8-KEarnings & ResultsExhibits & Filings

ECOLAB INC. 8-K Report, Financial Results (Apr 18, 2018)

Filed April 18, 2018For Securities:ECL

Summary

Ecolab Inc. (ECL) has filed a Current Report on Form 8-K on April 18, 2018, to provide supplemental financial information. The primary purpose of this filing is to present revised financial statements for the years ended December 31, 2017, and 2016, reflecting the adoption of new accounting standards: ASC Topic 606, Revenue from Contracts with Customers, and ASU 2017-07, Compensation – Retirement Benefits. The company applied these standards retrospectively using the full retrospective method for the revenue standard. In conjunction with these accounting standard adoptions, Ecolab has also reclassified certain costs from selling, general, and administrative expenses to cost of sales to better align expenses with revenue recognition. Additionally, the filing includes updated segment information, the establishment of a new 'Other' category for the Colloidal Technologies Group (CTG), and financial data presented at fixed currency exchange rates. The report also introduces revised non-GAAP financial measures, such as fixed currency sales and adjusted diluted EPS, intended to provide investors with enhanced transparency and improved comparability of operating results.

Key Highlights

  • 1Ecolab is retrospectively adopting ASC Topic 606 (Revenue from Contracts with Customers) and ASU 2017-07 (Pension Cost Presentation).
  • 2Certain costs previously classified under SG&A have been reclassified to cost of sales to align with the new revenue recognition standards.
  • 3The company is providing supplemental, revised Consolidated Statements of Income for 2017 and 2016, and for each quarter of 2017.
  • 4Supplemental reportable segment net sales and operating income information for 2017 and 2016, including quarterly data, is being provided.
  • 5The Colloidal Technologies Group (CTG) will be reported within 'Other' segment starting in Q1 2018.
  • 6The filing includes supplemental non-GAAP financial measures presented at fixed currency exchange rates to enhance comparability.
  • 7These revised financial presentations are supplemental and do not replace previously filed financial statements.

Frequently Asked Questions

Ecolab is filing this 8-K to provide investors with supplemental financial information resulting from the retrospective adoption of two new accounting standards: ASC Topic 606, Revenue from Contracts with Customers, and ASU 2017-07, which impacts the presentation of pension and post-retirement benefit costs. This allows for a more accurate and consistent presentation of historical financial performance according to the latest accounting principles.

The adoption of ASC Topic 606, applied retrospectively, means that revenue is now recognized based on a five-step model focusing on control transfer. This also led to a reclassification of certain costs from selling, general, and administrative expenses to cost of sales. The filing provides revised income statements showing the impact of these changes on prior periods.

Non-GAAP measures are financial metrics that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Ecolab is providing supplemental non-GAAP measures, such as fixed currency sales and adjusted diluted EPS, to offer investors a clearer view of ongoing operational performance and to facilitate period-to-period comparisons, especially by excluding the impact of foreign currency fluctuations.

Yes, this filing provides revised financial statements and segment information that reflect the impact of the new accounting standards. While the original filings remain the official GAAP-compliant reports, these supplemental presentations offer an updated view of the company's financial performance for 2017 and 2016 under the new accounting rules.