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Management is responsible for the integrity and objectivity of the
consolidated financial statements. The statements have been prepared
in accordance with accounting principles generally accepted in the
United States of America and, accordingly, include certain amounts
based on management's best estimates and judgments.
To meet its responsibility, management has established and
maintains a system of internal controls that provides reasonable assurance
regarding the integrity and reliability of the financial statements
and the protection of assets from unauthorized use or disposition.
These systems are supported by qualified personnel, by an appropriate
division of responsibilities and by an internal audit function. There are
limits inherent in any system of internal controls since the cost of
monitoring such systems should not exceed the desired benefit.
Management believes that the company's system of internal controls is
effective and provides an appropriate cost/benefit balance.
The Board of Directors, acting through its Audit Committee composed
solely of independent directors, is responsible for determining
that management fulfills its responsibilities in the preparation of financial
statements and maintains financial control of operations. The Audit
Committee recommends to the Board of Directors the appointment of
the company's independent accountants, subject to ratification by the
shareholders. It meets regularly with management, the internal auditors
and the independent auditors.
The independent auditors provide an objective, independent
review as to management's discharge of its responsibilities insofar as
they relate to the fair presentation of the consolidated financial
statements. Their report is presented separately.
Allan L. Schuman
Chairman of the Board and
Chief Executive Officer
Steven L. Fritze
Executive Vice President and
Chief Financial Officer
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To the Shareholders and Directors
Ecolab Inc.
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of income, of comprehensive income
and shareholders' equity and of cash flows present fairly, in all material
respects, the consolidated financial position of Ecolab Inc. as of
December 31, 2003, 2002 and 2001, and the consolidated results of its
operations and its cash flows for each of the three years in the period
ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. These financial
statements are the responsibility of Ecolab Inc.'s management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United
States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As discussed in Note 17 to the consolidated financial statements,
Ecolab Inc. changed the manner in which it accounts for goodwill and
other intangible assets as of January 1, 2002.
Minneapolis, Minnesota
February 26, 2004
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