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Nalco Reports Strong Double-Digit Third-Quarter Sales and EPS Growth; Raised 2011 Guidance

November 1, 2011

NAPERVILLE, Ill., Nov. 1, 2011 /PRNewswire/ —

(Logo: http://photos.prnewswire.com/prnh/20101231/NALCOLOGO)

Third Quarter 2011 Highlights

  • Reported diluted EPS of 55 cents, +31%; Record third quarter adjusted diluted EPS of 53 cents, +15%
  • Record reported sales +15%, double-digit growth in all segments; organic sales +13%
  • Double-digit profit growth in Water and Energy businesses, excluding one-time sales from the Gulf of Mexico emergency response in 2010
  • Increased sequential Adjusted EBITDA margin by 170 basis points; expected pricing gains achieved
  • Increased 2011 earnings guidance
  • Merger integration planning with Ecolab progressing; anticipating fourth quarter 2011 close


                                         Increase -- Third Quarter 2011 vs. 2010
                                         ---------------------------------------
                                                                           Organic,
                                                                              exc
                                       Actual           Organic(1)         Gulf(2)
                                       ------           ----------        ---------

    Net sales                                 15.0%             12.5%            14.5%

    Operating
     earnings                                 13.0%             14.0%            24.3%

    Adjusted
     operating
     earnings (3)                            7.8%              9.0%            18.5%

     EBITDA                                 10.0%             10.2%            18.1%

    Adjusted EBITDA
     (4)                                     5.9%              6.2%            13.6%

    (1) Excluding the impact of foreign currency translation
     rate changes and acquisitions and divestitures.
    (2)  Excluding impact of one-time sales of dispersant
     products used for the Gulf of Mexico emergency response
     in 2010.
    (3) Operating earnings adjusted for restructuring
     expenses and unusual items.
    (4) EBITDA adjusted for restructuring expenses and
     unusual items.

Nalco (NYSE: NLC), providing essential expertise for water, energy and air, reported record sales and double-digit adjusted earnings per share (EPS) growth for the third quarter ending September 30, 2011 and raised full year guidance, reflecting strong sales and profit growth in all segments and regions. Double-digit organic sales growth was driven by strong volume and price gains in all segments. These gains more than offset significantly higher raw material costs to yield a 31 percent reported diluted EPS increase in the quarter. Reported diluted EPS increased to 55 cents compared to 42 cents in the year-ago period reflecting improved operating earnings and reduced interest expense. Adjusted EPS increased 15 percent to 53 cents compared to 46 cents in the year-ago period. Prior year results include 6 cents EPS associated with one-time sales from the Gulf of Mexico emergency response in 2010 (Gulf). (See Attachment 9)

Record sales of $1.3 billion rose a strong 15 percent over last year, including a favorable impact from foreign exchange of 4 percent. Organic sales, excluding the one-time Gulf sales, grew 15 percent. Reported BRIC+ sales grew 21% to $229 million.

Adjusted EBITDA of $208 million increased 6 percent versus $196 million in the prior year (See Attachment 5). Adjusted EBITDA margin increased 170 basis points sequentially as pricing gains fully offset substantial raw material and freight headwinds.

Organic Adjusted EBITDA grew 14 percent, excluding approximately $13 million of Adjusted EBITDA in the year-ago quarter associated with Gulf sales.

The reported effective tax rate in the quarter was 35.0%. Excluding the impact of special gains and charges, the Adjusted Effective Tax Rate was 35.4%. (See Attachment 10)

“Our double-digit revenue and EPS growth underscores the stability and strength of our core markets as well as our ability to deliver strong results despite challenging economic environments. Our industry-leading technology and service expertise enabled us to grow both price and volume in the face of significant raw material cost inflation this quarter, and we are well-positioned to continue delivering strong gains in the fourth quarter and into 2012,” said Nalco Chairman and Chief Executive Officer Erik Fyrwald.

“Our planned merger with Ecolab will create even more growth potential as we combine Ecolab’s significant capabilities in cleaning and sanitization with our leading global positions in water, process and energy services. We see significant revenue synergy opportunities leveraging Ecolab’s very strong positions in Food & Beverage and Institutional markets where Nalco’s water services business has strong offerings and attractive margins but a smaller position. Our teams are excited and planning is progressing towards a fourth quarter close.”

Segment Details (See Attachment 6)


                       Sales                Year-
                       Three     Year-       Over-      Direct        Year-Over-
                                 Over-
                      Months      Year      Year         Contribution Year
                                                         (in
                      ended       Increase  Organic       $millions)  Increase
                      Sept. 30,   --------  Increase     -----------   (Decrease)
                       2011 (in              (Decrease)                ----------
                       $millions)            ----------
                       ----------
    Segment
    Water Services         $521.4     12.1%        11.2%       $101.8        14.7%
    Energy Services         510.2     19.0%        15.4%        102.8         4.2%
      Exc. Gulf Sales                 24.5%        20.7%                     19.7%
    Paper Services          219.4     12.9%         9.0%         35.7         7.1%
                            -----                                ----
    Total                $1,251.0     15.0%        12.5%       $240.3         8.9%
                         ========                              ======

Water Services: Sales of $521 million increased 11 percent organically, led by double-digit sales growth in Mining and in the Light Food & Beverage and Manufacturing end-markets. Light and Heavy industry organic sales grew 7 percent and 5 percent, respectively. Direct contribution improved 15 percent over prior year, driven by volume growth and pricing gains. Direct contribution margin improved 40 basis points versus prior year, reflecting strong pricing gains, partially offset by increased raw material costs and the impact from substantial BRIC+ hires last year.

Energy Services: Sales of $510 million increased 21 percent organically, excluding Gulf sales, led by substantial growth in Enhanced Oil Recovery and double-digit Upstream and Downstream sales growth. Direct contribution, excluding Gulf response sales, increased 20 percent over prior year, reflecting pricing gains and volume growth, partially offset by increased raw material costs and BRIC+ hires last year. Direct contribution margin, excluding Gulf response sales, declined 90 basis points reflecting primarily mix.

Paper Services: Sales grew 9 percent organically to $219 million, led by double-digit growth in the Americas. Direct contribution improved 7 percent over prior year driven primarily by pricing gains. Direct contribution margin declined 90 basis points from prior year reflecting primarily raw material and freight headwinds.

2011 Expectations

“Given the acceleration of our strong performance and slightly lower tax rate, we have updated our outlook for 2011,” Fyrwald said. “We delivered the price gains and margin improvement we committed to and we will continue to focus our commercial efforts towards even more growth. I’m excited about the future and confident that given our market momentum, unparalleled sales and service expertise, and soon to be improved financial position as part of Ecolab, we will grow even faster and stronger.”

Nalco raised 2011 guidance reflecting strong sales growth and improving margins as price increases continue to take effect.

The Company’s updated outlook for the Fiscal Year 2011 is as follows:


    Adjusted EBITDA        $745 million
    Adjusted EPS                  $1.75
    Adjusted Effective tax
     rate                            ~33%

Conference Call/Webcast

Nalco will discuss third-quarter 2011 results in a conference call and audio-only Webcast to be held on Nov. 2 at 10 a.m. ET. Information on the conference call and Webcast is available on our website at www.nalco.com/investors.

About Nalco

Nalco is the world’s largest sustainability services company focused on industrial water, energy and air applications; delivering significant environmental, social and economic performance benefits to our customers. We help our customers reduce energy, water and other natural resource consumption, enhance air quality, minimize environmental releases and improve productivity and end products while boosting the bottom line. Together our comprehensive solutions contribute to the sustainable development of customer operations. Nalco is a member of the Dow Jones Sustainability World and North America Indexes. More than 12,000 Nalco employees operate in 150 countries supported by a comprehensive network of manufacturing facilities, sales offices and research centers to serve a broad range of end markets. In 2010, Nalco achieved sales of $4.25 billion. For more information visit www.nalco.com.

Several non-GAAP measures are discussed in today’s press release. Management believes that discussion of these measures provides investors with additional insight into the ongoing operations of Nalco Holding Company. Non-GAAP measures are reconciled to the closest GAAP measure in schedules attached to this press release, which may also be found at www.nalco.com/investors. Adjusted Operating Earnings is a non-GAAP measure that includes adjusting for restructuring expenses and unusual items. Reconciliation to operating earnings is included in Attachment 4. EBITDA is a non-GAAP measure used by management as an internal operating metric and for enterprise valuation purposes. Adjusted EBITDA is a non-GAAP measure that includes adjusting for restructuring expenses and unusual items. Reconciliation to net earnings is included in Attachment 5. Free Cash Flow is reconciled on Attachment 8 to Cash from Operations as shown on Nalco’s Cash Flow Statement, and is defined as Cash from Operations less Capital Expenditures and Noncontrolling Interest charges. Adjusted EPS is a non-GAAP measure that includes adjusting for restructuring expenses and unusual items. Reconciliation to reported EPS as shown on Nalco’s Statement of Operations is included in Attachment 9. Adjusted Effective Tax Rate is defined as the income tax provision excluding the tax expense (benefit) of specified transactions, divided by earnings before income taxes excluding the earnings (loss) before income taxes attributable to those specified transactions. It is reconciled to the actual effective tax rate on Attachment 10. In addition, Nalco may discuss sales growth in terms of reported (actual), organic (reported less foreign currency and acquisition/divestiture/merger/joint venture/perimeter impacts), and real (organic growth less that portion of the growth which consists of price increases that simply pass along higher purchased material and freight costs) The non-GAAP measures should not be viewed as alternatives to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies.

Cautionary Statements Regarding Forward-Looking Information

This communication contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project,” “may,” “will,” “intend,” “plan,” “believe,” “target,” “forecast” (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the merger, integration plans and expected synergies, the expected timing of completion of the merger, and anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of Nalco and Ecolab, as applicable. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These risks and uncertainties include (i) the risk that the stockholders of Nalco may not adopt the merger agreement, (ii) the risk that the stockholders of Ecolab may not approve the issuance of Ecolab common stock to Nalco stockholders in the merger, (iii) the risk that the companies may be unable to obtain regulatory approvals required for the merger, or that required regulatory approvals may delay the merger or result in the imposition of conditions that could have a material adverse effect on the combined company or cause the companies to abandon the merger, (iv) the risk that the conditions to the closing of the merger may not be satisfied, (v) the risk that a material adverse change, event or occurrence may affect Nalco or Ecolab prior to the closing of the merger and may delay the merger or cause the companies to abandon the merger, (vi) the risk that an unsolicited offer by another company to acquire shares or assets of Nalco or Ecolab could interfere with or prevent the merger, (vii) problems that may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, (viii) the possibility that the merger may involve unexpected costs, unexpected liabilities or unexpected delays, (ix) the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies currently expect, (x) the risk that the businesses of the companies may suffer as a result of uncertainty surrounding the merger and (xi) the risk that disruptions from the transaction will harm relationships with customers, employees and suppliers.

Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of Nalco, Ecolab and the combined company. For a further discussion of these and other risks and uncertainties applicable to the respective businesses of Nalco and Ecolab, see the Annual Reports on Form 10-K of Nalco and Ecolab for the fiscal year ended December 31, 2010 and the companies’ other public filings with the Securities and Exchange Commission (the “SEC”). These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus included in the Registration Statement on Form S-4 that Ecolab has filed with the SEC in connection with the merger, which was declared effective by the SEC on October 28, 2011. On or about October 31, 2011, Nalco and Ecolab began mailing the definitive joint proxy statement/prospectus to stockholders of record as of the close of business on October 11, 2011. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Neither Nalco nor Ecolab undertakes, and each of them expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in their respective expectations, except as required by law.

Additional Information and Where to Find it

In connection with the proposed merger between Ecolab and Nalco, Ecolab filed with the SEC a Registration Statement on Form S-4 that includes a joint proxy statement of Ecolab and Nalco that also constitutes a prospectus of Ecolab relating to the proposed transaction. The Registration Statement was declared effective by the SEC on October 28, 2011. On or about October 31, 2011, Nalco and Ecolab began mailing the definitive joint proxy statement/prospectus to stockholders of record as of the close of business on October 11, 2011. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION about Ecolab, Nalco and the proposed merger. Investors and security holders can obtain these materials and other documents filed with the SEC free of charge at the SEC’s website, www.sec.gov. In addition, copies of the registration statement and joint proxy statement/prospectus can be obtained free of charge by accessing Nalco’s website at www.nalco.com by clicking on the “Investors” link and then clicking on the “SEC Filings” link or by writing Nalco at 1601 West Diehl Road, Naperville, Illinois 60563, Attention: Corporate Secretary or by accessing Ecolab’s website at www.ecolab.com by clicking on the “Investor” link and then clicking on the “SEC Filings” link or by writing Ecolab at 370 Wabasha Street North, Saint Paul, Minnesota, 55102, Attention: Corporate Secretary. Security holders may also read and copy any reports, statements and other information filed by Ecolab or Nalco with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

Participants in the Merger Solicitation

Ecolab, Nalco and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Ecolab’s directors and executive officers is available in its proxy statement filed with the SEC by Ecolab on March 18, 2011 in connection with its 2011 annual meeting of stockholders, and information regarding Nalco’s directors and executive officers is available in its proxy statement filed with the SEC by Nalco on March 14, 2011 in connection with its 2011 annual meeting of stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the registration statement and joint proxy statement/prospectus and other relevant materials that have been filed with the SEC.

Non-Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.


    Attachments

          Condensed Consolidated Balance Sheets
     1.   (Unaudited)
          Condensed Consolidated Statements of Operations
    2A.   --Quarter (Unaudited)
          Condensed Consolidated Statements of Operations
    2B.   --Year to Date (Unaudited)
          Condensed Consolidated Statements of Cash Flows
     3.   (Unaudited)
     4.  Adjusted Operating Earnings (Unaudited)
     5.  EBITDA (Unaudited)
     6.  Segment Information (Unaudited)
     7.  Regional Performance (Unaudited)
     8.  Free Cash Flow (Unaudited)
     9.  Earnings Per Share Data (Unaudited)
    10.  Adjusted Effective Income Tax Rate (Unaudited)


                              Nalco Holding Company and Subsidiaries
                               Condensed Consolidated Balance Sheets
                                       (dollars in millions)

                                                            (Unaudited)
                                                           September 30, December 31,
                                                                    2011         2010
                                                                    ----         ----
    Assets
    Current assets:
      Cash and cash equivalents                                 $120.8       $128.1
      Accounts receivable, less allowances
       of $15.6 in 2011 and
                                         $13.2 in 2010           900.8        765.5
      Inventories:
        Finished products                                        310.3        246.0
        Materials and work in process                            114.8         84.0
                                                                 -----         ----
                                                                 425.1        330.0
      Prepaid expenses, taxes and other
       current assets                                            215.5        211.1
                                                                 -----        -----
    Total current assets                                       1,662.2      1,434.7

    Property, plant, and equipment, net                          752.1        729.1
    Intangible assets:
      Goodwill                                                 1,771.5      1,844.1
      Other intangibles, net                                     993.2      1,023.3
    Other assets                                                 200.5        192.5
                                                                 -----        -----
    Total assets                                              $5,379.5     $5,223.7
                                                              ========     ========

    Liabilities and equity
    Current liabilities:
      Accounts payable                                          $378.8       $356.5
      Short-term debt                                            115.2         90.0
      Other current liabilities                                  425.5        411.7
                                                                 -----        -----
    Total current liabilities                                    919.5        858.2

    Other liabilities:
      Long-term debt                                           2,644.5      2,782.0
      Deferred income taxes                                      283.4        260.3
      Accrued pension benefits                                   387.1        405.6
      Other liabilities                                          205.0        190.1
                                                                 -----        -----
    Total liabilities                                          4,439.5      4,496.2

    Equity:
      Nalco Holding Company shareholders'
       equity                                                    910.5        696.8
      Noncontrolling interest                                     29.5         30.7
                                                                  ----         ----
    Total equity                                                 940.0        727.5
                                                                 -----        -----
    Total liabilities and equity                              $5,379.5     $5,223.7
                                                              ========     ========

                                        ATTACHMENT 1


                                      Nalco Holding Company and Subsidiaries
                            Condensed Consolidated Statements of Operations (Unaudited)
                                  (dollars in millions, except per share amounts)

                                                                     Three Months ended September 30, 2010
                                                                     -------------------------------------
                                    Three Months          As Reported              Sales of             Excluding Sales
                                        ended             -----------             Dispersant             of Dispersant
                                      September                                 Products Used            Products Used
                                             30,                                          in                       in
                                            2011                                Gulf Response            Gulf Response
                                          ----                                -------------            -------------

    Net sales                         $1,251.0             $1,088.3                    $19.0                 $1,069.3
    Operating costs and
     expenses:
      Cost of product sold               730.6                610.6                      4.3                    606.3
      Selling,
       administrative, and
       research
        expenses                         343.3                307.7                      1.9                    305.8
      Amortization of
       intangible assets                   9.9                 10.8                        -                     10.8
      Restructuring
       expenses                           (7.1)                (0.3)                       -                     (0.3)
      Impairment of
       goodwill                              -                  5.4                        -                      5.4
    Total operating costs
     and expenses                      1,076.7                934.2                      6.2                    928.0
                                       -------                -----                      ---                    -----

    Operating earnings                   174.3                154.1                     12.8                    141.3

    Other income
     (expense), net                       (6.0)                (2.8)                       -                     (2.8)
    Interest income                        0.1                  0.8                        -                      0.8
    Interest expense                     (47.4)               (59.1)                       -                    (59.1)
                                         -----                -----                      ---                    -----

    Earnings before
     income taxes                        121.0                 93.0                     12.8                     80.2

    Income tax provision                  42.3                 32.1                      4.8                     27.3
                                          ----                 ----                      ---                     ----

    Net earnings                          78.7                 60.9                      8.0                     52.9

    Less: Net earnings
     attributable to
      noncontrolling
       interests                           2.0                  2.0                        -                      2.0
                                           ---                  ---                      ---                      ---

    Net earnings
     attributable to
      Nalco Holding
       Company                           $76.7                $58.9                     $8.0                    $50.9
                                         =====                =====                     ====                    =====

    Net earnings per
     share
      attributable to Nalco
       Holding Company
      common shareholders:
        Basic                            $0.55                $0.43                    $0.06                    $0.37
                                         =====                =====                    =====                    =====
        Diluted                          $0.55                $0.42                    $0.06                    $0.37
                                         =====                =====                    =====                    =====
    Weighted-average
     shares outstanding
      (millions):
        Basic                            138.8                138.3                    138.3                    138.3
                                         =====                =====                    =====                    =====
        Diluted                          140.4                139.4                    139.4                    139.4
                                         =====                =====                    =====                    =====
    Cash dividends
     declared per
     share                              $0.035               $0.035
                                        ======               ======

                                             ATTACHMENT 2A


                                   Nalco Holding Company and Subsidiaries
                         Condensed Consolidated Statements of Operations (Unaudited)
                               (dollars in millions, except per share amounts)

                                                                 Nine Months ended September 30, 2010
                                                                 ------------------------------------
                                                            As                                        Excluding
                                     Nine Months            Reported              Sales of                  Sales
                                     ended             ---------             Dispersant            of Dispersant
                                   September                                Products Used           Products Used
                                          30,                                         in                      in
                                       2011                              Gulf Response           Gulf Response
                                       ----                              -------------           -------------

    Net sales                      $3,488.0            $3,131.5                   $88.2                $3,043.3
    Operating costs
     and expenses:
      Cost of product
       sold                         2,041.2             1,735.0                    27.3                 1,707.7
      Selling,
       administrative,
       and research
        expenses                    1,006.9               924.8                     4.6                   920.2
      Amortization of
       intangible assets               29.5                32.2                       -                    32.2
      Restructuring
       expenses                         4.9                 1.9                       -                     1.9
      Gain on
       divestitures                  (136.0)                  -                       -                       -
      Impairment of
       goodwill                           -                 5.4                       -                     5.4
    Total operating
     costs and
     expenses                       2,946.5             2,699.3                    31.9                 2,667.4
                                    -------             -------                    ----                 -------

    Operating earnings                541.5               432.2                    56.3                   375.9

    Other income
     (expense), net                   (11.8)              (20.3)                      -                   (20.3)
    Interest income                     1.1                 3.7                       -                     3.7
    Interest expense                 (142.9)             (176.2)                      -                  (176.2)
                                     ------              ------                     ---                  ------

    Earnings before
     income taxes                     387.9               239.4                    56.3                   183.1

    Income tax
     provision                        129.5                95.5                    21.1                    74.4
                                      -----                ----                    ----                    ----

    Net earnings                      258.4               143.9                    35.2                   108.7

    Less: Net earnings
     attributable to
      noncontrolling
       interests                        5.9                 3.1                       -                     3.1
                                        ---                 ---                     ---                     ---

    Net earnings
     attributable to
      Nalco Holding
       Company                       $252.5              $140.8                   $35.2                  $105.6
                                     ======              ======                   =====                  ======

    Net earnings per
     share
      attributable to
       Nalco Holding
       Company
      common
       shareholders:
        Basic                         $1.82               $1.02                   $0.25                   $0.76
                                      =====               =====                   =====                   =====
        Diluted                       $1.80               $1.01                   $0.25                   $0.76
                                      =====               =====                   =====                   =====
    Weighted-average
     shares
     outstanding
      (millions):
        Basic                         138.8               138.3                   138.3                   138.3
                                      =====               =====                   =====                   =====
        Diluted                       140.1               139.3                   139.3                   139.3
                                      =====               =====                   =====                   =====
    Cash dividends
     declared per
     share                           $0.105              $0.105
                                     ======              ======

    ATTACHMENT 2B


                                Nalco Holding Company and Subsidiaries
                     Condensed Consolidated Statements of Cash Flows (Unaudited)
                                        (dollars in millions)

                                                               Nine Months        Nine Months
                                                                       ended              ended
                                                              September 30,      September 30,
                                                                       2011               2010
                                                              --------------     --------------
    Operating activities
    Net earnings                                                    $258.4             $143.9
    Adjustments to reconcile net
     earnings
      to net cash provided by
       operating activities:
        Depreciation                                                 100.2               92.0
        Amortization                                                  29.5               32.2
        Gain on divestitures                                        (136.0)                 -
        Impairment of goodwill                                           -                5.4
        Amortization of deferred
         financing costs                                               8.8                9.1
        Loss on early extinguishment
         of debt                                                       2.8                  -
        Other, net                                                    25.4               48.6
        Changes in operating assets
         and liabilities                                            (221.4)            (115.5)
    Net cash provided by
     operating activities                                             67.7              215.7
                                                                      ----              -----

    Investing activities
    Additions to property, plant,
     and equipment, net                                             (125.6)            (101.4)
    Business purchases                                                (7.3)             (33.6)
    Net proceeds from business
     divestitures                                                    198.4                  -
    Other, net                                                         6.9                1.6
    Net cash provided by (used
     for) investing activities                                        72.4             (133.4)
                                                                      ----             ------

    Financing activities
    Cash dividends                                                   (14.6)             (14.5)
    Changes in short-term debt,
     net                                                                 -             (128.9)
    Proceeds from long-term debt                                      90.0              125.9
    Repayments of long-term debt                                    (208.7)              (0.1)
    Redemption premium on early
     extinguishment of debt                                           (3.0)                 -
    Deferred financing costs                                          (1.2)              (1.2)
    Other, net                                                       (10.2)              (4.1)
                                                                     -----               ----
    Net cash used for financing
     activities                                                     (147.7)             (22.9)
    Effect of exchange rate
     changes on cash and cash
     equivalents                                                       0.3              (12.0)
                                                                       ---              -----
    (Decrease) increase in cash
     and cash equivalents                                             (7.3)              47.4
    Cash and cash equivalents at
     beginning of period                                             128.1              127.6
                                                                     -----              -----
    Cash and cash equivalents
     at end of period                                               $120.8             $175.0
                                                                    ======             ======

    ATTACHMENT 3


                                              Nalco Holding Company and Subsidiaries
                                              Adjusted Operating Earnings (Unaudited)
                                                       (dollars in millions)

                                        Three Months               Three Months           Nine Months        Nine Months
                                                ended                      ended                  ended              ended
                                       September 30,              September 30,          September 30,      September 30,
                                                2011                       2010                   2011               2010
                                       --------------             --------------         --------------     --------------

      Operating
       earnings                              $174.3                     $154.1                 $541.5             $432.2
      Restructuring
       expenses                                (7.1)   (1)                (0.3)                   4.9   (1)          1.9
      Gain on
       divestitures                               -                          -                 (136.0)                 -
      Merger-
       related
       costs                                    4.6                          -                    4.6                  -
      Impairment of
       goodwill                                   -                        5.4                      -                5.4
                                                ---                        ---                    ---                ---
      Adjusted
       operating
       earnings                              $171.8                     $159.2    (2)          $415.0             $439.5   (2)
                                             ======                     ======                 ======             ======

    (1)  Includes $8.1 gain on sale of two manufacturing facilities.

    (2)  Excluding operating earnings contributed by sales of dispersant products used
     for the Gulf of Mexico emergency response,
      adjusted operating earnings would have been $146.4 and $383.2 for the three months
       and nine months ended September 30, 2010,
      respectively.

    ATTACHMENT 4


                                                       Nalco Holding Company and Subsidiaries
                                                                 EBITDA (Unaudited)
                                                               (dollars in millions)

                                   Three Months ended            Three Months ended            Nine Months ended         Nine Months ended
                                   September 30, 2011            September 30, 2010            September 30, 2011        September 30, 2010
                                   ------------------            ------------------            ------------------        ------------------

    Net earnings
     attributable
     to Nalco
      Holding
       Company                                  $76.7                         $58.9                        $252.5                    $140.8
    Income tax
     provision                                   42.3                          32.1                         129.5                      95.5
    Interest
     expense,
     net of
     interest
     income                                      47.3                  58.3                 141.8                 172.5
    Depreciation                                 33.9                          30.9                         100.2                      92.0
    Amortization                                  9.9                          10.8                          29.5                      32.2
                                                  ---                          ----                          ----                      ----
    EBITDA                                      210.1                         191.0                         653.5                     533.0
     Restructuring
     expenses                                    (7.1)   (1)                   (0.3)                          4.9    (1)                1.9
    Gain on
     divestitures                                   -                             -                        (136.0)                        -
    Merger-
     related
     costs                                        4.6                             -                           4.6                         -
    Impairment
     of goodwill                                    -                           5.4                             -                       5.4
    Loss on
     early
     extinguishment
     of debt                                        -                             -                           2.8                         -
    Foreign
     exchange
     loss from
     devaluation
     of
      Venezuelan
       bolivar
       fuerte                                       -                             -                             -                      18.4
                                                  ---                           ---                           ---                      ----
    Adjusted
     EBITDA                                    $207.6                        $196.1    (2)                 $529.8                    $558.7 (2)

    (1)  Includes $8.1 gain on sale of two manufacturing facilities.

    (2)  Excluding EBITDA contributed by sales of dispersant products used for the Gulf of Mexico emergency
     response,
      Adjusted EBITDA would have been $183.3 and $502.4 for the three months and nine months ended September
       30, 2010,
      respectively.

    ATTACHMENT 5


                                                           Nalco Holding Company and Subsidiaries
                                                              Segment Information (Unaudited)
                                                                   (dollars in millions)

    Net sales by reportable segment were as follows:

                                   Three Months ended            Three Months ended             Nine Months ended        Nine Months ended
                                   September 30, 2011            September 30, 2010            September 30, 2011       September 30, 2010
                                   ------------------            ------------------            ------------------       ------------------

    Water
     Services                                   $521.4                        $465.3                      $1,452.8                 $1,308.6
    Paper
     Services                                    219.4                         194.4                         628.0                    554.0
    Energy
     Services                                    510.2                         428.6  (1)                  1,407.2                  1,268.9  (1)
                                                 -----                         -----                       -------                  -------
    Net sales                                 $1,251.0                      $1,088.3                      $3,488.0                 $3,131.5
                                              ========                      ========                      ========                 ========

    The following table presents direct contribution by reportable segment and reconciles the total segment
    direct contribution to earnings before income taxes:

                                   Three Months ended            Three Months ended             Nine Months ended        Nine Months ended
                                   September 30, 2011            September 30, 2010            September 30, 2011       September 30, 2010
                                   ------------------            ------------------            ------------------       ------------------

    Segment
     direct
     contribution:
      Water
       Services                                 $101.8                         $88.8                        $251.6                   $244.1
      Paper
       Services                                   35.7                          33.3                          96.5                     91.7
      Energy
       Services                                  102.8                          98.6  (2)                    275.8                    301.4  (2)
                                                 -----                          ----                         -----                    -----
    Total segment
     direct
     contribution                                240.3                         220.7                         623.9                    637.2

    Expenses not
     allocated to
     segments:
       Administrative
       expenses                                   63.2                          50.7                         184.0                    165.5
      Amortization
       of
       intangible
       assets                                      9.9                          10.8                          29.5                     32.2
      Restructuring
       expenses                                   (7.1) (3)                     (0.3)                          4.9  (3)                 1.9
      Gain on
       divestitures                                  -                             -                        (136.0)                       -
      Impairment of
       goodwill                                      -                           5.4                             -                      5.4
                                                   ---                           ---                           ---                      ---
    Operating
     earnings                                    174.3                         154.1                         541.5                    432.2
    Other income
     (expense),
     net                                          (6.0)                         (2.8)                        (11.8)                   (20.3)
    Interest
     income                                        0.1                           0.8                           1.1                      3.7
    Interest
     expense                                     (47.4)                        (59.1)                       (142.9)                  (176.2)
                                                 -----                         -----                        ------                   ------
    Earnings
     before
     income
     taxes                                      $121.0                         $93.0                        $387.9                   $239.4
                                                ======                         =====                        ======                   ======

    (1)  Excluding sales of dispersant products used for the Gulf of Mexico emergency response in the year-ago
     period, Energy Services
      net sales would have been $409.6 and $1,180.7 for the three months and nine months ended September 30, 2010,
       respectively.

    (2)  Excluding sales of dispersant products used for the Gulf of Mexico emergency response in the year-ago
     period, Energy Services
      direct contribution would have been $85.8 and $245.1 for the three months and nine months ended September 30,
       2010,
      respectively.

    (3)  Includes $8.1 gain on sale of two manufacturing facilities.

    ATTACHMENT 6


                                            Nalco Holding Company and Subsidiaries
                                               Regional Performance (Unaudited)
                                                    (dollars in millions)

    The following tables present, by region, net sales for the period, the changes in
    reported and organic net sales from the year-ago period, the Adjusted EBITDA margin
    for the period, and the basis-points (bps) changes in Adjusted EBITDA margin from
     the
    year-ago period:

                                                             Year-Over-
                                                Reported         Year                    Year-Over-
                        Three Months ended        Year-        Organic      Adjusted         Year
                           September 30,       Over-Year       Increase       EBITDA     (Decrease)
                                2011            Increase     (Decrease)       Margin         bps
                           -------------------       ---------       -----------        ---------   -----------
    Region:
      North America                     $605.5             12.8%             11.9% (1)        17.9%         (170) (2)
      Latin America                      133.1             13.9%             11.9%            16.9%           20
      EAME                               296.3             17.0%             14.1%            14.5%         (210)
      Asia                               216.1             19.0%             12.3%            15.8%          (50)
                                         -----
    Total net sales
     by region                        $1,251.0             15.0%             12.5% (1)        16.6%         (140) (2)
                                      ========

    (1)   Excluding sales of dispersant products used for the Gulf of Mexico emergency
     response in the year-ago period,
      North America and total organic sales increased 16.0% and 14.5%, respectively.

    (2)   Excluding impact of sales of dispersant products used for the Gulf of Mexico
     emergency response in the year-ago
      period, North America Adjusted EBITDA margin increased 10 bps and total Adjusted
       EBITDA margin
      decreased 50 bps.
                                                      Reported        Year-Over-                     Year-Over-
                            Nine Months ended           Year-             Year           Adjusted        Year
                              September 30,          Over-Year          Organic            EBITDA    (Decrease)
                                   2011               Increase          Increase           Margin        bps
                           ------------------        ---------       -----------        ---------   -----------
    Region:
      North America                   $1,696.7              8.9%              7.3% (1)        16.0%         (290) (2)
      Latin America                      377.5             16.6%             12.7%            15.3%         (350)
      EAME                               822.7             11.2%              8.7%            13.8%         (240)
      Asia                               591.1             15.8%              9.5%            14.6%         (170)
                                         -----
    Total net sales
     by region                        $3,488.0             11.4%              8.6% (1)        15.2%         (260) (2)
                                      ========

    (1)   Excluding sales of dispersant products used for the Gulf of Mexico emergency
     response in the year-ago period,
    North America and total organic sales increased 13.7% and 11.7%, respectively.

    (2)   Excluding impact of sales of dispersant products used for the Gulf of Mexico
     emergency response in the year-ago
    period, North America and total Adjusted EBITDA margin decreased 20 bps and 130 bps,
     respectively.

    ATTACHMENT 7


                                           Nalco Holding Company and Subsidiaries
                                                 Free Cash Flow (Unaudited)
                                                    (dollars in millions)

                                             Three Months            Three Months        Nine Months    Nine Months
                                                     ended                   ended              ended          ended
                                            September 30,           September 30,         September      September
                                                     2011                    2010              30, 2011       30, 2010
                                            --------------          --------------       ----------     ----------

     Net
     cash
     provided
     by
     operating
     activities                                 $93.2             $111.6           $67.7       $215.7
    Net earnings attributable to noncontrolling
      interests                                     (2.0)                   (2.0)             (5.9)          (3.1)
    Additions to property, plant, and
      equipment, net                               (41.9)                  (43.6)           (125.6)        (101.4)
                                                   -----                   -----            ------         ------
     Free
     cash
     flow                                          $49.3                   $66.0            $(63.8)        $111.2
                                                   =====                   =====            ======         ======

    ATTACHMENT 8


     Nalco Holding Company and Subsidiaries
      Earnings Per Share Data (Unaudited)

                                                                                                       Nine Months ended   Nine Months ended
                                          Three Months ended            Three Months ended               September 30,       September 30,
                                          September 30, 2011            September 30, 2010                    2011                2010
                                           ------------------            ------------------           ------------------  ------------------

    Adjusted earnings
     per share
     attributable
      to Nalco Holding
       Company*                                         $0.53                         $0.46  (1)                   $1.26               $1.18  (2)
    Restructuring
     expenses, net of
     tax                                                 0.04                             -                        (0.02)              (0.01)
    Loss on early
     extinguishment of
     debt,
      net of tax                                            -                             -                        (0.01)                  -
    Gain on
     divestitures, net
     of tax                                                 -                             -                         0.60                   -
    Merger-related
     costs, net of tax                                  (0.02)                            -                        (0.02)                  -
    Impairment of
     goodwill                                               -                         (0.04)                           -               (0.04)
    Foreign exchange
     loss from
     devaluation of
      Venezuelan bolivar
       fuerte, net of tax                                   -                             -                            -               (0.10)
    Deferred tax
     adjustment for
     reduced
      tax deductibility
       of postretirement
      prescription drug
       benefits                                             -                             -                            -               (0.02)
    Diluted net
     earnings per share
     attributable
      to Nalco Holding
       Company, as
       reported                                         $0.55                         $0.42  (1)                   $1.80               $1.01  (2)

    *  Excludes after-tax impact of restructuring expenses, loss on early extinguishment of debt, gain on divestitures,
    merger-related costs, impairment of goodwill, foreign exchange loss from devaluation of Venezuelan bolivar fuerte,
    and deferred tax adjustment for reduced tax deductibility of postretirement prescription drug benefits.

    (1)   Includes 6 cents diluted earnings per share impact attributable to the net earnings contributed by
    the sale of dispersant products used for the Gulf of Mexico emergency response during the three months
    ended September 30, 2010.

    (2)   Includes 25 cents diluted earnings per share impact attributable to the net earnings contributed by
    the sale of dispersant products used for the Gulf of Mexico emergency response during the nine months
    ended September 30, 2010.

    ATTACHMENT 9


                          Nalco Holding Company and Subsidiaries
                      Adjusted Effective Income Tax Rate (Unaudited)
                                   (dollars in millions)

                                                 Three Months ended September 30, 2011
                                                 -------------------------------------
                                                                                        Effective
                                                                                              Income
                                             Earnings before           Income Tax               Tax
                                               Income Taxes             Provision               Rate
                                       ----------------         -----------           ----------

     As
     reported                                    $121.0                $42.3                35.0%
    Less:
       Restructuring
       expenses                                     7.1                  2.1
       Merger-
       related
       costs                                       (4.6)                (1.7)
     As
     adjusted                                    $118.5                $41.9                35.4%
                                                 ======                =====

                                               Nine Months ended September 30, 2011
                                               ------------------------------------
                                                                                      Effective
                                                                                           Income
                                          Earnings before           Income Tax               Tax
                                            Income Taxes             Provision               Rate
                                       ----------------         -----------           ----------

     As
     reported                                    $387.9               $129.5                33.4%
    Less:
       Restructuring
       expenses                                    (4.9)                (1.6)
       Merger-
       related
       costs                                       (4.6)                (1.7)
      Loss
       on
       early
       extinguishment
       of
       debt                                        (2.8)           (1.1)
      Gain
       on
       divestitures                               136.0                 52.5
                                                  -----                 ----
     As
     adjusted                                    $264.2                $81.4                30.8%
                                                 ======                =====

    ATTACHMENT 10

SOURCE Nalco Company


Source: PR Newswire