pnr-202202010000077360false00000773602022-02-012022-02-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 2022
Pentair plc
(Exact name of Registrant as specified in its charter)
| | | | | | | | |
| | |
| Ireland | 001-11625 | 98-1141328 |
(State or other jurisdiction of
incorporation or organization) | (Commission
File No.) | (I.R.S. Employer
Identification No.) |
Regal House, 70 London Road, Twickenham, London, TW13QS United Kingdom
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 44-74-9421-6154
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | | | | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Ordinary Shares, nominal value $0.01 per share | PNR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2). ☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 Results of Operations and Financial Condition
On February 1, 2022, Pentair plc (the “Company”) issued a press release announcing its earnings for the fourth quarter and full year of 2021 and a conference call in connection therewith. A copy of the release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
This press release refers to certain non-generally accepted accounting principles (“GAAP”) financial measures (core sales, segment income, return on sales, adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow) and a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in the Company’s financial statements prepared in accordance with GAAP.
The 2021 segment income, return on sales, adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations (“EPS”) include equity income (loss) of unconsolidated subsidiaries and eliminate intangible amortization, costs of certain transformation, restructuring and other activities, novel coronavirus 2019 (“COVID-19”) related costs and expenses, inventory step-up adjustments, deal-related costs and expenses, gain on sale of businesses, certain legal accrual adjustments and settlements, pension and other post-retirement mark-to-market gain, other income and certain tax items. The 2020 segment income, return on sales, adjusted net income from continuing operations and adjusted diluted EPS include equity income (loss) of unconsolidated subsidiaries and eliminate intangible amortization, certain targeted restructuring and other activities, COVID-19 related costs and expenses, deal-related costs and expenses, loss on sale of businesses, pension and other post-retirement mark-to-market loss, other income and certain tax items.
We use the term “core sales” to refer to GAAP net sales from continuing operations excluding (1) the impact of currency translation and (2) the impact of revenue from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to divested product lines not considered discontinued operations (“acquisition sales”). The portion of GAAP net sales attributable to currency translation is calculated as the difference between (a) the period-to-period change in net sales (excluding acquisition sales) and (b) the period-to-period change in net sales (excluding acquisition sales) after applying current period foreign exchange rates to the prior year period. We use the term “core sales growth” to refer to the measure of comparing current period core net sales with the corresponding period of the prior year.
Management utilizes these adjusted financial measures to assess the run-rate of its continuing operations against those of prior periods without the distortion of these factors. The Company believes that these non-GAAP financial measures will be useful to investors as well to assess the continuing strength of the Company’s underlying operations. In addition, adjusted EPS is used as a criterion to measure and pay long-term incentive compensation and segment income is used as a criterion to measure and pay annual incentive compensation. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of liquidity because it provides the Company and its investors a measurement of cash generated from operations that is available to pay dividends, repurchase shares and repay debt. In addition, free cash flow is used as a criterion to measure and pay annual incentive compensation. The Company’s measure of free cash flow may not be comparable to similarly titled measures reported by other companies.
ITEM 9.01 Financial Statements and Exhibits
(a)Financial Statements of Businesses Acquired
Not applicable.
(b)Pro Forma Financial Information
Not applicable.
(c)Shell Company Transactions
Not applicable
(d)Exhibits
EXHIBIT INDEX
| | | | | | | | |
| Exhibit | | Description |
| | Pentair plc press release dated February 1, 2022 announcing earnings for the fourth quarter and full year of 2021 |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 1, 2022.
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| PENTAIR PLC |
| Registrant |
| | |
| By | /s/ Robert P. Fishman |
| | Robert P. Fishman |
| | Executive Vice President, Chief Financial Officer and Chief Accounting Officer |
Exhibit 99.1
News Release
Pentair Reports Fourth Quarter and Full Year 2021 Results
•Fourth quarter sales of $989 million; full year 2021 sales of $3.76 billion.
•Fourth quarter GAAP EPS of $0.89 and adjusted EPS of $0.87; full year 2021 GAAP EPS of $3.32 and adjusted EPS of $3.40.
•The Company introduces its 2022 GAAP EPS guidance of approximately $3.54 to $3.64 and on an adjusted basis of approximately $3.70 to $3.80.
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
LONDON, United Kingdom — February 1, 2022 — Pentair plc (NYSE: PNR) today announced fourth quarter 2021 sales of $989 million. Sales were up 24 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 19 percent in the fourth quarter. Fourth quarter 2021 earnings per diluted share from continuing operations (“EPS”) were $0.89 compared to $0.60 in the fourth quarter of 2020. On an adjusted basis, the Company reported EPS of $0.87 compared to $0.70 in the fourth quarter of 2020. Segment income, adjusted net income, free cash flow, and adjusted EPS are described in the attached schedules.
Fourth quarter 2021 operating income was $151 million, up 24 percent compared to operating income for the fourth quarter of 2020, and return on sales (“ROS”) was 15.2 percent, a decrease of 10 basis points when compared to the fourth quarter of 2020. On an adjusted basis, the Company reported segment income of $167 million, up 18 percent for the fourth quarter, compared to segment income for the fourth quarter of 2020, and ROS was 16.9 percent, a decrease of 80 basis points when compared to the fourth quarter of 2020.
“We exit 2021 feeling very grateful for the tireless efforts of all of our employees to help Pentair deliver for our customers and create value for shareholders despite significant inflation and global supply chain challenges,” said John L. Stauch, Pentair’s President and Chief Executive Officer. “I am humbled and proud of how our employees remained agile and accountable throughout all of 2021.”
Full year 2021 sales were $3.76 billion. Sales were up 25 percent compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 21 percent in 2021. Full year 2021 EPS from continuing operations was $3.32 compared to $2.13 in 2020. On an adjusted basis, the Company reported EPS of $3.40 compared to $2.50 in 2020.
Full year 2021 operating income was $637 million, up 38 percent compared to operating income in 2020, and return on sales (“ROS”) was 16.9 percent, an increase of 160 basis points when compared to 2020. On an adjusted basis, the Company reported segment income of $686 million, up 33 percent in 2021, compared to segment income in 2020, and ROS was 18.2 percent, an increase of 100 basis points when compared to 2020.
Mr. Stauch continued, “Our residential businesses remained strong and we saw continued recovery in both our commercial and industrial businesses throughout the year. Even though we exited 2021 with near record backlog, we were extremely proud to deliver robust growth in sales, income, and EPS while also expanding margins. Our balance sheet ended the year well positioned as we delivered another strong year of free cash flow. In 2021, we returned half of our free cash flow to shareholders through dividends and share repurchases in addition to funding two strategic acquisitions that help build out our water treatment and pool capabilities. We recently announced a dividend increase that will mark the 46th consecutive year of Pentair raising its dividend, an important component of our long-term capital allocation strategy.”
Consumer Solutions sales were up 31 percent in the fourth quarter of 2021 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 23 percent in the fourth quarter. Segment income of $136 million was up 10 percent compared to the fourth quarter of 2020, and ROS was 21.6 percent, a decrease of 410 basis points when compared to the fourth quarter of 2020. Fourth quarter ROS was negatively impacted by the lower margin contribution from recent acquisitions, increased inflation, and ongoing supply chain inefficiencies.
Consumer Solutions sales were up 34 percent for the full year of 2021 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 30 percent in 2021. Segment income of $554 million was up 32 percent compared to 2020, and ROS was 23.7 percent, a decrease of 30 basis points when compared to 2020.
Industrial & Flow Technologies sales were up 14 percent in the fourth quarter of 2021 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 13 percent in the fourth quarter. Segment income of $54 million was up 63 percent compared to the fourth quarter of 2020, and ROS was 15.0 percent, an increase of 440 basis points when compared to the fourth quarter of 2020.
Industrial & Flow Technologies sales were up 12 percent for the full year of 2021 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 9 percent in 2021. Segment income of $213 million was up 30 percent compared to 2020, and ROS was 15.0 percent, an increase of 210 basis points when compared to 2020.
Full year net cash provided by operating activities of continuing operations was $614 million and free cash flow from continuing operations was $557 million.
Pentair paid a regular cash dividend of $0.20 per share in the fourth quarter of 2021. Pentair previously announced on December 7, 2021 that it will pay a regular quarterly cash dividend of $0.21 per share on February 4, 2022 to shareholders of record at the close of business on January 21, 2022. This dividend reflects a 5 percent increase in the Company’s regular cash dividend rate; 2022 marks the 46th consecutive year that Pentair has increased its dividend.
OUTLOOK
Mr. Stauch concluded, “While we enter 2022 with continued uncertainty around COVID-19 impacts and global supply chain stability, we remain confident of the long-term growth trends in all of our businesses. Our Residential businesses primarily benefit from our installed base and many of our customers are signaling strong order trends, which we believe bodes well for our Pool, Water Treatment, and Residential Flow businesses. Commercial demand continues to improve and is another positive indicator for our Water Treatment business. Finally, our Industrial facing businesses saw orders and backlog improve as the year progressed, which builds confidence in further growth in the new year. We believe we are well positioned for 2022 and our efforts in 2021 highlight our ability to be agile and navigate the continued challenging environment we are all facing to start the new year.”
The Company introduces 2022 GAAP EPS guidance of approximately $3.54 to $3.64 and on an adjusted basis of approximately $3.70 to $3.80. The Company anticipates full year 2022 sales to be up approximately 6 to 9 percent on a reported basis. The Company expects to deliver full year free cash flow approximately equal to 100 percent of net income.
In addition, the Company introduces first quarter 2022 GAAP EPS of approximately $0.76 and on an adjusted EPS basis of approximately $0.80. The Company expects first quarter sales to be up approximately 7 to 11 percent on a reported basis compared to first quarter 2021.
EARNINGS CONFERENCE CALL
Pentair President and Chief Executive Officer John L. Stauch and Chief Financial Officer Robert P. Fishman will discuss the Company’s fourth quarter and full year 2021 results on a two-way conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investor Relations section of the Company’s website, www.pentair.com, shortly before the call begins.
Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentations, each of which can be found on Pentair’s website. The webcast and presentations will be archived at the Company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release contains statements that we believe to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “could,” “positioned,” “strategy,” “future” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the overall impact of the COVID-19 pandemic on our business; the duration and severity of the COVID-19 pandemic, the impact of virus variants and the effectiveness of vaccinations; actions that may be taken by us, other businesses and governments to address or otherwise mitigate the impact of the COVID-19 pandemic, including those that may impact our ability to operate our facilities, meet production demands, and deliver products to our customers; the impacts of the COVID-19 pandemic on the global economy, our workforce, customers and suppliers, and customer demand; overall global economic and business conditions impacting our business, including the strength of housing and related markets; supply, demand, logistics, competition and pricing pressures related to and in the markets we serve; volatility in currency exchange rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; the ability to achieve the benefits of our restructuring plans, cost reduction initiatives and transformation program; risks associated with operating foreign businesses; the impact of raw material, logistics and labor costs and other inflation; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating and ESG goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2020 and our quarterly reports on Form 10-Q. All forward-looking statements, including all financial forecasts, speak only as of the date of this release. Pentair assumes no obligation, and disclaims any obligation, to update the information contained in this release.
ABOUT PENTAIR PLC
At Pentair, we inspire people to move, improve and enjoy life’s essential resources for happier, healthier lives. From our residential and business water solutions, to our sustainable innovations and applications, we deliver smart, sustainable solutions for life.
Pentair had revenue in 2021 of approximately $3.8 billion, and trades under the ticker symbol PNR. With approximately 11,250 global employees serving customers in more than 150 countries, we work to help improve lives and the environment around the world. To learn more, visit Pentair.com.
PENTAIR CONTACTS:
| | | | | |
| James C. Lucas | Rebecca Osborn |
| SVP, Treasurer, FP&A and Investor Relations | Senior Manager, External Communications |
| Direct: 763-656-5575 | Direct: 763-656-5589 |
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| 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 | |
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| 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 | |
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| Equity | 2,421.9 | | 2,106.3 | |
| Total liabilities and equity | $ | 4,753.6 | | $ | 4,197.2 | |
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| 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) | |
| | |
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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 | |
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| | | | | | | | |
| 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 | |
