OPERATING SEGMENTS

3 Months Ended

Mar. 31, 2025

OPERATING SEGMENTS

OPERATING SEGMENTS

15. OPERATING SEGMENTS

The Company’s organizational structure consists of global business units and market-based leadership teams. The Company’s seven 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 (“CODM”) 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 four reportable segments: Global Water, Global Institutional & Specialty, Global Pest Elimination and Global Life Sciences.

Comparability of Reportable Segments

Effective January 1, 2025, the Company’s former Global Industrial reportable segment was renamed Global Water and includes the Light & Heavy (previously named Water), Food & Beverage, and Paper operating segments. The Global Institutional & Specialty reportable segment continues to include the Institutional and Specialty operating segments. The Company’s former healthcare operating segment moved into the Institutional operating segment. Global Life Sciences was elevated to a standalone reportable segment. The

Global Pest Elimination segment remains a standalone reportable segment. The Company made other immaterial changes, including the movement of certain customers and cost allocations between reportable segments. These changes are presented in "Other" columns of the table below. Prior period amounts have been recast to conform with current period presentation.

The Company evaluates the performance of its non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminates 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. The “Fixed Currency Rate Change” column shown in the following table reflects international operations at fixed currency exchange rates established by management at the beginning of 2025, rather than the 2024 established rates. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the “Effect of foreign currency translation” row in the following table.

The impact of the preceding changes on previously reported full year 2024 reportable segment information is summarized as follows:

	December 31, 2024
	2024 Reported					Fixed	2024 Reported
	Valued at 2024				Currency		Valued at 2025
(millions)	Management Rates		Other		Rate Change		Management Rates
Net Sales
Global Water		$7,857.2		($1.2)		($372.6)		$7,483.4
Global Institutional & Specialty		5,413.9		726.0		(160.5)		5,979.4
Global Pest Elimination		1,167.8		-		(27.7)		1,140.1
Global Life Sciences		1,434.1		(724.8)		(38.8)		670.5
Subtotal at fixed currency rates		15,873.0		-		(599.6)		15,273.4
Effect of foreign currency translation		(131.6)				599.6		468.0
Consolidated reported GAAP net sales		$15,741.4		$-		$-		$15,741.4
Cost of Sales
Global Water		$4,691.2		$2.0		($222.3)		$4,470.9
Global Institutional & Specialty		2,727.5		490.6		(87.1)		3,131.0
Global Pest Elimination		655.0		0.1		(15.3)		639.8
Global Life Sciences		895.1		(492.7)		(19.8)		382.6
Corporate		5.4		-		(0.2)		5.2
Subtotal at fixed currency rates		$8,974.2		$-		($344.7)		$8,629.5
Selling, General and Administrative Expenses
Global Water		$1,865.4		$3.1		($63.2)		$1,805.3
Global Institutional & Specialty		1,503.7		181.2		(38.7)		1,646.2
Global Pest Elimination		292.4		5.1		(6.9)		290.6
Global Life Sciences		391.8		(189.4)		(6.3)		196.1
Corporate		199.3		-		(3.7)		195.6
Subtotal at fixed currency rates		$4,252.6		$-		($118.8)		$4,133.8
Special (Gains) and Charges
Corporate		(188.9)		-		0.2		(188.7)
Subtotal at fixed currency rates		($188.9)		$-		$0.2		($188.7)
Operating Income
Global Water		$1,300.6		($6.3)		($87.1)		$1,207.2
Global Institutional & Specialty		1,182.7		54.2		(34.7)		1,202.2
Global Pest Elimination		220.4		(5.2)		(5.5)		209.7
Global Life Sciences		147.2		(42.7)		(12.7)		91.8
Corporate		(15.8)		-		3.7		(12.1)
Subtotal at fixed currency rates		2,835.1		-		(136.3)		2,698.8
Effect of foreign currency translation		(32.7)		-		136.3		103.6
Consolidated reported GAAP operating income		$2,802.4		$-		$-		$2,802.4

Reportable Segment Information

The Company has determined its significant segment expenses are cost of sales (“COS”) and selling, general and administrative expenses (“SG&A”), which are regularly provided to the CODM at fixed currency exchange rates. Financial information for each of the Company’s reportable segments were as follows:

	March 31, 2025
(millions)	Net Sales	COS	SG&A	Special (gains) and charges	Operating Income (Loss)
Global Water	$1,800.5	$1,073.6	$466.9	$-	$260.0
Global Institutional & Specialty	1,406.5	705.3	402.6	-	298.6
Global Pest Elimination	278.1	161.7	70.3	-	46.1
Global Life Sciences	167.0	90.4	51.4	-	25.2
Corporate	-	4.7	48.5	29.3	(82.5)
Subtotal at fixed currency rates	$3,652.1	$2,035.7	$1,039.7	$29.3	$547.4
Effect of foreign currency translation	42.9				7.9
Consolidated reported GAAP	$3,695.0				$555.3
	March 31, 2024
(millions)	Net Sales	COS	SG&A	Special (gains) and charges	Operating Income (Loss)
Global Water	$1,755.0	$1,050.5	$460.9	$-	$243.6
Global Institutional & Specialty	1,446.9	770.6	418.9	-	257.4
Global Pest Elimination	260.3	147.5	66.3	-	46.5
Global Life Sciences	159.3	84.6	55.4	-	19.3
Corporate	-	1.6	48.9	28.3	(78.8)
Subtotal at fixed currency rates	$3,621.5	$2,054.8	$1,050.4	$28.3	$488.0
Effect of foreign currency translation	130.4				29.9
Consolidated reported GAAP	$3,751.9				$517.9

The profitability of the Company’s operating segments is evaluated by management based on operating income.

Consistent with the Company’s internal management reporting, Corporate includes intangible asset amortization specifically from the Nalco and Purolite acquisitions and special (gains) and charges, as discussed in Note 2, that are not allocated to the Company’s reportable segments.

The Company has an integrated supply chain function that serves all of its reportable segments. As such, asset and capital expenditure information by reportable segment has not been provided and is not available, since the Company does not produce or utilize such information internally. In addition, although depreciation and amortization expense is a component of each reportable segment’s operating results, it is not discretely identifiable.