notes to consolidated financial statements

The company's operating segments have generally similar products and services and the company is organized to manage its operations geographically. The company's operating segments have been aggregated into three reportable segments.

The “United States Cleaning & Sanitizing” segment provides cleaning and sanitizing products and services to United States markets through its Institutional, Kay, Textile Care, Professional Products, Vehicle Care, Water Care Services and Food & Beverage operations.

The “United States Other Services” segment includes all other U.S. operations of the company. This segment provides pest elimination and kitchen equipment repair and maintenance through its Pest Elimination and GCS Service operations.

The company's “International Cleaning & Sanitizing” segment provides cleaning and sanitizing product and service offerings to international markets in Europe, Asia Pacific, Latin America and Canada. Effective November 30, 2001, Henkel-Ecolab's total assets were included in the company's International Cleaning & Sanitizing operations. European operating data has been included beginning in 2002.

Information on the types of products and services of each of the company's operating segments is included on the inside front cover under “Services/Products Provided” of the Ecolab Overview section of this Annual Report.

The company evaluates the performance of its international operations based on fixed management currency exchange rates. All other accounting policies of the reportable segments are consistent with accounting principles generally accepted in the United States of America and the accounting policies of the company described in Note 2 of these notes to consolidated financial statements. The profitability of the company's operating segments is evaluated by management based on operating income. Intersegment sales and transfers were not significant.

Financial information for each of the company's reportable segments is as follows:

	United States			International   Cleaning &   Sanitizing	Other		Consolidated
(thousands)	Cleaning &   Sanitizing	Other	Total   United States		Foriegn Currency   Translation	Corporate
Net Sales
2003	$1,694,323	$320,444	$2,014,767	$1,560,557	$186,495		$ 3,761,819
2002	1,615,171	308,329	1,923,500	1,497,935	(17,850)		3,403,585
2001	1,548,882	273,020	1,821,902	474,089	24,719		2,320,710
Operating income (loss)
2003	285,212	21,031	306,243	159,866	21,383	(4,834)	482,658
2002	271,838	33,051	304,889	138,373	(1,388)	(46,008)	395,866
2001	246,936	29,338	276,274	44,575	2,268	(4,938)	318,179
Depreciation & amortization
2003	114,516	4,903	119,419	85,521	17,766	6,950	229,656
2002	112,303	4,615	116,918	105,765	(6,703)	7,448	223,428
2001	118,298	5,384	123,682	28,587	4,782	5,939	162,990
Total assets
2003	1,112,994	143,552	1,256,546	1,560,978	302,756	108,638	3,228,918
2002	1,067,226	129,498	1,196,724	1,423,309	173,497	72,377	2,865,907
2001	983,109	128,338	1,111,447	1,378,574	(39,377)	74,356	2,525,000
Capital expenditures
2003	117,361	3,726	121,087	80,271	10,536	141	212,035
2002	111,349	3,105	114,454	134,591	(36,777)	489	212,757
2001	$   114,427	$     6,911	$  121,338	$      33,628	$     2,271	$ 700	$    157,937

Consistent with the company's internal management reporting, corporate operating income includes special charges recorded for 2003, 2002 and 2001. In addition, corporate expense includes an adjustment made for death benefits for retired executives in 2003 and corporate overhead costs directly related to the Henkel-Ecolab joint venture in 2001. Corporate assets are principally cash and cash equivalents.

The company has two classes of products and services within its United States and International Cleaning & Sanitizing operations which comprise 10 percent or more of consolidated net sales. Sales of warewashing products were approximately 23 percent, 23 percent and 26 percent of consolidated net sales in 2003, 2002 and 2001, respectively. Sales of laundry products and services were approximately 10 percent, 11 percent and 10 percent of consolidated net sales in 2003, 2002 and 2001, respectively. Sales of the Henkel-Ecolab operations acquired on November 30, 2001 are reflected in these percentages beginning in 2002.

Property, plant and equipment of the company's United States and International operations were as follows:

December 31 (thousands)	2003	2002	2001
United States	$404,209	$418,973	$424,478
International	288,951	230,196	219,807
Corporate	0	4,653	4,429
Effect of foreign currency translation	43,637	26,443	(4,391)
Consolidated	$736,797	$680,265	$644,323