SPECIAL (GAINS) AND CHARGES

3 Months Ended

Mar. 31, 2025

SPECIAL (GAINS) AND CHARGES

SPECIAL (GAINS) AND CHARGES

2. SPECIAL (GAINS) AND CHARGES

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

	First Quarter Ended
	March 31
(millions)	2025		2024
Cost of sales
One Ecolab		$4.8		$ -
Other restructuring		-		1.6
Cost of sales subtotal		4.8		1.6
Special (gains) and charges
One Ecolab		39.4		-
Other restructuring		-		18.1
Sale of global surgical solutions business		1.6		6.0
Acquisition and integration activities		1.5		2.5
Other		(13.0)		1.6
Special (gains) and charges subtotal		29.5		28.2
Total special (gains) and charges		$34.3		$29.8

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

One Ecolab

On July 30, 2024, the Company announced the One Ecolab initiative, which will enhance its growth and margin expansion journey. As a program within this initiative, the Company also announced that it commenced a restructuring plan to leverage its digital technologies to realign the functional work done in many countries into global centers of excellence. The Company anticipates restructuring costs of $175 million ($136 million after tax) and special charges of $50 million ($39 million after tax) by the end of 2027. The Company anticipates that the restructuring costs will primarily be cash expenditures for severance costs relating to team reorganization.

The Company recorded restructuring charges of $39.4 million ($30.5 million after tax) during the first quarter of 2025 primarily related to severance. In addition, the Company recorded non-restructuring special charges of $4.8 million ($3.6 million after tax) during the first quarter of 2025, primarily related to professional services. The Company has recorded $121.2 million ($93.5 million after tax) of cumulative restructuring charges and $28.5 million ($21.5 million after tax) of cumulative special charges under the One Ecolab initiative.

The restructuring liability related to the One Ecolab initiative was $84.7 million and $54.9 million as of March 31, 2025 and December 31, 2024, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities.

Restructuring activity related to the One Ecolab initiative since inception of the underlying actions includes the following items:

	Employee		Asset
	Costs		Disposals		Other		Total
(millions)
2024 Activity
Recorded expense and accrual		$46.3		$-		$30.2		$76.5
Net cash payments		-		-		(26.9)		(26.9)
Non-cash net charges		-		-		-		-
Reclassification		-		-		5.3		5.3
Restructuring liability, December 31, 2024		46.3		-		8.6		54.9
2025 Activity
Recorded expense (income) and accrual		$33.1		$-		$6.3		$39.4
Net cash payments		(4.5)		-		(5.1)		(9.6)
Non-cash net charges		-		-		-		-
Reclassification		-		-		-		-
Restructuring liability, March 31, 2025		$74.9		$-		$9.8		$84.7

Other restructuring

Other restructuring is primarily related to the Combined Program, which is described below. These activities have been included as a component of cost of sales and special (gains) and charges on the Consolidated Statements of Income. Restructuring liabilities have been classified as a component of other current and other noncurrent liabilities on the Consolidated Balance Sheets.

Combined Program

In November 2022 the Company approved a Europe cost savings program and subsequently expanded the program to focus on its Institutional and Healthcare businesses in other regions (the “Combined Program”). The restructuring activities were completed at the end of 2024, with total costs $184.1 million ($151.5 million after tax).

The net liability related to the Combined Program was $5.7 million and $12.8 million as of March 31, 2025 and December 31, 2024, respectively. Net cash payments were $7.1 million in the first quarter of 2025. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities.

Restructuring activity related to the Combined Program since inception of the underlying actions includes the following items:

	Employee		Asset
(millions)	Costs		Disposals		Other		Total
2022-2024 Activity
Recorded expense and accrual		$118.0		$15.3		$36.8		$170.1
Net cash payments		(124.5)		-		(31.5)		(156.0)
Non-cash charges		-		(15.3)		-		(15.3)
Reclassification		19.3		-		(5.3)		14.0
Net restructuring liability, December 31, 2024		12.8		-		-		12.8

Other Restructuring Activities

The restructuring liability balance for all other restructuring plans excluding the Combined Program and One Ecolab was $5.6 million and $6.5 million as of March 31, 2025 and December 31, 2024, respectively.

Sale of global surgical solutions business

On April 27, 2024, the Company reached a definitive agreement to sell our global surgical solutions business, which closed on August 1, 2024. The Company recorded charges of $1.6 million ($1.2 million after tax) and $6.0 million ($4.5 million after tax) in the first quarter of 2025 and 2024 respectively.

Acquisition and integration related costs

Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income include $1.5 million ($1.1 million after tax) and $2.5 million ($1.9 million after tax) in the first quarter of 2025 and 2024, respectively.

Other operating activities

Other special gains recorded in special (gains) and charges on the Consolidated Statements of Income in the first quarter of 2025 and 2024 were $13.0 million ($11.3 million gain after tax) and charges of $1.6 million ($0.9 million after tax), respectively, are driven by the sale of an equity method investment.