filings.toolsEcolab 10-K 2020-12-31
Filed 2021-02-26. 22 sections, 587K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended December 31, 2020 |
OR
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| ☐ | 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)
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| Delaware | | 41-0231510 | ||
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | ||
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| 1 Ecolab Place**,** St. Paul**,** Minnesota 55102 | ||||
| (Address of principal executive offices) (Zip Code) | ||||
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| Registrant’s telephone number, including area code: **1-800-**232-6522 | ||||
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| Securities registered pursuant to Section 12(b) of the Act: | ||||
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| Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
| Common Stock, $1.00 par value 2.625% Euro Notes due 2025 1.000% Euro Notes due 2024 | | ECL ECL 25 ECL 24 | | New York Stock Exchange New York Stock Exchange New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ⌧ Yes ◻ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ◻ Yes ⌧ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes ◻ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. ⌧ Yes ◻ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer ☒ | | Accelerated filer ☐ |
| Non-accelerated filer ☐ | | Smaller reporting company ☐ |
| | | Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ YES ☒ NO
Aggregate market value of voting and non-voting common equity held by non-affiliates of registrant on June 30, 2020, the last business day of the Registrant’s most recently completed second fiscal quarter: $56,528,667,907 (see Item 12, under Part III hereof), based on a closing price of registrant’s Common Stock of $198.95 per share.
The number of shares of registrant’s Common Stock, par value $1.00 per share, outstanding as of January 29, 2021: 285,849,956 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held May 6, 2021, and to be filed within 120 days after the registrant’s fiscal year ended December 31, 2020 (hereinafter referred to as “Proxy Statement”), are incorporated by reference into Part III.
ECOLAB INC.
FORM 10-K
For the Year Ended December 31, 2020
TABLE OF CONTENTS
PART I
Except where the context otherwise requires, references in this Form 10-K to (i) “Ecolab,” “Company,” “we” and “our” are to Ecolab Inc. and its subsidiaries, collectively; (ii) “Nalco” are to Nalco Company LLC, a wholly-owned subsidiary of the Company; and (iii) “Nalco transaction” are to the merger of Ecolab and Nalco Holding Company completed in December 2011.
Item 1. Business.
General Development of Business.
Ecolab was incorporated as a Delaware corporation in 1924. Our fiscal year is the calendar year ending December 31. International subsidiaries are included in the consolidated financial statements on the basis of their U.S. GAAP (accounting principles generally accepted in the United States of America) November 30 fiscal year ends to facilitate the timely inclusion of such entities in our consolidated financial reporting.
On June 3, 2020, the Company completed the previously announced separation of its Upstream Energy business (the “ChampionX business”) in a Reverse Morris Trust transaction (the “Transaction”) through the split-off of ChampionX Holding Inc. (“ChampionX”), formed by Ecolab as a wholly owned subsidiary to hold the ChampionX business, followed immediately by the merger (the “Merger”) of ChampionX with a wholly owned subsidiary of ChampionX Corporation (f/k/a Apergy Corporation, “Apergy”).
As discussed in Note 5 Discontinued Operations, the ChampionX business met the criteria to be reported as discontinued operations because the separation of ChampionX was a strategic shift in business that had a major effect on our operations and financial results. Therefore, we are reporting the historical results of ChampionX, including the results of operations and cash flows as discontinued operations, and related assets and liabilities were retrospectively reclassified for all periods presented herein. Unless otherwise noted, the accompanying financial information has been revised to reflect the effect of the separation of ChampionX and prior year balances have been revised accordingly to reflect continuing operations only.
Subsequent to the separation of ChampionX, the Company no longer reports the Upstream Energy segment, which previously held the ChampionX business. We are aligned into three reportable segments and Other.
Effective in the first quarter of 2020, and in anticipation of the separation of the Upstream Energy business, we created the Upstream and Downstream operating segments from the Global Energy operating segment, which was also a reportable segment. We eliminated the Global Energy reportable segment and created the Downstream operating segment and the Upstream operating segment, which are reported in the Global Industrial reportable segment and newly established Upstream Energy reportable segment which is reported in discontinued operations, respectively. Also, in the first quarter of 2020, we announced leadership changes which allow for shared oversight and focus on the Healthcare and Life Sciences operating segments and established the Global Healthcare & Life Sciences reportable segment. This segment is comprised of the Healthcare operating segment which was previously aggregated in the Global Institutional reportable segment and the Life Sciences operating segment which was previously aggregated in the Global Industrial reportable segment. Additionally, the Textile Care operating segment is reported in Other, which had previously been aggregated in the Global Industrial reportable segment. We also renamed the Global Institutional reportable segment to the Global Institutional & Specialty reportable segment. We made other immaterial changes, including the movement of certain customers and cost allocations between reportable segments.
We continued to invest in and build our business through various acquisitions that complement our strategic vision. See Part II, Item 8, Note 4 of this Form 10-K for additional information about the acquisitions and divestitures of the Company.
Narrative Description of Business.
General
With 2020 sales of $11.8 billion, we believe we are the global leader in water, hygiene and infection prevention solutions and services. We deliver comprehensive solutions, data-driven insights and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries around the world. Our cleaning and sanitizing programs and products and pest elimination services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors. Our products and technologies are also used in water treatment, pollution control, energy conservation, refining, primary metals manufacturing, papermaking, mining and other industrial processes.
We pursue a “Circle the Customer – Circle the Globe” strategy by providing an array of innovative programs, products and services designed to meet the specific operational and sustainability needs of our customers throughout the world. Through this strategy and our varied product and service mix, one customer may utilize the offerings of several of our operating segments. Important in our business proposition for customers is our ability to produce improved results while reducing their water and energy use. With that in mind, we focus on continually innovating to optimize both our own operations and the solutions we provide to customers, aligning with our corporate strategy to address some of the world’s most pressing and complex sustainability challenges such as water scarcity and climate change.
The work we do matters, and the way we do it matters to our employees, customers, investors and the communities in which we and our customers operate.
Sustainability is core to our business strategy. We deliver sustainable solutions that help companies around the world achieve their business goals while reducing environmental impacts. We partner with customers at approximately three million customer locations around the world to reduce water and energy use as well as greenhouse gas emissions through our high-efficiency solutions. By partnering with our customers to help them do more with less through the use of our innovative and differentiated solutions, we aim to help our customers conserve more than 300 billion gallons of water annually by 2030. In 2019, we helped our customers conserve more than 206 billion gallons of water and avoid more than 1.5 million metric tons of greenhouse gas emissions.
The following description of our business is based upon our reportable segments as reported in our consolidated financial statements for the year ended December 31, 2020, which are located in Item 8 of Part II of this Form 10-K. 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 & Specialty and Global Healthcare & Life Sciences. Operating segments that were not aggregated and do not exceed the quantitative criteria to be separately reported have been combined into Other. We provide similar information for Other as compared to our three reportable segments as we consider the information regarding its underlying operating segments as useful in understanding our consolidated results.
Global Industrial
This reportable segment consists of the Water, Food & Beverage, Downstream and Paper operating segments, which provide water treatment and process applications, and cleaning and sanitizing solutions, primarily to large industrial customers within the manufacturing, food and beverage processing, transportation, chemical, primary metals and mining, power generation, global refining, petrochemical, pulp and paper industries. The underlying operating segments exhibit similar manufacturing processes, distribution methods and economic characteristics. Descriptions of the four operating segments which comprise our Global Industrial reportable segment fol
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Item 1A. Risk Factors.
The following are 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-K. See the section entitled “Forward-Looking Statements” set forth above.
We may also refer to this disclosure to identify factors that may cause results to differ materially from those expressed in other forward-looking statements including those made in oral presentations, including telephone conferences and/or webcasts open to the public.
Economic & Operational Risks
The COVID-19 pandemic has materially and adversely impacted, and we expect will continue to materially and adversely impact, our business.
The COVID-19 pandemic has had a rapid and significant negative impact on the global economy, including a significant downturn in the foodservice, hospitality and travel industries. Measures taken to alleviate the pandemic (such as stay-at-home orders and other responsive measures) have significantly impacted our restaurant and hospitality customers and negatively affected demand for our products and services in these segments, resulting in a material adverse effect on our business and results of operations. Prolonged economic weakness, including an extended period of elevated levels of unemployment in the key countries we serve, could further reduce discretionary consumer spending and consumer confidence, which could have a further adverse effect on our business and results of operations. We expect the full impact of the COVID-19 pandemic, including the extent of its effect on our business, results of operations and financial condition, to be dictated by future developments which remain uncertain and cannot be predicted, such as the severity of the disease, the duration of the outbreak, the distribution and efficacy of vaccines, the likelihood of a resurgence of the outbreak, actions that may be taken by governmental authorities intended to minimize the spread of the pandemic or to stimulate the economy and other unintended consequences. In addition to the reduction in the demand for our products and services, the COVID-19 pandemic has had, and we expect will continue to have, certain negative impacts on our business, including, but not limited to, the following:
| ● | We rely on a global workforce and take measures to protect the health and safety of our employees, customers and others with whom we do business while continuing to effectively manage our employees and maintain business operations. We have taken additional measures and incurred additional expenses to protect the health and safety of our employees to comply with applicable government requirements and safety guidance. Additionally, our business operations may be disrupted if a significant portion of our workforce is unable to work safely and effectively due to illness, quarantines, government actions or other restrictions or measures responsive to the pandemic, or if members of senior management or our Board of Directors are unable to perform their duties for an extended period of time. Measures taken across our business operations to address health and safety may not be sufficient to prevent the spread of COVID-19 among our employee base, customers and others. Therefore, we could face operational disruptions and incur additional expenses, including devoting additional resources to assisting employees diagnosed with COVID-19 and further changing health and safety protocols and processes, that could adversely affect our business and results of operations. |
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| ● | A significant number of our employees, as well as customers and others with whom we do business, continue to work remotely in response to the COVID-19 pandemic. Our business operations may be disrupted, and we may experience increased risk of adverse effects to our business, if a significant portion of our workforce or certain business operations are negatively impacted as a result of remote work arrangements, including due to cybersecurity risks or other disruption to our technology infrastructure. Further, if our key operating facilities experience closures or worker shortages as a result of COVID-19, whether temporary or sustained, our business operations could be significantly disrupted. |
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| ● | Cost management and various cost-containment actions implemented across our business in response to the COVID-19 pandemic could hinder execution of our business strategy, including the deferral of planned capital expenditures, and could adversely affect our business and results of operations. |
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| ● | We take measures to appropriately reserve for expected credit losses, however we cannot be certain that loss or delay in the collection of accounts receivable will not have a material adverse effect on our results of operations and financial condition. |
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Our results depend upon the continued vitality of the markets we serve.
Economic downturns, and in particular downturns in our larger markets including the foodservice, hospitality, travel, health care, food processing, refining, pulp and paper, mining and steel industries, can adversely impact our end-users. This year we are experiencing the negative impact of the COVID-19 pandemic on the demand for our products and services provided to customers in the full-service restaurant, hospitality, lodging and entertainment industries. In recent years, the weaker global economic environment, particularly in Europe, has also negatively impacted certain of our end-markets. During these periods of weaker economic activity, our customers and potential customers may reduce or discontinue their volume of purchases of cleaning and sanitizing products and water treatment and process chemicals, which has had, and may continue to have, a material adverse effect on our business, financial condition, results of operation or cash flows.
Our results are impacted by general worldwide economic factors.
Economic factors such as the worldwide economy, capital flows, interest rates and currency movements, including, in particular, our exposure to foreign currency risk, have affected our business in the past and may have a material adverse impact on our business in the future. For example, in 2011 and 2012, the European Union’s sovereign debt crisis negatively impacted economic activity in that region as well as the strength of the euro versus the U.S. dollar. Additionally, the June 2016 Brexit vote resulted in a sharp decline in the value of the British pound, as compared to the U.S. dollar and other currencies, and has caused increased fluctuations and unpredictability in foreign currency exchange rates. The possibility for referendum by other EU member states may lead to further market volatility. Other regions of the world, including emerging market areas, also expose us to foreign currency risk. As a result of increasing currency controls, importation restrictions, workforce regulations, pricing constraints and local capitalization requirements, we deconsolidated our Venezuelan subsidiaries effective as of the end of the fourth quarter of 2015. Prior to deconsolidation, across the second through fourth quarters of 2015, we devalued our Venezuelan bolivar operations within various of our operating segments, including Water, Paper, Food & Beverage and Institutional. Similar currency devaluations, credit market disruptions or other economic turmoil in other countries could have a material adverse impact on our consolidated results of operations, financial position and cash flows by negatively impacting economic activity, including in our key end-markets, and by further weakening the local currency versus the U.S. dollar, resulting in reduced sales and earnings from our foreign operations, which are generated in the local currency, and then translated to U.S. dollars.
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 failure, malicious intrusion and random attack. Acquisitions have resulted in further de-centralization of systems and additional complexity in our systems infrastructure. Likewise, data security breaches by employees or 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 failures, cybersecurity attacks or breaches in our systems that could cause reputational damage, business disruption or legal and regulatory costs; could result in third-party claims; could result in compromise or misappropriation of our intellectual property, trade secrets or sensitive information; or could otherwise adversely affect our business. Certain of our customer offerings include digital components, such as remote monitoring of certain customer operations. A breach of those remote monitoring systems could expose customer data giving rise to potential third-party claims and reputational damage. There may be other related challenges and risks as we complete implementation of our ERP system upgrade.
We depend on key personnel to lead our business.
Our continued success will largely depend on our ability to attract, retain and develop a high caliber of talent and on the efforts and abilities of our executive officers and certain other key employees, particularly those with sales and sales management responsibilities to drive business growth, development and profitability. As we continue to grow our business, make acquisitions, expand our geographic scope and offer new products and services, we need the organizational talent necessary to ensure effective succession for executive officer and key employee roles in order to meet the growth, development and profitability goals of our business. Our operations could be materially and adversely affected if for any reason we were unable to attract, retain or develop such officers or key employees and successfully execute organizational change and management transitions at leadership levels.
Our results could be materially and adversely affected by difficulties in securing the supply of certain raw materials or by fluctuations in the cost of raw materials.
The prices of raw materials used in our business can fluctuate from time to time, and in recent years we have experienced periods of increased raw material costs. Changes in raw material prices, unavailability of adequate and reasonably priced raw materials or substitutes for those raw materials, or the inability to obtain or renew supply agreements on favorable terms can materially and adversely affect our consolidated results of operations, financial position or cash flows. In addition, volatility and disruption in economic activity and conditions could disrupt or delay the performance of our suppliers and thus impact our ability to obtain raw materials at favorable prices or on favorable terms, which may materially and adversely affect our business.
Severe public health outbreaks may materially and adversely impact our business.
Our business could be adversely affected by the effect of a public health epidemic. Besides the COVID-19 pandemic, the United States and other countries have experienced, and may experience in the future, public health outbreaks such as Zika virus, Avian Flu, SARS and H1N1 influenza. A prolonged occurrence of a contagious disease such as these could result in a significant downturn in the foodservice, hospitality and travel industries and also may result in health or other government authorities imposing restrictions on travel further impacting our end markets. Any of these events could result in a significant drop in demand for some of our products and services and materially and adversely affect our business. Uncertainty with respect to the impact on our financial results of the COVID-19 pandemic is discussed further in Management Discussion & Analysis located at Part II, Item 7, of this form 10-K under the heading “Global Economic and Political Environment.”
Strategic Risks
If we are unsuccessful in executing on key business initiatives, including restructurings and our Enterprise Resource Planning (“ERP”) system upgrades, our business could be materially and adversely affected.
We continue to execute key business initiatives, including restructurings and investments to develop business systems, as part of our ongoing efforts to improve our efficiency and returns. In particular, we are undertaking the Accelerate 2020 plan to simplify and automate processes and tasks, reduce complexity and management layers, consolidate facilities and focus on key long term growth areas by leveraging technology and structural improvements as discussed under Note 3 entitled “Special (Gains) and Charges” of this Form 10-K. Additionally, we are continuing implementation of our ERP system upgrades, which are expected to continue in phases over the next several years. These upgrades, which include sales, supply chain and certain finance functions, are expected to improve the efficiency of certain financial and related transactional processes. These upgrades involve complex business process design and a failure of 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 materially and adversely be affected.
Our growth depends upon our ability to compete successfully with respect to value, innovation and customer support**.**
We have numerous global, national, regional and local competitors. Our ability to compete depends in part on providing high quality and high value-added products, technology and service. We must also continue to identify, develop and commercialize innovative, profitable and high value-added products for niche applications and commercial digital applications. We have made significant investments in commercial digital product offerings, and our culture and expertise must continue to evolve to develop, support and profitably deploy commercial digital offerings, which are becoming an increasingly important part of our business. There can be no assurance that we will be able to accomplish our technology development goals or that technological developments by our competitors will not place certain of our products, technology or services at a competitive disadvantage in the future. In addition, certain of the new products that we have under development will be offered in markets in which we do not currently compete, and there can be no assurance that we will be able to compete successfully in those new markets. If we fail to introduce new technologies or commercialize our digital offerings on a timely and profitable basis, we may lose market share and our consolidated results of operations, financial position or cash flows could be materially and adversely affected.
Our significant non-U.S. operations expose us to global economic, political and legal risks that could impact our profitability.
We have significant operations outside the United States, including joint ventures and other alliances. We conduct business in approximately 170 countries and, in 2020, approximately 48% of our net sales originated outside the United States. There are inherent risks in our international operations, including:
| ● | exchange controls and currency restrictions; |
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| ● | currency fluctuations and devaluations; |
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| ● | tariffs and trade barriers; |
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| ● | export duties and quotas; |
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| ● | changes in the availability and pricing of raw materials, energy and utilities; |
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| ● | changes in local economic conditions; |
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| ● | changes in laws and regulations, including the imposition of economic or trade sanctions affecting international commercial transactions; |
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| ● | impact from Brexit and the possibility of similar events in other EU member states; |
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| ● | difficulties in managing international operations and the burden of complying with international and foreign laws; |
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| ● | requirements to include local ownership or management in our business; |
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| ● | economic and business objectives that differ from those of our joint venture partners; |
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| ● | exposure to possible expropriation, nationalization or other government actions; |
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| ● | restrictions on our ability to repatriate dividends from our subsidiaries; |
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| ● | unsettled political conditions, military action, civil unrest, acts of terrorism, force majeure, war or other armed conflict; and |
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| ● | countries whose governments have been hostile to U.S.-based businesses. |
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As a result of a referendum in June 2016, the UK withdrew from the European Union on January 31, 2020. It began a transition period in which to negotiate a new trading relationship for goods and services that ended on December 31, 2020. On December 24, 2020, the EU and UK agreed to a trade deal with no tariffs nor quotas on products, regulatory and customs cooperation mechanisms as well as provisions ensuring a level playing field for open and fair competition. Since the referendum, there have been periods of significant volatility in the global stock markets and currency exchange rates, as well as challenging market conditions in the UK. Given the lack of comparable precedent, it is unclear what financial, trade, regulatory and legal implications the agreed Brexit trade deal will have on our business, particularly our UK and other European operations, however, Brexit and its related effects could adversely affect our relationships with customers, suppliers and employees and could have a material adverse effect our business.
In addition, changes in U.S. or foreign government policy on international trade, including the imposition or continuation of tariffs, could materially and adversely affect our business. In 2018, the U.S. imposed tariffs on certain imports from China and other countries, resulting in retaliatory tariffs by China and other countries. While the U.S. and China signed what is being known as the Phase One Deal in January 2020, which included the suspension and rollback of tariffs, any new tariffs imposed by the U.S., China or other countries or any additional retaliatory measures by any of these countries, could increase our costs, reduce our sales and earnings or otherwise have an adverse effect on our operations.
Also, because of uncertainties regarding the interpretation and application of laws and regulations and the enforceability of intellectual property and contract rights, we face risks in some countries that our intellectual property rights and contract rights would not be enforced by local governments. We are also periodically faced with the risk of economic uncertainty, which has impacted our business in some countries. Other risks in international business also include difficulties in staffing and managing local operations, including managing credit risk to local customers and distributors.
Further, our operations outside the United States require us to comply with a number of United States and international regulations, including anti-corruption laws such as the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act, as well as U.S. and international economic sanctions regulations. We have internal policies and procedures relating to such regulations; however, there is risk that such policies and procedures will not always protect us from the misconduct or reckless acts of employees or representatives, particularly in the case of recently acquired operations that may not have significant training in applicable compliance policies and procedures. Violations of such laws and regulations could result in disruptive investigations of us, significant fines and sanctions, which could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social, legal and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, which could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
Consolidation of our customers and vendors could materially and adversely affect our results.
Customers and vendors in the foodservice, hospitality, travel, healthcare, energy, food processing and pulp and paper industries, as well as other industries we serve, have consolidated in recent years and that trend may continue. This consolidation could have a material adverse impact on our ability to retain customers and on our pricing, margins and consolidated results of operations.
We enter into multi-year contracts with customers that could impact our results.
Our multi-year contracts with some of our customers include terms affecting our pricing flexibility. There can be no assurance that these restraints will not have a material adverse impact on our margins and consolidated results of operations.
If we are unsuccessful in integrating acquisitions, our business could be materially and adversely affected.
As part of our long-term strategy, we seek to acquire complementary businesses. There can be no assurance that we will find attractive acquisition candidates or succeed at effectively managing the integration of acquired businesses into existing businesses. If the underlying business performance of such acquired businesses deteriorates, the expected synergies from such transactions do not materialize or we fail to successfully integrate new businesses into our existing businesses, our consolidated results of operations, financial position or cash flows could be materially and adversely affected.
Legal, Regulatory & Compliance Risks
Our business depends on our ability to comply with laws and governmental regulations, and we may be materially and 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 and anti-corruption laws. Compliance with these laws and regulations exposes us to potential financial liability and increases our operating costs. A violation of these laws and regulations could expose us to financial liability that may have a material adverse effect on our results of operations and cash flows. 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 have a material adverse effect on our consolidated results of operations, financial position or cash flows. Changes to labor and employment laws and regulations, as well as related rulings by courts and administrative bodies, could materially and adversely affect our operations and expose us to potential financial liability.
Potential indemnification liabilities pursuant to the separation and split-off of our Upstream Energy business could materially and adversely affect our business and financial statements.
With respect to the separation and subsequent split-off of our Upstream Energy business, we entered into a separation and distribution agreement with ChampionX Holding Inc. and ChampionX Corporation (f/k/a Apergy Corporation and taken together with ChampionX Holding Inc., “ChampionX”) as well as certain other agreements to govern the separation and related transactions and our relationship with ChampionX going forward. These agreements provide for specific indemnity and certain other obligations of each party and could lead to disputes between ChampionX and us. If we are required to indemnify ChampionX under the circumstances set forth in these agreements, we may be subject to substantial related liabilities. In addition, with respect to the liabilities for which ChampionX has agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against ChampionX will be sufficient to protect us against the full amount of such liabilities, or that ChampionX will be able to fully satisfy its indemnification obligations. Each of these risks could negatively affect our business and our consolidated results of operations, financial position or cash flows could be materially and adversely affected.
A chemical spill or release could materially and adversely impact our business**.**
As a manufacturer and supplier of chemical products, there is a potential for chemicals to be accidentally spilled, released or discharged, either in liquid or gaseous form, during production, transportation, storage or use. Such a release could result in environmental contamination as well as a human or animal health hazard. Accordingly, such a release could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
Extraordinary events may significantly impact our business.
The occurrence of (a) litigation or claims, (b) the loss or insolvency of a major customer or distributor, (c) repeated or prolonged federal government shutdowns or similar events, (d) war (including acts of terrorism or hostilities which impact our markets), (e) natural or manmade disasters, (f) water shortages or (g) severe weather conditions affecting our operations or the energy, foodservice, hospitality and travel industries may have a material adverse effect on our business.
Defense of litigation, particularly certain types of actions such as antitrust, patent infringement, personal injury, product liability, wage hour and class action lawsuits, can be costly and time consuming even if ultimately successful, and if not successful could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
While we have a diverse customer base and no customer or distributor constitutes 10 percent or more of our consolidated revenues, we do have customers and independent, third-party distributors, the loss of which could have a material adverse effect on our consolidated results of operations or cash flows for the affected earnings periods.
Federal government shutdowns can have a material adverse effect on our consolidated results of operations or cash flows by disrupting or delaying new product launches, renewals of registrations for existing products and receipt of import or export licenses for raw materials or products.
War (including acts of terrorism or hostilities), natural or manmade disasters, water shortages or severe weather conditions affecting the energy, foodservice, hospitality, travel, health care, food processing, pulp and paper, mining, steel and other industries can cause a downturn in the business of our customers, which in turn can have a material adverse effect on our consolidated results of operations, financial position or cash flows. In particular, the U.S. Gulf Coast is a region with significant refining, petrochemicals and chemicals operations which provide us raw materials, as well as being an important customer base for our Downstream and Water operating segments. Hurricanes or other severe weather events impacting the Gulf Coast could materially and adversely affect our ability to obtain raw materials at reasonable cost, or at all, and could adversely affect our business with our customers in the region.
Financial Risks
If the separation and split-off of our Upstream Energy business or certain internal transactions undertaken in anticipation of the divestiture are determined to be taxable in whole or in part, we and our stockholders may incur significant tax liabilities.
In connection with the separation and split-off of our Upstream Energy business that was consummated on June 3, 2020, we obtained opinions of outside tax counsel that the related merger and exchange offer will qualify as tax-free transactions to us and our stockholders, except to the extent that cash was paid to Ecolab stockholders in lieu of fractional shares. We have not sought or obtained a ruling from the Internal Revenue Service (IRS) on the tax consequences of these transactions. An opinion of counsel is not binding on the IRS or the courts, which may disagree with the opinion. Even if the merger and exchange offer otherwise qualified as tax-free transactions, they may become taxable to us if certain events occur that affect either Ecolab or ChampionX Corporation. While ChampionX Corporation has agreed not to take certain actions that could cause the transactions not to qualify as tax-free transactions and is generally obligated to indemnify us against any tax consequences if it breaches this agreement, the potential tax liabilities could have a material adverse effect on us if we were not entitled to indemnification or if the indemnification obligations were not fulfilled. If the merger or exchange offer were determined to be taxable, we could be subject to a substantial tax liability, and each U.S. holder of our common stock who participated in the exchange offer could be treated as exchanging the Ecolab shares surrendered for ChampionX Corporation shares in a taxable transaction.
Changes in tax laws and unanticipated tax liabilities could materially and adversely affect the taxes we pay and our profitability.
We are subject to income and other taxes in the United States and foreign jurisdictions, and our operations, plans and results are affected by tax and other initiatives around the world. In particular, we are affected by the impact of changes to tax laws or related authoritative interpretations in the United States, including tax reform under the 2017 Tax Cuts and Jobs Act (the “Tax Act”), which includes broad and complex changes to the United States tax code, and the state tax response to the Tax Act, including, but not limited to variability in our future tax rate. We are also subject to changes in tax law outside the United States. For example, the Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of member countries, is supporting changes to numerous long-standing tax principles through its base erosion and profit shifting project (“BEPS”), which is focused on a number of issues, including improving tax disclosure and transparency and eliminating structures and activities that could be perceived by a particular country as resulting in tax avoidance. The changes recommended by the OECD have been or are being adopted by many of the countries in which we do business. Some of the BEPS and related proposals, if enacted into law in the United States and in the foreign countries where we do business, could increase the burden and costs of our tax compliance, the amount of taxes we incur in those jurisdictions and our global effective tax rate. In addition, we are impacted by settlements of pending or any future adjustments proposed by the IRS or other taxing authorities in connection with our tax audits, all of which will depend on their timing, nature and scope. Increases in income tax rates, changes in income tax laws (including regulations which interpret the Tax Act) or unfavorable resolution of tax matters could have a material adverse impact on our financial results.
Future events may impact our deferred tax position, including the utilization of foreign tax credits and undistributed earnings of international affiliates that are considered to be reinvested indefinitely.
We evaluate the recoverability of deferred tax assets and the need for deferred tax liabilities based on available evidence. This process involves significant management judgment about assumptions that are subject to change from period to period based on changes in tax laws or variances between future projected operating performance and actual results. We are required to establish a valuation allowance for deferred tax assets if we determine, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making this determination, we evaluate all positive and negative evidence as of the end of each reporting period. Future adjustments (either increases or decreases), to the deferred tax asset valuation allowance are determined based upon changes in the expected realization of the net deferred tax assets. The realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income in either the carry-back or carry-forward periods under the tax law. Due to significant estimates used to establish the valuation allowance and the potential for changes in facts and circumstances, it is reasonably possible that we will be required to record adjustments to the valuation allowance in future reporting periods. Changes to the valuation allowance or the amount of deferred tax liabilities could have a material adverse effect on our consolidated results of operations or financial position. Further, should we change our assertion regarding the permanent reinvestment of the undistributed earnings of international affiliates, a deferred tax liability may need to be established.
Our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could materially and adversely affect our liquidity and financial statements.
As of December 31, 2020, we had approximately $6.7 billion in outstanding indebtedness, which was comprised almost entirely of fixed rate debt. Our debt level and related debt service obligations may have negative consequences, including:
| ● | requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes such as acquisitions and capital investment; |
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| ● | reducing our flexibility in planning for or reacting to changes in our business and market conditions; and |
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| ● | increasing our cost of funds and materially and adversely affecting our liquidity and access to the capital markets should we fail to maintain the credit ratings assigned to us by independent rating agencies. |
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If we add new debt, the risks described above could increase.
We incur significant expenses related to the amortization of intangible assets and may be required to report losses resulting from the impairment of goodwill or other assets recorded in connection with the Nalco transaction and other acquisitions.
We expect to continue to complete selected acquisitions and joint venture transactions in the future. In connection with acquisition and joint venture transactions, applicable accounting rules generally require the tangible and intangible assets of the acquired business to be recorded on the balance sheet of the acquiring company at their fair values. Intangible assets other than goodwill are required to be amortized over their estimated useful lives and this expense may be significant. Any excess in the purchase price paid by the acquiring company over the fair value of tangible and intangible assets of the acquired business is recorded as goodwill. If it is later determined that the anticipated future cash flows from the acquired business may be less than the carrying values of the assets and goodwill of the acquired business, the assets or goodwill may be deemed to be impaired. In this case, the acquiring company may be required under applicable accounting rules to write down the value of the assets or goodwill on its balance sheet to reflect the extent of the impairment. This write-down of assets or goodwill is generally recognized as a non-cash expense in the statement of operations of the acquiring company for the accounting period during which the write down occurs. As of December 31, 2020, we had goodwill of $6.0 billion which is maintained in various reporting units, including goodwill from the Nalco transaction. If we determine that any of the assets or goodwill recorded in connection with the Nalco transaction or any other prior or future acquisitions or joint venture transactions have become impaired, we will be required to record a loss resulting from the impairment. Impairment losses could be significant and could have a material adverse effect on our consolidated results of operations and financial position.
Item 1B. Unresolved Staff Comments.
We have no unresolved comments from the staff of the Securities and Exchange Commission.
Item 2. Properties.
Our manufacturing philosophy is to manufacture products wherever an economic, process or quality assurance advantage exists or where proprietary manufacturing techniques dictate in-house production. Currently, most products that we sell are manufactured at our facilities. We position our manufacturing locations and warehouses in a manner to permit ready access to our customers.
Our manufacturing facilities produce chemical products as well as medical devices and equipment for all of our operating segments, although Pest Elimination purchases the majority of their products and equipment from outside suppliers. Our chemical production process consists of blending purchased raw materials into finished products in powder, liquid, and solid form. Additionally, intermediates from reaction chemistries are used in some of the blends and are also packaged directly into finished goods. Our devices and equipment manufacturing operations consist of producing chemical product dispensers and injectors and other mechanical equipment, medical devices, dishwasher racks, related sundries, dish machine refurbishment and water monitoring and maintenance equipment system from purchased components and subassemblies.
The following table profiles our more significant physical properties with approximately 70,000 square feet or more with ongoing production activities, as well as certain other facilities important in terms of specialization and sources of supply. In general, manufacturing facilities located in the United States serve our U.S. markets and facilities located outside of the United States serve our international markets. However, most of the United States facilities do manufacture products for export.
PLANT PROFILES
| Location | Approximate Size (Sq. Ft.) | Segment | Majority Owned or Leased | |||
| Joliet, IL USA | 610,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Tai Cang, CHINA | 468,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Sainghin, FRANCE | 360,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| South Beloit, IL USA | 313,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences, Other | Owned | |||
| Jianghai, CHINA | 296,000 | Global Industrial | Owned | |||
| Chalons, FRANCE | 280,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Clearing, IL USA | 270,000 | Global Industrial, Global Healthcare & Life Sciences, Other (Colloidal) | Owned | |||
| Nanjing, CHINA | 240,000 | Global Industrial | Owned | |||
| Garland, TX USA | 239,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Martinsburg, WV USA | 228,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Elwood City, PA USA | 222,000 | Global Industrial | Owned | |||
| Weavergate, UNITED KINGDOM | 222,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Celra, SPAIN | 218,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Greensboro, NC USA | 193,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Owned | |||
| Fresno, TX USA | 192,000 | Global Industrial | Owned | |||
| Santiago, CHILE | | 188,000 | | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | | Owned |
| Las Americas, DOMINICAN REPUBLIC | 182,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Owned | |||
| Jacksonville, FL USA | 181,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Leased | |||
| Garyville, LA USA | 178,000 | Global Industrial | Owned | |||
| Gul Lane, SINGAPORE | | 169,000 | | Global Industrial | Owned | |
| Nieuwegein, NETHERLANDS | 168,000 | Global Institutional & Specialty, Global Industrial | Owned |
| Location | Approximate Size (Sq. Ft.) | Segment | Majority Owned or Leased | |||
| La Romana, DOMINICAN REPUBLIC | 160,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Leased | |||
| Tessenderlo, BELGIUM | 153,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Cheltenham, AUSTRALIA | 145,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Suzano, BRAZIL | 142,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| McDonough, GA USA | 141,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Darra, AUSTRALIA | 138,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Burlington, ON CANADA | 136,000 | Global Industrial | Owned | |||
| Eagan, MN USA | 133,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences, Other | Owned | |||
| Huntington, IN USA | 127,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Rozzano, ITALY | 126,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| City of Industry, CA USA | 125,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Mississauga, ON CANADA | 120,000 | Global Institutional & Specialty, Global Industrial | Leased | |||
| Elk Grove Village, IL USA | 115,000 | Global Institutional & Specialty | Leased | |||
| Biebesheim, GERMANY | 109,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Fort Worth, TX USA | 101,000 | Global Institutional & Specialty | Leased | |||
| Johannesburg, SOUTH AFRICA | 100,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Pilar, ARGENTINA | | 96,000 | | Global Institutional & Specialty, Global Industrial | | Owned |
| Hamilton, NEW ZEALAND | 96,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Konnagar, India | | 88,000 | | Global Industrial | Owned | |
| Kwinana, AUSTRALIA | 87,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Yangsan, KOREA | 85,000 | Global Industrial | Owned | |||
| Cisterna, ITALY | 80,000 | Global Industrial | Owned | |||
| Cuautitlan, MEXICO | 76,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Barueri, BRAZIL | 75,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Leased | |||
| Citereup, Indonesia | | 74,000 | | Global Industrial | | Owned |
| Mullingar, IRELAND | 74,000 | Global Institutional & Specialty, Global Industrial | Leased | |||
| Mosta, MALTA | 73,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Leased | |||
| Aubagne, FRANCE | 65,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Leased | |||
| Siegsdorf, GERMANY | 56,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned | |||
| Verona, ITALY | 55,000 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Owned | |||
| Guangzhou, CHINA | 55,000 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Navanakorn, THAILAND | 53,000 | Global Institutional & Specialty, Global Industrial | Leased | |||
| Lerma, MEXICO | 49,000 | Global Industrial | Owned | |||
| Maribor, SLOVENIA | 46,400 | Global Institutional & Specialty, Global Industrial | Owned | |||
| Leeds, UNITED KINGDOM | 25,000 | Global Institutional & Specialty | Owned | |||
| Baglan, UNITED KINGDOM | 24,400 | Global Institutional & Specialty, Global Healthcare & Life Sciences | Leased | |||
| Noda, JAPAN | 22,000 | Global Institutional & Specialty, Global Industrial, Global Healthcare & Life Sciences | Owned |
Generally, our manufacturing facilities are adequate to meet our existing in-house production needs. We continue to invest in our plant sites to maintain viable operations and to add capacity as necessary to meet business imperatives.
Most of our manufacturing plants also serve as distribution centers. In addition, we operate distribution centers around the world, most of which are leased, and utilize third party logistics service providers to facilitate the distribution of our products and services.
Our corporate headquarters is comprised of a 17-story building that we own in St. Paul, Minnesota. We also own a 90-acre campus in Eagan, Minnesota that houses a significant research and development center, a data center and training facilities as well as several of our administrative functions. We also have a significant business presence in Naperville, Illinois, where our Water and Paper operating segments maintain their principal administrative offices and research center, as well as in Greensboro, North Carolina, where our Specialty operating segment maintains its principal administrative offices and a research center. Our Downstream operating segment leases administrative and research facilities in Sugar Land, Texas and maintains additional Company-owned research facilities in Fresno, Texas.
Significant regional administrative and/or research facilities are located in Campinas, Brazil; Leiden, Netherlands; and Pune, India, which we own, and in Dubai, UAE; Monheim, Germany; Singapore; Shanghai, China; and Zurich, Switzerland, which we lease. We also have a network of small leased sales offices in the United States and, to a lesser extent, in other parts of the world.
Item 3. Legal Proceedings.
Discussion of legal proceedings is incorporated by reference from Part II, Item 8, Note 16, “Commitments and Contingencies,” of this Form 10-K and should be considered an integral part of Part I, Item 3, “Legal Proceedings.”
Discussion of other environmental-related legal proceedings is incorporated by reference from Part I, Item 1 above, under the heading “Environmental and Regulatory Considerations.”
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is listed on the New York Stock Exchange under the symbol “ECL.” Our common stock is also traded on an unlisted basis on certain other United States exchanges.
Holders
On January 29, 2021, we had 5,383 holders of record of our Common Stock.
Issuer Purchases of Equity Securities
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | Total number of shares | | Maximum number of | |
| | | | | | | purchased as part of | | shares that may yet be | ||
| | | Total number of | | Average price paid | | publicly announced | | purchased under the | ||
| Period | | shares purchased (1) | | per share (2) | | plans or programs (3) | | plans or programs (3) | ||
| October 1-31, 2020 | 21,418 | | | $188.8075 | 21,180 | 6,321,388 | | |||
| November 1-30, 2020 | 82,925 | | | 188.9141 | 81,442 | 6,239,946 | | |||
| December 1-31, 2020 | 8,680 | | | 223.0651 | - | 6,239,946 | | |||
| Total | 113,023 | | | $191.5166 | 102,622 | 6,239,946 | |
| (1) | Includes 10,401 shares reacquired from employees and/or directors to satisfy the exercise price of stock options or shares surrendered to satisfy statutory tax obligations under our stock incentive plans. |
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| (2) | The average price paid per share includes brokerage commissions associated with publicly announced plan purchases plus the value of such other reacquired shares. |
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| (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 these 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 program. |
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Item 6. Selected Financial Data.
The following selected consolidated financial information for 2020, 2019 and 2018 has been obtained from our Consolidated Financial Statements. The selected historical statement of income data for the fiscal year ended December 31, 2017 has been derived from our audited consolidated financial statements included in Form 8-K filed September 25, 2020. The selected historical statement of income data for the fiscal year ended December 31, 2016 and balance sheet data as of December 31, 2017 and 2016, have not been recast for discontinued operations, are unaudited and have been derived from our accounting records. The information below is not necessarily indicative of the results of future operations and should be read in conjunction with the consolidated financial statements, related notes, and other financial information included therein.
| | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (millions, except per share amounts) | 2020 (1) | | 2019 (2) | | 2018 (3) | | 2017 (4) | | 2016 (5) | ||||||||||
| Year ended December 31: | | | | | | | | | | | | | | | | | | | |
| Net sales | $11,790.2 | | | | | $12,562.0 | | | | $12,222.1 | | | | $11,531.1 | | | | $13,151.8 | |
| Operating income | 1,395.7 | | | | | 1,845.2 | | | | 1,728.3 | | | | 1,747.3 | | | | 1,870.2 | |
| Net income from continuing operations attributable to Ecolab | | 967.4 | | | | | 1,425.6 | | | | 1,250.3 | | | | 1,352.3 | | | | |
| Net (loss) income from discontinued operations, net of tax | | (2,172.5) | | | | | 133.3 | | | | 178.8 | | | | 152.3 | | | | |
| Net (loss) income attributable to Ecolab | (1,205.1) | | | | | 1,558.9 | | | | 1,429.1 | | | | 1,504.6 | | | | 1,229.0 | |
| Basic earnings (loss) per share: | | | | | | | | | | | | | | | | | | | |
| Continuing operations | | 3.37 | | | | | 4.95 | | | | 4.33 | | | | 4.67 | | | | |
| Discontinued operations | | (7.57) | | | | | 0.46 | | | | 0.62 | | | | 0.53 | | | | |
| Earnings (loss) attributable to Ecolab | | (4.20) | | | | | 5.41 | | | | 4.95 | | | | 5.20 | | | | 4.20 |
| Diluted earnings (loss) per share, as reported (U.S. GAAP): | | | | | | | | | | | | | | | | | | | |
| Continuing operations | | 3.33 | | | | | 4.87 | | | | 4.27 | | | | 4.60 | | | | |
| Discontinued operations | | (7.48) | | | | | 0.46 | | | | 0.61 | | | | 0.52 | | | | |
| Earnings (loss) attributable to Ecolab | | (4.15) | | | | | 5.33 | | | | 4.88 | | | | 5.12 | | | | 4.14 |
| Cash dividends declared per common share | | 1.89 | | | | | 1.85 | | | | 1.69 | | | | 1.52 | | | | 1.42 |
| | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share from continuing operations, as reported (U.S. GAAP) | | | | | | | | | | | | | | | | | | | |
| Adjustments: | | $3.33 | | | | | $4.87 | | | | $4.27 | | | | $4.60 | | | | $4.14 |
| Special (gains) and charges | | 0.88 | | | | | 0.45 | | | | 0.30 | | | | 0.14 | | | | 0.21 |
| Discrete tax expense (benefits) | | (0.19) | | | | | (0.20) | | | | 0.01 | | | | (0.64) | | | | 0.01 |
| Adjusted diluted earnings per share from continuing operations (Non-GAAP) | | $4.02 | | | | | $5.12 | | | | $4.58 | | | | $4.10 | | | | $4.37 |
| | | | | | | | | | | | | | | | | | | | |
| At December 31: | | | | | | | | | | | | | | | | | | | |
| Total assets | | $18,126.0 | | | | | $20,869.1 | | | | $20,074.5 | | | | $19,963.5 | | | | $18,331.1 |
| Current assets of discontinued operations | | - | | | | | 950.8 | | | | 990.2 | | | | | | | | |
| Long-term assets of discontinued operations | | - | | | | | 3,332.8 | | | | 3,341.1 | | | | | | | | |
| Long-term debt (excluding portions due within one year) | | 6,669.3 | | | | | 5,973.1 | | | | 6,301.5 | | | | 6,758.3 | | | | 6,145.7 |
| | | | | | | | | | | | | | | | | | | | |
Selected financial data for 2016 is not presented on a comparable basis as it has not been recast for discontinued_._ Per share amounts do not necessarily sum due to rounding.
(1) Special (gains) and charges for 2020 include the following charges net of tax, debt refinancing charges of $64.0, restructuring charges of $60.6, disposal and impairment charges of $41.5, charges for pay protection for certain employees impacted by COVID-19 net of government subsidies of $27.4, acquisition and integration charges of $10.6 and litigation and other charges of $50.0.
Discrete tax expense (benefits) for 2020 primarily include benefits associated with share-based compensation excess tax benefits of $(57.3), favorable adjustments due to the reduction of income tax reserves for uncertain tax positions of $(9.8) and expense related to the filing of prior year tax returns and other adjustments of $11.3.
(2) Special (gains) and charges for 2019 include the following charges net of tax, net restructuring charges of $88.7, pension settlement and curtailment charges associated with ChampionX separation of $6.4, acquisition and integration charges of $9.9 and litigation and other charges of $23.3.
Discrete tax expense (benefits) for 2019 include benefits associated with share-based compensation excess tax benefits of $(43.1), favorable adjustments to the estimate for U.S. tax reform one-time repatriation tax benefit of $(3.1) and other tax net benefits of $(11.5).
(3) Special (gains) and charges for 2018 include the following charges net of tax, a commitment to the Ecolab Foundation of $18.9, net restructuring charges of $61.9, acquisition and integration charges of $5.7 and litigation and other charges of $2.3.
Discrete tax expense (benefits) for 2018 include adjustments to the estimate for U.S. tax reform one-time repatriation tax expense of $66.0, benefits associated with share-based compensation excess tax benefits of $(27.7), a favorable adjustment related to changes in estimates and an IRS approved method change in our filed U.S. federal tax returns of $(39.9) and other tax expense of $3.7.
(4) Special (gains) and charges for 2017 include the following charges net of tax, acquisition and integration charges of $18.5, net restructuring charges of $32.3, and charges on extinguished debt of $13.6. Gains, net of tax, include gain on sale of Equipment Care of $(12.4), tax benefits on the repatriation of cash to the U.S. of $(7.8) and a net gain of $(2.5) from other activity.
Discrete tax expense (benefits) for 2017 include a net benefit of $(158.9) for repricing of U.S. deferred tax positions to the U.S. tax reform rate and share-based compensation excess tax benefits of $(39.5). Expenses include recognizing adjustments from filing our 2016 U.S. federal income tax return and release of uncertain tax positions totaling $9.8 and other charges of $0.2.
(5) Special (gains) and charges for 2016 include net of tax, charges of $50.0 associated with the downturn in the global energy market and litigation related charges of $26.4. Gains, net of tax, include a net gain for restructuring and a net gain for other activity of $(3.2).
Discrete tax expense (benefits) for 2016 include net expense of $3.9 driven primarily from adjustments to deferred tax asset and liability positions, recognizing adjustments from filing our 2015 U.S. federal income tax return, tax charges related to optimizing our business structure and settlement of international tax matters offset by benefits driven primarily by the release of reserves for uncertain tax positions due to expiration of statute of limitations in non-U.S. jurisdictions, settlement of international tax matters, remeasurements of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in an international jurisdiction and valuation allowance releases.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following management discussion and analysis (“MD&A”) provides information that 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 reportable 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 discussion should be read in conjunction with the consolidated financial statements and related notes included in this Form 10-K. Our consolidated financial statements are prepared in accordance with U.S. GAAP. 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 and information set forth in the sections entitled “Non-GAAP Financial Measures” at the end of this MD&A, and “Forward-Looking Statements” and “Risk Factors” within Items 1 and 1A of this Form 10-K. We also refer readers to the tables within the section entitled “Results of Operations” of this MD&A for reconciliation information of Non-GAAP measures to U.S. GAAP.
Comparability of Results
ChampionX Transaction
On June 3, 2020, we completed the previously announced separation of our Upstream Energy business (the “ChampionX business”) in a Reverse Morris Trust transaction (the “Transaction”) through the split-off of ChampionX Holding Inc. (“ChampionX”), formed by Ecolab as a wholly owned subsidiary to hold the ChampionX Business, followed immediately by the merger of ChampionX (the “Merger”) with a wholly owned subsidiary of ChampionX Corporation (f/k/a Apergy Corporation, “Apergy”).
The ChampionX business met the criteria to be reported as discontinued operations because the separation of ChampionX is a strategic shift in business that has a major effect on our operations and financial results. Therefore, we report the historical results of ChampionX, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein. Unless otherwise noted, the accompanying MD&A has been revised to reflect the ChampionX business as discontinued operations and prior year balances have been revised accordingly to reflect continuing operations only.
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. Public currency rate data provided within the “Segment Performance” section of this MD&A reflect amounts translated at actual public average rates of exchange prevailing during the corresponding period and is provided for informational purposes only.
Comparability of Reportable Segments
Effective in the first quarter of 2020, and in anticipation of the separation of the Upstream Energy business, we created the Upstream and Downstream operating segments from the Global Energy operating segment, which was also a reportable segment. Subsequent to the separation of ChampionX, we will no longer report the Upstream Energy segment, which previously held the ChampionX business.
The Downstream operating segment has been aggregated into the Global Industrial reportable segment. Also, in the first quarter of 2020, we announced leadership changes which allow for shared oversight and focus on the Healthcare and Life Sciences operating segments and established the Global Healthcare & Life Sciences reportable segment. This segment is comprised of the Healthcare operating segment which was previously aggregated in the Global Institutional reportable segment and the Life Sciences operating segment which was previously aggregated in the Global Industrial reportable segment. Additionally, the Textile Care operating segment, which is now being reported in Other, had previously been aggregated in the Global Industrial reportable segment. We also renamed the Global Institutional reportable segment to the Global Institutional & Specialty reportable segment. We made other immaterial changes, including the movement of certain customers and cost allocations between reportable segments.
Impact of Acquisitions and Divestitures
Acquisition adjusted growth rates exclude the results of our acquired businesses from the first twelve months post acquisition, the results of our divested businesses from the twelve months prior to divestiture and the Venezuelan results of operations from all comparable periods.
EXECUTIVE SUMMARY
In 2020, we faced significant effects from the COVID-19 pandemic. While the greater use of cleaning and sanitizing products benefited consolidated results and led to strong growth in the Healthcare & Life Sciences segment, this was more than offset by reduced overall volumes in the Institutional & Specialty, Industrial and Other segments primarily due to lower levels of global economic activity resulting from mandated government restrictions implemented to control the pandemic spread. Despite the range of actions we took to expand our sales and benefit our earnings through new products, programs, investments in the business and cost efficiency programs, as well as to position us for long term growth, the more substantial impact from the pandemic resulted in lower sales and a significant earnings decline for the full year.
Sales
Reported sales decreased 6% to $11.8 billion in 2020 from $12.6 billion in 2019. When measured in fixed rates of foreign currency exchange, fixed currency sales decreased 5% compared to the prior year. Acquisition adjusted fixed currency sales decreased 7% compared to the prior year.
Gross Margin
Our reported gross margin was 41.4% of sales for 2020, compared to our 2019 reported gross margin of 43.9%. Excluding the impact of special (gains) and charges included in cost of sales from both 2020 and 2019, our adjusted gross margin was 41.8% in 2020 and 44.2% in 2019.
Operating Income
Reported operating income decreased 24% to $1.4 billion in 2020, compared to $1.8 billion in 2019. Adjusted operating income, excluding the impact of special (gains) and charges, decreased 19% in 2020. When measured in fixed rates of foreign currency exchange, adjusted fixed currency operating income decreased 18% in 2020.
Earnings from Continuing Operations Attributable to Ecolab Per Common Share (“EPS”)
Reported continuing operations diluted EPS decreased 32% to $3.33 in 2020 compared to $4.87 in 2019. Special (gains) and charges had an impact on both years. Special (gains) and charges in 2020 were driven primarily by the impact of debt refinancing charges, restructuring charges, disposal and impairment charges, discrete tax items, acquisition and integration charges, charges for pay protection for certain employees impacted by COVID-19 net of government subsidies and litigation and other charges. Special (gains) and charges in 2019 were driven primarily by the impact of restructuring charges, discrete tax items, acquisition and integration charges and litigation and other charges. Special (gains) and charges in 2018 we
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
The discussion under the heading entitled "Market Risk" and “Global Economic and Political Environment” is incorporated by reference from Part II, Item 7 of this Form 10-K.
Item 8. Financial Statements and Supplementary Data.
REPORTS OF MANAGEMENT
To our Shareholders:
Management’s Responsibility for Financial Statements
Management is responsible for the integrity and objectivity of the consolidated financial statements. The statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include certain amounts based on management’s best estimates and judgments.
The Board of Directors, acting through its Audit Committee composed solely of independent directors, is responsible for determining that management fulfills its responsibilities in the preparation of financial statements and maintains internal control over financial reporting. The Audit Committee recommends to the Board of Directors the appointment of the Company’s independent registered public accounting firm, subject to ratification by the shareholders. It meets regularly with management, the internal auditors and the independent registered public accounting firm.
The independent registered public accounting firm has audited the consolidated financial statements included in this annual report and have expressed their opinion regarding whether these consolidated financial statements present fairly in all material respects our financial position and results of operation and cash flows as stated in their report presented separately herein.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the principal executive officer and principal financial officer, an evaluation of the design and operating effectiveness of internal control over financial reporting was conducted based on the 2013 framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under the framework in Internal Control — Integrated Framework, management concluded that internal control over financial reporting was effective as of December 31, 2020.
The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 as stated in their report which is included herein.
 |  | |
| Christophe Beck | Daniel J. Schmechel | |
| President and Chief Executive Officer | Chief Financial Officer |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Ecolab Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheet of Ecolab Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the compan
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
As of December 31, 2020, we carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 as amended). Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.
The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. Their report, and our management reports, can be found in Item 8 of Part II of this Form 10-K.
During the period October 1 - December 31, 2020 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 continuing our implementation of our enterprise resource planning (“ERP”) system upgrades, which are expected to occur in phases over the next several years. These upgrades, which include supply chain and certain finance functions, are expected to improve the efficiency of certain financial and related transactional processes. These upgrades of the ERP systems will affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information about our directors is incorporated by reference from the discussion under the heading “Proposal 1: Election of Directors” located in the Proxy Statement. Information about compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by reference from the discussion under the heading “Delinquent Section 16(a) Reports” located in the Proxy Statement. Information about our Audit Committee, including the members of the Committee, and our Audit Committee financial experts, is incorporated by reference from the discussion under the heading “Corporate Governance,” and sub-headings “Board Committees” and “Audit Committee,” located in the Proxy Statement. Information about our Code of Conduct is incorporated by reference from the discussion under the heading “Corporate Governance Materials and Code of Conduct” located in the Proxy Statement. Information regarding our executive officers is presented under the heading “Information about our Executive Officers” in Part I, Item 1 of this Form 10-K, and is incorporated herein by reference.
Item 11. Executive Compensation.
Information appearing under the following headings of the Proxy Statement is incorporated herein by reference:
| ● | Director Compensation for 2020 |
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| ● | Compensation Risk Analysis |
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| ● | Compensation Committee Interlocks and Insider Participation |
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| ● | Compensation Committee Report |
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| ● | Compensation Discussion and Analysis |
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| ● | Summary Compensation Table for 2020 |
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| ● | Grants of Plan-Based Awards for 2020 |
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| ● | Outstanding Equity Awards at Fiscal Year End for 2020 |
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| ● | Option Exercises and Stock Vested for 2020 |
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| ● | Pension Benefits for 2020 |
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| ● | Non-Qualified Deferred Compensation for 2020 |
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| ● | Potential Payments Upon Termination or Change in Control |
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| ● | Pay Ratio Disclosure |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information appearing under the heading entitled “Security Ownership” located in the Proxy Statement is incorporated herein by reference.
A total of 1,249,726 shares of Common Stock held by our directors and executive officers, some of whom may be deemed to be “affiliates” of the Company, have been excluded from the computation of market value of our Common Stock on the cover page of this Form 10-K. This total represents that portion of the shares reported as beneficially owned by our directors and executive officers as of June 30, 2020 which are actually issued and outstanding.
Equity Compensation Plan Information
| | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| | (a) | | | | ||||
| | | Number of securities to be | | (b) | | (c) | ||
| | | issued upon exercise of | | Weighted average exercise | | Number of securities remaining | ||
| | | outstanding options, | | price of outstanding options, | | available for future issuance under | ||
| | | warrants | | warrants | | equity compensation plans (excluding | ||
| Plan Category | | and rights | | and rights | | securities reflected in column (a)) | ||
| Equity compensation plans approved | | | | | | | | |
| by security holders | | 8,085,944 | (1) | | $ 144.32 | (1) | 8,644,262 | |
| Equity compensation plans not approved | | | | | | | | |
| by security holders | | 9,200 | (2) | | 55.60 | (2) | - | |
| Total | 8,095,144 | | | $ 144.20 | | 8,644,262 | |
(1) Includes 214,416 Common Stock equivalents representing deferred compensation stock units earned by non-employee directors under our 2001 Non-Employee Director Stock Option and Deferred Compensation Plan, 914,630 Common Stock equivalents under our 2010 Stock Incentive Plan representing performance-based restricted stock units payable to employees, and 163,683 Common Stock equivalents under our 2010 Stock Incentive Plan representing restricted stock units payable to employees. All of the Common Stock equivalents described in this footnote (1) are not included in the calculation of weighted average exercise price of outstanding options, warrants and rights in column (b) of this table. The reported amount additionally includes 5,094 shares of Common Stock subject to stock options assumed by us in connection with the Nalco merger. Such options, which have a weighted-average exercise price of $40.53, are included in the calculation of weighted average exercise price of outstanding options, warrants and rights in column (b) of this table.
(2) The reported amount represents shares of our Common Stock which were formerly reserved for future issuance under the Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan (the “rollover shares”) and granted to legacy Nalco associates on December 1, 2011, under the Ecolab Inc. 2010 Stock Incentive Plan in the form of stock options. These rollover shares are deemed exempt from shareholder approval under Rule 303A.08 of the New York Stock Exchange in accordance with our notice to the New York Stock Exchange dated December 16, 2011. The Nalco plan was amended to prohibit future grants.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information appearing under the headings entitled “Director Independence Standards and Determinations” and “Related Person Transactions” located in the Proxy Statement is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
Information appearing under the heading entitled “Audit Fees” located in the Proxy Statement is incorporated herein by reference.
PART IV
Item 15. Exhibit and Financial Statement Schedules.
| Do | | | |
|---|---|---|---|
| | The following information required under this item is filed as part of this report: | ||
| (a)(1) | Financial Statements. | | |
| | Document: | Page: | |
| | (i) | Report of Independent Registered Public Accounting Firm. | 51 |
| | (ii) | Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018. | 53 |
| | (iii) | Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018. | 54 |
| | (iv) | Consolidated Balance Sheets at December 31, 2020 and 2019. | 55 |
| | (v) | Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018. | 56 |
| | (vi) | Consolidated Statements of Equity for the years ended December 31, 2020, 2019 and 2018. | 58 |
| | (vii) | Notes to Consolidated Financial Statements. | 59 |
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|---|---|---|---|---|---|---|
| Exhibit No.: | Document: | Method of Filing: | ||||
| | | | | | | |
| (a)(2) | | Financial Statement Schedules. | ||||
| | | | | | | |
| | | All financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the accompanying notes to the consolidated financial statements. The separate financial statements and summarized financial information of subsidiaries not consolidated and of fifty percent or less owned persons have been omitted because they do not satisfy the requirements for inclusion in this Form 10-K. | ||||
| | | | | | | |
| (a)(3) | | The documents below are filed as exhibits to this Report. We will, upon request and payment of a fee not exceeding the rate at which copies are available from the Securities and Exchange Commission, furnish copies of any of the following exhibits to stockholders. | ||||
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| (2.1) | | Agreement and Plan of Merger and Reorganization, dated December 18, 2019, by and among Ecolab Inc., ChampionX Holding Inc., Apergy Corporation and Athena Merger Sub, Inc. | | Incorporated by reference to Exhibit (2.1) of our Form 8-K, dated December 18, 2019. (File No. 001-9328) | ||
| | | | | | | |
| (2.2) | | Separation and Distribution Agreement, dated December 18, 2019, by and among Ecolab Inc., ChampionX Holding Inc. and Apergy Corporation | | Incorporated by reference to Exhibit (2.1) of our Form 8-K, dated December 18, 2019. (File No. 001-9328) | ||
| | | | | | | |
| (3.1) | | Restated Certificate of Incorporation of Ecolab Inc., dated January 2, 2013. | | Incorporated by reference to Exhibit (3.2) of our Form 8-K, dated January 2, 2013. (File No. 001-9328) | ||
| | | | | | | |
| (3.2) | | By-Laws, as amended through December 3, 2015. | | Incorporated by reference to Exhibit (3.1) of our Form 8-K, dated December 3, 2015. (File No. 001-9328) | ||
| | | | | | | |
| (4.1) | | Common Stock. | | See Exhibits (3.1) and (3.2) | ||
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| (4.2) | | Form of Common Stock Certificate effective October 2, 2017 | | Incorporated by reference to Exhibit (4.1) of our Form 10-Q Quarterly Report for the quarter ended September 30, 2017. (File No. 001-9328) | ||
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|---|---|---|---|---|---|---|
| Exhibit No.: | Document: | Method of Filing: | ||||
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| (4.3) | | Amended and Restated Indenture, dated January 9, 2001, between Ecolab Inc. and The Bank of New York Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, N.A. and Bank One, N.A.), as Trustee. | | Incorporated by reference to Exhibit (4)(A) of our Form 8-K, dated January 23, 2001. (File No. 001-9328) | ||
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| (4.4) | | Second Supplemental Indenture, dated December 8, 2011, between Ecolab Inc., Wells Fargo Bank, National Association, as Trustee and the Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A., as successor in interest to J.P. Morgan Trust Company, N.A. and Bank One, N.A.), as original trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated December 5, 2011. (File No. 001-9328) | ||
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| (4.5) | | Form of 5.500% Notes due 2041. | | Included in Exhibit (4.4) above. | ||
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| (4.6) | | Indenture, dated January 12, 2015, between Ecolab Inc. and Wells Fargo Bank, National Association, as Trustee. | | Incorporated by reference to Exhibit 4.1 of our Form 8-K, dated January 15, 2015. (File No. 001-9328) | ||
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| (4.7) | | Second Supplemental Indenture, dated July 8, 2015, by and among Ecolab Inc., Wells Fargo Bank, National Association, as Trustee, Elavon Financial Services Limited, UK Branch, as paying agent, and Elavon Financial Services Limited, as transfer agent and registrar. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated July 8, 2015. (File No. 001-9328) | ||
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| (4.8) | | Form of 2.625% Euro Notes due 2025. | | Included in Exhibit (4.7) above. | ||
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| (4.9) | | Third Supplemental Indenture, dated January 14, 2016, between Ecolab Inc. and Wells Fargo Bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated January 11, 2016. (File No. 001-9328) | ||
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| (4.10) | | Form of 3.250% Notes due 2023. | | Included in Exhibit (4.9) above. | ||
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| (4.11) | | Fourth Supplemental Indenture, dated October 18, 2016, between Ecolab Inc. and Wells Fargo Bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated October 13, 2016. (File No. 001-9328) | ||
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| (4.12) | | Forms of 2.700% Notes due 2026 and 3.700% Notes due 2046. | | Included in Exhibit (4.11) above. | ||
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| (4.13) | | Fifth Supplemental Indenture, dated December 8, 2016, by and among Ecolab Inc., Wells Fargo Bank, National Association, as Trustee, Elavon Financial Services DAC, UK Branch, as paying agent, and Elavon Financial Services DAC, as transfer agent and registrar. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated December 1, 2016. (File No. 001-9328) | ||
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| (4.14) | | Form of 1.000% Euro Notes due 2024. | | Included in Exhibit (4.13) above. | ||
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| (4.15) | | Sixth Supplemental Indenture, dated August 10, 2017, between Ecolab Inc. and Wells Fargo Bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated August 10, 2017. (File No. 001-9328) | ||
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| (4.16) | | Form of 2.375% Notes due 2022. | | Included in Exhibit (4.15) above. | ||
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| (4.17) | | Seventh Supplemental Indenture, dated November 27, 2017, between Ecolab Inc. and Wells Fargo Bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K, dated November 30, 2017. (File No. 001-9328) | ||
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| (4.18) | | Form of 3.250% Notes due 2027. | | Included in Exhibit (4.17) above. | ||
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| (4.19) | | Form of 3.950% Notes due 2047. | | Included in Exhibit (4.17) above. | ||
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|---|---|---|---|---|---|---|
| Exhibit No.: | Document: | Method of Filing: | ||||
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| (4.20) | | Eighth Supplemental Indenture, dated March 24, 2020, between Ecolab Inc. and Wells Fargo bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K filed on March 24, 2020. (File No. 001-9328) | ||
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| (4.21) | | Form of 4.800% Notes due 2030. | | Included in Exhibit (4.20) above. | ||
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| (4.22) | | Ninth Supplemental Indenture, dated August 13, 2020, between Ecolab Inc. and Wells Fargo bank, National Association, as Trustee. | | Incorporated by reference to Exhibit (4.2) of our Form 8-K filed by Ecolab Inc. on August 13, 2020. (File No. 001-9328) | ||
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| (4.23) | | Form of 1.300% Notes due 2031. | | Included in Exhibit (4.22) above. | ||
| | | | | | | |
| (4.24) | | Form of 2.125% Notes due 2050. | | Included in Exhibit (4.22) above. | ||
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| (4.25) | | Description of Securities. | | Incorporated by reference to Exhibit (4.20) of our Form 10-K Annual Report for the year ended December 31, 2019. (File No. 001-9328) | ||
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| | | Copies of other constituent instruments defining the rights of holders of our long-term debt are not filed herewith, pursuant to Section (b)(4)(iii) of Item 601 of Regulation S-K, because the aggregate amount of securities authorized under each of such instruments is less than 10% of our total assets on a consolidated basis. We will, upon request by the Securities and Exchange Commission, furnish to the Commission a copy of each such instrument. | ||||
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| (10.1) | | Second Amended and Restated $2.0 billion 5-Year Revolving Credit Facility, dated November 28, 2017, among Ecolab Inc., the lenders party thereto, the issuing banks party thereto, Bank of America, N.A., as administrative agent and swing line bank, and Citibank, N.A., JPMorgan Chase Bank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as co-syndication agents. | | Incorporated by reference to Exhibit (10.1) of our Form 8-K, dated November 30, 2017. (File No. 001-9328) | ||
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| (10.2) | | Documents comprising global Commercial Paper Programs. | | | ||
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| | | (i) | U.S. $2,000,000,000 Euro-Commercial Paper Programme. | |||
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| | | | (a) | Amended and Restated Dealer Agreement, dated 9 June 2017, between Ecolab Inc., Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L., Ecolab NL 10 B.V. and Ecolab NL 11 B.V. (as Issuers), Ecolab Inc. (as Guarantor in respect of the notes issued by Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L. and Ecolab NL 10 B.V. and Ecolab NL 11 B.V.), Credit Suisse Securities (Europe) Limited (as Arranger), and Citibank Europe plc, UK Branch, Credit Suisse Securities (Europe) Limited, Citigroup Global Markets Europe AG, Credit Suisse Securities Sociedad de Valores S.A. and Credit Suisse International (as Dealers). | | Incorporated by reference to Exhibit (10.1)(a) of our Form 10-Q for the quarter ended June 30, 2017. (File No. 001-9328) |
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| | | | (b) | Amended and Restated Note Agency Agreement, dated 9 June 2017, between Ecolab Inc., Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L., Ecolab NL 10 B.V. Ecolab NL 11 B.V. (as Issuers), Ecolab Inc. (as Guarantor in respect of the notes issued by Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L., Ecolab NL 10 B.V. and Ecolab NL 11 B.V.), and Citibank, N.A., London Branch (as Issue and Paying Agent). | | Incorporated by reference to Exhibit (10.1)(b) of our Form 10-Q for the quarter ended June 30, 2017. (File No. 001-9328) |
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| | | | (c) | Deed of Covenant made on 9 June 2017 by Ecolab Inc., Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L., Ecolab NL 10 B.V. and Ecolab NL 11 B.V. (as Issuers) | | Incorporated by reference to Exhibit (10.1)(c) of our Form 10-Q for the quarter ended June 30, 2017. (File No. 001-9328) |
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|---|---|---|---|---|---|---|
| Exhibit No.: | Document: | Method of Filing: | ||||
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| | | | (d) | Deed of Guarantee made on 9 June 2017 by Ecolab Inc. (in respect of notes issued by Ecolab Lux 1 S.À R.L., Ecolab Lux 2 S.À R.L., Ecolab NL 10 B.V. and Ecolab NL 11 B.V.) | | Incorporated by reference to Exhibit (10.1)(d) of our Form 10-Q for the quarter ended June 30, 2017. (File No. 001-9328) |
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| | | (ii) | U.S. $2,000,000,000 U.S. Commercial Paper Program. | |||
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| | | | (a) | Form of Commercial Paper Dealer Agreement for 4(a)(2) Program, dated September 22, 2014. The dealers for the program are Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, BofA Securities, Inc., Mizuho Securities USA LLC, and Wells Fargo Securities, LLC. | | Incorporated by reference to Exhibit (10.1)(a) of our Form 10-Q for the quarter ended September 30, 2014. (File No. 001-9328) |
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| | | | (b) | Issuing and Paying Agency Agreement, dated September 18, 2017, between Ecolab Inc. and MUFG Union Bank, N.A., as Issuing and Paying Agent. | | Incorporated by reference to Exhibit (10.1)(a) of our Form 10-Q for the quarter ended September 30, 2017. (File No. 001-9328) |
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| | | | (c) | Corporate Commercial Paper – Master Note, dated September 18, 2017, together with annex thereto. | | Incorporated by reference to Exhibit (10.1)(b) of our Form 10-Q for the quarter ended September 30, 2017. (File No. 001-9328) |
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| (10.3) | † | (i) | Ecolab Inc. 2001 Non-Employee Director Stock Option and Deferred Compensation Plan, as amended and restated, effective as of August 1, 2013. | | Incorporated by reference to Exhibit (10.6) of our Form 10-K Annual Report for the year ended December 31, 2013. (File No. 001-9328) | |
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| | † | (ii) | Declaration of Amendment, dated May 5, 2016, to Ecolab Inc. 2001 Non-Employee Director Stock Option and Deferred Compensation Plan, as amended and restated, effective as of August 1, 2013. | | Incorporated by reference to Exhibit (10.1) of our Form 10-Q for the quarter ended June 30, 2016. (File No. 001-9328) | |
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| | † | (iii) | Master Agreement Relating to Periodic Options, as amended, effective as of May 1, 2004. | | Incorporated by reference to Exhibit (10)D(ii) of our Form 10-Q for the quarter ended June 30, 2004. (File No. 001-9328) | |
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| | † | (iv) | Amendment No. 1 to Master Agreement Relating to Periodic Options, as amended, effective as of May 2, 2008. | | Incorporated by reference to Exhibit (10)B of our Form 10-Q for the quarter ended September 30, 2008. (File No. 001-9328) | |
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| (10.4) | † | Form of Director Indemnification Agreement. Substantially identical agreements are in effect as to each of our directors. | | Incorporated by reference to Exhibit (10)I of our Form 10-K Annual Report for the year ended December 31, 2003. (File No. 001-9328) | ||
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| (10.5) | † | (i) | Ecolab Executive Death Benefits Plan, as amended and restated, effective as of March 1, 1994. | | Incorporated by reference to Exhibit (10)H(i) of our Form 10-K Annual Report for the year ended December 31, 2006. See also Exhibit (10.12) hereof. (File No. 001-9328) | |
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| | † | (ii) | Amendment No. 1 to Ecolab Executive Death Benefits Plan, effective as of July 1, 1997. | | Incorporated by reference to Exhibit (10)H(ii) of our Form 10-K Annual Report for the year ended December 31, 1998. (File No. 001-9328) | |
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| | † | (iii) | Second Declaration of Amendment to Ecolab Executive Death Benefits Plan, effective as of March 1, 1998. | | Incorporated by reference to Exhibit (10)H(iii) of our Form 10-K Annual Report for the year ended December 31, 1998. (File No. 001-9328) | |
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| | † | (iv) | Amendment No. 3 to the Ecolab Executive Death Benefits Plan, effective as of August 12, 2005. | | Incorporated by reference to Exhibit (10)B of our Form 8-K, dated December 13, 2005. (File No. 001-9328) | |
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| | † | (v) | Amendment No. 4 to the Ecolab Executive Death Benefits Plan, effective as of January 1, 2005. | | Incorporated by reference to Exhibit (10)H(v) of our Form 10-K Annual Report for the year ended December 31, 2009. (File No. 001-9328) | |
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| | † | (vi) | Amendment No. 5 to the Ecolab Executive Death Benefits Plan, effective as of May 6, 2015. | | Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the quarter ended June 30, 2015. (File No. 001-9328) | |
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| | † | (vii) | Amendment No. 6 to the Ecolab Executive Death Benefits Plan, effective as of June 23, 2017 | | Incorporated by reference to Exhibit 10.1(vii) of Ecolab’s Form 8-K dated June 23, 2017. (File No. 001-9328) | |
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| (10.6) | † | (i) | Ecolab Executive Long-Term Disability Plan, as amended and restated, effective as of January 1, 1994. | | Incorporated by reference to Exhibit (10)I of our Form 10-K Annual Report for the year ended December 31, 2004. See also Exhibit (10.12) hereof. (File No. 001-9328). | |
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| | † | (ii) | Amendment No. 1 to the Ecolab Executive Long-Term Disability Plan, effective as of August 21, 2015. | | Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended September 30, 2015. (File No. 001-9328) | |
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| (10.7) | † | (i) | Ecolab Supplemental Executive Retirement Plan, as amended and restated, effective as of January 1, 2014. | | Incorporated by reference to Exhibit 10.11 of our Form 10-K Annual Report for the year ended December 31, 2013. See also Exhibit (10.12) hereof. (File No. 001-9328). | |
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| | † | (ii) | Amendment No. 1 to the Ecolab Supplemental Executive Retirement Plan, effective as of May 6, 2015. | | Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended June 30, 2015. (File No. 001-9328) | |
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| | † | (iii) | Amendment No. 2 to the Ecolab Supplemental Executive Retirement Plan, effective as of December 31, 2020. | | Filed herewith electronically. | |
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| (10.8) | † | (i) | Ecolab Mirror Savings Plan, as amended and restated, effective as of January 1, 2014. | | Incorporated by reference to Exhibit 10.12 of our Form 10-K Annual Report for the year ended December 31, 2013. See also Exhibit (10.12) hereof. (File No. 001-9328) | |
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| | † | (ii) | Amendment No. 1 to Ecolab Mirror Savings Plan, as amended and restated, effective as of December 31, 2020. | | Filed herewith electronically. | |
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| (10.9) | † | (i) | Ecolab Mirror Pension Plan, as amended and restated, effective as of January 1, 2014. | | Incorporated by reference to Exhibit 10.13 of our Form 10-K Annual Report for the year ended December 31, 2013. See also Exhibit (10.12) hereof. (File No. 001-9328). | |
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| | † | (ii) | Amendment No. 1 to Ecolab Mirror Pension Plan, as amended and restated, effective as of December 31, 2020. | | Filed herewith electronically. | |
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| (10.10) | † | (i) | Ecolab Inc. Administrative Document for Non-Qualified Plans, as amended and restated, effective as of January 1, 2011. | | Incorporated by reference to Exhibit (10.16) of our Form 10-K Annual Report for the year ended December 31, 2011. (File No. 001-9328) | |
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| | † | (ii) | Amendment No. 1 to the Ecolab Inc. Administrative Document for Non-Qualified Plans, effective as of January 1, 2013. | | Incorporated by reference to Exhibit (10.14)(II) of our Form 10-K Annual Report for the year ended December 31, 2013. (File No. 001-9328) | |
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| (10.11) | † | (i) | Ecolab Inc. Change in Control Severance Compensation Policy, as amended and restated, effective as of February 26, 2010. | | Incorporated by reference to Exhibit (10) of our Form 8-K, dated February 26, 2010. (File No. 001-9328) | |
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| | † | (ii) | Amendment No. 1 to Ecolab Inc. Change-in-Control Severance Policy, as amended and restated, effective as of February 26, 2010. | | Incorporated by reference to Exhibit (10.18)(ii) of our Form 10-K Annual Report for the year ended December 31, 2011. (File No. 001-9328) | |
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| (10.12) | † | Description of Ecolab Management Incentive Plan. | | Incorporated by reference to Exhibit (10.16) of our Form 10-K Annual Report for the year ended December 31, 2015. (File No. 001-9328) | ||
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| (10.13) | † | (i) | Ecolab Inc. 2010 Stock Incentive Plan, as amended and restated, effective as of May 2, 2013. | | Incorporated by reference to Exhibit (10.1) of our Form 8-K, dated May 2, 2013. (File No. 001-9328) | |
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| | † | (ii) | Declaration of Amendment, effective as of February 22, 2019, to Ecolab Inc. 2010 Stock Incentive Plan, as amended and restated, effective as of May 2, 2013. | | Incorporated by reference to Exhibit (10.3) of our Form 10-Q, dated May 2, 2019. (File No. 001-9328) | |
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| | † | (iii) | Sample form of Non-Statutory Stock Option Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted May 6, 2010. | | Incorporated by reference to Exhibit (10)B of our Form 8-K, dated May 6, 2010. (File No. 001-9328) | |
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| | † | (iv) | Sample form of Restricted Stock Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted May 6, 2010. | | Incorporated by reference to Exhibit (10)C of our Form 8-K, dated May 6, 2010. (File No. 001-9328) | |
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| | † | (v) | Sample form of Restricted Stock Unit Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted August 4, 2010. | | Incorporated by reference to Exhibit (10)A of our Form 10-Q, for the quarter ended September 30, 2010. (File No. 001-9328) | |
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| | † | (vi) | Sample form of Performance-Based Restricted Stock Unit Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted December 6, 2017. | | Incorporated by reference to Exhibit (10.16)(viii) of our Form 10-K Annual Report for the year ended December 31, 2017. (File No. 001-9328) | |
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| | † | (vii) | Sample form of Performance-Based Restricted Stock Unit Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted December 4, 2018. | | Incorporated by reference to Exhibit (10.15)(viii) of our Form 10-K Annual Report for the year ended December 31, 2018. (File No. 001-9328) | |
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| | † | (viii) | Sample form of Performance-Based Restricted Stock Unit Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted December 3, 2019. | | Incorporated by reference to Exhibit (10.15)(ix) of our Form 10-K Annual Report for the year ended December 31, 2019. (File No. 001-9328) | |
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| | † | (ix) | Sample form of Performance-Based Restricted Stock Unit Award Agreement under the Ecolab Inc. 2010 Stock Incentive Plan, adopted December 3, 2020. | | Filed herewith electronically. | |
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| (10.14) | † | Policy on Reimbursement of Incentive Payments, as amended February 22, 2019. | | Incorporated by reference to Exhibit (10.16) of our Form 10-K Annual Report for the year ended December 31, 2018. (File No. 001-9328) | ||
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| (10.15) | † | Second Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan, effective as of December 1, 2011. | | Incorporated by reference to Exhibit (4.3) of our Post-Effective Amendment No. 1 on Form S-8 to Form S-4 Registration Statement dated December 2, 2011. (File No. 001-9328) | ||
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| (10.16) | † | Form of Nalco Company Death Benefit Agreement and Addendum to Death Benefit Agreement. | | Incorporated by reference from Exhibit (99.2) on Form 8-K of Nalco Holding Company filed on May 11, 2005. (File No. 001-32342) | ||
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| (10.17) | † | Employee Matters Agreement, dated December 18, 2019, by and among Ecolab, Inc., ChampionX Holding Inc. and Apergy Corporation. | | Incorporated by reference to Exhibit (10.1) of our Form 8-K, dated December 18, 2019. (File No. 001-9328) | ||
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| (10.18) | † | Employment Transition Agreement, dated March 11, 2020 between Ecolab Inc. and Jill Wyant. | | Incorporated by reference to Exhibit (10.1) of our Form 10-Q Quarterly Report for the quarter ended March 31, 2020. (File No. 001 9328) | ||
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| (14.1) | | Ecolab Code of Conduct, as amended November 26, 2012. | | Incorporated by reference to Exhibit (14.1) of our Form 10-K Annual Report for the year ended December 31, 2012. (File No. 001-9328) | ||
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| (21.1) | | List of Subsidiaries. | | Filed herewith electronically. | ||
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| (23.1) | | Consent of Independent Registered Public Accounting Firm. | | Filed herewith electronically. | ||
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| (24.1) | | Powers of Attorney. | | Filed herewith electronically. | ||
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| (31.1) | | Rule 13a-14(a) CEO Certification. | | Filed herewith electronically. | ||
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| (31.2) | | Rule 13a-14(a) CFO Certification. | | Filed herewith electronically. | ||
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| (32.1) | | Section 1350 CEO and CFO Certifications. | | Filed herewith electronically. | ||
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| (101.INS) | | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | | Filed herewith electronically. | ||
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| (101.SCH) | | Inline XBRL Taxonomy Extension Schema. | | Filed herewith electronically. | ||
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| (101.CAL) | | Inline XBRL Taxonomy Extension Calculation Linkbase. | | Filed herewith electronically. | ||
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| (101.DEF) | | Inline XBRL Taxonomy Extension Definition Linkbase. | | Filed herewith electronically. | ||
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| (101.LAB) | | Inline XBRL Taxonomy Extension Label Linkbase. | | Filed herewith electronically. | ||
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| (101.PRE) | | Inline XBRL Taxonomy Extension Presentation Linkbase. | | Filed herewith electronically. | ||
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| (104) | | Cover Page Interactive Data File. | | Formatted as Inline XBRL and contained in Exhibit 101. |
† This exhibit is an executive compensation plan or arrangement.
Item 16. Form 10-K Summary.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Ecolab Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 26th day of February, 2021.
| | ECOLAB INC. | |
|---|---|---|
| | (Registrant) | |
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| | By: | /s/ Christophe Beck |
| | | Christophe Beck |
| | | President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Ecolab Inc. and in the capacities indicated, on the 26th day of February, 2020.
| /s/ Christophe Beck | | President and Chief Executive Officer |
|---|---|---|
| Christophe Beck | | (Principal Executive Officer and Director) |
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| /s/ Daniel J. Schmechel | | Chief Financial Officer |
| Daniel J. Schmechel | | (Principal Financial Officer) |
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| /s/ Scott D. Kirkland | | Senior Vice President and Corporate Controller |
| Scott D. Kirkland | | (duly authorized officer and Chief Accounting Officer) |
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| /s/ Michael C. McCormick | | Directors |
| Michael C. McCormick | | |
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| as attorney-in-fact for: | | |
| Douglas M. Baker Jr., Shari L. Ballard, Barbara J. Beck, Jeffrey M. Ettinger, Arthur J. Higgins, Michael Larson, David W. MacLennan, Tracy B. McKibben, Lionel L. Nowell, III, Victoria J. Reich, Suzanne M. Vautrinot and John J. Zillmer | | |