XML 135 R27.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Financial Statements of Parent Company Guarantor | 12 Months Ended
--- | ---
Dec. 31, 2012
Financial Statements of Parent Company Guarantor |
20. |  | Financial Statements of Parent Company Guarantor
Pentair Ltd. (the “Parent Company Guarantor”), fully and unconditionally, guarantees the 1.35% Senior Notes due 2015, 1.875% Senior Notes due 2017, 2.65% Senior Notes due 2019, 5.00% Senior Notes due 2021 and 3.15% Senior Notes due 2022 (collectively, the “Notes”) of Pentair Finance S.A. (the “Subsidiary Issuer”). The Subsidiary Issuer is a Luxembourg public limited liability company formed in January 2012 and 100 percent-owned subsidiary of the Parent Company Guarantor. The following supplemental financial information sets forth the financial information of:
| • |  | Parent Company Guarantor;
| • |  | Subsidiary Issuer;
| • |  | Non-guarantor Subsidiaries of Pentair Ltd. on a combined basis;
| • |  | Consolidating entries and eliminations representing adjustments to:
| a. | eliminate intercompany transactions between or among the Parent Company Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries;
| b. | eliminate the investments in subsidiaries; and
| c. | record consolidating entries.
| • |  | Pentair Ltd. and subsidiaries on a consolidated basis.
Each entity in the consolidating financial information follows the same accounting policies as described in Note 2. The following present the Company’s Condensed Consolidating Statement of Operations and Comprehensive Income (Loss), Condensed Consolidating Balance Sheet and Condensed Consolidating Statement of Cash Flows as of and for the year ended December 31, 2012. Since the Parent Company Guarantor and the Subsidiary Issuer were acquired in the Merger, there was no guarantee of the Notes in effect in prior periods. The historical consolidated financial statements of Pentair Ltd. prior to the Merger include all non-guarantor subsidiaries. Consequently, no consolidating financial information for the years ended December 31, 2011 and 2010 is presented. Pentair Ltd. and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Year ended December 31, 2012
In thousands |  | Parent Company Guarantor |  |  | Subsidiary Issuer |  |  | Non-guarantor Subsidiaries |  |  | Eliminations |  |  | Pentair Ltd. and Subsidiaries Consolidated |
Net sales |  | $ | — |  |  | $ | — |  |  | $ | 4,416,146 |  |  | $ | — |  |  | $ | 4,416,146 |
Cost of goods sold |  |  | — |  |  |  | — |  |  |  | 3,146,554 |  |  |  | — |  |  |  | 3,146,554 |
Gross profit |  |  | — |  |  |  | — |  |  |  | 1,269,592 |  |  |  | — |  |  |  | 1,269,592 |
Selling, general and administrative |  |  | 5,017 |  |  |  | (3,792 | ) |  |  | 1,157,211 |  |  |  | — |  |  |  | 1,158,436 |
Research and development |  |  | — |  |  |  | — |  |  |  | 93,557 |  |  |  | — |  |  |  | 93,557 |
Impairment of trade names and goodwill |  |  | — |  |  |  | — |  |  |  | 60,718 |  |  |  | — |  |  |  | 60,718 |
Operating (loss) income |  |  | (5,017 | ) |  |  | 3,792 |  |  |  | (41,894 | ) |  |  | — |  |  |  | (43,119 | )
Loss (earnings) from investment in subsidiaries |  |  | 101,400 |  |  |  | 102,344 |  |  |  | — |  |  |  | (203,744 | ) |  |  | — |
Other (income) expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss on early extinguishment of debt |  |  | — |  |  |  | — |  |  |  | 75,367 |  |  |  | — |  |  |  | 75,367 |
Equity income of unconsolidated subsidiaries |  |  | — |  |  |  | — |  |  |  | (2,156 | ) |  |  | — |  |  |  | (2,156 | )
Net interest (income) expense |  |  | 81 |  |  |  | 971 |  |  |  | 66,583 |  |  |  | — |  |  |  | 67,635 |
Income (loss) from continuing operations before income taxes and noncontrolling interest |  |  | (106,498 | ) |  |  | (99,523 | ) |  |  | (181,688 | ) |  |  | 203,744 |  |  |  | (183,965 | )
Provision (benefit) for income taxes |  |  | 688 |  |  |  | 1,101 |  |  |  | (81,142 | ) |  |  | — |  |  |  | (79,353 | )
Net income (loss) before noncontrolling interest |  |  | (107,186 | ) |  |  | (100,624 | ) |  |  | (100,546 | ) |  |  | 203,744 |  |  |  | (104,612 | )
Noncontrolling interest |  |  | — |  |  |  | — |  |  |  | 2,574 |  |  |  | — |  |  |  | 2,574 |
Net income (loss) attributable to Pentair Ltd. |  | $ | (107,186 | ) |  | $ | (100,624 | ) |  | $ | (103,120 | ) |  | $ | 203,744 |  |  | $ | (107,186 | )
Comprehensive income (loss), net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) before noncontrolling interest |  | $ | (107,186 | ) |  | $ | (100,624 | ) |  | $ | (100,546 | ) |  | $ | 203,744 |  |  | $ | (104,612 | )
Changes in cumulative translation adjustment |  |  | 34,416 |  |  |  | 34,416 |  |  |  | 35,830 |  |  |  | 68,832 |  |  |  | 35,830 |
Amortization of pension and other post-retirement prior service cost |  |  | (253 | ) |  |  | (253 | ) |  |  | (253 | ) |  |  | 506 |  |  |  | (253 | )
Changes in market value of derivative financial instruments |  |  | (3,630 | ) |  |  | (3,630 | ) |  |  | (3,630 | ) |  |  | 7,260 |  |  |  | (3,630 | )
Total comprehensive income (loss) |  |  | (76,653 | ) |  |  | (70,091 | ) |  |  | (68,599 | ) |  |  | 142,678 |  |  |  | (72,665 | )
Less: Comprehensive income (loss) attributable to noncontrolling interest |  |  | — |  |  |  | — |  |  |  | 3,988 |  |  |  | — |  |  |  | 3,988 |
Comprehensive income (loss) attributable to Pentair Ltd. |  | $ | (76,653 | ) |  | $ | (70,091 | ) |  | $ | (72,587 | ) |  | $ | 142,678 |  |  | $ | (76,653 | )
Pentair Ltd. and Subsidiaries Condensed Consolidating Balance Sheet December 31, 2012
In thousands |  | Parent Company Guarantor |  |  | Subsidiary Issuer |  |  | Non-guarantor Subsidiaries |  |  | Eliminations |  |  | Pentair Ltd. and Subsidiaries Consolidated |
Assets |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 30 |  |  | $ | 261,311 |  |  | $ | — |  |  | $ | 261,341 |
Accounts and notes receivable, net |  |  | 20,197 |  |  |  | 1,458,341 |  |  |  | 1,348,698 |  |  |  | (1,534,588 | ) |  |  | 1,292,648 |
Inventories |  |  | — |  |  |  | — |  |  |  | 1,380,271 |  |  |  | — |  |  |  | 1,380,271 |
Other current assets |  |  | 1,425 |  |  |  | — |  |  |  | 324,683 |  |  |  | — |  |  |  | 326,108 |
Total current assets |  |  | 21,622 |  |  |  | 1,458,371 |  |  |  | 3,314,963 |  |  |  | (1,534,588 | ) |  |  | 3,260,368 |
Property, plant and equipment, net |  |  | — |  |  |  | — |  |  |  | 1,224,488 |  |  |  | — |  |  |  | 1,224,488 |
Other assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in subsidiaries |  |  | 6,496,081 |  |  |  | 7,471,843 |  |  |  | — |  |  |  | (13,967,924 | ) |  |  | — |
Goodwill |  |  | — |  |  |  | — |  |  |  | 4,894,512 |  |  |  | — |  |  |  | 4,894,512 |
Intangibles, net |  |  | — |  |  |  | — |  |  |  | 1,909,656 |  |  |  | — |  |  |  | 1,909,656 |
Other non-current assets |  |  | 13,300 |  |  |  | 8,988 |  |  |  | 497,299 |  |  |  | (13,300 | ) |  |  | 506,287 |
Total other assets |  |  | 6,509,381 |  |  |  | 7,480,831 |  |  |  | 7,301,467 |  |  |  | (13,981,224 | ) |  |  | 7,310,455 |
Total assets |  | $ | 6,531,003 |  |  | $ | 8,939,202 |  |  | $ | 11,840,918 |  |  | $ | (15,515,812 | ) |  | $ | 11,795,311 |
Liabilities and Equity |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current maturities of long-term debt and short-term borrowings |  | $ | — |  |  | $ | — |  |  | $ | 3,096 |  |  | $ | — |  |  | $ | 3,096 |
Accounts payable |  |  | 54,263 |  |  |  | 1,787 |  |  |  | 589,793 |  |  |  | (76,247 | ) |  |  | 569,596 |
Employee compensation and benefits |  |  | — |  |  |  | — |  |  |  | 295,067 |  |  |  | — |  |  |  | 295,067 |
Other current liabilities |  |  | 96,580 |  |  |  | 11,297 |  |  |  | 562,285 |  |  |  | — |  |  |  | 670,162 |
Total current liabilities |  |  | 150,843 |  |  |  | 13,084 |  |  |  | 1,450,241 |  |  |  | (76,247 | ) |  |  | 1,537,921 |
Other liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-term debt |  |  | — |  |  |  | 2,297,710 |  |  |  | 1,614,909 |  |  |  | (1,458,341 | ) |  |  | 2,454,278 |
Pension and other post-retirement compensation and benefits |  |  | — |  |  |  | — |  |  |  | 378,066 |  |  |  | — |  |  |  | 378,066 |
Deferred tax liabilities |  |  | — |  |  |  | — |  |  |  | 488,102 |  |  |  | — |  |  |  | 488,102 |
Other non-current liabilities |  |  | 13,300 |  |  |  | — |  |  |  | 453,587 |  |  |  | (13,300 | ) |  |  | 453,587 |
Total liabilities |  |  | 164,143 |  |  |  | 2,310,794 |  |  |  | 4,384,905 |  |  |  | (1,547,888 | ) |  |  | 5,311,954 |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries |  |  | 6,366,860 |  |  |  | 6,628,408 |  |  |  | 7,339,516 |  |  |  | (13,967,924 | ) |  |  | 6,366,860 |
Noncontrolling interest |  |  | — |  |  |  | — |  |  |  | 116,497 |  |  |  | — |  |  |  | 116,497 |
Total equity |  |  | 6,366,860 |  |  |  | 6,628,408 |  |  |  | 7,456,013 |  |  |  | (13,967,924 | ) |  |  | 6,483,357 |
Total liabilities and equity |  | $ | 6,531,003 |  |  | $ | 8,939,202 |  |  | $ | 11,840,918 |  |  | $ | (15,515,812 | ) |  | $ | 11,795,311 |
Pentair Ltd. and Subsidiaries Condensed Consolidating Statement of Cash Flows Year ended December 31, 2012
In thousands |  | Parent Company Guarantor |  |  | Subsidiary Issuer |  |  | Non-guarantor Subsidiaries |  |  | Eliminations |  |  | Pentair Ltd. and Subsidiaries Consolidated |
Operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net cash provided by (used for) operating activities |  | $ | (108,944 | ) |  | $ | (88,253 | ) |  | $ | 61,413 |  |  | $ | 203,744 |  |  | $ | 67,960 |
Investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  |  | — |  |  |  | — |  |  |  | (94,532 | ) |  |  | — |  |  |  | (94,532 | )
Proceeds from sale of property and equipment |  |  | — |  |  |  | — |  |  |  | 5,508 |  |  |  | — |  |  |  | 5,508 |
Acquisitions, net of cash acquired |  |  | — |  |  |  | 300,061 |  |  |  | 170,398 |  |  |  | — |  |  |  | 470,459 |
Other |  |  | — |  |  |  | — |  |  |  | (5,858 | ) |  |  | — |  |  |  | (5,858 | )
Net cash provided by (used for) investing activities |  |  | — |  |  |  | 300,061 |  |  |  | 75,516 |  |  |  | — |  |  |  | 375,577 |
Financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net short-term borrowings |  |  | — |  |  |  | — |  |  |  | (3,700 | ) |  |  | — |  |  |  | (3,700 | )
Proceeds from long-term debt |  |  | — |  |  |  | 1,397,710 |  |  |  | 138,436 |  |  |  | — |  |  |  | 1,536,146 |
Repayment of long-term debt |  |  | — |  |  |  | — |  |  |  | (1,305,339 | ) |  |  | — |  |  |  | (1,305,339 | )
Debt issuance costs |  |  | — |  |  |  | (8,722 | ) |  |  | (982 | ) |  |  | — |  |  |  | (9,704 | )
Debt extinguishment costs |  |  | — |  |  |  | — |  |  |  | (74,752 | ) |  |  | — |  |  |  | (74,752 | )
Net change in advances to subsidiaries |  |  | 156,977 |  |  |  | (1,600,766 | ) |  |  | 1,647,533 |  |  |  | (203,744 | ) |  |  | — |
Excess tax benefits from share-based compensation |  |  | — |  |  |  | — |  |  |  | 4,976 |  |  |  | — |  |  |  | 4,976 |
Shares issued to employees, net of shares withheld |  |  | — |  |  |  | — |  |  |  | 68,177 |  |  |  | — |  |  |  | 68,177 |
Repurchases of common shares |  |  | — |  |  |  | — |  |  |  | (334,159 | ) |  |  | — |  |  |  | (334,159 | )
Dividends paid |  |  | (48,033 | ) |  |  | — |  |  |  | (64,364 | ) |  |  | — |  |  |  | (112,397 | )
Distributions to noncontrolling interest |  |  | — |  |  |  | — |  |  |  | (1,554 | ) |  |  | — |  |  |  | (1,554 | )
Net cash provided by (used for) financing activities |  |  | 108,944 |  |  |  | (211,778 | ) |  |  | 74,272 |  |  |  | (203,744 | ) |  |  | (232,306 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | — |  |  |  | 33 |
Change in cash and cash equivalents |  |  | — |  |  |  | 30 |  |  |  | 211,234 |  |  |  | — |  |  |  | 211,264 |
Cash and cash equivalents, beginning of year |  |  | — |  |  |  | — |  |  |  | 50,077 |  |  |  | — |  |  |  | 50,077 |
Cash and cash equivalents, end of year |  | $ | — |  |  | $ | 30 |  |  | $ | 261,311 |  |  | $ | — |  |  | $ | 261,341 |

X
- Definition The entire disclosure for condensed financial statements. + References No definition available. + Details
Name: | us-gaap_CondensedFinancialStatementsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration