30, 2017

OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

9. OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

Other comprehensive income (loss) includes net income, foreign currency translation adjustments, unrecognized gains and losses on securities, defined benefit pension and postretirement plan adjustments, gains and losses on derivative instruments designated and effective as cash flow hedges and non-derivative instruments designated and effective as foreign currency net investment hedges that are charged or credited to the accumulated other comprehensive loss account in shareholders’ equity.

The following tables provide other comprehensive income information related to the Company’s derivatives and hedging instruments and pension and postretirement benefits. See Note 8 for additional information related to the Company’s derivatives and hedging transactions. See Note 13 for additional information related to the Company’s pension and postretirement benefits activity.

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Derivative and Hedging Instruments
Unrealized gains (losses) on derivative & hedging instruments
Amount recognized in AOCI		$(118.8)		$(11.5)		$(192.4)		$(51.9)
(Gains) losses reclassified from AOCI into income
Cost of sales		0.9		(5.0)		11.7		(26.6)
SG&A		99.5		0.7		157.3		20.3
Interest (income) expense, net		(5.6)		1.6		(10.7)		1.9
		94.8		(2.7)		158.3		(4.4)
Other activity		(0.6)		0.1		(0.1)		0.1
Tax impact		3.8		4.6		5.1		16.0
Net of tax		$(20.8)		$(9.5)		$(29.1)		$(40.2)
Pension and Postretirement Benefits
Amount reclassified from AOCI into income
Actuarial losses		11.3		10.8		33.3		32.6
Prior service costs		(6.1)		(2.0)		(18.1)		(6.0)
Postretirement benefits changes		-		50.0		-		50.0
		5.2		58.8		15.2		76.6
Tax impact		(3.9)		(22.3)		(7.0)		(29.0)
Net of tax		$1.3		$36.5		$8.2		$47.6

The following table summarizes the derivative and pension and postretirement benefit amounts reclassified from AOCI into income.

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
	2017		2016		2017		2016
(millions)
Derivative losses (gains) reclassified from AOCI into income, net of tax		$72.7		$(2.0)		$120.3	$	(3.5)
Pension and postretirement benefits net actuarial losses
and prior services costs reclassified from AOCI into income, net of tax		$1.3		$5.6		$8.2	$	16.7

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SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2017

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

10. SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

In February 2015, the Company’s Board of Directors authorized the repurchase of up to 20 million shares of its common stock, including shares to be repurchased under Rule 10b5–1. As of September 30, 2017, 12,358,110 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions.

Accelerated Stock Repurchase (“ASR”) Agreements

In February 2017, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,077,224 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. In connection with the final settlement of the ASR agreement in June 2017, the Company received an additional 286,620 shares of common stock.

In February 2016, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,459,490 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. Upon final settlement of the ASR agreement in May 2016, the Company received an additional 232,012 shares of common stock.

The final per share purchase price and the total number of shares to be repurchased under both 2017 and 2016 ASR agreements generally were based on the volume-weighted average price of the Company’s common stock during the term of the agreements.

All shares acquired under the ASR agreements were recorded as treasury stock.

During their respective open periods in 2017 and 2016, neither of the ASRs was dilutive to the Company’s earnings per share calculations, nor did they trigger the two-class earnings per share methodology. Additionally, the unsettled portion of ASRs during their respective open periods met the criteria to be accounted for as a forward contract indexed to the Company’s stock and qualified as equity transactions.

The initial delivery of shares, as well as the additional receipt of shares at settlement resulted in a reduction to the Company’s common stock outstanding used to calculate earnings per share.

Share Repurchases

During the first nine months of 2017, the Company reacquired 4,614,646 shares of its common stock, of which 4,414,416 related to share repurchases through open market or private purchases, including the February 2017 ASR discussed above, and 200,230 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

During 2016, the Company reacquired 6,483,198 shares of its common stock, of which 6,126,033 related to share repurchases through open market or private purchases, including the February 2016 ASR discussed above, and 357,165 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

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EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS")

9 Months Ended

Sep. 30, 2017

EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS")

EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS")

11. EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE (“EPS”)

The difference in the weighted average common shares outstanding for calculating basic and diluted EPS is a result of the dilution associated with the Company’s equity compensation plans. As noted in the table below, certain stock options and units outstanding under these equity compensation plans were not included in the computation of diluted EPS because they would not have had a dilutive effect.

The computations of the basic and diluted EPS amounts were as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions, except per share)	2017		2016		2017		2016
Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3
Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8
Effect of dilutive stock options and units		4.4		4.1		4.4		4.3
Diluted		293.4		295.7		294.2		297.1
Basic EPS		$ 1.36		$ 1.28		$ 3.25		$ 2.95
Diluted EPS		$ 1.34		$ 1.27		$ 3.20		$ 2.91
Anti-dilutive securities excluded from the computation of EPS		0.1		1.7		1.7		1.7

The Company’s diluted EPS for 2017 was impacted by the adoption of the new accounting guidance that amends the calculation of diluted EPS for share-based payments to exclude excess tax benefits or deficiencies from assumed proceeds during application of the treasury stock method.

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INCOME TAXES

9 Months Ended

Sep. 30, 2017

INCOME TAXES

INCOME TAXES

12. INCOME TAXES

The Company’s tax rate was 24.6% and 25.5% for the third quarter of 2017 and 2016, respectively, and 21.7% and 24.7% for the first nine months of 2017 and 2016, respectively. The change in the Company’s tax rate for the third quarter of 2017 compared to the third quarter of 2016 was primarily driven by global tax planning strategies and geographic mix. The change in the Company’s tax rate for the first nine months of 2017 compared to first nine months of 2016 was primarily driven by the tax rate impact of discrete tax items with lesser impacts from global tax planning strategies and geographic mix.

The Company recognized net expenses related to discrete tax items of $8.3 million and net tax benefits related to discrete tax items of $24.2 million during the third quarter and first nine months of 2017, respectively. The third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2016 U.S. federal income tax return and international adjustments due to changes in estimates, partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters. Net benefits for the first nine months of 2017 was also impacted by the recognition of $29.2 million of share-based compensation excess tax benefits related to employee share-based payments (resulting from the adoption of a new accounting standard as discussed in Note 1).

The Company recognized net expenses related to discrete tax items of $4.5 million and $3.6 million during the third quarter and first nine months of 2016, respectively. Third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2015 U.S. federal income tax return, partially offset by settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in an international jurisdiction. Net expense related to discrete tax items for the first nine months of 2016 was also impacted by adjustments to deferred tax asset and liability positions and the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

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PENSION AND POSTRETIREMENT PLANS

9 Months Ended

Sep. 30, 2017

PENSION AND POSTRETIREMENT PLANS

PENSION AND POSTRETIREMENT PLANS

13. PENSION AND POSTRETIREMENT PLANS

The Company has a non-contributory qualified defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory non-qualified defined benefit plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The Company provides postretirement health care benefits to certain U.S. employees and retirees.

The components of net periodic pension and postretirement health care benefit costs for the third quarter ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$17.5		$16.8		$7.7		$7.0		$0.7		$0.8
Interest cost on benefit obligation		20.9		20.4		7.0		8.0		1.5		2.0
Expected return on plan assets		(37.4)		(35.9)		(13.9)		(13.3)		(0.1)		(0.2)
Recognition of net actuarial (gain) loss		7.2		7.7		4.5		3.6		(0.6)		(0.4)
Amortization of prior service
cost (benefit)		(1.7)		(1.7)		(0.2)		(0.2)		(4.2)		(0.1)
Total expense (benefit)		$6.5		$7.3		$5.1		$5.1		$(2.7)		$2.1

The components of net periodic pension and postretirement health care benefit costs for the nine months ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$52.6		$50.3		$23.0		$20.9		$2.0		$2.3
Interest cost on benefit obligation		62.6		61.2		21.1		24.0		4.4		6.1
Expected return on plan assets		(112.3)		(107.7)		(41.7)		(40.0)		(0.4)		(0.6)
Recognition of net actuarial (gain) loss		21.5		23.1		13.6		10.7		(1.8)		(1.2)
Amortization of prior service
cost (benefit)		(5.1)		(5.2)		(0.5)		(0.6)		(12.5)		(0.2)
Total expense (benefit)		$19.3		$21.7		$15.5		$15.0		$(8.3)		$6.4

As of September 30, 2017, the Company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. In September 2017, the Company made an $80 million voluntary contribution to its non-contributory qualified U.S. pension plan. During the first nine months of 2017, the Company made payments of $6 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will make additional payments of approximately $1 million to such plans during the remainder of 2017.

The Company contributed $33 million to its international pension benefit plans during the first nine months of 2017. The Company estimates it will contribute approximately an additional $9 million to such plans during the remainder of 2017.

During the first nine months of 2017, the Company made payments of $12 million to its U.S. postretirement health care benefit plans and estimates it will make additional payments of approximately $4 million to such plans during the remainder of 2017.

The Company’s U.S. postretirement health care costs decreased in 2017 relative to the costs incurred in the comparable period of the prior year as a result of moving the U.S. postretirement healthcare plans to a Retiree Exchange approach for post-65 retiree medical coverage beginning in 2018 and the merger of Nalco U.S. postretirement health care plan with the Ecolab U.S. postretirement plan.

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OPERATING SEGMENTS

9 Months Ended

Sep. 30, 2017

OPERATING SEGMENTS

OPERATING SEGMENTS

14. OPERATING SEGMENTS

The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level.

The Company’s operating segments that share similar economic characteristics and future prospects, nature of the products and production processes, end-use markets, channels of distribution and regulatory environment have been aggregated into three reportable segments: Global Industrial, Global Institutional and Global Energy. The Company’s operating segments that do not meet the quantitative criteria to be separately reported have been combined into the Other segment. The Company provides similar information for the Other segment as the Company considers the information regarding its underlying operating segments as useful in understanding its consolidated results.

Comparability of Reportable Segments

The Company evaluates the performance of its non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on its international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. Fixed currency rates are generally based on existing market rates at the time they are established. The “Fixed Currency Rate Change” column shown in the following table reflects the impact on previously reported values related to fixed currency exchange rates established by management at the beginning of 2017.

Effective in the first quarter of 2017, the Company established the Life Sciences operating segment, to align with the strategy for growth in the pharmaceutical and personal care manufacturing operations. Life Sciences is comprised of operations previously recorded in the Food & Beverage and Healthcare operating segments and has been aggregated into the Global Industrial reportable segment.  The Company also made immaterial changes to its reportable segments, including the movement of certain customers and cost allocations between reportable segments. These changes are presented in "Segment Change" column of the table below.

The impact of the preceding changes on previously reported full year 2016 reportable segment net sales and operating income is summarized as follows:

	December 31, 2016
			Fixed
	Values at		Currency		Segment	Values at
(millions)	2016 Rates		Rate Change		Change	2017 Rates
Net Sales
Global Industrial		$ 4,617.1		$ 6.9	$ 63.2	$ 4,687.2
Global Institutional		4,495.6		7.7	(63.2)	4,440.1
Global Energy		3,035.8		40.0	-	3,075.8
Other		806.5		(4.8)	-	801.7
Subtotal at fixed currency rates		12,955.0		49.8	-	13,004.8
Effect of foreign currency translation		197.8		(49.8)	-	148.0
Consolidated reported GAAP net sales		$ 13,152.8		$ -	$ -	$ 13,152.8
Operating Income
Global Industrial		$ 703.0		$ (0.9)	$ 17.9	$ 720.0
Global Institutional		966.7		3.0	(19.2)	950.5
Global Energy		337.1		7.9	1.7	346.7
Other		148.1		(2.5)	(0.4)	145.2
Corporate		(272.1)		(0.5)	-	(272.6)
Subtotal at fixed currency rates		1,882.8		7.0	-	1,889.8
Effect of foreign currency translation		32.2		(7.0)	-	25.2
Consolidated reported GAAP operating income		$ 1,915.0		$ -	$ -	$ 1,915.0

Reportable Segment Information

Financial information for each of the Company’s reportable segments, including the impact of all preceding segment structure changes, is as follows:

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Net Sales
Global Industrial		$1,248.1		$1,202.1		$3,586.5		$3,468.4
Global Institutional		1,225.1		1,149.2		3,524.3		3,315.0
Global Energy		796.7		771.2		2,346.1		2,305.6
Other		221.7		209.2		633.8		598.1
Subtotal at fixed currency rates		3,491.6		3,331.7		10,090.7		9,687.1
Effect of foreign currency translation		71.7		54.4		96.9		113.6
Consolidated reported GAAP net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7
Operating Income
Global Industrial		$207.4		$204.1		$501.9		$510.1
Global Institutional		274.2		262.1		726.1		697.8
Global Energy		89.7		102.6		236.1		244.9
Other		44.0		40.4		110.9		108.2
Corporate		(46.9)		(45.0)		(198.9)		(222.9)
Subtotal at fixed currency rates		568.4		564.2		1,376.1		1,338.1
Effect of foreign currency translation		11.4		9.9		16.0		20.0
Consolidated reported GAAP operating income		$579.8		$574.1		$1,392.1		$1,358.1

The profitability of the Company’s operating segments is evaluated by management based on operating income. The Company has no intersegment revenues.

Consistent with the Company’s internal management reporting, Corporate amounts in the table above include amortization specifically from the Nalco merger and special (gains) and charges, as discussed in Note 2, that are not allocated to the Company’s reportable segments.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2017

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

15. COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters and lawsuits. The Company also has contractual obligations related to lease commitments.

Insurance

Globally, the Company has insurance policies with varying deductible levels for property and casualty losses. The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The Company determines its liabilities for claims on an actuarial basis.

Litigation and Environmental Matters

The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include, from time to time, antitrust, commercial, patent infringement, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The Company has established accruals for certain lawsuits, claims and environmental matters. The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 45 locations, excluding recently acquired Anios locations which are currently under review. The majority of these locations are in the U.S. Environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities.

Matters Related to Deepwater Horizon Incident Response

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after a catastrophic explosion and fire that began on April 20, 2010. A massive oil spill resulted. Approximately one week following the incident, subsidiaries of BP plc, under the authorization of the responding federal agencies, formally requested Nalco Company, now an indirect subsidiary of Ecolab, to supply large quantities of COREXIT® 9500, a Nalco oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule. Nalco Company responded immediately by providing available COREXIT and increasing production to supply the product to BP’s subsidiaries for use, as authorized and directed by agencies of the federal government throughout the incident. Prior to the incident, Nalco and its subsidiaries had not provided products or services or otherwise had any involvement with the Deepwater Horizon platform. On July 15, 2010, BP announced that it had capped the leaking well, and the application of dispersants by the responding parties ceased shortly thereafter.

On May 1, 2010, the President appointed retired U.S. Coast Guard Commandant Admiral Thad Allen to serve as the National Incident Commander in charge of the coordination of the response to the incident at the national level. The EPA directed numerous tests of all the dispersants on the National Contingency Plan Product Schedule, including those provided by Nalco Company, “to ensure decisions about ongoing dispersant use in the Gulf of Mexico are grounded in the best available science.” Nalco Company cooperated with this testing process and continued to supply COREXIT, as requested by BP and government authorities. The use of dispersants by the responding parties was one tool used by the government and BP to avoid and reduce damage to the Gulf area from the spill.

In connection with its provision of COREXIT, Nalco Company has been named in several lawsuits as described below.

Cases arising out of the Deepwater Horizon accident were administratively transferred for pre-trial purposes to a judge in the United States District Court for the Eastern District of Louisiana with other related cases under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (“MDL 2179”). Nalco Company was named, along with other unaffiliated defendants, in six putative class action complaints related to the Deepwater Horizon oil spill and 21 complaints filed by individuals.  Those complaints were consolidated in MDL 2179.  The complaints generally allege, among other things, strict liability and negligence relating to the use of our Corexit dispersant in connection with the Deepwater Horizon oil spill.

Pursuant to orders issued by the Court in MDL 2179, the claims were consolidated in several master complaints, including one naming Nalco Company and others who responded to the Gulf Oil Spill (known as the “B3 Master Complaint”). On May 18, 2012, Nalco filed a motion for summary judgment against the claims in the B3 Master Complaint, on the grounds that: (i) Plaintiffs’ claims are preempted by the comprehensive oil spill response scheme set forth in the Clean Water Act and National Contingency Plan; and (ii) Nalco is entitled to derivative immunity from suit. On November 28, 2012, the Court granted Nalco’s motion and dismissed with prejudice the claims in the “B3” Master Complaint asserted against Nalco. The Court held that such claims were preempted by the Clean Water Act and National Contingency Plan. Because claims in the “B3” Master Complaint remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Under Federal Rule of Appellate Procedure 4(a), plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision.

In December 2012 and January 2013, the MDL 2179 court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. Pursuant to the proposed settlements, class members agree to release claims against BP and other released parties, including Nalco Company and its related entities.

Nalco Company, the incident defendants and the other responder defendants have been named as first party defendants by Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against Nalco Company and other unaffiliated cross defendants. The Cross Claimants generally allege, among other things, that if they are found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, they are entitled to indemnity or contribution from the cross defendants.

In April and June 2011, in support of its defense of the claims against it, Nalco Company filed counterclaims against the Cross Claimants. In its counterclaims, Nalco Company generally alleges that if it is found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, it is entitled to contribution or indemnity from the Cross Claimants.

In May 2016, Nalco was named in nine additional complaints filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.  In April 2017, Nalco was named in two additional complaints filed by individuals seeking, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.  The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These actions have been consolidated in the MDL and the Company expects they will be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.

On February 22, 2017, the Court dismissed the “B3” Master Complaint and ordered that Plaintiffs who had previously filed a claim that fell within the scope of the “B3” Master Complaint and who had “opted out” of and not released their claims under the Medical Benefits Class Action Settlement either: (1) complete a sworn statement indicating, among other things, that they opted out of the Medical Benefits Class Action Settlement (to be completed by Plaintiffs who previously filed an individual complaint); or (2) file an individual lawsuit attaching the sworn statement as an exhibit, by a deadline date set by the Court. The Court will then determine which “B3” Plaintiffs are entitled to pursue their claims and the procedures for addressing those claims.

The Company believes the claims asserted against Nalco Company are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, the Company cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2017

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

16. NEW ACCOUNTING PRONOUNCEMENTS

			Required
	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that are not yet adopted:
ASU 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	August 2017	Amends the hedge accounting recognition and presentation requirements in ASC 815. Simplifies the guidance on the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item.	January 1, 2019	The Company is currently evaluating the impact of adoption, and certain transition elections provided for by the ASU.
ASU 2017-09 - Compensation - Stock Compensation (Topic 718):  Scope of Modification Accounting	August 2017	Clarifies the definition of what's considered a substantive modification related to a change in terms or conditions of a share-based payment award and when it's appropriate to apply modification accounting.  The current definition of "modification" is too broad, resulting in diverse interpretations of what's considered a substantive modification.	January 1, 2018	This ASU must be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of adoption.
ASU 2017-07 - Compensation - Retirement Benefits (Topic 715):  Improving the Presentation of Net Periodic Pension Cost and the Net Periodic Postretirement Benefit Cost	March 2017	Amends the requirements related to income statement presentation of the components of net periodic benefit costs. New requirements include (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components") and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented.	January 1, 2018	Upon adoption of the standard, the Company will record only the service cost component with compensation cost in Cost of Sales and Selling, General, and Administrative costs. The other components of net period benefit cost will be presented below operating income. The Company is currently evaluating the impact of adoption.
ASU 2017-05 - Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20):  Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	February 2017	Clarifies the scope of guidance on nonfinancial asset derecognition (ASC 610-20) including the accounting for partial sales of nonfinancial assets. The ASU defines "in-substance nonfinancial asset".  Also clarifies the derecognition of all businesses should be accounted for in accordance with derecognition and deconsolidation guidance in 810-10.	January 1, 2018	The Company is required to apply this ASU on a retrospective basis. The Company is currently evaluating the impact of adoption.
ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	January 2017	Simplifies subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.	January 1, 2020	The ASU must be applied on a prospective basis upon adoption. The Company is currently evaluating the impact of adoption.
ASU 2017-01--Business Combinations (Topic 805): Clarifying the Definition of a Business	January 2017	Clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.	January 1, 2018	The ASU must be applied prospectively on or after the effective date, and no disclosures are required at transition. The Company is currently evaluating the impact of adoption.
ASU 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash	November 2016	Clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows.	January 1, 2018	Presentation impact only related to restricted cash. The Company does not expect the updated guidance to have a significant impact on future financial statements.
ASU 2016-16 - Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	October 2016	Simplifies the guidance on the accounting for the income tax consequences of intra-entity transfers of assets other than inventory (e.g. intellectual property).	January 1, 2018	This ASU must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adoption.
ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	August 2016	The guidance's objective is to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flow.	January 1, 2018	Presentation impact only related to eight specific cash flow items. The Company is currently evaluating the impact of adoption.
ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	June 2016	Addresses the recognition, measurement, presentation and disclosure of credit losses on trade and reinsurance receivables, loans, debt securities, net investments in leases, off-balance-sheet credit exposures and certain other instruments. Amends guidance on reporting credit losses from an incurred model to an expected model for assets held at amortized cost, such as accounts receivable, loans and held-to-maturity debt securities. Additional disclosures will also be required.	January 1, 2020	Adoption of the standard will change how the allowance for trade and other receivables is calculated. The Company is currently evaluating the impact of adoption.
ASU 2016-02 - Leases (Topic 842)	February 2016	Introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance.	January 1, 2019	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (a).
Revenue Recognition ASUs: 2014-09 - Revenue from Contracts with Customers 2015-14 - Deferral of the Effective Date 2016-08 - Principal Versus Agent Considerations 2016-10 - Identifying Performance Obligations and Licensing 2016-11 - Revenue Recognition and Derivatives and Hedging 2016-12 - Narrow-Scope Improvements & Practical Expedients 2016-20 - Technical Corrections and Improvements	Various	Recognition standard contains principles for entities to apply to determine the measurement of revenue and timing of when the revenue is recognized. The underlying principle of the updated guidance will have entities recognize revenue to depict the transfer of goods or services to customers at an amount that is expected to be received in exchange for those goods or services.	January 1, 2018	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (b).

(a) As part of implementing the new standard, the Company is in process of reviewing current accounting policies, developing future policies, and assessing the practical expedients allowed under the new accounting guidance. In addition, the project team is defining future processes to identify, accumulate, and report on the Company’s various leases. The Company expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption and is currently evaluating other impacts on the consolidated financial statements. The standard requires a modified retrospective transition to be applied at the beginning of the earliest comparative period presented in the year of adoption.

(b) The Company has reached conclusions on certain key accounting assessments related to the standard and is finalizing the related accounting policies. The Company’s focus on the identification and evaluation of performance obligations within certain contracts has identified additional performance obligations within contracts which relate to providing services to customers. These additional performance obligations, when aggregated with the service revenue that is currently reported, represent more than 10% of consolidated net sales. Upon adoption of the new standard, service revenues are expected to be reported separately from product revenues. Additionally, the Company anticipates certain costs currently classified in Selling, General, and Administrative expenses will be reclassified as Cost of Sales as they are tied to satisfaction of a service performance obligation. In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the consolidated financial statements. The Company currently intends to adopt the new standard using the full retrospective method on January 1, 2018, which is dependent upon the completion of the analysis of information necessary to restate prior period financial statements.

	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that were adopted:
ASU 2015-11 - Inventory (Topic 330): Simplifying the Measurement of Inventory	July 2015	The amendment requires entities to measure inventory under the FIFO or average cost methods at the lower of cost or net realizable value.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-01 - Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	January 2016	The amendment revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-05 - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships	March 2016	The amendment clarifies language related to hedge accounting criteria that a change in the counterparty is not in and of itself considered a termination of the derivative or critical term of the hedging relationship.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-07 - Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting	March 2016	Simplifies the transition to equity method accounting for entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	March 2016	The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements.	January 1, 2017	The Company included appropriate disclosures within this 10-Q to adhere to this new ASU.
ASU 2017-03 - Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323)	January 2017	Amends the disclosure requirements associated with certain recently issued Accounting Standards and how they will have an impact on the Financial Statements of a registrant when such standards are adopted in a future period. It applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and any subsequent amendments to these ASU's.	Effective Immediately	The Company included appropriate disclosure requirements within this 10-Q to adhere to this new ASU.

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SPECIAL (GAINS) AND CHARGES (Tables)

9 Months Ended

Sep. 30, 2017

SPECIAL (GAINS) AND CHARGES

Special (gains) and charges

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Other		-		-		11.1		10.0
Subtotal		0.3		-		26.2		61.9
Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Other		2.2		9.2		9.1		32.7
Subtotal		4.9		3.2		47.9		35.7
Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6

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ACQUISITIONS AND DISPOSITIONS (Tables)

9 Months Ended

Sep. 30, 2017

Anios

Business acquisitions

Schedule of assets acquired and liabilities assumed

(millions)
Tangible assets	$142.7
Identifiable intangible assets:
Customer relationships	252.0
Trademarks	65.7
Other technology	16.1
Total assets acquired	476.5
Total liabilities assumed	184.7
Goodwill	506.5
Total consideration transferred	798.3
Long-term debt repaid upon close	192.8
Net consideration transferred to sellers	$605.5

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BALANCE SHEET INFORMATION (Tables)

9 Months Ended

Sep. 30, 2017

BALANCE SHEET INFORMATION

Balance Sheet Information

	September 30		December 31
(millions)	2017		2016
Accounts receivable, net
Accounts receivable		$2,606.4		$2,408.8
Allowance for doubtful accounts		(73.2)		(67.6)
Total		$2,533.2		$2,341.2
Inventories
Finished goods		$1,004.8		$860.0
Raw materials and parts		461.0		408.4
Inventories at FIFO cost		1,465.8		1,268.4
FIFO cost to LIFO cost difference		43.2		51.0
Total		$1,509.0		$1,319.4
Other current assets
Prepaid assets		$128.2		$98.3
Taxes receivable		155.9		105.0
Derivative assets		29.0		46.3
Other		50.1		41.8
Total		$363.2		$291.4
Property, plant and equipment, net
Land		$227.4		$211.0
Buildings and leasehold improvements		1,174.5		1,121.2
Machinery and equipment		2,219.3		2,035.8
Merchandising and customer equipment		2,396.6		2,199.4
Capitalized software		583.0		531.1
Construction in progress		422.0		344.1
		7,022.8		6,442.6
Accumulated depreciation		(3,405.6)		(3,077.6)
Total		$3,617.2		$3,365.0
Other intangible assets, net
Intangible assets not subject to amortization
Trade names		$1,230.0		$1,230.0
Intangible assets subject to amortization
Customer relationships		$3,588.2		$3,206.1
Trademarks		378.8		303.3
Patents		459.7		446.5
Other technology		229.1		210.5
		4,655.8		4,166.4
Accumulated amortization
Customer relationships		(1,356.1)		(1,148.2)
Trademarks		(144.6)		(125.2)
Patents		(179.0)		(157.3)
Other technology		(166.5)		(147.9)
		(1,846.2)		(1,578.6)
Net intangible assets subject to amortization		2,809.6		2,587.8
Total		$4,039.6		$3,817.8
Other assets
Deferred income taxes		$105.3		$92.3
Pension		35.6		27.2
Derivative assets		-		21.5
Restricted cash		-		53.0
Other		290.1		291.0
Total		$431.0		$485.0

	September 30		December 31
(millions)	2017		2016
Other current liabilities
Discounts and rebates		$318.3		$275.2
Dividends payable		106.9		108.0
Interest payable		70.4		37.3
Taxes payable, other than income		117.0		103.7
Derivative liabilities		86.6		24.6
Restructuring		45.7		30.5
Other		261.3		311.9
Total		$1,006.2		$891.2
Accumulated other comprehensive loss
Unrealized loss on derivative financial instruments, net of tax		$(37.6)		$(8.5)
Unrecognized pension and postretirement benefit expense, net of tax		(527.2)		(511.4)
Cumulative translation, net of tax		(999.5)		(1,193.0)
Total		$(1,564.3)		$(1,712.9)

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DEBT AND INTEREST (Tables)

9 Months Ended

Sep. 30, 2017

DEBT AND INTEREST

Schedule of short-term debt obligations

	September 30		December 31
(millions)	2017		2016
Short-term debt
Commercial paper		$238.0		$-
Notes payable		24.2		29.9
Long-term debt, current maturities		810.8		511.4
Total		$1,073.0		$541.3

Schedule of long-term debt obligations including current maturities

	Maturity	September 30		December 31
(millions)	by Year	2017		2016
Long-term debt
Public notes (2017 principal amount)
Five year 2012 senior notes ($500 million)	2017		$499.6		$498.9
Three year 2015 senior notes ($300 million)	2018		299.5		298.9
Three year 2016 senior notes ($400 million)	2019		396.6		395.9
Five year 2015 senior notes ($300 million)	2020		298.9		298.6
Ten year 2011 senior notes ($1.25 billion)	2021		1,245.6		1,244.8
Five year 2017 senior notes ($500 million)	2022		496.0		-
Seven year 2016 senior notes ($400 million)	2023		397.4		397.0
Seven year 2016 senior notes (€575 million)	2024		676.5		608.4
Ten year 2015 senior notes (€575 million)	2025		679.5		604.3
Ten year 2016 senior notes ($750 million)	2026		742.7		742.1
Thirty year 2011 senior notes ($750 million)	2041		739.1		738.7
Thirty year 2016 senior notes ($250 million)	2046		245.9		245.9
Private notes (2017 principal amount)
Series A private placement senior notes ($250 million)	2018		248.8		248.9
Series B private placement senior notes ($250 million)	2023		249.3		249.2
Capital lease obligations			4.9		5.2
Other			75.0		80.3
Total debt			7,295.3		6,657.1
Long-term debt, current maturities			(810.8)		(511.4)
Total long-term debt			$6,484.5		$6,145.7

Schedule of interest expense and interest income

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Interest expense		$60.7		$69.0		$191.0		$209.4
Interest income		(5.6)		(4.1)		(13.8)		(13.1)
Interest expense, net		$55.1		$64.9		$177.2		$196.3

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2017

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill

	Global		Global		Global
(millions)	Industrial		Institutional		Energy		Other		Total
December 31, 2016		$2,522.3		$653.4		$3,093.6		$113.7		$6,383.0
Reclassifications (a)		62.7		(62.7)		-		-		-
December 31, 2016 revised		$2,585.0		$590.7		$3,093.6		$113.7		$6,383.0
Current year business combinations (b)		4.1		506.5		-		-		510.6
Prior year business combinations (c)		-		-		0.3		-		0.3
Effect of foreign currency translation		97.9		41.6		116.8		4.2		260.5
September 30, 2017		$2,687.0		$1,138.8		$3,210.7		$117.9		$7,154.4

(a) Relates to establishment of the Life Sciences reporting unit, and goodwill being allocated to Life Sciences based on fair value allocation of goodwill. The Life Sciences reporting unit is included in the Industrial reportable segment and is comprised of operations previously recorded in the Food & Beverage and Healthcare reporting units, which are aggregated and reported in the Global Industrial and Global Institutional reportable segments, respectively. See Note 14 for further information.

(b) Represents goodwill associated with current year acquisitions. Of the goodwill acquired, the Company expects $4.1 million of the goodwill related to businesses acquired to be tax deductible.

(c) Represents purchase price allocation adjustments for 2016 acquisitions deemed preliminary as of December 31, 2016.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENTS

Schedule of the carrying amount and estimated fair value of assets and liabilities measured on recurring basis

	September 30, 2017
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$52.1		$-		$52.1		$-
Liabilities
Foreign currency forward contracts		209.2		-		209.2		-
Interest rate swap agreements		3.6		-		3.6		-

	December 31, 2016
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$ 93.4		$ -		$ 93.4		$ -
Liabilities
Foreign currency forward contracts		46.7		-		46.7		-
Interest rate swap agreements		3.5		-		3.5		-

Schedule of carrying amount and estimated fair value of long-term debt

	September 30				December 31
(millions)	2017				2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Long-term debt, including current maturities		$7,295.3		$7,707.6		$6,657.1		$6,963.9

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DERIVATIVES AND HEDGING TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2017

DERIVATIVES AND HEDGING TRANSACTIONS

Gross fair value of the company's outstanding derivative assets and liabilities

	Asset Derivatives				Liability Derivatives
	September 30		December 31		September 30		December 31
(millions)	2017		2016		2017		2016
Derivatives designated as hedging instruments
Foreign currency forward contracts		$30.2		$73.4		$156.7		$19.8
Interest rate swap agreements		-		-		3.6		3.5
Derivatives not designated as hedging instruments
Foreign currency forward contracts		21.9		20.0		52.5		26.9
Gross value of derivatives		52.1		93.4		212.8		50.2
Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)		(23.1)		(25.7)
Net value of derivatives		$29.0		$67.7		$189.7		$24.5

Summary of notional values of outstanding derivatives

	Notional Values
	September 30		December 31
(millions)	2017		2016
Foreign currency forward contracts (a)		$ 5,617		$ 4,317
Interest rate agreements		$ 1,450		$ 1,450

Impact on AOCI and earnings from derivative contracts qualified as cash flow hedges

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Unrealized gain (loss) recognized into AOCI
Foreign currency forward contracts	AOCI (equity)		$(118.8)		$(12.9)		$(192.4)		$(40.4)
Interest rate swap agreements	AOCI (equity)		-		1.4		-		(11.5)
	Total		(118.8)		(11.5)		(192.4)		(51.9)
Gain (loss) recognized in income
Foreign currency forward contracts	Cost of sales		(0.9)		5.0		(11.7)		26.6
	SG&A		(99.5)		(0.7)		(157.3)		(20.3)
	Interest expense, net		7.4		-		16.1		2.9
	Subtotal		(93.0)		4.3		(152.9)		9.2
Interest rate swap agreements	Interest expense, net		(1.8)		(1.6)		(5.4)		(4.8)
	Total		$(94.8)		$2.7		$(158.3)		$4.4

Impact on earnings from derivative contracts that qualified as fair value hedges

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) on derivative recognized income
Interest rate swap	Interestexpense, net		$0.3		$(7.6)		$(0.1)		$6.1
Gain (loss) on hedged item recognized income
Interest rate swap	Interest expense, net		$(0.3)		$7.6		$0.1		$(6.1)

Revaluation gains and losses on euronotes and forward contracts

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Revaluation gains (losses), net of tax		$(50.9)		$(1.2)		$(103.7)		$(29.1)

Impact on earnings from derivative contracts not designated as hedging instruments

		Third Quarter Ended				Nine Months Ended
		September 30				September 30
(millions)		2017		2016		2017		2016
Gain (loss) recognized in income
Foreign currency forward contracts	SG&A		$(29.4)		$(12.0)		$(38.1)		$(27.3)
	Interestexpense, net		(0.2)		1.0		(3.5)		(2.1)
	Total		$(29.6)		$(11.0)		$(41.6)		$(29.4)

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OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Tables)

9 Months Ended

Sep. 30, 2017

OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

Schedule of other comprehensive income information related to the Company's derivatives and hedging instruments and pension and postretirement benefits

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Derivative and Hedging Instruments
Unrealized gains (losses) on derivative & hedging instruments
Amount recognized in AOCI		$(118.8)		$(11.5)		$(192.4)		$(51.9)
(Gains) losses reclassified from AOCI into income
Cost of sales		0.9		(5.0)		11.7		(26.6)
SG&A		99.5		0.7		157.3		20.3
Interest (income) expense, net		(5.6)		1.6		(10.7)		1.9
		94.8		(2.7)		158.3		(4.4)
Other activity		(0.6)		0.1		(0.1)		0.1
Tax impact		3.8		4.6		5.1		16.0
Net of tax		$(20.8)		$(9.5)		$(29.1)		$(40.2)
Pension and Postretirement Benefits
Amount reclassified from AOCI into income
Actuarial losses		11.3		10.8		33.3		32.6
Prior service costs		(6.1)		(2.0)		(18.1)		(6.0)
Postretirement benefits changes		-		50.0		-		50.0
		5.2		58.8		15.2		76.6
Tax impact		(3.9)		(22.3)		(7.0)		(29.0)
Net of tax		$1.3		$36.5		$8.2		$47.6

Summary of the net of tax derivative and pension and postretirement benefit amounts reclassified from AOCI into income

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
	2017		2016		2017		2016
(millions)
Derivative losses (gains) reclassified from AOCI into income, net of tax		$72.7		$(2.0)		$120.3	$	(3.5)
Pension and postretirement benefits net actuarial losses
and prior services costs reclassified from AOCI into income, net of tax		$1.3		$5.6		$8.2	$	16.7

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EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") (Tables)

9 Months Ended

Sep. 30, 2017

EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS")

Computations of the basic and diluted EPS

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions, except per share)	2017		2016		2017		2016
Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3
Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8
Effect of dilutive stock options and units		4.4		4.1		4.4		4.3
Diluted		293.4		295.7		294.2		297.1
Basic EPS		$ 1.36		$ 1.28		$ 3.25		$ 2.95
Diluted EPS		$ 1.34		$ 1.27		$ 3.20		$ 2.91
Anti-dilutive securities excluded from the computation of EPS		0.1		1.7		1.7		1.7

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PENSION AND POSTRETIREMENT PLANS (Tables)

9 Months Ended

Sep. 30, 2017

PENSION AND POSTRETIREMENT PLANS

Net periodic pension and postretirement health care benefit costs

The components of net periodic pension and postretirement health care benefit costs for the third quarter ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$17.5		$16.8		$7.7		$7.0		$0.7		$0.8
Interest cost on benefit obligation		20.9		20.4		7.0		8.0		1.5		2.0
Expected return on plan assets		(37.4)		(35.9)		(13.9)		(13.3)		(0.1)		(0.2)
Recognition of net actuarial (gain) loss		7.2		7.7		4.5		3.6		(0.6)		(0.4)
Amortization of prior service
cost (benefit)		(1.7)		(1.7)		(0.2)		(0.2)		(4.2)		(0.1)
Total expense (benefit)		$6.5		$7.3		$5.1		$5.1		$(2.7)		$2.1

The components of net periodic pension and postretirement health care benefit costs for the nine months ended September 30 are as follows:

	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016
Service cost		$52.6		$50.3		$23.0		$20.9		$2.0		$2.3
Interest cost on benefit obligation		62.6		61.2		21.1		24.0		4.4		6.1
Expected return on plan assets		(112.3)		(107.7)		(41.7)		(40.0)		(0.4)		(0.6)
Recognition of net actuarial (gain) loss		21.5		23.1		13.6		10.7		(1.8)		(1.2)
Amortization of prior service
cost (benefit)		(5.1)		(5.2)		(0.5)		(0.6)		(12.5)		(0.2)
Total expense (benefit)		$19.3		$21.7		$15.5		$15.0		$(8.3)		$6.4

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OPERATING SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2017

OPERATING SEGMENTS

Schedule of financial information for each of the entity's reportable segments, including the impact of the preceding changes on previously reported full year 2016 net sales and oeprating income

	December 31, 2016
			Fixed
	Values at		Currency		Segment	Values at
(millions)	2016 Rates		Rate Change		Change	2017 Rates
Net Sales
Global Industrial		$ 4,617.1		$ 6.9	$ 63.2	$ 4,687.2
Global Institutional		4,495.6		7.7	(63.2)	4,440.1
Global Energy		3,035.8		40.0	-	3,075.8
Other		806.5		(4.8)	-	801.7
Subtotal at fixed currency rates		12,955.0		49.8	-	13,004.8
Effect of foreign currency translation		197.8		(49.8)	-	148.0
Consolidated reported GAAP net sales		$ 13,152.8		$ -	$ -	$ 13,152.8
Operating Income
Global Industrial		$ 703.0		$ (0.9)	$ 17.9	$ 720.0
Global Institutional		966.7		3.0	(19.2)	950.5
Global Energy		337.1		7.9	1.7	346.7
Other		148.1		(2.5)	(0.4)	145.2
Corporate		(272.1)		(0.5)	-	(272.6)
Subtotal at fixed currency rates		1,882.8		7.0	-	1,889.8
Effect of foreign currency translation		32.2		(7.0)	-	25.2
Consolidated reported GAAP operating income		$ 1,915.0		$ -	$ -	$ 1,915.0

Schedule of financial information for each of the entity's reportable segments

	Third Quarter Ended				Nine Months Ended
	September 30				September 30
(millions)	2017		2016		2017		2016
Net Sales
Global Industrial		$1,248.1		$1,202.1		$3,586.5		$3,468.4
Global Institutional		1,225.1		1,149.2		3,524.3		3,315.0
Global Energy		796.7		771.2		2,346.1		2,305.6
Other		221.7		209.2		633.8		598.1
Subtotal at fixed currency rates		3,491.6		3,331.7		10,090.7		9,687.1
Effect of foreign currency translation		71.7		54.4		96.9		113.6
Consolidated reported GAAP net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7
Operating Income
Global Industrial		$207.4		$204.1		$501.9		$510.1
Global Institutional		274.2		262.1		726.1		697.8
Global Energy		89.7		102.6		236.1		244.9
Other		44.0		40.4		110.9		108.2
Corporate		(46.9)		(45.0)		(198.9)		(222.9)
Subtotal at fixed currency rates		568.4		564.2		1,376.1		1,338.1
Effect of foreign currency translation		11.4		9.9		16.0		20.0
Consolidated reported GAAP operating income		$579.8		$574.1		$1,392.1		$1,358.1

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NEW ACCOUNTING PRONOUNCEMENTS (Tables)

9 Months Ended

Sep. 30, 2017

NEW ACCOUNTING PRONOUNCEMENTS

Schedule of new accounting pronouncements

			Required
	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that are not yet adopted:
ASU 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	August 2017	Amends the hedge accounting recognition and presentation requirements in ASC 815. Simplifies the guidance on the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item.	January 1, 2019	The Company is currently evaluating the impact of adoption, and certain transition elections provided for by the ASU.
ASU 2017-09 - Compensation - Stock Compensation (Topic 718):  Scope of Modification Accounting	August 2017	Clarifies the definition of what's considered a substantive modification related to a change in terms or conditions of a share-based payment award and when it's appropriate to apply modification accounting.  The current definition of "modification" is too broad, resulting in diverse interpretations of what's considered a substantive modification.	January 1, 2018	This ASU must be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of adoption.
ASU 2017-07 - Compensation - Retirement Benefits (Topic 715):  Improving the Presentation of Net Periodic Pension Cost and the Net Periodic Postretirement Benefit Cost	March 2017	Amends the requirements related to income statement presentation of the components of net periodic benefit costs. New requirements include (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components") and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented.	January 1, 2018	Upon adoption of the standard, the Company will record only the service cost component with compensation cost in Cost of Sales and Selling, General, and Administrative costs. The other components of net period benefit cost will be presented below operating income. The Company is currently evaluating the impact of adoption.
ASU 2017-05 - Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20):  Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	February 2017	Clarifies the scope of guidance on nonfinancial asset derecognition (ASC 610-20) including the accounting for partial sales of nonfinancial assets. The ASU defines "in-substance nonfinancial asset".  Also clarifies the derecognition of all businesses should be accounted for in accordance with derecognition and deconsolidation guidance in 810-10.	January 1, 2018	The Company is required to apply this ASU on a retrospective basis. The Company is currently evaluating the impact of adoption.
ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	January 2017	Simplifies subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.	January 1, 2020	The ASU must be applied on a prospective basis upon adoption. The Company is currently evaluating the impact of adoption.
ASU 2017-01--Business Combinations (Topic 805): Clarifying the Definition of a Business	January 2017	Clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.	January 1, 2018	The ASU must be applied prospectively on or after the effective date, and no disclosures are required at transition. The Company is currently evaluating the impact of adoption.
ASU 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash	November 2016	Clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows.	January 1, 2018	Presentation impact only related to restricted cash. The Company does not expect the updated guidance to have a significant impact on future financial statements.
ASU 2016-16 - Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	October 2016	Simplifies the guidance on the accounting for the income tax consequences of intra-entity transfers of assets other than inventory (e.g. intellectual property).	January 1, 2018	This ASU must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adoption.
ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	August 2016	The guidance's objective is to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flow.	January 1, 2018	Presentation impact only related to eight specific cash flow items. The Company is currently evaluating the impact of adoption.
ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	June 2016	Addresses the recognition, measurement, presentation and disclosure of credit losses on trade and reinsurance receivables, loans, debt securities, net investments in leases, off-balance-sheet credit exposures and certain other instruments. Amends guidance on reporting credit losses from an incurred model to an expected model for assets held at amortized cost, such as accounts receivable, loans and held-to-maturity debt securities. Additional disclosures will also be required.	January 1, 2020	Adoption of the standard will change how the allowance for trade and other receivables is calculated. The Company is currently evaluating the impact of adoption.
ASU 2016-02 - Leases (Topic 842)	February 2016	Introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance.	January 1, 2019	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (a).
Revenue Recognition ASUs: 2014-09 - Revenue from Contracts with Customers 2015-14 - Deferral of the Effective Date 2016-08 - Principal Versus Agent Considerations 2016-10 - Identifying Performance Obligations and Licensing 2016-11 - Revenue Recognition and Derivatives and Hedging 2016-12 - Narrow-Scope Improvements & Practical Expedients 2016-20 - Technical Corrections and Improvements	Various	Recognition standard contains principles for entities to apply to determine the measurement of revenue and timing of when the revenue is recognized. The underlying principle of the updated guidance will have entities recognize revenue to depict the transfer of goods or services to customers at an amount that is expected to be received in exchange for those goods or services.	January 1, 2018	See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (b).

(a) As part of implementing the new standard, the Company is in process of reviewing current accounting policies, developing future policies, and assessing the practical expedients allowed under the new accounting guidance. In addition, the project team is defining future processes to identify, accumulate, and report on the Company’s various leases. The Company expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption and is currently evaluating other impacts on the consolidated financial statements. The standard requires a modified retrospective transition to be applied at the beginning of the earliest comparative period presented in the year of adoption.

(b) The Company has reached conclusions on certain key accounting assessments related to the standard and is finalizing the related accounting policies. The Company’s focus on the identification and evaluation of performance obligations within certain contracts has identified additional performance obligations within contracts which relate to providing services to customers. These additional performance obligations, when aggregated with the service revenue that is currently reported, represent more than 10% of consolidated net sales. Upon adoption of the new standard, service revenues are expected to be reported separately from product revenues. Additionally, the Company anticipates certain costs currently classified in Selling, General, and Administrative expenses will be reclassified as Cost of Sales as they are tied to satisfaction of a service performance obligation. In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the consolidated financial statements. The Company currently intends to adopt the new standard using the full retrospective method on January 1, 2018, which is dependent upon the completion of the analysis of information necessary to restate prior period financial statements.

	Date of		Date of	Effect on the
Standard	Issuance	Description	Adoption	Financial Statements
Standards that were adopted:
ASU 2015-11 - Inventory (Topic 330): Simplifying the Measurement of Inventory	July 2015	The amendment requires entities to measure inventory under the FIFO or average cost methods at the lower of cost or net realizable value.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-01 - Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	January 2016	The amendment revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-05 - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships	March 2016	The amendment clarifies language related to hedge accounting criteria that a change in the counterparty is not in and of itself considered a termination of the derivative or critical term of the hedging relationship.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-07 - Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting	March 2016	Simplifies the transition to equity method accounting for entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence.	January 1, 2017	The adoption of the guidance did not have a material impact on the Company's financial statements.
ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	March 2016	The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements.	January 1, 2017	The Company included appropriate disclosures within this 10-Q to adhere to this new ASU.
ASU 2017-03 - Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323)	January 2017	Amends the disclosure requirements associated with certain recently issued Accounting Standards and how they will have an impact on the Financial Statements of a registrant when such standards are adopted in a future period. It applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and any subsequent amendments to these ASU's.	Effective Immediately	The Company included appropriate disclosure requirements within this 10-Q to adhere to this new ASU.

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CONSOLIDATED FINANCIAL INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Recognized discrete tax benefits	$ (8.3)	$ (4.5)	$ 24.2	$ (3.6)
Accounting Standards Update 2016-09
Recognized discrete tax benefits	2.4		29.2
Cumulative effect of new accounting principle in period of adoption	$ 1.9		$ 1.9

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SPECIAL (GAINS) AND CHARGES - Charges Reported on Statement of Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Special (gains) and charges
Energy related charges			$ 0.0	$ 63.6
Subtotal	$ 4.9	$ 3.2	47.9	35.7
Total special (gains) and charges	5.2	3.2	74.1	97.6
Cost of sales
Special (gains) and charges
Restructuring activities			2.2	0.9
Acquisition and integration costs	0.3		12.9
Energy related charges				51.0
Other			11.1	10.0
Subtotal	0.3		26.2	61.9
Special (gains) and charges
Special (gains) and charges
Restructuring activities	4.1	(7.7)	34.6	(6.8)
Acquisition and integration costs	1.8	1.7	12.7	5.0
Energy related charges				12.6
Venezuela related gain	(3.2)		(8.5)	(7.8)
Other	2.2	9.2	9.1	32.7
Subtotal	$ 4.9	$ 3.2	$ 47.9	$ 35.7

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SPECIAL (GAINS) AND CHARGES - Restructuring Activities, Acquisition and Integration Related Costs (Details) 10Q $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) item	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Non-restructuring Special (Gains) and Charges
Energy related charges, before tax				$ 0.0	$ 63.6
Energy related charges, after tax					42.9
Energy related charges, inventory write-downs and related disposal costs					31.1
Property, Plant and Equipment, Net	$ 3,617.2		$ 3,617.2	3,617.2		$ 3,365.0
Contract termination and litigation related charges, before tax				20.2
Contract termination and litigation related charges, after tax				15.9
Fixed asset impairment and related inventory charges, before tax					10.0
Fixed asset impairment and related inventory charges, after tax		$ 0.0			6.3
Litigation related charges, before tax	2.2	9.2			32.7
Litigation related charges, after tax	1.4	5.6			20.7
Special (gains) and charges
Restructuring
Restructuring charges incurred, pre-tax	4.1	(7.7)		34.6	(6.8)
Non-restructuring Special (Gains) and Charges
Acquisition and integration costs	1.8	1.7		12.7	5.0
Acquisition and integration costs, after tax		1.0			3.1
Business combination and integration related costs, pre tax	1.8			12.7
Business combination and integration related costs, after tax	1.2			8.5
Energy related charges, before tax					12.6
Foreign currency translation (charges) recovery associated with remeasurement and deconsolidation, before tax	3.2			8.5	7.8
Cost of sales
Restructuring
Restructuring charges incurred, pre-tax				2.2	0.9
Non-restructuring Special (Gains) and Charges
Acquisition and integration costs	0.3			12.9
Energy related charges, before tax					51.0
Cost of sales | Anios and Swisher
Non-restructuring Special (Gains) and Charges
Acquisition and integration costs	0.3			12.9
Acquisition and integration costs, after tax	0.2			8.2
2017 Restructuring Plan
Restructuring
Number of positions expected to be eliminated | item			570
Restructuring charges incurred, pre-tax	3.6			36.6
Restructuring charges incurred, after tax	1.3			26.2
Cash payments	4.3			4.9
Restructuring liability	28.2		$ 28.2	28.2
2017 Restructuring Plan | Minimum
Restructuring
Restructuring charge expected to be incurred, pre-tax	40.0		40.0	40.0
Restructuring charge expected to be incurred, after tax	30.0		30.0	30.0
2017 Restructuring Plan | Maximum
Restructuring
Restructuring charge expected to be incurred, pre-tax	45.0		45.0	45.0
Restructuring charge expected to be incurred, after tax	35.0		35.0	35.0
Energy and Combined Restructuring Plans
Restructuring
Restructuring net gain		7.7			5.9
Restructuring net gain, net of tax		7.2			7.3
Restructuring liability	23.1		23.1	23.1		$ 39.6
VENEZUELA
Non-restructuring Special (Gains) and Charges
Foreign currency translation (charges) recovery associated with remeasurement and deconsolidation, before tax	3.2			8.5	7.8
Foreign currency translation (charges) recovery associated with remeasurement and deconsolidation, after tax	2.0	0.0		5.3	4.9
Global Energy | Special (gains) and charges
Non-restructuring Special (Gains) and Charges
Employee termination costs					12.8
Accrued severance	$ 3.2		$ 3.2	$ 3.2
Global Energy | North America
Non-restructuring Special (Gains) and Charges
Energy related charges, fixed asset impairment and accelerated depreciation					18.2
Certain U.S. Production Equipment and Buildings | Global Energy | North America
Non-restructuring Special (Gains) and Charges
Property, Plant and Equipment, Net		$ 0.0			$ 0.0

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ACQUISITIONS AND DISPOSITIONS - Acquisition Summary (Details) € in Millions, $ in Millions		3 Months Ended	9 Months Ended		12 Months Ended
	Feb. 01, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)
Acquisitions and Dispositions
Increase (decrease) in restricted cash			$ (53.8)	$ 55.9
Identifiable intangible assets
Goodwill expected to be tax deductible		$ 4.1	4.1
Cost of sales
Acquisitions and Dispositions
Acquisition and integration costs		$ 0.3	12.9
Anios
Acquisitions and Dispositions
Total consideration transferred	$ 798.3
Pre-acquisition annual sales						$ 245.0
Increase (decrease) in restricted cash | €					€ 50
Components of the aggregate purchase prices of the completed acquisitions
Tangible Assets	142.7
Identifiable intangible assets
Customer relationships	252.0
Trademarks	65.7
Other technology	16.1
Total assets acquired	476.5
Total liabilities assumed	184.7
Goodwill	506.5
Total consideration transferred	798.3
Long-term debt satisfied upon close	192.8
Net consideration transferred to sellers	605.5
Accounts receivable	66.2
Property, plant and equipment	25.6
Inventory	29.7
Goodwill expected to be tax deductible	$ 0.0
Other Acquisitions
Acquisitions and Dispositions
Total consideration transferred			32.6	48.5
Identifiable intangible assets
Intangible assets			18.4	2.5
Total consideration transferred			$ 32.6	$ 48.5
Weighted average useful lives of identifiable intangible assets acquired			12 years	5 years
Customer relationships | Anios
Identifiable intangible assets
Weighted average useful lives of identifiable intangible assets acquired	20 years
Other technology | Anios
Identifiable intangible assets
Weighted average useful lives of identifiable intangible assets acquired	11 years
Trademarks | Anios
Identifiable intangible assets
Weighted average useful lives of identifiable intangible assets acquired	17 years

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ACQUISITIONS AND DISPOSITIONS - Dispositions (Details) - item	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
ACQUISITIONS AND DISPOSITIONS
Number of business dispositions	0	0

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BALANCE SHEET INFORMATION (Details) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Accounts receivable, net
Accounts receivable	$ 2,606.4	$ 2,408.8
Allowance for doubtful accounts	(73.2)	(67.6)
Total	2,533.2	2,341.2
Inventories
Finished goods	1,004.8	860.0
Raw materials and parts	461.0	408.4
Inventories at FIFO cost	1,465.8	1,268.4
FIFO cost to LIFO cost difference	43.2	51.0
Total	1,509.0	1,319.4
Other current assets
Prepaid assets	128.2	98.3
Taxes receivable	155.9	105.0
Derivative assets	29.0	46.3
Other current assets	50.1	41.8
Total	363.2	291.4
Property, plant and equipment, net
Land	227.4	211.0
Buildings and leasehold improvements	1,174.5	1,121.2
Machinery and equipment	2,219.3	2,035.8
Merchandising and customer equipment	2,396.6	2,199.4
Capitalized software	583.0	531.1
Construction in progress	422.0	344.1
Property, plant and equipment, gross	7,022.8	6,442.6
Accumulated depreciation	(3,405.6)	(3,077.6)
Total	3,617.2	3,365.0
Intangible assets subject to amortization:
Other intangible assets, gross	4,655.8	4,166.4
Accumulated amortization	(1,846.2)	(1,578.6)
Net intangible assets subject to amortization	2,809.6	2,587.8
Total	4,039.6	3,817.8
Other assets
Deferred income taxes	105.3	92.3
Pension	35.6	27.2
Derivative assets		21.5
Restricted cash		53.0
Other	290.1	291.0
Total	431.0	485.0
Other current liabilities
Discounts and rebates	318.3	275.2
Dividends payable	106.9	108.0
Interest payable	70.4	37.3
Taxes payable, other than income	117.0	103.7
Derivative liabilities	86.6	24.6
Restructuring	45.7	30.5
Other	261.3	311.9
Total	1,006.2	891.2
Accumulated other comprehensive loss
Unrealized gain (loss) on derivative financial instruments, net of tax	(37.6)	(8.5)
Unrecognized pension and postretirement benefit expense, net of tax	(527.2)	(511.4)
Cumulative translation, net of tax	(999.5)	(1,193.0)
Total	(1,564.3)	(1,712.9)
Customer relationships
Intangible assets subject to amortization:
Other intangible assets, gross	3,588.2	3,206.1
Accumulated amortization	(1,356.1)	(1,148.2)
Trademarks
Intangible assets subject to amortization:
Other intangible assets, gross	378.8	303.3
Accumulated amortization	(144.6)	(125.2)
Patents
Intangible assets subject to amortization:
Other intangible assets, gross	459.7	446.5
Accumulated amortization	(179.0)	(157.3)
Other technology
Intangible assets subject to amortization:
Other intangible assets, gross	229.1	210.5
Accumulated amortization	(166.5)	(147.9)
Trade names
Intangible assets not subject to amortization:
Other intangible assets, gross	$ 1,230.0	$ 1,230.0

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DEBT AND INTEREST (Details) € in Millions, $ in Millions	Sep. 30, 2017 EUR (€)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Components of the company's debt obligations
Long-term debt, current maturities		$ 810.8	$ 511.4
Short-term debt including current maturities of long-term debt		1,073.0	541.3
Commercial paper.
Components of the company's debt obligations
Short-term debt		238.0
Maximum borrowing capacity, commercial paper		2,000.0
U.S. commercial paper program
Components of the company's debt obligations
Maximum borrowing capacity, commercial paper		2,000.0
Outstanding commercial paper			0.0
European commercial paper
Components of the company's debt obligations
Maximum borrowing capacity, commercial paper		2,000.0
Outstanding commercial paper	€ 200	238.0	0.0
Notes payable
Components of the company's debt obligations
Short-term debt		24.2	29.9
Credit facility
Components of the company's debt obligations
Maximum borrowing capacity under the credit agreement		2,000.0
Amount outstanding under the credit agreement		$ 0.0	$ 0.0

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DEBT AND INTEREST - Other Debt Inforamtion (Details) € in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 EUR (€)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)
Debt instrument
CARRYING VALUE							$ 7,295,300,000		$ 6,657,100,000
Long-term debt, current maturities							(810,800,000)		(511,400,000)
Long-term debt							6,484,500,000		6,145,700,000
Interest
Interest expense		$ 60,700,000	$ 69,000,000	$ 191,000,000	$ 209,400,000
Interest income		(5,600,000)	(4,100,000)	(13,800,000)	(13,100,000)
Interest expense, net		$ 55,100,000	$ 64,900,000	177,200,000	$ 196,300,000
Public Notes
Debt instrument
Principal outstanding payable at time of prepayment of notes (as a percent)				101
Private Notes
Debt instrument
Principal outstanding payable at time of prepayment of notes (as a percent)				$ 100
Five year 2012 senior notes
Debt instrument
CARRYING VALUE							499,600,000		498,900,000
Aggregate principal amount							500,000,000		500,000,000
Debt instrument, term				5 years
Five year 2017 senior notes
Debt instrument
CARRYING VALUE							496,000,000
Aggregate principal amount	$ 500,000,000						500,000,000
Debt instrument, term	5 years			5 years
Interest rate (as a percent)	2.375%
Three year 2016 senior notes
Debt instrument
CARRYING VALUE							396,600,000		395,900,000
Aggregate principal amount							400,000,000		400,000,000
Debt instrument, term				3 years
Seven year 2016 senior Notes
Debt instrument
CARRYING VALUE							397,400,000		397,000,000
Aggregate principal amount							400,000,000		400,000,000
Debt instrument, term				7 years
Seven year 2016 senior euro notes
Debt instrument
CARRYING VALUE							676,500,000		608,400,000
Aggregate principal amount | €						€ 575		€ 575
Debt instrument, term				7 years
Ten year 2016 senior notes
Debt instrument
CARRYING VALUE							742,700,000		742,100,000
Aggregate principal amount							750,000,000		750,000,000
Debt instrument, term				10 years
Thirty year 2016 senior notes
Debt instrument
CARRYING VALUE							245,900,000		245,900,000
Aggregate principal amount							250,000,000		250,000,000
Debt instrument, term				30 years
Three year 2015 senior notes
Debt instrument
CARRYING VALUE							299,500,000		298,900,000
Aggregate principal amount							300,000,000		300,000,000
Debt instrument, term				3 years
Five year 2015 senior notes
Debt instrument
CARRYING VALUE							298,900,000		298,600,000
Aggregate principal amount							300,000,000		300,000,000
Debt instrument, term				5 years
Ten Year 2015 senior euro notes
Debt instrument
CARRYING VALUE							679,500,000		604,300,000
Aggregate principal amount | €						€ 575		€ 575
Debt instrument, term				10 years
Series A private placement senior notes due 2018
Debt instrument
CARRYING VALUE							248,800,000		248,900,000
Aggregate principal amount							250,000,000		250,000,000
Series B private placement senior notes due 2023
Debt instrument
CARRYING VALUE							249,300,000		249,200,000
Aggregate principal amount							250,000,000		250,000,000
Ten year 2011 senior notes
Debt instrument
CARRYING VALUE							1,245,600,000		1,244,800,000
Aggregate principal amount							1,250,000,000		1,250,000,000
Debt instrument, term				10 years
Thirty year 2011 senior notes
Debt instrument
CARRYING VALUE							739,100,000		738,700,000
Aggregate principal amount							750,000,000		750,000,000
Debt instrument, term				30 years
Capital lease obligations
Debt instrument
CARRYING VALUE							4,900,000		5,200,000
Other
Debt instrument
CARRYING VALUE							$ 75,000,000		$ 80,300,000

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) item	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Changes in the carrying amount of goodwill
Beginning goodwill, net			$ 6,383.0
Current year business combinations			510.6
Prior year business combinations			0.3
Effect of foreign currency translation			(260.5)
Ending goodwill, net	$ 7,154.4		7,154.4		$ 6,383.0
Goodwill expected to be tax deductible	4.1		$ 4.1
Number of operating units | item			11
Impairment of goodwill			$ 0.0
Future estimated amortization expense related to amortizable other identifiable intangible assets
Estimated expense remaining for the year	84.0		84.0
Total amortization expense related to other intangible assets	77.6	$ 71.9	228.5	$ 217.2
Previously Reported
Changes in the carrying amount of goodwill
Beginning goodwill, net			6,383.0
Ending goodwill, net					6,383.0
Nalco | Trademarks
Changes in the carrying amount of goodwill
Carrying value of asset subject to impairment testing	1,200.0		1,200.0
Impairment of indefinite life intangible asset			0.0
Global Industrial
Changes in the carrying amount of goodwill
Beginning goodwill, net			2,585.0
Current year business combinations			4.1
Effect of foreign currency translation			(97.9)
Ending goodwill, net	2,687.0		2,687.0		2,585.0
Global Industrial | Previously Reported
Changes in the carrying amount of goodwill
Beginning goodwill, net			2,522.3
Ending goodwill, net					2,522.3
Global Industrial | Adjustment.
Changes in the carrying amount of goodwill
Reclassifications					62.7
Global Institutional
Changes in the carrying amount of goodwill
Beginning goodwill, net			590.7
Current year business combinations			506.5
Effect of foreign currency translation			(41.6)
Ending goodwill, net	1,138.8		1,138.8		590.7
Global Institutional | Previously Reported
Changes in the carrying amount of goodwill
Beginning goodwill, net			653.4
Ending goodwill, net					653.4
Global Institutional | Adjustment.
Changes in the carrying amount of goodwill
Reclassifications					(62.7)
Global Energy
Changes in the carrying amount of goodwill
Beginning goodwill, net			3,093.6
Prior year business combinations			0.3
Effect of foreign currency translation			(116.8)
Ending goodwill, net	3,210.7		3,210.7		3,093.6
Global Energy | Previously Reported
Changes in the carrying amount of goodwill
Beginning goodwill, net			3,093.6
Ending goodwill, net					3,093.6
Other
Changes in the carrying amount of goodwill
Beginning goodwill, net			113.7
Effect of foreign currency translation			(4.2)
Ending goodwill, net	$ 117.9		117.9		113.7
Other | Previously Reported
Changes in the carrying amount of goodwill
Beginning goodwill, net			$ 113.7
Ending goodwill, net					$ 113.7

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FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Carrying Amount
Assets:
Foreign currency forward contracts	$ 52.1	$ 93.4
Liabilities:
Foreign currency forward contracts	209.2	46.7
Interest rate swap contracts	3.6	3.5
Level 2
Assets:
Foreign currency forward contracts	52.1	93.4
Liabilities:
Foreign currency forward contracts	209.2	46.7
Interest rate swap contracts	$ 3.6	$ 3.5

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FAIR VALUE MEASUREMENTS - Long-term Debt (Details) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Carrying Amount
Carrying amount and fair value of financial instruments
Long-term debt (including current maturities)	$ 7,295.3	$ 6,657.1
Fair Value | Level 2
Carrying amount and fair value of financial instruments
Long-term debt (including current maturities)	$ 7,707.6	$ 6,963.9

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DERIVATIVES AND HEDGING TRANSACTIONS - Derivative Positions Summary (Details) € in Millions, $ in Millions	Sep. 30, 2017 EUR (€)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)
Asset Derivatives
Gross value of derivatives		$ 52.1		$ 93.4
Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)
Net value of derivatives presented in the Consolidated Balance Sheet		29.0		67.7
Liability Derivatives
Gross value of derivatives		212.8		50.2
Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)
Net value of derivatives presented in the Consolidated Balance Sheet		189.7		24.5
Foreign currency forward contracts.
Liability Derivatives
Notional values		5,617.0		4,317.0
Foreign currency forward contracts. | Net Investment Hedges
Liability Derivatives
Notional values | €	€ 40		€ 0
Interest rate swaps
Liability Derivatives
Notional values		1,450.0		1,450.0
Derivatives designated as hedging instruments | Foreign currency forward contracts.
Asset Derivatives
Gross value of derivatives		30.2		73.4
Liability Derivatives
Gross value of derivatives		156.7		19.8
Derivatives designated as hedging instruments | Interest rate swaps
Liability Derivatives
Gross value of derivatives		3.6		3.5
Derivatives not designated as hedging instruments | Foreign currency forward contracts.
Asset Derivatives
Gross value of derivatives		21.9		20.0
Liability Derivatives
Gross value of derivatives		$ 52.5		$ 26.9

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DERIVATIVES AND HEDGING TRANSACTIONS - Information by Type of Derivative and Hedging Activities (Details) € in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 EUR (€)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 EUR (€)	Dec. 31, 2016 USD ($)	Jan. 31, 2016 USD ($)	Jan. 31, 2015 USD ($)	May 31, 2014 USD ($)
Net Investment Hedge:
Revaluation gain (loss), net of tax	$ (50.9)	$ (1.2)	$ (103.7)	$ (29.1)
Derivative Summary
Maximum period for hedged transactions			5 years
Three year 2016 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount						$ 400.0		$ 400.0
Three year 2015 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount						300.0		300.0
Series A private placement senior notes due 2018
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount						250.0		250.0
Five year 2012 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount						500.0		500.0
Ten year 2011 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount						1,250.0		1,250.0
Ten Year 2015 senior euro notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount | €					€ 575		€ 575
Foreign currency forward contracts.
Net Investment Hedge:
Notional values						5,617.0		4,317.0
Interest rate swaps
Net Investment Hedge:
Notional values						1,450.0		$ 1,450.0
Cash Flow Hedges | Derivatives designated as hedging instruments
Impact on AOCI and earnings from derivative contracts
Unrealized gain (loss) recognized into AOCI (effective portion)	(118.8)	(11.5)	$ (192.4)	(51.9)
Gain (loss) reclassified from AOCI into income (effective portion)	(94.8)	2.7	(158.3)	4.4
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments
Impact on AOCI and earnings from derivative contracts
Gain (loss) reclassified from AOCI into income (effective portion)	(93.0)	4.3	(152.9)	9.2
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | AOCI (equity)
Impact on AOCI and earnings from derivative contracts
Unrealized gain (loss) recognized into AOCI (effective portion)	(118.8)	(12.9)	(192.4)	(40.4)
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Cost of sales
Impact on AOCI and earnings from derivative contracts
Gain (loss) reclassified from AOCI into income (effective portion)	(0.9)	5.0	(11.7)	26.6
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Selling, general and administrative expenses
Impact on AOCI and earnings from derivative contracts
Gain (loss) reclassified from AOCI into income (effective portion)	(99.5)	(0.7)	(157.3)	(20.3)
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Interest expense, net
Impact on AOCI and earnings from derivative contracts
Gain (loss) reclassified from AOCI into income (effective portion)	7.4		16.1	2.9
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments
Impact on AOCI and earnings from derivative contracts
Gain (loss) on derivative recognized in income	(29.6)	(11.0)	(41.6)	(29.4)
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Selling, general and administrative expenses
Impact on AOCI and earnings from derivative contracts
Gain (loss) on derivative recognized in income	(29.4)	(12.0)	(38.1)	(27.3)
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Interest expense, net
Impact on AOCI and earnings from derivative contracts
Gain (loss) on derivative recognized in income	(0.2)	1.0	(3.5)	(2.1)
Cash Flow Hedges | Interest rate swaps | Derivatives designated as hedging instruments | AOCI (equity)
Impact on AOCI and earnings from derivative contracts
Unrealized gain (loss) recognized into AOCI (effective portion)		1.4		(11.5)
Cash Flow Hedges | Interest rate swaps | Derivatives designated as hedging instruments | Interest expense, net
Impact on AOCI and earnings from derivative contracts
Gain (loss) reclassified from AOCI into income (effective portion)	(1.8)	(1.6)	(5.4)	(4.8)
Fair Value Hedges | Interest rate swaps | Three year 2016 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount									$ 400.0
Interest rate (as a percent)									2.00%
Fair Value Hedges | Interest rate swaps | Three year 2015 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount										$ 300.0
Interest rate (as a percent)										1.55%
Fair Value Hedges | Interest rate swaps | Series A private placement senior notes due 2018
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount										$ 250.0
Interest rate (as a percent)										3.69%
Fair Value Hedges | Interest rate swaps | Five year 2012 senior notes
Impact on AOCI and earnings from derivative contracts
Aggregate principal amount											$ 500.0
Interest rate (as a percent)											1.45%
Fair Value Hedges | Interest rate swaps | Interest expense, net
Impact on AOCI and earnings from derivative contracts
Gain (loss) on derivative recognized in income	0.3	(7.6)	(0.1)	6.1
Gain (loss) on hedged item recognized in income	(0.3)	7.6	0.1	(6.1)
Net Investment Hedges
Net Investment Hedge:
Revaluation gain (loss), net of tax	$ (50.9)	$ (1.2)	$ (103.7)	$ (29.1)
Net Investment Hedges | European commercial paper
Net Investment Hedge:
Notional values					200	238.0
Net Investment Hedges | Senior euro notes
Net Investment Hedge:
Notional values					1,150	$ 1,356.0
Net Investment Hedges | Foreign currency forward contracts.
Net Investment Hedge:
Notional values | €					€ 40		€ 0

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OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reclassification adjustments
Cost of sales	$ (1,891.3)	$ (1,737.2)	$ (5,454.4)	$ (5,153.8)
SG&A	(1,087.3)	(1,071.6)	(3,293.2)	(3,253.1)
Interest expense, net	(55.1)	(64.9)	(177.2)	(196.3)
Subtotal	80.2	43.0	151.2	(23.0)
Derivative gains reclassified from AOCI into income, net of tax	72.7	(2.0)	120.3	(3.5)
Pension and postretirement net actuarial losses and prior service cost reclassified from AOCI into income, net of tax	1.3	5.6	8.2	16.7
Derivative & Hedging Instruments.
Reclassification adjustments
Amount recognized in AOCI	(118.8)	(11.5)	(192.4)	(51.9)
Other activity	(0.6)	0.1	(0.1)	0.1
Tax impact	3.8	4.6	5.1	16.0
Subtotal	(20.8)	(9.5)	(29.1)	(40.2)
Derivative & Hedging Instruments. | Amount reclassified from AOCI
Reclassification adjustments
Cost of sales	0.9	(5.0)	11.7	(26.6)
SG&A	99.5	0.7	157.3	20.3
Interest expense, net	(5.6)	1.6	(10.7)	1.9
(Gains) losses reclassified from AOCI into income	94.8	(2.7)	158.3	(4.4)
Pension & Postretirement Benefits.
Reclassification adjustments
(Gains) losses reclassified from AOCI into income	5.2	58.8	15.2	76.6
Tax impact	(3.9)	(22.3)	(7.0)	(29.0)
Subtotal	1.3	36.5	8.2	47.6
Actuarial losses
Reclassification adjustments
(Gains) losses reclassified from AOCI into income	11.3	10.8	33.3	32.6
Prior service costs
Reclassification adjustments
(Gains) losses reclassified from AOCI into income	$ (6.1)	(2.0)	$ (18.1)	(6.0)
Postretirement benefits changes
Reclassification adjustments
(Gains) losses reclassified from AOCI into income		$ 50.0		$ 50.0

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SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended				3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2017	Feb. 28, 2017	May 31, 2016	Feb. 29, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Feb. 28, 2015
Shareholder's Equity
Common stock, par value per share (in dollars per share)					$ 1.00		$ 1.00		$ 1.00
Common stock, shares authorized					800,000,000		800,000,000		800,000,000
Dividends declared per common share (in dollars per share)					$ 0.370	$ 0.350	$ 1.110	$ 1.050
Common Stock
Shareholder's Equity
Common stock, shares authorized to be repurchased										20,000,000
Remaining shares authorized to be repurchased					12,358,110		12,358,110
Amount of common stock to be repurchased under ASR agreement		$ 300		$ 300
Shares received under ASR agreement	286,620	2,077,224	232,012	2,459,490
Shares received under the ASR agreement compared to the shares the company expected to receive (as a percent)		85.00%		85.00%
Reacquired shares							4,614,646		6,483,198
Number of shares reacquired through the open market or private purchases							4,414,416		6,126,033
Number of shares that have been repurchased through the exercise of stock options and vesting of stock awards							200,230		357,165

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EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Computations of the basic and diluted earnings attributable to Ecolab per share amounts
Net income attributable to Ecolab	$ 392.4	$ 374.1	$ 942.5	$ 863.3
Weighted-average common shares outstanding
Basic (in shares)	289.0	291.6	289.8	292.8
Effect of dilutive stock options and units (in shares)	4.4	4.1	4.4	4.3
Diluted (in shares)	293.4	295.7	294.2	297.1
Earnings attributable to Ecolab per common share
Basic (in dollars per share)	$ 1.36	$ 1.28	$ 3.25	$ 2.95
Diluted (in dollars per share)	$ 1.34	$ 1.27	$ 3.20	$ 2.91
Anti-dilutive securities excluded from the computation of EPS	0.1	1.7	1.7	1.7

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Effective income tax rate (as a percent)	24.60%	25.50%	21.70%	24.70%
Recognized discrete tax expense (benefit)	$ 8.3	$ 4.5	$ (24.2)	$ 3.6
Accounting Standards Update 2016-09
Recognized discrete tax expense (benefit)	$ (2.4)		$ (29.2)

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PENSION AND POSTRETIREMENT PLANS (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
U.S. Pension
Net periodic benefit costs
Service cost		$ 17.5	$ 16.8	$ 52.6	$ 50.3
Interest cost on benefit obligation		20.9	20.4	62.6	61.2
Expected return on plan assets		(37.4)	(35.9)	(112.3)	(107.7)
Recognition of net actuarial (gain) loss		7.2	7.7	21.5	23.1
Amortization of prior service cost (benefit)		(1.7)	(1.7)	(5.1)	(5.2)
Total expense		6.5	7.3	19.3	21.7
U.S. qualified defined benefit plans
Other Pension Plan Information
Contributions to plan	$ 80.0
U.S. non-contributory non-qualified defined benefit plans
Other Pension Plan Information
Contributions to plan				6.0
Contributions anticipated to be made during the remainder of 2017				1.0
International Pension
Net periodic benefit costs
Service cost		7.7	7.0	23.0	20.9
Interest cost on benefit obligation		7.0	8.0	21.1	24.0
Expected return on plan assets		(13.9)	(13.3)	(41.7)	(40.0)
Recognition of net actuarial (gain) loss		4.5	3.6	13.6	10.7
Amortization of prior service cost (benefit)		(0.2)	(0.2)	(0.5)	(0.6)
Total expense		5.1	5.1	15.5	15.0
Other Pension Plan Information
Contributions to plan				33.0
Contributions anticipated to be made during the remainder of 2017				9.0
U.S. Postretirement Health Care
Net periodic benefit costs
Service cost		0.7	0.8	2.0	2.3
Interest cost on benefit obligation		1.5	2.0	4.4	6.1
Expected return on plan assets		(0.1)	(0.2)	(0.4)	(0.6)
Recognition of net actuarial (gain) loss		(0.6)	(0.4)	(1.8)	(1.2)
Amortization of prior service cost (benefit)		(4.2)	(0.1)	(12.5)	(0.2)
Total expense		$ (2.7)	$ 2.1	(8.3)	$ 6.4
Other Pension Plan Information
Contributions to plan				12.0
Contributions anticipated to be made during the remainder of 2017				$ 4.0

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OPERATING SEGMENTS (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) item	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Financial information of reportable segments
Number of reportable segments | item			3
Net sales	$ 3,563.3	$ 3,386.1	$ 10,187.6	$ 9,800.7	$ 13,152.8
Operating Income (Loss)	579.8	574.1	1,392.1	1,358.1	1,915.0
Previously Reported
Financial information of reportable segments
Net sales					13,152.8
Operating Income (Loss)					1,915.0
Operating segment
Financial information of reportable segments
Net sales	3,491.6	3,331.7	10,090.7	9,687.1	13,004.8
Operating Income (Loss)	568.4	564.2	1,376.1	1,338.1	1,889.8
Operating segment | Previously Reported
Financial information of reportable segments
Net sales					12,955.0
Operating Income (Loss)					1,882.8
Operating segment | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					49.8
Operating Income (Loss)					7.0
Operating segment | Global Industrial
Financial information of reportable segments
Net sales	1,248.1	1,202.1	3,586.5	3,468.4	4,687.2
Operating Income (Loss)	207.4	204.1	501.9	510.1	720.0
Operating segment | Global Industrial | Previously Reported
Financial information of reportable segments
Net sales					4,617.1
Operating Income (Loss)					703.0
Operating segment | Global Industrial | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					6.9
Operating Income (Loss)					(0.9)
Operating segment | Global Industrial | Adjustment | Other
Financial information of reportable segments
Net sales					63.2
Operating Income (Loss)					17.9
Operating segment | Global Institutional
Financial information of reportable segments
Net sales	1,225.1	1,149.2	3,524.3	3,315.0	4,440.1
Operating Income (Loss)	274.2	262.1	726.1	697.8	950.5
Operating segment | Global Institutional | Previously Reported
Financial information of reportable segments
Net sales					4,495.6
Operating Income (Loss)					966.7
Operating segment | Global Institutional | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					7.7
Operating Income (Loss)					3.0
Operating segment | Global Institutional | Adjustment | Other
Financial information of reportable segments
Net sales					(63.2)
Operating Income (Loss)					(19.2)
Operating segment | Global Energy
Financial information of reportable segments
Net sales	796.7	771.2	2,346.1	2,305.6	3,075.8
Operating Income (Loss)	89.7	102.6	236.1	244.9	346.7
Operating segment | Global Energy | Previously Reported
Financial information of reportable segments
Net sales					3,035.8
Operating Income (Loss)					337.1
Operating segment | Global Energy | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					40.0
Operating Income (Loss)					7.9
Operating segment | Global Energy | Adjustment | Other
Financial information of reportable segments
Operating Income (Loss)					1.7
Operating segment | Other
Financial information of reportable segments
Net sales	221.7	209.2	633.8	598.1	801.7
Operating Income (Loss)	44.0	40.4	110.9	108.2	145.2
Operating segment | Other | Previously Reported
Financial information of reportable segments
Net sales					806.5
Operating Income (Loss)					148.1
Operating segment | Other | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					(4.8)
Operating Income (Loss)					(2.5)
Operating segment | Other | Adjustment | Other
Financial information of reportable segments
Operating Income (Loss)					(0.4)
Currency Impact
Financial information of reportable segments
Net sales	71.7	54.4	96.9	113.6	148.0
Operating Income (Loss)	11.4	9.9	16.0	20.0	25.2
Currency Impact | Previously Reported
Financial information of reportable segments
Net sales					197.8
Operating Income (Loss)					32.2
Currency Impact | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Net sales					(49.8)
Operating Income (Loss)					(7.0)
Corporate
Financial information of reportable segments
Operating Income (Loss)	$ (46.9)	$ (45.0)	(198.9)	$ (222.9)	(272.6)
Corporate | Previously Reported
Financial information of reportable segments
Operating Income (Loss)					(272.1)
Corporate | Adjustment | Fixed Currency Rate Change
Financial information of reportable segments
Operating Income (Loss)					$ (0.5)
Intersegment
Financial information of reportable segments
Net sales			$ 0.0

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COMMITMENTS AND CONTINGENCIES (Details)	1 Months Ended		9 Months Ended
	Apr. 30, 2017 complaint	May 31, 2016 complaint	Sep. 30, 2017 location item complaint
Loss contingencies
Period to appeal court's decision after entry of final judgment under Federal Rule of Appellate Procedure			30 days
Environmental matters
Number of locations for environmental assessments and remediation | location			45
Deepwater Horizon Incident | Nalco
Loss contingencies
Number of putative class action complaints filed			6
Number of complaints filed by individuals			21
Number of complaints filed by individuals claiming economic loss	2	9
Number of master complaints naming Nalco and others who responded to the oil spill (known as the "B3 Bundle")			1
Number of proposed class action settlements | item			2