
| James C. Lucas | Rebecca Osborn | ||||
| SVP, Treasurer, FP&A and Investor Relations | Senior Manager, External Communications | ||||
| Direct: 763-656-5575 | Direct: 763-656-5589 | ||||
Email: jim.lucas@pentair.com | Email: rebecca.osborn@pentair.com | ||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||
| Three months ended | Twelve months ended | ||||||||||||||||
| In millions, except per-share data | December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||||
| Net sales | $ | 988.6 | $ | 796.0 | $ | 3,764.8 | $ | 3,017.8 | |||||||||
| Cost of goods sold | 660.4 | 512.5 | 2,445.6 | 1,960.2 | |||||||||||||
| Gross profit | 328.2 | 283.5 | 1,319.2 | 1,057.6 | |||||||||||||
| % of net sales | 33.2 | % | 35.6 | % | 35.0 | % | 35.0 | % | |||||||||
| Selling, general and administrative | 156.0 | 141.9 | 596.4 | 520.5 | |||||||||||||
| % of net sales | 15.8 | % | 17.8 | % | 15.8 | % | 17.2 | % | |||||||||
| Research and development | 21.5 | 20.1 | 85.9 | 75.7 | |||||||||||||
| % of net sales | 2.2 | % | 2.5 | % | 2.3 | % | 2.5 | % | |||||||||
| Operating income | 150.7 | 121.5 | 636.9 | 461.4 | |||||||||||||
| % of net sales | 15.2 | % | 15.3 | % | 16.9 | % | 15.3 | % | |||||||||
| Other (income) expense: | |||||||||||||||||
| (Gain) loss on sale of businesses | — | — | (1.4) | 0.1 | |||||||||||||
| Other (income) expense | (2.0) | 6.9 | (1.0) | 5.3 | |||||||||||||
| Net interest expense | 1.0 | 3.9 | 12.5 | 23.9 | |||||||||||||
| % of net sales | 0.1 | % | 0.5 | % | 0.3 | % | 0.8 | % | |||||||||
Income from continuing operations before income taxes | 151.7 | 110.7 | 626.8 | 432.1 | |||||||||||||
| Provision for income taxes | 3.1 | 10.9 | 70.8 | 75.0 | |||||||||||||
| Effective tax rate | 2.0 | % | 9.8 | % | 11.3 | % | 17.4 | % | |||||||||
Net income from continuing operations | 148.6 | 99.8 | 556.0 | 357.1 | |||||||||||||
| Income (loss) from discontinued operations, net of tax | 0.1 | 3.2 | (3.0) | 1.5 | |||||||||||||
| Net income | $ | 148.7 | $ | 103.0 | $ | 553.0 | $ | 358.6 | |||||||||
| Earnings (loss) per ordinary share | |||||||||||||||||
| Basic | |||||||||||||||||
| Continuing operations | $ | 0.90 | $ | 0.60 | $ | 3.36 | $ | 2.14 | |||||||||
| Discontinued operations | — | 0.02 | (0.02) | 0.01 | |||||||||||||
| Basic earnings per ordinary share | $ | 0.90 | $ | 0.62 | $ | 3.34 | $ | 2.15 | |||||||||
| Diluted | |||||||||||||||||
| Continuing operations | $ | 0.89 | $ | 0.60 | $ | 3.32 | $ | 2.13 | |||||||||
| Discontinued operations | — | 0.01 | (0.02) | 0.01 | |||||||||||||
| Diluted earnings per ordinary share | $ | 0.89 | $ | 0.61 | $ | 3.30 | $ | 2.14 | |||||||||
| Weighted average ordinary shares outstanding | |||||||||||||||||
| Basic | 165.3 | 166.2 | 165.8 | 166.5 | |||||||||||||
| Diluted | 167.0 | 167.5 | 167.5 | 167.4 | |||||||||||||
| Cash dividends paid per ordinary share | $ | 0.20 | $ | 0.19 | $ | 0.80 | $ | 0.76 | |||||||||
| Pentair plc and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| December 31, 2021 | December 31, 2020 | |||||||
| In millions | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 94.5 | $ | 82.1 | ||||
| Accounts and notes receivable, net | 534.3 | 367.5 | ||||||
| Inventories | 562.9 | 420.0 | ||||||
| Other current assets | 112.3 | 105.5 | ||||||
| Total current assets | 1,304.0 | 975.1 | ||||||
| Property, plant and equipment, net | 310.0 | 301.2 | ||||||
| Other assets | ||||||||
| Goodwill | 2,504.5 | 2,392.2 | ||||||
| Intangibles, net | 428.0 | 325.9 | ||||||
| Other non-current assets | 207.1 | 202.8 | ||||||
| Total other assets | 3,139.6 | 2,920.9 | ||||||
| Total assets | $ | 4,753.6 | $ | 4,197.2 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 385.7 | $ | 245.1 | ||||
| Employee compensation and benefits | 140.1 | 117.0 | ||||||
| Other current liabilities | 525.9 | 410.4 | ||||||
| Total current liabilities | 1,051.7 | 772.5 | ||||||
| Other liabilities | ||||||||
| Long-term debt | 894.1 | 839.6 | ||||||
| Pension and other post-retirement compensation and benefits | 93.2 | 102.0 | ||||||
| Deferred tax liabilities | 89.8 | 107.4 | ||||||
| Other non-current liabilities | 202.9 | 269.4 | ||||||
| Total liabilities | 2,331.7 | 2,090.9 | ||||||
| Equity | 2,421.9 | 2,106.3 | ||||||
| Total liabilities and equity | $ | 4,753.6 | $ | 4,197.2 | ||||
| Pentair plc and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| Years ended December 31 | ||||||||
| In millions | 2021 | 2020 | ||||||
| Operating activities | ||||||||
| Net income | $ | 553.0 | $ | 358.6 | ||||
| Loss (income) from discontinued operations, net of tax | 3.0 | (1.5) | ||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities of continuing operations | ||||||||
| Equity income of unconsolidated subsidiaries | (0.3) | (1.4) | ||||||
| Depreciation | 51.2 | 46.7 | ||||||
| Amortization | 26.3 | 28.4 | ||||||
| (Gain) loss on sale of businesses | (1.4) | 0.1 | ||||||
| Deferred income taxes | (9.0) | 4.6 | ||||||
| Share-based compensation | 29.8 | 20.3 | ||||||
| Pension and other post-retirement expense | 2.8 | 12.2 | ||||||
| Pension and other post-retirement contributions | (9.4) | (8.4) | ||||||
| Changes in assets and liabilities, net of effects of business acquisitions | ||||||||
| Accounts receivable | (142.0) | 148.3 | ||||||
| Inventories | (121.4) | (29.1) | ||||||
| Other current assets | (12.3) | (2.3) | ||||||
| Accounts payable | 114.2 | (81.9) | ||||||
| Employee compensation and benefits | 24.5 | 42.5 | ||||||
| Other current liabilities | 116.2 | 32.0 | ||||||
| Other non-current assets and liabilities | (11.6) | 5.1 | ||||||
| Net cash provided by operating activities of continuing operations | 613.6 | 574.2 | ||||||
| Net cash used for operating activities of discontinued operations | (0.4) | (0.6) | ||||||
| Net cash provided by operating activities | 613.2 | 573.6 | ||||||
| Investing activities | ||||||||
| Capital expenditures | (60.2) | (62.2) | ||||||
| Proceeds from sale of property and equipment | 3.9 | 0.1 | ||||||
| Proceeds from sale of businesses, net | 1.4 | — | ||||||
| Acquisitions, net of cash acquired | (338.5) | (58.0) | ||||||
| Other | 2.7 | 2.2 | ||||||
| Net cash used for investing activities | (390.7) | (117.9) | ||||||
| Financing activities | ||||||||
| Net borrowings (repayments) of revolving long-term debt | 158.9 | (117.5) | ||||||
| Repayments of long-term debt | (103.8) | (74.0) | ||||||
| Shares issued to employees, net of shares withheld | 22.2 | 32.9 | ||||||
| Repurchases of ordinary shares | (150.0) | (150.2) | ||||||
| Dividends paid | (133.0) | (127.1) | ||||||
| Payments upon the maturity of cross currency swaps | (14.7) | — | ||||||
| Other | (1.8) | — | ||||||
| Net cash used for financing activities | (222.2) | (435.9) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 12.1 | (20.2) | ||||||
| Change in cash and cash equivalents | 12.4 | (0.4) | ||||||
| Cash and cash equivalents, beginning of year | 82.1 | 82.5 | ||||||
| Cash and cash equivalents, end of year | $ | 94.5 | $ | 82.1 | ||||
| Pentair plc and Subsidiaries | ||||||||
Reconciliation of the GAAP Operating Activities Cash Flow to the Non-GAAP Free Cash Flow (Unaudited) | ||||||||
| Years ended December 31 | ||||||||
| In millions | 2021 | 2020 | ||||||
| Net cash provided by operating activities of continuing operations | $ | 613.6 | $ | 574.2 | ||||
| Capital expenditures | (60.2) | (62.2) | ||||||
| Proceeds from sale of property and equipment | 3.9 | 0.1 | ||||||
| Free cash flow from continuing operations | $ | 557.3 | $ | 512.1 | ||||
| Net cash used for operating activities of discontinued operations | (0.4) | (0.6) | ||||||
| Free cash flow | $ | 556.9 | $ | 511.5 | ||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Supplemental Financial Information by Reportable Segment (Unaudited) | |||||||||||||||||
| 2021 | |||||||||||||||||
| In millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||
| Net sales | |||||||||||||||||
| Consumer Solutions | $ | 521.4 | $ | 576.9 | $ | 613.6 | $ | 630.0 | $ | 2,341.9 | |||||||
| Industrial & Flow Technologies | 344.1 | 363.9 | 355.1 | 358.3 | 1,421.4 | ||||||||||||
| Other | 0.4 | 0.3 | 0.5 | 0.3 | 1.5 | ||||||||||||
| Consolidated | $ | 865.9 | $ | 941.1 | $ | 969.2 | $ | 988.6 | $ | 3,764.8 | |||||||
| Segment income (loss) | |||||||||||||||||
| Consumer Solutions | $ | 131.0 | $ | 143.4 | $ | 144.2 | $ | 135.8 | $ | 554.4 | |||||||
| Industrial & Flow Technologies | 50.0 | 57.1 | 52.4 | 53.8 | 213.3 | ||||||||||||
| Other | (16.6) | (25.6) | (16.9) | (22.7) | (81.8) | ||||||||||||
| Consolidated | $ | 164.4 | $ | 174.9 | $ | 179.7 | $ | 166.9 | $ | 685.9 | |||||||
| Return on sales | |||||||||||||||||
| Consumer Solutions | 25.1 | % | 24.9 | % | 23.5 | % | 21.6 | % | 23.7 | % | |||||||
| Industrial & Flow Technologies | 14.5 | % | 15.7 | % | 14.8 | % | 15.0 | % | 15.0 | % | |||||||
| Consolidated | 19.0 | % | 18.6 | % | 18.5 | % | 16.9 | % | 18.2 | % | |||||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Supplemental Financial Information by Reportable Segment (Unaudited) | |||||||||||||||||
| 2020 | |||||||||||||||||
| In millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||
| Net sales | |||||||||||||||||
| Consumer Solutions | $ | 388.8 | $ | 401.2 | $ | 470.8 | $ | 482.1 | $ | 1,742.9 | |||||||
| Industrial & Flow Technologies | 320.9 | 311.8 | 327.4 | 313.5 | 1,273.6 | ||||||||||||
| Other | 0.3 | 0.3 | 0.3 | 0.4 | 1.3 | ||||||||||||
| Consolidated | $ | 710.0 | $ | 713.3 | $ | 798.5 | $ | 796.0 | $ | 3,017.8 | |||||||
| Segment income (loss) | |||||||||||||||||
| Consumer Solutions | $ | 84.8 | $ | 96.7 | $ | 113.8 | $ | 123.8 | $ | 419.1 | |||||||
| Industrial & Flow Technologies | 44.7 | 44.1 | 42.7 | 33.1 | 164.6 | ||||||||||||
| Other | (18.0) | (16.1) | (16.0) | (16.0) | (66.1) | ||||||||||||
| Consolidated | $ | 111.5 | $ | 124.7 | $ | 140.5 | $ | 140.9 | $ | 517.6 | |||||||
| Return on sales | |||||||||||||||||
| Consumer Solutions | 21.8 | % | 24.1 | % | 24.2 | % | 25.7 | % | 24.0 | % | |||||||
| Industrial & Flow Technologies | 13.9 | % | 14.1 | % | 13.0 | % | 10.6 | % | 12.9 | % | |||||||
| Consolidated | 15.7 | % | 17.5 | % | 17.6 | % | 17.7 | % | 17.2 | % | |||||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2021 | |||||||||||||||||
| Excluding the Effect of Adjustments (Unaudited) | |||||||||||||||||
| In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||
| Net sales | $ | 865.9 | $ | 941.1 | $ | 969.2 | $ | 988.6 | $ | 3,764.8 | |||||||
| Operating income | 157.1 | 161.8 | 167.3 | 150.7 | 636.9 | ||||||||||||
| % of net sales | 18.1 | % | 17.2 | % | 17.3 | % | 15.2 | % | 16.9 | % | |||||||
| Adjustments: | |||||||||||||||||
| Restructuring and other | 1.5 | 3.9 | 0.1 | 2.0 | 7.5 | ||||||||||||
| Transformation costs | — | 1.9 | 4.0 | 5.8 | 11.7 | ||||||||||||
| Intangible amortization | 7.1 | 6.3 | 6.0 | 6.9 | 26.3 | ||||||||||||
| COVID-19 related costs and expenses | 0.2 | 0.1 | 0.1 | 0.2 | 0.6 | ||||||||||||
| Legal accrual adjustments and settlements | (2.4) | — | — | (5.2) | (7.6) | ||||||||||||
| Inventory step-up | — | — | — | 2.3 | 2.3 | ||||||||||||
| Deal-related costs and expenses | 0.7 | 1.0 | 2.1 | 4.1 | 7.9 | ||||||||||||
| Equity income (loss) of unconsolidated subsidiaries | 0.2 | (0.1) | 0.1 | 0.1 | 0.3 | ||||||||||||
| Segment income | 164.4 | 174.9 | 179.7 | 166.9 | 685.9 | ||||||||||||
| Return on sales | 19.0 | % | 18.6 | % | 18.5 | % | 16.9 | % | 18.2 | % | |||||||
Net income from continuing operations—as reported | 131.1 | 132.6 | 143.7 | 148.6 | 556.0 | ||||||||||||
| Gain on sale of businesses | — | — | (1.4) | — | (1.4) | ||||||||||||
| Pension and other post-retirement mark-to-market gain | — | — | — | (2.4) | (2.4) | ||||||||||||
| Other income | — | (0.3) | — | — | (0.3) | ||||||||||||
| Adjustments to operating income | 7.1 | 13.2 | 12.3 | 16.1 | 48.7 | ||||||||||||
| Income tax adjustments | (2.4) | (4.6) | (6.2) | (17.0) | (30.2) | ||||||||||||
Net income from continuing operations—as adjusted | $ | 135.8 | $ | 140.9 | $ | 148.4 | $ | 145.3 | $ | 570.4 | |||||||
Continuing earnings per ordinary share—diluted | |||||||||||||||||
| Diluted earnings per ordinary share—as reported | $ | 0.78 | $ | 0.79 | $ | 0.86 | $ | 0.89 | $ | 3.32 | |||||||
| Adjustments | 0.03 | 0.05 | 0.03 | (0.02) | 0.08 | ||||||||||||
| Diluted earnings per ordinary share—as adjusted | $ | 0.81 | $ | 0.84 | $ | 0.89 | $ | 0.87 | $ | 3.40 | |||||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending December 31, 2022 | |||||||||||||||||
| Excluding the Effect of Adjustments (Unaudited) | |||||||||||||||||
| Forecast | |||||||||||||||||
| In millions, except per-share data | First Quarter | Full Year | |||||||||||||||
| Net sales | approx | Up 7% - 11% | approx | Up 6% - 9% | |||||||||||||
| Operating income | approx | Flat | approx | Up 14% - 17% | |||||||||||||
| Adjustments: | |||||||||||||||||
| Intangible amortization | approx | $6 | approx | $23 | |||||||||||||
Equity income of unconsolidated subsidiaries | approx | 1 | approx | 4 | |||||||||||||
| Segment income | approx | Flat | approx | Up 10% - 13% | |||||||||||||
Net income from continuing operations—as reported | approx | $127 | approx | $593 - $610 | |||||||||||||
| Adjustments to operating income | approx | 6 | approx | 23 | |||||||||||||
| Income tax adjustments | approx | 1 | approx | 4 | |||||||||||||
Net income from continuing operations—as adjusted | approx | $134 | approx | $620 - $637 | |||||||||||||
Continuing earnings per ordinary share—diluted | |||||||||||||||||
| Diluted earnings per ordinary share—as reported | approx | $0.76 | approx | $3.54 - $3.64 | |||||||||||||
| Adjustments | approx | 0.04 | approx | 0.16 | |||||||||||||
| Diluted earnings per ordinary share—as adjusted | approx | $0.80 | approx | $3.70 - $3.80 | |||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||||||||||||||
| Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment | |||||||||||||||||||||||||||||
| For the Quarter and Year Ended December 31, 2021 (Unaudited) | |||||||||||||||||||||||||||||
| Q4 Net Sales Growth | Full Year Net Sales Growth | ||||||||||||||||||||||||||||
| Core | Currency | Acq. / Div. | Total | Core | Currency | Acq. / Div. | Total | ||||||||||||||||||||||
| Total Pentair | 19.4 | % | (0.5) | % | 5.3 | % | 24.2 | % | 20.9 | % | 1.3 | % | 2.6 | % | 24.8 | % | |||||||||||||
| Consumer Solutions | 23.2 | % | (0.1) | % | 7.6 | % | 30.7 | % | 29.5 | % | 0.6 | % | 4.3 | % | 34.4 | % | |||||||||||||
| Industrial & Flow Technologies | 13.4 | % | (0.9) | % | 1.8 | % | 14.3 | % | 9.1 | % | 2.1 | % | 0.4 | % | 11.6 | % | |||||||||||||
| Pentair plc and Subsidiaries | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2020 | |||||||||||||||||
| Excluding the Effect of Adjustments (Unaudited) | |||||||||||||||||
| In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||
| Net sales | $ | 710.0 | $ | 713.3 | $ | 798.5 | $ | 796.0 | $ | 3,017.8 | |||||||
| Operating income | 100.7 | 111.1 | 128.1 | 121.5 | 461.4 | ||||||||||||
| % of net sales | 14.2 | % | 15.6 | % | 16.0 | % | 15.3 | % | 15.3 | % | |||||||
| Adjustments: | |||||||||||||||||
| Restructuring and other | 2.4 | 1.1 | 2.1 | 9.8 | 15.4 | ||||||||||||
| Intangible amortization | 7.6 | 7.0 | 6.9 | 6.9 | 28.4 | ||||||||||||
| COVID-19 related costs and expenses | 0.9 | 4.8 | 2.6 | 2.1 | 10.4 | ||||||||||||
| Deal related costs and expenses | 0.4 | — | — | 0.2 | 0.6 | ||||||||||||
| Equity (loss) income of unconsolidated subsidiaries | (0.5) | 0.7 | 0.8 | 0.4 | 1.4 | ||||||||||||
| Segment income | 111.5 | 124.7 | 140.5 | 140.9 | 517.6 | ||||||||||||
| Return on sales | 15.7 | % | 17.5 | % | 17.6 | % | 17.7 | % | 17.2 | % | |||||||
Net income from continuing operations—as reported | 72.7 | 73.8 | 110.8 | 99.8 | 357.1 | ||||||||||||
| Loss on sale of businesses | — | 0.1 | — | — | 0.1 | ||||||||||||
| Pension and other post-retirement mark-to-market loss | — | — | — | 6.7 | 6.7 | ||||||||||||
| Other income | — | — | (2.2) | — | (2.2) | ||||||||||||
| Adjustments to operating income | 11.3 | 12.9 | 11.6 | 19.0 | 54.8 | ||||||||||||
| Income tax adjustments | 3.3 | 11.1 | (3.6) | (8.1) | 2.7 | ||||||||||||
Net income from continuing operations—as adjusted | $ | 87.3 | $ | 97.9 | $ | 116.6 | $ | 117.4 | $ | 419.2 | |||||||
Continuing earnings per ordinary share—diluted | |||||||||||||||||
| Diluted earnings per ordinary share—as reported | $ | 0.43 | $ | 0.44 | $ | 0.66 | $ | 0.60 | $ | 2.13 | |||||||
| Adjustments | 0.09 | 0.15 | 0.04 | 0.10 | 0.37 | ||||||||||||
| Diluted earnings per ordinary share—as adjusted | $ | 0.52 | $ | 0.59 | $ | 0.70 | $ | 0.70 | $ | 2.50 | |||||||