Ecolab is deeply committed to constantly improving its shareholder value. Year after year, we aggressively pursue our long-term profitability and growth objectives with the goal of providing our shareholders consistent, reliable, above-average earnings growth.

Our financial objectives are as follows:

• 15% earnings per share growth;
• 20% return on beginning equity; and
• Investment grade balance sheet.

Ecolab possesses certain financial characteristics that enable it to accomplish these objectives. These characteristics include:

Strong Cash Flow
Because of strong margins on most products, stable markets and low capital investment requirements, Ecolab generates a strong cash flow from operations.

Solid Balance Sheet, Attractive Returns
Ecolab's attractive business and strong financial management have resulted in a solid balance sheet. This gives Ecolab the financial flexibility to fund its business needs while maintaining financial discipline and yielding attractive returns on assets and investments.

Moderate Capital Investment Requirements
Ecolab is primarily a service business. As a result, capital expenditures have generally been moderate. This allows Ecolab to use its cash resources for other business investment purposes.

Attractive Profitability
Because of superior differentiated products, systems and service, Ecolab achieves attractive profit levels.

Stable, Growing Market
Ecolab's primary customer base - schools, restaurants, hotels and other institutions - tends to be less sensitive to the economic cycles faced by many other businesses. Since Ecolab products fulfill basic hygiene needs, they are less susceptible to reduction in tough economic times. This provides Ecolab with a relatively stable market in which to do business.