Ecolab, Inc. (NYSE:ECL) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Nalco Cost Synergies
David Begleiter – Deutsche Bank: Doug, you mentioned some upside on Nalco’s synergies, both cost and growth. Can you quantify when you might be able to raise actually the cost synergies going forward from the $150 million level?
Douglas M. Baker, Jr. – Chairman, President and CEO: Yeah, well, Dave we actually had announcement in the month where we’ve raised it up to $250 million on a going basis. So, this year it went from roughly 35 to 75 anticipated synergies and I guess what I was alluding to in the opening comments is, as we continue to push and look for this, there are going to be additional cost savings opportunities and it’s going to start becoming difficult to things which explain cost savings and synergies as we go forward. But the point is, there are additional opportunities in our business should we need to get after them.
David Begleiter – Deutsche Bank: Just on your pain margins in 2011-12. Can you comment on where they ended 2011 and obviously 2011 and our ability flattish in Q1, but the target for 2012 European margins for Ecolab?
Douglas M. Baker, Jr. – Chairman, President and CEO: Yeah. We were up for the year in 2011 versus 2010 sort of north of 60 basis points, I think it was 65 basis points. Now, I will tell you that were shy of the 100 basis point target that we gave at the beginning of 2011. And fundamentally, what happened was the (Renaissance) work which was the code name that we have for the restructure activity more than delivered against its plan, but it was offset by significantly higher raw materials. We anticipate the pricing will catch raws in the second half in Europe, and we expect that we will see the 200 basis point increase in 2012 versus 2011 that we talked about last year.
Gary Bisbee – Barclays Capital: Can you give us any commentary on just timing of the cost savings within the year? Would it be more prudent to expect that that much more than half of that falls in the second half of the year or any comments on that?
Douglas M. Baker, Jr. – Chairman, President and CEO: Yeah, Gary, I think, there’s two things. Yeah, most of it is going to be in the second half. That’s simply how cost savings come on. And you’ve got two factors when it comes to synergies. We have cost to achieve, i.e., we have a dedicated team. The team is going to be at its largest point at the beginning of the year, and its smallest number at the end of the year. So the cost to achieve end up declining throughout the year, and obviously, the growth synergies grow throughout the year, so your net increase is quite dramatically quarter-by-quarter. So if you look at Slide 11 of the deck that we had also send out as part of the earnings release just before this call, we talk about $0.02 contribution from synergies, net synergies in Q1 and $0.16 for the next three quarters, and obviously, the $0.16 build is not a straight average over the three.
Gary Bisbee – Barclays Capital: Then if I could just try and get a little more color on Europe, I think I heard some weakness in legacy businesses in volumes in the Mediterranean countries, but the overall growth you reported was positive and solid. How is Northern Europe looking? Has the trend really weakened quite a bit versus what maybe you were seeing two months ago and I guess just any update on how you feel about growing that business this year? Thank you.
Douglas M. Baker, Jr. – Chairman, President and CEO: I guess the unfortunate part was, we expected Europe growth to be improving this year, if you had a solid footing, but we don’t have a solid footing. So, all the work we’ve done in terms of capturing new business and the rest is really neutralizing what I’d call market degradation. So, in total for the year, we expect the same kind of growth in 2012, that we saw in 2011, so a couple of points of sales growth. So, not a terrible story, but it’s a little frustrating given all the good work that’s been done by that team.
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