ECOLAB INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
ECL$300.68-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001558370-24-006535
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001558370-24-010647
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 147 current paragraphs.
78 unchanged; 48 reworded; 20 added; 7 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 45 previous and 46 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
During the second quarter of 2024 and 2023, we recorded total Combined Program restructuring charges of $2.3 million ($1.4 million after tax) or $0.01 per diluted share and $19.7 million ($16.2 million after tax) or $0.06 per diluted share, respectively, and during the first six months of 2024 and 2023, recorded $22.0 million ($17.2 million after tax) or $0.06 per diluted share and $33.1 million ($26.4 million after tax) or $0.09 per diluted share, respectively, primarily related to severance. We recorded $180.9 million ($150.1 million after tax), or $0.52 per diluted share of cumulative charges under the Combined Plan.
Current report
We reclassified $5.3 million ($4.0 million after tax) or $0.01 per diluted share from the combined restructuring program to other restructuring in the second quarter of 2024.
Current report
Other Restructuring Activities
Current report
During 2024, we incurred restructuring charges of $10.6 million ($8.0 million after tax) or $0.03 per diluted share related to an immaterial restructuring plan approved in the second quarter.
Current report
The restructuring liability balance for all other restructuring plans excluding the Combined Program was $9.0 million as of the end of the second quarter.
Current report
One Ecolab
Current report
On July 30, 2024, we announced the One Ecolab initiative, which will enhance our growth and margin expansion journey. As a program within this initiative, we also announced that we commenced a restructuring plan to leverage our digital technologies to realign the functional work done in many countries into global centers of excellence. We anticipate restructuring costs of $175 million ($136 million after tax) and special charges of $50 million ($39 million after tax) by the end of 2027. We anticipate that the restructuring costs will primarily be cash expenditures for severance costs relating to team reorganization.
Current report
We expect total program savings of approximately $140 million by 2027. Actual costs may vary from these estimates depending on actions taken.
Current report
Sale of global surgical solutions business
Current report
On April 27, 2024, we reached a definitive agreement to sell our global surgical solutions business. We recorded charges of $7.3 million ($3.1 million gain after tax) or ($0.01) per diluted share and $13.3 million ($1.4 million after tax) or $0.01 per diluted share in the second quarter and first six months of 2024, respectively, which are primarily related to professional fees to support the sale. The tax benefit is driven by a reduction to our valuation allowance on capital loss carryforwards.
Current report
Other special charges recorded in special (gains) and charges on the Consolidated Statements of Income in the second quarter of 2024 and 2023 were ($4.3 million) ($3.1 million gain after tax) or ($0.01) per diluted share and $3.8 million ($2.8 million after tax) or $0.01 per diluted share, respectively, and in the first six months of 2024 and 2023 were ($2.7 million) ($2.2 million gain after tax) or ($0.01) per diluted share and $10.7 million ($8.2 million after tax) or $0.03 per diluted share, respectively, primarily related to recoveries of COVID era credits, professional fees and certain legal charges.
Current report
Reported net interest expense was stable at $78.8 million and $77.8 million in the second quarter of 2024 and 2023, respectively, and $150.4 million and $152.0 million in the first six months of 2024 and 2023, respectively.
Current report
Organic operating income margins increased 2.2 percentage points during the second quarter of 2024 as the 4.8 percentage point positive impact of lower delivered product costs and strong pricing overcame the 2.3 percentage point impact of investments in the business. Organic operating income margins increased 2.3 percentage points during the first six months of 2024 as the 3.9 percentage point positive impact of lower delivered product costs overcame the 2.1 percentage point impact of investments in the business.
Current report
Organic operating income margins increased 6.7 percentage points during the second quarter of 2024, as the 8.3 percentage point positive impact from lower supply chain costs, strong pricing and higher volumes overcame the 1.9 percentage point impact from investments in the business. Organic operating income margins increased 7.4 percentage points during the first six months of 2024, as the 9.5 percentage point positive impact from lower supply chain costs, strong pricing and higher volumes overcame the 1.5 percentage point impact from investments in the business.
Current report
Organic operating income margins increased 0.1 percentage points during the second quarter of 2024, as the 2.8 percentage point positive impact from strong pricing overcame the 2.8 percentage point impacts from targeted investments in the business. Organic operating income margins increased 0.3 percentage points during the first six months of 2024, as the 2.9 percentage point positive impact from strong pricing overcame the 2.4 percentage point impacts from targeted investments in the business.
Current report
Organic operating income margins increased 1.9 percentage points during the second quarter of 2024, as the 4.9 percentage point positive impact from strong pricing and higher volumes overcame the 3.9 percentage point impactof investments in the business. Organic operating income margins increased 1.1 percentage points during the first six months of 2024, as the 4.5 percentage point positive impact from strong pricing and higher volumes overcame the 4.0 percentage point impact of investments in the business.
Current report
Total cash paid for acquisitions, net of cash acquired along with net cash received from dispositions, during the first six months of 2024 and 2023, was $39 million and $105 million, respectively. Our acquisitions are discussed further in Note 4. We continue to target strategic business acquisitions which complement our growth strategy and expect to continue to make capital investments and acquisitions in the future to support our long-term growth.
Current report
Subsequent to the second quarter of 2024, we formally commenced a restructuring plan to leverage our investments in technology and emerging AI tools to transform the way we work and deliver scalable operations through our global centers of excellence.
Current report
In July 2024, we entered into cross-currency swap derivative contracts with notional amounts of €200 million, €100 million and €100 million maturing in 2028, 2028 and 2026, respectively. These cross-currency swap derivative contracts are designated as net investment hedges of our Euro denominated exposures from our investments in certain of its Euro denominated functional currency subsidiaries.
Current report
On August 1, 2024, we completed the sale of our global surgical solutions business pursuant to the definitive agreement dated April 27, 2024.
Removed paragraphs (7)
Previous report
Other special charges recorded in special (gains) and charges on the Consolidated Statements of Income in the first quarter of 2024 and 2023 were $7.6 million ($5.4 million after tax) or $0.02 per diluted share and $6.9 million ($5.4 million after tax) or $0.02 per diluted share, respectively.
Previous report
Reported net interest expense was $71.6 million and $74.2 million in the first quarter of 2024 and 2023, respectively. The decrease in interest expense reflected the favorable impact from lower outstanding debt and higher interest income earned on cash balances partially offset by higher interest rates on floating rate debt.
Previous report
Organic operating income margins increased 2.4 percentage points during the first quarter of 2024 as the 4.0 percentage point positive impact of lower delivered product costs was partially offset by the 1.9 percentage point impact of investments in the business.
Previous report
Organic operating income margins increased 8.2 percentage points during the first quarter of 2024, as the 8.8 percentage point positive impact from strong pricing, higher volumes, and lower delivered product costs were partially offset by the 1.1 percentage point impact from investments in the business.
Previous report
Organic operating income margins increased 0.5 percentage points during the first quarter of 2024, as the 6.7 percentage point positive impact from strong pricing and lower supply chain costs were partially offset by the 5.6 percentage point impacts from continued targeted investments in the business and lower volume.
Previous report
Organic operating income margins increased 0.1 percentage points during the first quarter of 2024, as the 4.3 percentage point positive impact from strong pricing and higher volumes were partially offset by the 4.2 percentage point impactof investments in the business.
Previous report
On April 27, 2024, we reached a definitive agreement to sell our global surgical solutions business for total consideration of $950 million in cash, subject to certain working capital and other purchase price adjustments. The sale is expected to close in the second half of 2024, subject to regulatory clearances and other customary closing conditions. We expect to record an associated pre-tax gain within special (gains) and charges in the Consolidated Statements of Income.
Reworded paragraphs (48)
Previous wording
OVERVIEW OF THE FIRST QUARTER ENDED MARCH 31, 2024
Current wording
OVERVIEW OF THE SECOND QUARTER ENDED JUNE 30, 2024
Previous wording
When comparing first quarter 2024 against first quarter 2023, sales performance was as follows:
Current wording
When comparing second quarter 2024 against second quarter 2023, sales performance was as follows:
Previous wording
When comparing first quarter 2024 against first quarter 2023, our financial performance was as follows:
Current wording
When comparing second quarter 2024 against second quarter 2023, our financial performance was as follows:
Previous wording
Our reported gross margin was 43.3% and 38.3% for the first quarter of 2024 and 2023, respectively. Special (gains) and charges included in items impacting cost of sales are shown within the “Special (Gains) and Charges” table below.
Current wording
Our reported gross margin was 43.8% and 39.4% for the second quarter of 2024 and 2023, respectively. Our reported gross margin was 43.5% and 38.8% for the first six months of 2024 and 2023, respectively. Special (gains) and charges included in items impacting cost of sales are shown within the “Special (Gains) and Charges” table below.
Previous wording
Excluding the impact of special (gains) and charges within COS, first quarter 2024 and 2023 adjusted gross margin was 43.3% and 38.3%, respectively.
Current wording
Excluding the impact of special (gains) and charges within COS, second quarter 2024 and 2023 adjusted gross margin was 43.8% and 39.6%, respectively, and for the first six months of 2024 and 2023 was 43.6% and 39.0%, respectively.
Previous wording
Our adjusted gross margin increased when comparing the first quarter of 2024 against the first quarter of 2023 reflecting lower delivered product costs and strong pricing.
Current wording
Our adjusted gross margin increased when comparing the second quarter of 2024 against the second quarter of 2023 reflecting lower supply chain costs and strong pricing.
Previous wording
Selling, general and administrative (“SG&A”) expenses as a percentage of sales were 28.7% for the first quarter of 2024 compared to 27.7% for the first quarter of 2023. The SG&A ratio to sales in the first quarter of 2024 increased as sales productivity was offset by growth-oriented investments in the business.
Current wording
Selling, general and administrative (“SG&A”) expenses as a percentage of sales were 27.0% and 27.8% for the second quarter and first six months of 2024, respectively, compared to 26.3% and 27.0% for the second quarter and first six months of 2023, respectively. The SG&A ratio to sales in the second quarter of 2024 increased as sales productivity was offset by growth-oriented investments in the business.
Previous wording
In November 2022, we approved a Europe cost savings program. In February 2023, we expanded our previously announced Europe cost savings program to focus on its Institutional and Healthcare businesses in other regions. In connection with the expanded program (“Combined Program”), we expect to incur total pre-tax charges of $195 million ($150 million after tax) or $0.52 per diluted share. We expect that these restructuring charges will be substantially completed by the end of 2024. Program actions include headcount reductions from terminations, not filling certain open positions, and facility closures. The Combined Program charges are expected to be primarily cash expenditures related to severance and asset disposals.
Current wording
In November 2022, we approved a Europe cost savings program. In February 2023, we expanded our previously announced Europe cost savings program to focus on its Institutional and Healthcare businesses in other regions. In connection with the expanded program (“the Combined Program”), we expect to incur total pre-tax charges of $195 million ($150 million after tax) or $0.52 per diluted share. We expect that these restructuring charges will be substantially completed by the end of 2024. Program actions include headcount reductions from terminations, not filling certain open positions, and facility closures. The Combined Program charges are expected to be primarily cash expenditures related to severance and asset disposals.
Previous wording
During the first quarter of 2024 and 2023, we recorded total Combined Program restructuring charges of $19.7 million ($15.8 million after tax) or $0.05 per diluted share, and $13.4 million ($10.2 million after tax) or $0.04 per diluted share, respectively, primarily related to severance. The net liability related to the Combined Program was $44.1 million and $43.1 million as of March 31, 2024 and December 31, 2023, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities.
Current wording
The net liability related to the Combined Program was $32.2 million and $43.1 million as of June 30, 2024 and December 31, 2023, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities.
Previous wording
The Combined Program has delivered $137 million of cumulative cost savings with estimated annualized cost savings of $175 million in continuing operations by 2024.
Current wording
The Combined Program has delivered $159 million of cumulative cost savings with estimated annualized cost savings of $175 million in continuing operations by 2024.
Previous wording
Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income include $2.5 million ($1.9 million after tax)or $0.01 per diluted share and $5.0 million ($3.7 million after tax) or $0.01 per diluted share in the first quarter of 2024 and 2023, respectively.
Current wording
Acquisition and integration related costs reported in special (gains) and charges on the Consolidated Statements of Income include $2.3 million ($1.7 million after tax)or less than $0.01 per diluted share and $3.5 million ($2.7 million after tax) or $0.01 per diluted share in the second quarter of 2024 and 2023, respectively, and $4.8 million ($3.6 million after tax) or $0.01 per diluted share and $8.5 million ($6.4 million after tax) or $0.02 per diluted share in the first six months of 2024 and 2023, respectively.
Previous wording
Our reported operating income increased 47% in the first quarter of 2024 versus the comparable period of 2023. Our reported operating income for 2024 and 2023 was impacted by special (gains) and charges; excluding the impact of special (gains) and charges from 2024 and 2023 reported results, our adjusted operating income increased 44% in the first quarter of 2024.
Current wording
Our reported operating income increased 36% and 40% in the second quarter and first six months of 2024, respectively, versus the comparable periods of 2023. Our reported operating income for 2024 and 2023 was impacted by special (gains) and charges; excluding the impact of special (gains) and charges from 2024 and 2023 reported results, our adjusted operating income increased 30% and 36% in the second quarter and first six months of 2024, respectively.
Previous wording
As shown in the previous table, foreign currency had a zero percentage point impact on adjusted operating income growth for the first quarter of 2024. Foreign currency had a 5 percentage point impact on adjusted operating income growth for the first quarter of 2023.
Current wording
As shown in the previous table, foreign currency had a 2 and 1 percentage point impact on adjusted operating income growth for the second quarter and first six months of 2024, respectively. Foreign currency had a 2 and 3 percentage point impact on adjusted operating income growth for the second quarter and first six months of 2023, respectively.
Previous wording
Reported other (income) expense decreased to ($12.6) million from ($13.1) million in the first quarter of 2024 compared to the first quarter of 2023, respectively, driven by higher pension costs.
Current wording
Reported other (income) expense decreased to ($12.6) million from ($14.4) million in the second quarter of 2024 compared to the second quarter of 2023, respectively, and decreased to ($25.2) million from ($27.5) million in the first six months of 2024 compared to the first six months of 2023, respectively, driven by higher pension costs.
Previous wording
Our reported tax rate was 9.2% and 18.0% for the first quarter of 2024 and 2023, respectively. The change in our tax rate for the first quarter of 2024 versus the comparable period of 2023 was driven primarily by discrete tax items and special (gains) and charges. The change in our tax rate includes the tax impact of special (gains) and charges and discrete tax items, which have impacted the comparability of our historical reported tax rates, as amounts included in our special (gains) and charges are derived from tax jurisdictions with rates that vary from our tax rate, and discrete tax items are not necessarily consistent across periods. The tax impact of special (gains) and charges and discrete tax items will likely continue to impact comparability of our reported tax rate in the future.
Current wording
Our reported tax rate was 16.2% and 20.6% for the second quarter of 2024 and 2023, respectively, and 13.1% and 19.5% for the first six months of 2024 and 2023, respectively. The change in our tax rate for the second quarter and first six months of 2024 versus the comparable periods of 2023 was driven primarily by discrete tax items and special (gains) and charges. The change in our tax rate includes the tax impact of special (gains) and charges and discrete tax items, which have impacted the comparability of our historical reported tax rates, as amounts included in our special (gains) and charges are derived from tax jurisdictions with rates that vary from our tax rate, and discrete tax items are not necessarily consistent across periods. The tax impact of special (gains) and charges and discrete tax items will likely continue to impact comparability of our reported tax rate in the future.
Previous wording
We recognized net tax benefits related to discrete tax items of $48.2 million in the first quarter of 2024. This included a tax benefit of $41.9 million associated with transferring certain intangible property between affiliates and $8.6 million associated with share-based compensation excess tax benefits. The remaining net expense of $2.3 million is from other income tax adjustments including the impact of changes in tax laws, audit settlements, and other changes in estimates.
Current wording
We recognized net tax benefits related to discrete tax items of $10.3 million and $58.5 million in the second quarter and first six months of 2024, respectively. This included a tax benefit of $41.9 million in the first six months of 2024, associated with transferring certain intangible property between affiliates and $3.7 million and $12.3 million in the second quarter and first six months of 2024, respectively, associated with share-based compensation excess tax benefits. The remaining net benefit of $6.6 million and $4.3 million in the second quarter and first six months of 2024, respectively, is from other income tax adjustments including the impact of changes in tax laws, audit settlements, unrecognized tax benefits and other changes in estimates.
Previous wording
We recognized net tax benefits related to discrete tax items of $4.0 million in the first quarter of 2023 primarily due to changes in uncertain tax positions, prior year return adjustments, repricing of deferred tax balances, and other changes in estimates.
Current wording
We recognized net tax expense related to discrete tax items of $2.8 million and a net tax benefit of $1.2 million in the second quarter and first six months of 2023, respectively. This included share-based compensation excess tax benefits of $1.8 million and $1.9 million in the second quarter and first six months of 2023, respectively. Additionally, we recognized net tax expense related to discrete tax items of $4.6 million and $0.7 million in the second quarter and first six months of 2023, respectively, primarily due to audit settlements, uncertain tax positions, prior year return adjustments, repricing of deferred tax balances, and other changes in estimates.
Previous wording
Currency translation had an unfavorable impact of approximately ($0.01) per share on diluted EPS for the first quarter of 2024 when compared to the comparable period of 2023.
Current wording
Currency translation had an unfavorable impact of approximately ($0.04) and ($0.05) per share on diluted EPS for the second quarter and first six months of 2024, respectively, when compared to the comparable period of 2023.
Previous wording
Fixed currency net sales and operating income for the first quarter of 2024 for our reportable segments are shown in the following tables:
Current wording
Fixed currency net sales and operating income for the second quarter and first six months of 2024 for our reportable segments are shown in the following tables:
Previous wording
Unless otherwise noted, the following segment performance commentary compares the first quarter of 2024 against the first quarter of 2023.
Current wording
Unless otherwise noted, the following segment performance commentary compares the second quarter and first six months of 2024 against the second quarter and first six months of 2023.
Previous wording
Organic sales for Global Industrial increased in the first quarter of 2024 as growth in Food & Beverage and Water more than offset the expected short-term decline in Paper sales.
Current wording
Organic sales for Global Industrial increased in the second quarter and first six months of 2024 driven by accelerating Water sales growth.
Previous wording
Water organic sales increased 2%in the first quarter of 2024 driven by sales growth in Downstream, Light and Heavy that overcame lower Mining sales. Light industry reported sales growth driven by continued strong performance in high-tech and growth in food & beverage and institutional segments. Heavy industry recorded sales growth in chemicals, primary metals, and power. Downstream industry reported sales growth driven by water treatment.** **Food & Beverage organic sales increased 3% in the first quarter 2024, driven sales growth in dairy, food, and beverage & brewery. Paper organic sales decreased 5% in the first quarter of 2024, reflecting new business wins that were more than offset by lower customer production rates.
Current wording
Water organic sales increased 4% and 3%in the second quarter and first six months of 2024, respectively, driven by strong growth in downstream and light water. Light water reported sales growth driven by strong high-tech (data centers and microelectronics) growth and good growth in the food & beverage, transportation, and institutional markets. Heavy industry recorded sales were stable as good growth in primary metals was offset by modestly lower power sales. Downstream industry reported sales growth reflecting good performance across all segments.** **Food & Beverage organic sales increased 0% and 1% in the second quarter and first six months of 2024, respectively, as good new business was offset by soft industry demand. Paper organic sales decreased 1% and 3% in the second quarter and first six months of 2024, respectively, reflecting new business wins that were offset by soft but stabilizing customer production rates.
Previous wording
Organic operating income and organic operating income margins increased for Global Industrial in the first quarter of 2024.
Current wording
Organic operating income and organic operating income margins both increased for Global Industrial in the second quarter and first six months of 2024, respectively.
Previous wording
Organic sales for Global Institutional & Specialty increased in the first quarter of 2024 with double-digit growth in both the Institutional and Specialty divisions.
Current wording
Organic sales for Global Institutional & Specialty increased in the second quarter and first six months of 2024, with strong growth in both the Institutional and Specialty divisions.
Previous wording
At an operating segment level, Institutional organic sales increased 11% in the first quarter of 2024, reflecting sales growth across foodservice, lodging and long term care. Specialty organic sales increased 10% in the first quarter of 2024, reflecting sales growth driven by quick service and food retail.
Current wording
At an operating segment level, Institutional organic sales increased 7% and 9% in the second quarter and first six months of 2024, respectively, reflecting sales growth across foodservice, lodging and long term care. Specialty organic sales increased 6% and 8% in the second quarter and first six months of 2024, respectively, reflecting sales growth driven by quick service and food retail.
Previous wording
Organic operating income and organic operating income margin increased in the first quarter of 2024 for our Global Institutional & Specialty segment.
Current wording
Organic operating income and organic operating income margin both increased in the second quarter and first six months of 2024 for our Global Institutional & Specialty segment.
Previous wording
Organic sales for Global Healthcare & Life Sciences decreased in the first quarter of 2024 as lower Healthcare sales was offset by growth in Life Sciences.
Current wording
Organic sales for Global Healthcare & Life Sciences was stable the second quarter and first six months of 2024 as growth in Life Sciences was offset by modestly lower Healthcare sales.
Previous wording
At an operating segment level, Healthcare organic sales decreased 2% in the first quarter of 2024, reflecting strategic low margin business exits. Life Sciences organic sales increased 1% in the first quarter of 2024 reflected improved underlying business momentum that offset soft near-term industry demand.
Current wording
At an operating segment level, Healthcare organic sales decreased 3% in both the second quarter and first six months of 2024 reflecting strategic low margin business exits. Life Sciences organic sales increased 4% and 3% in the second quarter and first six months of 2024, respectively, reflecting improved underlying business momentum that offset soft near-term industry demand.
Previous wording
Organic operating income and organic operating income margins both increased in the first quarter of 2024 for our Global Healthcare & Life Sciences segment.
Current wording
Organic operating income and organic operating income margins both increased in the second quarter and first six months of 2024 for both our Global Healthcare & Life Sciences segment.
Previous wording
Organic sales for Global Pest Elimination increased 9% in the first quarter of 2024 driven by growth in food & beverage, restaurants, and food retail.
Current wording
Organic sales for Global Pest Elimination increased in the second quarter and first six months of 2024 driven by growth in food & beverage, restaurants, and food retail.
Previous wording
Organic operating income and organic operating income margins increased for Global Pest Elimination in the first quarter of 2024.
Current wording
Organic operating income and organic operating income margins increased for Global Pest Elimination in both the second quarter and first six months of 2024.
Previous wording
Total assets were $21.3 billion as of March 31, 2024, compared to total assets of $21.8 billion as of December 31, 2023.
Current wording
Total assets were $21.5 billion as of June 30, 2024, compared to total assets of $21.8 billion as of December 31, 2023.
Previous wording
Total liabilities were $13.1 billion as of March 31, 2024, compared to total liabilities of $13.8 billion as of December 31, 2023. Total debt was $7.5 billion as of March 31, 2024 and $8.2 billion as of December 31, 2023. See further discussion of our debt activity within the “Liquidity and Capital Resources” section of this MD&A.
Current wording
Total liabilities were $13.2 billion as of June 30, 2024, compared to total liabilities of $13.8 billion as of December 31, 2023. Total debt was $7.5 billion as of June 30, 2024 and $8.2 billion as of December 31, 2023. See further discussion of our debt activity within the “Liquidity and Capital Resources” section of this MD&A.
Previous wording
We continue to generate cash flow from operations, allowing us to fund our ongoing operations, acquisitions, investments in the business and pension obligations along with returning cash to our shareholders through dividend payments and share repurchases. Cash provided by operating activities increased $451 million in the first quarter of 2024 compared to the first quarter of 2023, driven primarily by a $223 million net favorable change in working capital and $179 million increase in net income. The cash flow impact from working capital was primarily driven by improvement in accounts payable, partially offset by an increase in inventory.
Current wording
We continue to generate cash flow from operations, allowing us to fund our ongoing operations, acquisitions, investments in the business and pension obligations along with returning cash to our shareholders through dividend payments and share repurchases. Cash provided by operating activities increased $489 million in the first six months of 2024 compared to the first six months of 2023, driven primarily by a $174 million net favorable change in working capital and $339 million increase in net income. The cash flow impact from working capital was primarily driven by improvement in accounts payable, partially offset by a seasonal increase in inventory.
Previous wording
We continue to make capital investments in the business, including merchandising equipment, manufacturing equipment and facilities. Total capital expenditures were $202 million and $174 million in the first quarter of 2024 and 2023, respectively.
Current wording
We continue to make capital investments in the business, including merchandising equipment, manufacturing equipment and facilities. Total capital expenditures were $398 million and $346 million in the first six months of 2024 and 2023, respectively.
Previous wording
We had net issuances of commercial paper and notes payable of $7 million and $6 million in the first quarter of 2024 and 2023, respectively.
Current wording
We had net issuances of commercial paper and notes payable of $2 million in both the first six months of 2024 and 2023.
Previous wording
Shares are repurchased for the purpose of partially offsetting the dilutive effect of our equity compensation plans, to manage our capital structure and to efficiently return capital to shareholders. We reacquired a total of $196 million and $11 million of shares in the first quarter of 2024 and 2023, respectively. Cash proceeds and tax benefits from stock option exercises provide a portion of the funding for repurchase activity.
Current wording
Shares are repurchased for the purpose of partially offsetting the dilutive effect of our equity compensation plans, to manage our capital structure and to efficiently return capital to shareholders. We reacquired a total of $519 million and $11 million of shares in the first six months of 2024 and 2023, respectively. Cash proceeds and tax benefits from stock option exercises provide a portion of the funding for repurchase activity.
Previous wording
There was no long-term debt issuance activity through the first quarter of 2024 or 2023. We repaid $630 million of long-term debt in the first quarter of 2024.
Current wording
There was no long-term debt issuance activity through the first six months of 2024 or 2023. We repaid $630 million of long-term debt in the first six months of 2024.
Previous wording
We paid dividends of $175 million and $158 million in the first three months of 2024 and 2023, respectively.
Current wording
We paid dividends of $341 million and $309 million in the first six months of 2024 and 2023, respectively.
Previous wording
As of March 31, 2024, we had $480 million of cash and cash equivalents on hand, of which $195 million was held outside of the U.S. We will continue to evaluate our cash position in light of future developments.
Current wording
As of June 30, 2024, we had $384 million of cash and cash equivalents on hand, of which $241 million was held outside of the U.S. We will continue to evaluate our cash position in light of future developments.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
standards, and to the manufacture, storage, distribution, sale and use of our products, as well as to the conduct of our business generally, including labor and employment and anti-corruption; potential chemical spill or release; our commitments, goals, targets, objectives and initiatives related to sustainability; potential to incur significant tax liabilities or indemnification liabilities relating to the separation and split-off of our ChampionX business; the occurrence of litigation or claims, including class action lawsuits; the loss or insolvency of a major customer or distributor; repeated or prolonged government and/or business shutdowns or similar events; acts of war or terrorism; natural or man-made disasters; water shortages; severe weather conditions; changes in tax laws and unanticipated tax liabilities; potential loss of deferred tax assets; our indebtedness, and any failure to comply with covenants that apply to our indebtedness; potential losses arising from the impairment of goodwill or other assets; and other uncertainties or risks reported from time to time in our reports to the SEC. There can be no assurances that our earnings levels will meet investors’ expectations. Except as may be required under applicable law, we do not undertake, and expressly disclaim, any duty to update our Forward-Looking Statements.