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 2, 2016
Commission file number 001-11625
Pentair plc
(Exact name of Registrant as specified in its charter)
|
| | |
| | |
Ireland | | 98-1141328
|
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification number) |
P.O. Box 471, Sharp Street, Walkden, Manchester, M28 8BU United Kingdom
(Address of principal executive offices)
Registrant’s telephone number, including area code: 44-161-703-1885
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:
|
| |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
| |
¨ | 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)) |
|
| |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 Results of Operations and Financial Condition
On February 2, 2016, Pentair plc (the “Company”) issued a press release announcing its earnings for the fourth quarter of 2015 and a conference call in connection therewith. A copy of the release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
In the fourth quarter of 2015, we performed step one of the goodwill impairment analysis required under U.S. GAAP. As a result, we determined the fair value of our Valves & Controls reporting unit was less than its carrying value. We are currently in the process of completing the second step of the goodwill impairment test in order to determine the implied fair value of the goodwill of Valves & Controls. We will complete the necessary work to determine an estimated impairment amount prior to the issuance of our 2015 Annual Report on Form 10-K. We estimate we will record a pre-tax, non-cash impairment charge of $400 million to $600 million for the year ended December 31, 2015. This press release includes certain financial measures that exclude the impact of this impairment charge.
This press release refers to certain non-GAAP financial measures (core sales, segment income, return on sales, adjusted 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 generally accepted accounting principles.
The 2015 segment income, return on sales and adjusted earnings per share from continuing operations (“EPS”) eliminate intangible amortization, certain targeted restructuring activities, acquisition-related expenses, “mark-to-market” gain for pension and other post-retirement plans, loss on sale of a business and certain tax items. The 2014 segment income, return on sales and adjusted EPS eliminate intangible amortization, certain targeted restructuring activities, certain expenses related to the redomicile of the Company, “mark-to-market” loss for pension and other post-retirement plans and certain tax items.
We use the term “core sales” to refer to GAAP net sales 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. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
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.
The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of operating performance because it provides the Company and its investors a measurement of cash generated from continuing operations that is available to pay dividends and repay debt. In addition, free cash flow is used as criterion to measure and pay compensation-based incentives. 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
The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:
|
| | |
Exhibit | | Description |
99.1 | | Pentair plc press release dated February 2, 2016 announcing earnings results for the fourth quarter of 2015. |
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 2, 2016.
|
| | |
| PENTAIR PLC |
| Registrant |
| | |
| By | /s/ John L. Stauch |
| | John L. Stauch |
| | Executive Vice President and Chief Financial Officer |
PENTAIR PLC
Exhibit Index to Current Report on Form 8-K
Dated February 2, 2016
|
| | |
Exhibit Number | | Description |
99.1 | | Pentair plc press release dated February 2, 2016 announcing earnings results for the fourth quarter of 2015. |
Exhibit 99.1
News Release
Pentair Reports Fourth Quarter and Full Year 2015 Results
| |
• | Fourth quarter sales of $1.8 billion. |
| |
• | Fourth quarter adjusted EPS declined 3 percent to $1.13. |
| |
• | Full year free cash flow of $643 million was approximately 90 percent of adjusted net income. |
| |
• | The company anticipates a pre-tax non-cash goodwill and intangible asset impairment charge of $400 million to $600 million. |
| |
• | The company confirms adjusted 2016 EPS guidance of $4.05 - $4.25. |
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
MANCHESTER, United Kingdom — February 2, 2016— Pentair plc (NYSE: PNR) today announced fourth quarter 2015 sales of $1.8 billion. Sales were down 2 percent compared to sales for the same period last year. Excluding the unfavorable impact of currency translation and positive contribution from acquisitions, core sales declined 4 percent in the fourth quarter. Adjusted fourth quarter 2015 earnings per diluted share from continuing operations (“EPS”) were $1.13, down 3 percent from adjusted EPS of $1.17 in the fourth quarter of last year. On a GAAP basis, excluding impairment charges, the company reported EPS of $0.51 compared to $0.70 in the fourth quarter of 2014. Amounts excluded from segment income, adjusted net income and adjusted EPS are described in the attached schedules.
Fourth quarter 2015 segment income was $280 million, down 7 percent compared to segment income for fourth quarter 2014, and return on sales was 15.9 percent, a decrease of 90 basis points when compared to 2014 return on sales. On a GAAP basis, excluding impairment charges, the company reported operating income of $163 million for the quarter.
For the full year, the company reported sales of $6.4 billion, segment income of $1.0 billion, and adjusted EPS of $3.94. On a GAAP basis, excluding impairment charges, the company reported operating income of $732 million and EPS of $2.63.
Free cash flow was $316 million for the quarter and $643 million for the full year; which represented approximately 90 percent conversion of adjusted net income for the full year.
In the fourth quarter of 2015, we performed step one of the goodwill impairment analysis required under U.S. GAAP. As a result, we determined the fair value of our Valves & Controls reporting unit was less than its carrying value. We are currently in the process of completing the second step of the goodwill impairment test in order to determine the implied fair value of the goodwill of Valves & Controls. We will complete the necessary work to determine an estimated impairment amount prior to the issuance of our 2015 Annual Report on Form 10-K. We estimate we will record a pre-tax, non-cash impairment charge of $400 million - $600 million for the year ended December 31, 2015.
Pentair paid dividends of $0.32 per share in the fourth quarter of 2015. Pentair previously announced on December 8, 2015 that its Board of Directors approved a 5 percent increase in the company's regular annual cash dividend rate for 2016 to $1.34 from $1.28. 2016 will mark the 40th consecutive year that Pentair has increased its dividend.
“We delivered on our fourth quarter commitments despite the challenges our businesses serving the Energy and Industrial markets continue to face,” said Randall J. Hogan, Pentair Chairman and Chief Executive Officer. "We are maintaining our full year 2016 adjusted EPS guidance of $4.05 to $4.25 per share, which assumes continued difficult business conditions combined with additional productivity actions. We continue to believe in the long-term prospects of all of our businesses and we expect our proven track record around operational rigor and cash flow will help us manage our way through this uncertain economic environment.”
FOURTH QUARTER BUSINESS HIGHLIGHTS
All references to changes in core sales exclude the impact of currency translation and acquisitions. See attached reconciliations of these Non-GAAP measures.
Valves & Controls delivered fourth quarter 2015 sales of $474 million, down 22 percent versus the prior year quarter. Core sales declined 15 percent year over year for the fourth quarter and FX translation was a negative 7 percent. Backlog, including the impact of currency translation, declined 4 percent to $1.1 billion compared to third quarter 2015.
| |
• | Core sales in the Energy vertical, which accounted for approximately 60 percent of Valves & Controls revenue in the quarter, decreased 16 percent. Core sales to the oil & gas industry decreased 20 percent while core sales to the power and mining industries were down 10 percent. |
| |
• | Core sales in the Industrial vertical, which accounted for approximately 40 percent of Valves & Controls revenue in the quarter, decreased 12 percent. |
Valves & Controls delivered fourth quarter segment income of $48 million, down 59 percent compared to $116 million in the same quarter last year. Fourth quarter 2015 segment margins decreased 900 basis points to 10.0 percent.
Flow & Filtration Solutions fourth quarter sales were $354 million, down 8 percent versus the prior year quarter. Core sales declined 2 percent in the fourth quarter and FX translation was negative 6 percent.
| |
• | Core sales in the Residential & Commercial vertical, which accounted for approximately 30 percent of Flow & Filtration Solutions revenue in the quarter, decreased 7 percent. |
| |
• | Core sales in the Food & Beverage vertical, which accounted for approximately 25 percent of Flow & Filtration Solutions revenue in the quarter, decreased 2 percent. |
| |
• | Core sales in the Infrastructure vertical, which accounted for approximately 20 percent of Flow & Filtration Solutions revenue in the quarter, decreased 3 percent. |
Flow & Filtration Solutions delivered fourth quarter segment income of $40 million compared to $42 million in the same period last year. Segment margins increased 40 basis points to 11.3 percent.
Water Quality Systems delivered fourth quarter 2015 sales of $365 million, up 4 percent versus the prior year quarter. Core sales grew 7 percent in the fourth quarter and FX translation was negative 3 percent.
| |
• | Core sales in the Residential & Commercial vertical, which accounted for approximately 80 percent of Water Quality Systems revenue in the quarter, increased 7 percent. |
| |
• | Core sales in the Food & Beverage vertical, which accounted for approximately 20 percent of Water Quality Systems revenue in the quarter, increased 9 percent. |
Water Quality Systems fourth quarter segment income of $81 million represented a 30 percent increase as compared to $62 million in the same quarter last year. Fourth quarter 2015 segment margins increased 450 basis points to 22.3 percent.
Technical Solutions delivered fourth quarter 2015 sales of $574 million, up 23 percent versus the prior year quarter. Core sales were flat in the fourth quarter, ERICO added 29 percent and FX translation was negative 6 percent.
| |
• | Core sales in the Industrial vertical, which accounted for approximately 35 percent of Technical Solutions revenue in the quarter, decreased 2 percent. |
| |
• | Core sales in the Residential & Commercial vertical, which accounted for approximately 25 percent of Technical Solutions revenue in the quarter, increased 7 percent. |
| |
• | Core sales in the Energy vertical, which accounted for approximately 20 percent of Technical Solutions revenue in the quarter, decreased 3 percent. |
| |
• | Core sales in the Infrastructure vertical, which accounted for approximately 15 percent of Technical Solutions revenue in the quarter, increased 2 percent. |
Technical Solutions delivered fourth quarter segment income of $130 million, up 17 percent compared to $111 million in the same quarter last year. Fourth quarter 2015 segment margins decreased 130 basis points to 22.6 percent.
OUTLOOK
The company previously communicated its full year 2016 adjusted EPS outlook of $4.05 - $4.25. On an adjusted basis, this would represent an increase of 5 percent over 2015 adjusted EPS of $3.94. The company anticipates full year 2016 sales of $6.6 billion, or up approximately 2 percent on a reported basis and down 2 to 3 percent on a core sales basis. The company expects to generate free cash flow approximately equal to adjusted net income in 2016.
In addition, the company introduced first quarter 2016 adjusted EPS guidance of $0.70 - $0.72, down approximately 7 percent on an adjusted basis versus the same quarter last year's adjusted EPS. The company expects first quarter revenue to be
approximately $1.6 billion, which would be up 7 to 8 percent on a reported basis and up approximately 1 percent on a core basis compared to first quarter 2015 revenue.
EARNINGS CONFERENCE CALL
Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company’s performance, fourth quarter and full year 2015 results, and 2016 outlook 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 Investors 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 presentation, both of which can be found on Pentair’s website. The webcast and presentation will be archived at the company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press 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,” “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 overall global economic and business conditions, including worldwide demand for oil and gas; the ability to achieve the benefits of our restructuring plans; the ability to successfully identify, finance, complete and integrate acquisitions, including the ability to successfully integrate and achieve the expected benefits of the acquisition of ERICO Global Company; competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission (“SEC”), including in our Quarterly Report on Form 10-Q for the quarter ended September 26, 2015 and our 2014 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this report. We assume no obligation, and disclaim any obligation, to update the information contained in this report.
ABOUT PENTAIR PLC
Pentair plc (www.pentair.com) delivers industry-leading products, services and solutions for its customers’ diverse needs in water and other fluids, thermal management and equipment protection. With 2015 revenues of $6.4 billion, Pentair employs approximately 30,000 people worldwide.
PENTAIR CONTACTS:
Jim Lucas
Vice President, Investor Relations & Strategic Planning
Direct: 763-656-5575
Email: jim.lucas@pentair.com
Rebecca Osborn
Senior Manager, External Communications
Direct: 763-656-5589
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,
2015 | December 31,
2014 | | December 31,
2015 | December 31,
2014 |
Net sales | $ | 1,760.7 |
| $ | 1,802.5 |
| | $ | 6,449.0 |
| $ | 7,039.0 |
|
Cost of goods sold | 1,191.4 |
| 1,174.6 |
| | 4,263.2 |
| 4,576.0 |
|
Gross profit | 569.3 |
| 627.9 |
| | 2,185.8 |
| 2,463.0 |
|
% of net sales | 32.3 | % | 34.9 | % | | 33.9 | % | 35.0 | % |
Selling, general and administrative | 375.6 |
| 422.8 |
| | 1,334.3 |
| 1,493.8 |
|
% of net sales | 21.3 | % | 23.5 | % | | 20.7 | % | 21.2 | % |
Research and development | 30.9 |
| 29.1 |
| | 119.6 |
| 117.3 |
|
% of net sales | 1.8 | % | 1.6 | % | | 1.9 | % | 1.7 | % |
Operating income | 162.8 |
| 176.0 |
| | 731.9 |
| 851.9 |
|
% of net sales | 9.2 | % | 9.8 | % | | 11.3 | % | 12.1 | % |
Other (income) expense: | | | | | |
Equity income of unconsolidated subsidiaries | (0.8 | ) | (0.3 | ) | | (2.8 | ) | (1.2 | ) |
Loss on sale of businesses, net | 3.2 |
| — |
| | 3.2 |
| 0.2 |
|
Net interest expense | 34.6 |
| 17.5 |
| | 102.7 |
| 68.6 |
|
% of net sales | 2.0 | % | 1.0 | % | | 1.6 | % | 1.0 | % |
Income from continuing operations before income taxes | 125.8 |
| 158.8 |
| | 628.8 |
| 784.3 |
|
Provision for income taxes | 32.6 |
| 29.0 |
| | 148.3 |
| 177.3 |
|
Effective tax rate | 25.9 | % | 18.3 | % | | 23.6 | % | 22.6 | % |
Net income from continuing operations | 93.2 |
| 129.8 |
| | 480.5 |
| 607.0 |
|
Loss (income) from discontinued operations, net of tax | 0.9 |
| (9.0 | ) | | (4.7 | ) | (6.4 | ) |
Loss from sale / impairment of discontinued operations, net of tax | (1.9 | ) | — |
| | (6.7 | ) | (385.7 | ) |
Net income | $ | 92.2 |
| $ | 120.8 |
| | $ | 469.1 |
| $ | 214.9 |
|
Earnings (loss) per ordinary share | | | | | |
Basic | | | | | |
Continuing operations | $ | 0.52 |
| $ | 0.71 |
| | $ | 2.66 |
| $ | 3.19 |
|
Discontinued operations | (0.01 | ) | (0.05 | ) | | (0.06 | ) | (2.06 | ) |
Basic earnings per ordinary share | $ | 0.51 |
| $ | 0.66 |
| | $ | 2.60 |
| $ | 1.13 |
|
Diluted | | | | | |
Continuing operations | $ | 0.51 |
| $ | 0.70 |
| | $ | 2.63 |
| $ | 3.14 |
|
Discontinued operations | (0.01 | ) | (0.05 | ) | | (0.06 | ) | (2.03 | ) |
Diluted earnings per ordinary share | $ | 0.50 |
| $ | 0.65 |
| | $ | 2.57 |
| $ | 1.11 |
|
Weighted average ordinary shares outstanding | | | | | |
Basic | 180.5 |
| 183.1 |
| | 180.3 |
| 190.6 |
|
Diluted | 182.5 |
| 185.8 |
| | 182.6 |
| 193.7 |
|
Cash dividends paid per ordinary share | $ | 0.32 |
| $ | 0.30 |
| | $ | 1.28 |
| $ | 1.10 |
|
Note: 2015 excludes impairment charge | | | | | |
|
| | | | | | |
Pentair plc and Subsidiaries |
Condensed Consolidated Balance Sheets (Unaudited) |
| | |
| December 31,
2015 | December 31,
2014 |
In millions |
Assets |
Current assets | | |
Cash and cash equivalents | $ | 126.3 |
| $ | 110.4 |
|
Accounts and notes receivable, net | 1,167.7 |
| 1,205.9 |
|
Inventories | 1,174.3 |
| 1,130.4 |
|
Other current assets | 312.3 |
| 366.8 |
|
Current assets held for sale | — |
| 80.6 |
|
Total current assets | 2,780.6 |
| 2,894.1 |
|
Property, plant and equipment, net | 942.8 |
| 950.0 |
|
Other assets | | |
Goodwill | 5,770.6 |
| 4,741.9 |
|
Intangibles, net | 2,529.6 |
| 1,608.1 |
|
Other non-current assets | 388.1 |
| 436.2 |
|
Non-current assets held for sale | — |
| 24.9 |
|
Total other assets | 8,688.3 |
| 6,811.1 |
|
Total assets | $ | 12,411.7 |
| $ | 10,655.2 |
|
Liabilities and Equity |
Current liabilities | | |
Current maturities of long-term debt and short-term borrowings | $ | 0.7 |
| $ | 6.7 |
|
Accounts payable | 578.8 |
| 583.1 |
|
Employee compensation and benefits | 262.9 |
| 305.5 |
|
Other current liabilities | 644.1 |
| 709.1 |
|
Current liabilities held for sale | — |
| 35.1 |
|
Total current liabilities | 1,486.5 |
| 1,639.5 |
|
Other liabilities | | |
Long-term debt | 4,709.3 |
| 2,997.4 |
|
Pension and other post-retirement compensation and benefits | 287.2 |
| 322.0 |
|
Deferred tax liabilities | 847.8 |
| 528.3 |
|
Other non-current liabilities | 526.6 |
| 497.7 |
|
Non-current liabilities held for sale | — |
| 6.5 |
|
Total liabilities | 7,857.4 |
| 5,991.4 |
|
Equity | 4,554.3 |
| 4,663.8 |
|
Total liabilities and equity | $ | 12,411.7 |
| $ | 10,655.2 |
|
Note: 2015 excludes impairment charge | | |
|
| | | | | | |
Pentair plc and Subsidiaries |
Condensed Consolidated Statements of Cash Flows (Unaudited) |
| Twelve months ended |
In millions | December 31,
2015 | December 31,
2014 |
Operating activities | | |
Net income | $ | 469.1 |
| $ | 214.9 |
|
Loss from discontinued operations, net of tax | 4.7 |
| 6.4 |
|
Loss from sale / impairment of discontinued operations, net of tax | 6.7 |
| 385.7 |
|
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities of continuing operations | | |
Equity income of unconsolidated subsidiaries | (2.8 | ) | (1.2 | ) |
Depreciation | 139.5 |
| 138.7 |
|
Amortization | 121.4 |
| 114.0 |
|
Loss on sale of businesses, net | 3.2 |
| 0.2 |
|
Deferred income taxes | 40.3 |
| 2.0 |
|
Share-based compensation | 33.0 |
| 33.6 |
|
Excess tax benefits from share-based compensation | (6.0 | ) | (12.6 | ) |
Amortization of bridge financing debt issuance costs | 10.8 |
| — |
|
Pension and other post-retirement expense (benefit) | 9.1 |
| 76.2 |
|
Pension and other post-retirement contributions | (24.7 | ) | (27.7 | ) |
Changes in assets and liabilities, net of effects of business acquisitions | | |
Accounts and notes receivable | 48.8 |
| 9.0 |
|
Inventories | 1.4 |
| (3.7 | ) |
Other current assets | (21.7 | ) | (22.0 | ) |
Accounts payable | (8.1 | ) | 34.5 |
|
Employee compensation and benefits | (41.1 | ) | 13.2 |
|
Other current liabilities | (31.2 | ) | 58.5 |
|
Other non-current assets and liabilities | (2.4 | ) | (14.7 | ) |
Net cash provided by (used for) operating activities of continuing operations | 750.0 |
| 1,005.0 |
|
Net cash provided by (used for) operating activities of discontinued operations | (10.7 | ) | 3.4 |
|
Net cash provided by (used for) operating activities | 739.3 |
| 1,008.4 |
|
Investing activities | | |
Capital expenditures | (134.3 | ) | (129.6 | ) |
Proceeds from sale of property and equipment | 27.3 |
| 13.1 |
|
Acquisitions, net of cash acquired | (1,913.9 | ) | (12.3 | ) |
Other | (3.6 | ) | 0.5 |
|
Net cash provided by (used for) investing activities of continuing operations | (2,024.5 | ) | (128.3 | ) |
Net cash provided by (used for) investing activities of discontinued operations | 59.0 |
| — |
|
Net cash provided by (used for) investing activities | (1,965.5 | ) | (128.3 | ) |
Financing activities | | |
Net receipts (repayments) of short-term borrowings | (2.3 | ) | 0.5 |
|
Net receipts of commercial paper and revolving long-term debt | 363.5 |
| 468.6 |
|
Proceeds from long-term debt | 1,714.8 |
| 2.2 |
|
Repayment of long-term debt | (356.6 | ) | (16.8 | ) |
Debt issuance costs | (26.8 | ) | (3.1 | ) |
Excess tax benefits from share-based compensation | 6.0 |
| 12.6 |
|
Shares issued to employees, net of shares withheld | 19.4 |
| 37.0 |
|
Repurchases of ordinary shares | (200.0 | ) | (1,150.0 | ) |
Dividends paid | (231.7 | ) | (211.4 | ) |
Purchase of noncontrolling interest | — |
| (134.7 | ) |
Net cash provided by (used for) financing activities | 1,286.3 |
| (995.1 | ) |
Effect of exchange rate changes on cash and cash equivalents | (44.2 | ) | (30.6 | ) |
Change in cash and cash equivalents | 15.9 |
| (145.6 | ) |
Cash and cash equivalents, beginning of year | 110.4 |
| 256.0 |
|
Cash and cash equivalents, end of year | $ | 126.3 |
| $ | 110.4 |
|
Note: 2015 excludes impairment charge | | |
|
| | | | | | |
Pentair plc and Subsidiaries |
Free Cash Flow (Unaudited) |
| Twelve months ended |
In millions | December 31,
2015 | December 31,
2014 |
Free cash flow | | |
Net cash provided by (used for) operating activities of continuing operations | $ | 750.0 |
| $ | 1,005.0 |
|
Capital expenditures | (134.3 | ) | (129.6 | ) |
Proceeds from sale of property and equipment | 27.3 |
| 13.1 |
|
Free cash flow | $ | 643.0 |
| $ | 888.5 |
|
|
| | | | | | | | | | | | | | | |
Pentair plc and Subsidiaries |
Supplemental Financial Information by Reportable Segment (Unaudited) |
| | | | | |
| 2015 |
In millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full
Year |
Net sales | | | | | |
Valves & Controls | $ | 429.2 |
| $ | 496.4 |
| $ | 440.9 |
| $ | 473.6 |
| $ | 1,840.1 |
|
Flow & Filtration Solutions | 350.1 |
| 374.6 |
| 362.7 |
| 354.2 |
| 1,441.6 |
|
Water Quality Systems | 306.9 |
| 387.7 |
| 322.0 |
| 364.9 |
| 1,381.5 |
|
Technical Solutions | 395.8 |
| 407.1 |
| 432.3 |
| 574.1 |
| 1,809.3 |
|
Other | (7.0 | ) | (4.6 | ) | (5.8 | ) | (6.1 | ) | (23.5 | ) |
Consolidated | $ | 1,475.0 |
| $ | 1,661.2 |
| $ | 1,552.1 |
| $ | 1,760.7 |
| $ | 6,449.0 |
|
Segment income (loss) | | | | | |
Valves & Controls | $ | 55.4 |
| $ | 64.4 |
| $ | 55.7 |
| $ | 47.5 |
| $ | 223.0 |
|
Flow & Filtration Solutions | 35.9 |
| 56.3 |
| 52.8 |
| 40.1 |
| 185.1 |
|
Water Quality Systems | 51.8 |
| 88.2 |
| 60.5 |
| 81.3 |
| 281.8 |
|
Technical Solutions | 77.6 |
| 86.4 |
| 101.0 |
| 130.0 |
| 395.0 |
|
Other | (21.9 | ) | (22.4 | ) | (20.8 | ) | (18.6 | ) | (83.7 | ) |
Consolidated | $ | 198.8 |
| $ | 272.9 |
| $ | 249.2 |
| $ | 280.3 |
| $ | 1,001.2 |
|
Return on sales | | | | | |
Valves & Controls | 12.9 | % | 13.0 | % | 12.6 | % | 10.0 | % | 12.1 | % |
Flow & Filtration Solutions | 10.2 | % | 15.0 | % | 14.6 | % | 11.3 | % | 12.8 | % |
Water Quality Systems | 16.9 | % | 22.8 | % | 18.8 | % | 22.3 | % | 20.4 | % |
Technical Solutions | 19.6 | % | 21.2 | % | 23.4 | % | 22.6 | % | 21.8 | % |
Consolidated | 13.5 | % | 16.4 | % | 16.1 | % | 15.9 | % | 15.5 | % |
|
| | | | | | | | | | | | | | | |
| 2014 |
In millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full
Year |
Net sales | | | | | |
Valves & Controls | $ | 531.0 |
| $ | 628.6 |
| $ | 607.9 |
| $ | 609.8 |
| $ | 2,377.3 |
|
Flow & Filtration Solutions | 401.1 |
| 424.5 |
| 394.1 |
| 383.4 |
| 1,603.1 |
|
Water Quality Systems | 304.0 |
| 377.9 |
| 324.1 |
| 350.4 |
| 1,356.4 |
|
Technical Solutions | 415.3 |
| 408.6 |
| 438.8 |
| 465.4 |
| 1,728.1 |
|
Other | (7.4 | ) | (5.5 | ) | (6.5 | ) | (6.5 | ) | (25.9 | ) |
Consolidated | $ | 1,644.0 |
| $ | 1,834.1 |
| $ | 1,758.4 |
| $ | 1,802.5 |
| $ | 7,039.0 |
|
Segment income (loss) | | | | | |
Valves & Controls | $ | 74.3 |
| $ | 100.9 |
| $ | 107.6 |
| $ | 115.7 |
| $ | 398.5 |
|
Flow & Filtration Solutions | 42.3 |
| 61.8 |
| 53.5 |
| 41.9 |
| 199.5 |
|
Water Quality Systems | 50.3 |
| 84.7 |
| 56.0 |
| 62.3 |
| 253.3 |
|
Technical Solutions | 83.9 |
| 81.9 |
| 101.1 |
| 111.2 |
| 378.1 |
|
Other | (21.7 | ) | (21.0 | ) | (22.4 | ) | (28.6 | ) | (93.7 | ) |
Consolidated | $ | 229.1 |
| $ | 308.3 |
| $ | 295.8 |
| $ | 302.5 |
| $ | 1,135.7 |
|
Return on sales | | | | | |
Valves & Controls | 14.0 | % | 16.1 | % | 17.7 | % | 19.0 | % | 16.8 | % |
Flow & Filtration Solutions | 10.6 | % | 14.6 | % | 13.6 | % | 10.9 | % | 12.3 | % |
Water Quality Systems | 16.6 | % | 22.4 | % | 17.3 | % | 17.8 | % | 18.7 | % |
Technical Solutions | 20.2 | % | 20.0 | % | 23.1 | % | 23.9 | % | 21.9 | % |
Consolidated | 13.9 | % | 16.8 | % | 16.8 | % | 16.8 | % | 16.1 | % |
|
| | | | | | | | | | | | | | | | |
Pentair plc and Subsidiaries |
Reconciliation of the GAAP year ended December 31, 2015 to the non-GAAP |
excluding the effect of 2015 adjustments (Unaudited) |
| | | | | | |
In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth
Quarter | | Full Year |
Total Pentair | | | | | | |
Net sales | $ | 1,475.0 |
| $ | 1,661.2 |
| $ | 1,552.1 |
| $ | 1,760.7 |
| | $ | 6,449.0 |
|
Operating income | 171.2 |
| 217.9 |
| 180.0 |
| 162.8 |
| | 731.9 |
|
% of net sales | 11.6 | % | 13.1 | % | 11.6 | % | 9.2 | % | | 11.3 | % |
Adjustments: |
|
| | |
|
| |
|
|
Restructuring and other | — |
| 25.5 |
| 25.3 |
| 70.1 |
| | 120.9 |
|
Pension and other post-retirement mark-to-market gain | — |
| — |
| — |
| (23.0 | ) | | (23.0 | ) |
Intangible amortization | 27.6 |
| 28.0 |
| 28.2 |
| 37.6 |
| | 121.4 |
|
Inventory step-up | — |
| 1.5 |
| 1.4 |
| 32.8 |
| | 35.7 |
|
Deal related costs and expenses | — |
| — |
| 14.3 |
| — |
| | 14.3 |
|
Segment income | 198.8 |
| 272.9 |
| 249.2 |
| 280.3 |
| | 1,001.2 |
|
% of net sales | 13.5 | % | 16.4 | % | 16.1 | % | 15.9 | % | | 15.5 | % |
Net income from continuing operations—as reported | 118.2 |
| 153.9 |
| 115.2 |
| 93.2 |
| | 480.5 |
|
Loss on sale of businesses, net of tax | — |
| — |
| — |
| 2.7 |
| | 2.7 |
|
Amortization of bridge financing fees, net of tax | — |
| — |
| 8.3 |
| — |
| | 8.3 |
|
Adjustments, net of tax | 21.2 |
| 42.4 |
| 53.2 |
| 110.5 |
| | 227.3 |
|
Net income from continuing operations—as adjusted | $ | 139.4 |
| $ | 196.3 |
| $ | 176.7 |
| $ | 206.4 |
|
| $ | 718.8 |
|
Continuing earnings per ordinary share—diluted |
|
| | |
|
| |
|
|
Diluted earnings per ordinary share—as reported | $ | 0.65 |
| $ | 0.84 |
| $ | 0.63 |
| $ | 0.51 |
| | $ | 2.63 |
|
Adjustments | 0.11 |
| 0.24 |
| 0.34 |
| 0.62 |
| | 1.31 |
|
Diluted earnings per ordinary share—as adjusted | $ | 0.76 |
| $ | 1.08 |
| $ | 0.97 |
| $ | 1.13 |
| | $ | 3.94 |
|
Note: Fourth quarter and full year excludes impairment charge | | | | |
|
| | | | | | | | | | | | | | | | | |
Pentair plc and Subsidiaries |
Reconciliation of Net Sales Growth to Core Net Sales Growth by Vertical |
for the quarter and year ended December 31, 2015 (Unaudited) |
| | | | | | | |
| Q4 Net Sales Growth | | Full Year Net Sales Growth |
| Core | Currency | Acq. / Div. | Total | | Core | Currency | Acq. / Div. | Total |
Valves & Controls | (14.9 | )% | (7.4 | )% | — | % | (22.3 | )% | | (13.7 | )% | (8.9 | )% | — | % | (22.6 | )% |
Industrial | (11.5 | )% | (6.0 | )% | — | % | (17.5 | )% | | (13.4 | )% | (6.9 | )% | — | % | (20.3 | )% |
Energy | (16.4 | )% | (8.9 | )% | — | % | (25.3 | )% | | (13.9 | )% | (10.1 | )% | — | % | (24.0 | )% |
Flow & Filtration Solutions | (1.7 | )% | (5.9 | )% | — | % | (7.6 | )% | | (3.6 | )% | (6.5 | )% | — | % | (10.1 | )% |
Residential & Commercial | (6.8 | )% | (4.9 | )% | — | % | (11.7 | )% | | (8.2 | )% | (6.9 | )% | — | % | (15.1 | )% |
Food & Beverage | (2.3 | )% | (8.7 | )% | — | % | (11.0 | )% | | 2.3 | % | (8.9 | )% | — | % | (6.6 | )% |
Infrastructure | (2.5 | )% | (5.6 | )% | — | % | (8.1 | )% | | (3.6 | )% | (6.3 | )% | — | % | (9.9 | )% |
Water Quality Systems | 7.0 | % | (2.9 | )% | — | % | 4.1 | % | | 5.0 | % | (3.1 | )% | — | % | 1.9 | % |
Residential & Commercial | 7.0 | % | (2.8 | )% | — | % | 4.2 | % | | 4.8 | % | (2.9 | )% | — | % | 1.9 | % |
Food & Beverage | 9.1 | % | (3.0 | )% | — | % | 6.1 | % | | 7.6 | % | (3.9 | )% | — | % | 3.7 | % |
Technical Solutions | — | % | (5.5 | )% | 28.9 | % | 23.4 | % | | 2.3 | % | (6.1 | )% | 8.5 | % | 4.7 | % |
Industrial | (1.5 | )% | (5.3 | )% | 9.4 | % | 2.6 | % | | 0.5 | % | (6.5 | )% | 2.7 | % | (3.3 | )% |
Residential & Commercial | 6.5 | % | (5.7 | )% | 96.2 | % | 97.0 | % | | 8.4 | % | (7.1 | )% | 30.2 | % | 31.5 | % |
Energy | (2.5 | )% | (6.3 | )% | 10.1 | % | 1.3 | % | | 5.5 | % | (5.6 | )% | 3.5 | % | 3.4 | % |
Infrastructure | 1.5 | % | (4.1 | )% | 51.3 | % | 48.7 | % | | (4.9 | )% | (5.6 | )% | 12.8 | % | 2.3 | % |
Total Pentair | (3.9 | )% | (5.4 | )% | 7.0 | % | (2.3 | )% | | (3.9 | )% | (6.6 | )% | 2.1 | % | (8.4 | )% |
Industrial | (7.7 | )% | (5.3 | )% | 3.8 | % | (9.2 | )% | | (7.4 | )% | (6.0 | )% | 1.0 | % | (12.4 | )% |
Residential & Commercial | 3.4 | % | (3.8 | )% | 15.1 | % | 14.7 | % | | 1.6 | % | (4.7 | )% | 4.2 | % | 1.1 | % |
Energy | (10.4 | )% | (8.3 | )% | 2.5 | % | (16.2 | )% | | (8.6 | )% | (8.9 | )% | 0.7 | % | (16.8 | )% |
Food & Beverage | 1.6 | % | (6.5 | )% | — | % | (4.9 | )% | | 4.2 | % | (7.1 | )% | — | % | (2.9 | )% |
Infrastructure | (0.3 | )% | (5.1 | )% | 22.4 | % | 17.0 | % | | (3.6 | )% | (6.0 | )% | 6.1 | % | (3.5 | )% |
|
| | | | | | | | | | | | | | | | |
Pentair plc and Subsidiaries |
Reconciliation of the GAAP year ended December 31, 2014 to the non-GAAP |
excluding the effect of 2014 adjustments (Unaudited) |
| | | | | | |
In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | | Full Year |
Total Pentair | | | | | | |
Net sales | $ | 1,644.0 |
| $ | 1,834.1 |
| $ | 1,758.4 |
| $ | 1,802.5 |
| | $ | 7,039.0 |
|
Operating income | 182.1 |
| 226.4 |
| 267.4 |
| 176.0 |
| | 851.9 |
|
% of net sales | 11.1 | % | 12.3 | % | 15.2 | % | 9.8 | % | | 12.1 | % |
Adjustments: | | | | | |
|
|
Restructuring and other | 17.0 |
| 44.1 |
| — |
| 48.5 |
| | 109.6 |
|
Intangible asset amortization | 28.5 |
| 29.0 |
| 28.4 |
| 28.1 |
| | 114.0 |
|
Pension and other post-retirement mark-to-market loss | — |
| — |
| — |
| 49.9 |
| | 49.9 |
|
Redomicile related expenses | 1.5 |
| 8.8 |
| — |
| — |
| | 10.3 |
|
Segment income | 229.1 |
| 308.3 |
| 295.8 |
| 302.5 |
| | 1,135.7 |
|
% of net sales | 13.9 | % | 16.8 | % | 16.8 | % | 16.8 | % | | 16.1 | % |
Net income from continuing operations—as reported | 125.5 |
| 159.2 |
| 192.5 |
| 129.8 |
| | 607.0 |
|
Adjustments, net of tax | 38.1 |
| 63.5 |
| 21.5 |
| 87.6 |
| | 210.7 |
|
Net income from continuing operations—as adjusted | $ | 163.6 |
| $ | 222.7 |
| $ | 214.0 |
| $ | 217.4 |
| | $ | 817.7 |
|
Continuing earnings per ordinary share—diluted | | | | | |
|
|
Diluted earnings per ordinary share—as reported | $ | 0.63 |
| $ | 0.81 |
| $ | 1.00 |
| $ | 0.70 |
| | $ | 3.14 |
|
Adjustments | 0.19 |
| 0.32 |
| 0.11 |
| 0.47 |
| | $ | 1.09 |
|
Diluted earnings per ordinary share—as adjusted | $ | 0.82 |
| $ | 1.13 |
| $ | 1.11 |
| $ | 1.17 |
| | $ | 4.23 |
|
Pentair (NYSE:PNR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Pentair (NYSE:PNR)
Historical Stock Chart
From Apr 2023 to Apr 2024
