What changed in this filing

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Item 1. Financial Statements

2022-07-26 compared with 2022-04-21 · 153 added, 95 removed, 508 unchanged (33% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

Three months ended

In millions, except per-share data March 31,

2022 March 31,

Three months ended Six months ended

In millions, except per-share data June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Net sales $ 1,064.2 $ 941.1 $ 2,063.8 $ 1,807.0

57 unchanged sentences

Commitments and contingencies (Note 16)

Ordinary shares $ 0.01 par value, 426.0 authorized, 165.4 and 165.1 issued at March 31, 2022 and December 31, 2021, respectively

Ordinary shares $ 0.01 par value, 426.0 authorized, 164.5 and 165.1 issued at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 1,540.5 1,582.7

6 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three months ended

In millions March 31,

2022 March 31,

Six months ended

In millions June 30,

2022 June 30,

Operating activities

8 unchanged sentences

Amortization of bridge financing fees 7.7 —

(Gain) loss on sale of assets ( 2.3 ) 0.5

Changes in assets and liabilities, net of effects of business acquisitions

6 unchanged sentences

Other non-current assets and liabilities ( 5.7 ) ( 1.5 )

Net cash used for operating activities of continuing operations ( 131.5 ) ( 18.8 )

Net cash provided by operating activities of continuing operations 176.3 361.0

Net cash used for operating activities of discontinued operations ( 1.0 ) ( 0.2 )

Net cash used for operating activities ( 131.5 ) ( 19.0 )

Net cash provided by operating activities 175.3 360.8

Investing activities

2 unchanged sentences

Acquisitions, net of cash acquired ( 1.4 ) ( 82.8 )

Settlement of net investment hedges 8.8 —

Net cash used for investing activities ( 29.8 ) ( 100.9 )

1 unchanged sentence

Net borrowings of revolving long-term debt 19.8 ( 20.0 )

Repayments of long-term debt — ( 103.8 )

Debt issuance costs ( 8.9 ) —

2 unchanged sentences

Dividends paid ( 69.5 ) ( 66.7 )

Payments upon the maturity of cross currency swaps — ( 14.7 )

Net cash provided by financing activities 153.8 34.6

Receipts (payments) upon the maturity of cross currency swaps 0.2 ( 14.7 )

Net cash used for financing activities ( 113.8 ) ( 251.2 )

Effect of exchange rate changes on cash and cash equivalents 8.9 5.1

18 unchanged sentences

Balance - March 31, 2022 165.4 $ 1.7 $ 1,584.3 $ 1,132.6 $ ( 214.7 ) $ 2,503.9

Net income — — — 152.9 — 152.9

Other comprehensive loss, net of tax — — — — ( 15.4 ) ( 15.4 )

Dividends declared, $ 0.21 per share

— — — ( 34.6 ) — ( 34.6 )

Share repurchases ( 0.9 ) — ( 50.0 ) — — ( 50.0 )

Exercise of options, net of shares tendered for payment — — 0.2 — — 0.2

Shares surrendered by employees to pay taxes — — ( 0.3 ) — — ( 0.3 )

Share-based compensation — — 6.3 — — 6.3

Balance - June 30, 2022 164.5 $ 1.7 $ 1,540.5 $ 1,250.9 $ ( 230.1 ) $ 2,563.0

In millions Ordinary shares Additional paid-in capital Retained earnings Accumulated

12 unchanged sentences

Balance - March 31, 2021 166.2 $ 1.7 $ 1,676.6 $ 726.5 $ ( 211.0 ) $ 2,193.8

Net income — — — 132.1 — 132.1

Other comprehensive income, net of tax — — — — 4.3 4.3

Dividends declared, $ 0.20 per share

— — — ( 33.3 ) — ( 33.3 )

Share repurchases ( 0.6 ) — ( 40.4 ) — — ( 40.4 )

Exercise of options, net of shares tendered for payment 0.3 — 5.6 — — 5.6

Issuance of restricted shares, net of cancellations 0.1 — — — — —

Shares surrendered by employees to pay taxes ( 0.1 ) — ( 1.5 ) — — ( 1.5 )

Share-based compensation — — 11.0 — — 11.0

Balance - June 30, 2021 165.9 $ 1.7 $ 1,651.3 $ 825.3 $ ( 206.7 ) $ 2,271.6

See accompanying notes to condensed consolidated financial statements.

19 unchanged sentences

Geographic net sales information, based on geographic destination of the sale, was as follows:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

$ 757.0 $ 639.1 $ 1,463.0 $ 1,225.7

1 unchanged sentence

Developing (1)

127.4 120.5 238.0 225.9

Other Developed (2)

63.9 60.8 129.0 119.4

Consolidated net sales $ 1,064.2 $ 941.1 $ 2,063.8 $ 1,807.0

2 unchanged sentences

Vertical net sales information was as follows:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Residential $ 730.3 $ 599.5 $ 1,413.1 $ 1,171.2

5 unchanged sentences

Performance obligations

On March 31, 2022, we had $ 73.9 million of remaining performance obligations on contracts with an original expected duration of one year or more.

On June 30, 2022, we had $ 92.2 million of remaining performance obligations on contracts with an original expected duration of one year or more.

We expect to recognize the majority of our remaining performance obligations on these contracts within the next 12 to 18 months.

1 unchanged sentence

Contract assets and liabilities consisted of the following:

In millions March 31,

In millions June 30,

2022 December 31,

2 unchanged sentences

Contract liabilities 47.4 39.4 8.0 20.3 %

Net contract assets $ 10.1 $ 9.4 $ 0.7 7.4 %

The $ 0.7 million increase in net contract assets from December 31, 2021 to March 31, 2022 was primarily the result of timing of milestone payments and the recognition of $ 1.1 million of impairment losses on our contract assets in the first quarter of 2022 related to our exit of business activity in Russia.

Approximately 50 % of our contract liabilities at December 31, 2021 were recognized in revenue in the first quarter of 2022.

Net contract (liabilities) assets $ ( 4.4 ) $ 9.4 $ ( 13.8 ) ( 146.8 ) %

The $ 13.8 million change in net contract liabilities from December 31, 2021 to June 30, 2022 was primarily the result of timing of milestone payments and the recognition of $ 1.1 million of impairment losses on our contract assets in the first quarter of 2022 related to our exit of business activity in Russia.

Approximately 80 % of our contract liabilities at December 31, 2021 were recognized in revenue in the first half of 2022.

On March 2, 2022, as part of our Consumer Solutions reporting segment, we entered into a definitive agreement with Welbilt, Inc.

(“Welbilt”) to acquire the issued and outstanding equity securities of certain subsidiaries of Welbilt and certain other assets, rights, and properties, and assume certain liabilities, comprising Welbilt’s Manitowoc Ice business (“Manitowoc Ice”), for an aggregate purchase price of $ 1.6 billion, subject to customary adjustments contemplated by the definitive agreement.

We expect to fund the purchase price for the acquisition with new debt that we anticipate to be investment grade, including the Term Loan Facility (as defined below).

We expect to close our Manitowoc Ice acquisition in the second or third quarter of 2022, subject to customary closing conditions and necessary regulatory approvals.

We expect to fund the purchase price for the acquisition with borrowings under our term loan facility and net proceeds from the issuance of our 2032 senior notes, together with cash on hand and/or borrowings under our revolving credit facility.

We expect to close our Manitowoc Ice acquisition on or around July 28, 2022, subject to customary closing conditions set forth in the definitive agreement.

In October 2021, as part of both of our Consumer Solutions and Industrial & Flow Technologies reporting segments, we completed the acquisition of Pleatco Holdings, LLC and related entities for $ 256.9 million in cash, net of cash acquired and working capital true-ups.

3 unchanged sentences

for $ 82.2 million in cash, net of cash acquired and working capital true-ups.

The excess of purchase price over tangible net assets acquired has been preliminarily allocated to goodwill in the amount of $ 28.3 million, all of which is expected to be deductible for income tax purposes.

The excess of purchase price over tangible net assets acquired has been allocated to goodwill in the amount of $ 28.3 million, all of which is expected to be deductible for income tax purposes.

Identifiable intangible assets acquired consisted of $ 38.0 million of definite-lived customer relationships with an estimated useful life of 22 years.

The pro forma impact of these acquisitions is not material.

Total share-based compensation expense for the three months ended March 31, 2022 and 2021 was as follows:

Three months ended

In millions March 31,

2022 March 31,

Total share-based compensation expense for the three and six months ended June 30, 2022 and 2021 was as follows:

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Restricted stock units $ 3.3 $ 3.6 $ 6.9 $ 7.0

20 unchanged sentences

The Transformation Program is structured in multiple phases and is expected to empower us to work more efficiently and optimize our business to better serve our customers while meeting our financial objectives.

During the three months ended March 31, 2022, we initiated and continued execution of actions aimed at reducing our fixed cost structure and realigning our business associated with restructuring and the Transformation Program.

During the six months ended June 30, 2022, we initiated and continued execution of actions aimed at reducing our fixed cost structure and realigning our business associated with restructuring and the Transformation Program.

Restructuring and transformation-related costs within Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income included the following:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Restructuring Initiatives

1 unchanged sentence

Other restructuring costs (1)

0.2 — 0.2 0.2

Total restructuring costs 1.0 4.2 2.9 5.3

1 unchanged sentence

Transformation costs (2)

5.2 1.9 10.7 1.9

Total restructuring and transformation costs $ 6.2 $ 6.1 $ 13.6 $ 7.2

4 unchanged sentences

Restructuring and transformation costs by reportable segment were as follows:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Consumer Solutions $ 0.5 $ 0.2 $ 1.8 $ 0.7

2 unchanged sentences

Consolidated $ 6.2 $ 6.1 $ 13.6 $ 7.2

Activity related to accrued severance and related costs recorded in Other current liabilities in the Condensed Consolidated Balance Sheets is summarized as follows for the three months ended March 31, 2022:

In millions March 31,

Activity related to accrued severance and related costs recorded in Other current liabilities in the Condensed Consolidated Balance Sheets is summarized as follows for the six months ended June 30, 2022:

In millions June 30,

Beginning balance $ 10.7

4 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three months ended

In millions, except per-share data March 31,

2022 March 31,

Three months ended Six months ended

In millions, except per-share data June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Net income $ 152.9 $ 132.1 $ 270.5 $ 260.7

4 unchanged sentences

Dilutive impact of stock options, restricted stock units and performance share units

0.7 1.8 1.0 1.6

Diluted 165.5 167.8 166.0 167.7

7 unchanged sentences

Anti-dilutive stock options excluded from the calculation of diluted earnings per share

0.9 0.1 0.7 0.3

Pentair plc and Subsidiaries

7 unchanged sentences

We review our allowance for credit losses on a quarterly basis.

Activity related to our allowance for credit losses is summarized as follows for the three months ended March 31, 2022:

In millions March 31,

Activity related to our allowance for credit losses is summarized as follows for the six months ended June 30, 2022:

In millions June 30,

Beginning balance $ 9.1

2 unchanged sentences

Ending balance $ 12.3

(1) Other amounts are primarily the effects of changes in currency translation and the impact of allowance for credits.

Pentair plc and Subsidiaries

1 unchanged sentence

Supplemental Balance Sheet Information

In millions March 31,

In millions June 30,

2022 December 31,

48 unchanged sentences

In millions December 31,

2021 Purchase Accounting Adjustments Foreign

translation March 31,

2021 Purchase

Adjustments Foreign

translation June 30,

Consumer Solutions $ 1,722.5 $ 1.4 $ ( 10.8 ) $ 1,713.1

13 unchanged sentences

Total intangibles $ 761.5 $ ( 353.7 ) $ 407.8 $ 780.2 $ ( 352.2 ) $ 428.0

Identifiable intangible asset amortization expense was $ 6.6 million and $ 7.1 million for the three months ended March 31, 2022 and 2021, respectively.

Identifiable intangible asset amortization expense was $ 6.3 million for both the three months ended June 30, 2022 and 2021 and $ 12.9 million and $ 13.4 million for the six months ended June 30, 2022 and 2021, respectively.

Estimated future amortization expense for identifiable intangible assets during the remainder of 2022 and the next five years is as follows:

2 unchanged sentences

Debt and the average interest rates on debt outstanding were as follows:

In millions Average interest rate as of March 31, 2022 Maturity

Year March 31,

In millions Average interest rate as of June 30, 2022 Maturity

Year June 30,

2022 December 31,

18 unchanged sentences

The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating.

As of March 31, 2022, total availability under the Senior Credit Facility was $ 505.0 million.

As of June 30, 2022, total availability under the Senior Credit Facility was $ 685.0 million.

In addition, PFSA has the option to request to increase the revolving credit facility and/or enter into one or more additional tranches of term loans in an aggregate amount of up to $ 300.0 million, subject to customary conditions, including the commitment of the participating lenders.

1 unchanged sentence

The Bridge Facility will be subject to mandatory reduction and prepayment for 100% of the net cash proceeds from the issuance of any debt and other of our securities, other specified events and the Term Loan Facility (as defined below), subject to certain exceptions.

On March 24, 2022, in contemplation of the acquisition of Manitowoc Ice, Pentair and PFSA entered into a Loan Agreement among PFSA, as borrower, Pentair, as guarantor, and the lenders and agents party thereto, providing for a five-year $ 600.0 million senior unsecured term loan facility (the “Term Loan Facility”).

PFSA and Pentair intend to borrow the full $ 600.0 million aggregate principal amount available under the Term Loan Facility to finance a portion of the purchase price in the Manitowoc Ice acquisition and to pay related fees and expenses.

In March 2022, in contemplation of the acquisition of Manitowoc Ice, Pentair and PFSA entered into a Loan Agreement among PFSA, as borrower, Pentair, as guarantor, and the lenders and agents party thereto, providing for a five-year $ 600.0 million senior unsecured term loan facility (the “Term Loan Facility”).

On June 30, 2022, the Term Loan Facility was amended to increase the facility by $ 400.0 million to an aggregate principal amount of $ 1.0 billion.

PFSA and Pentair intend to borrow the full $ 1.0 billion aggregate principal amount available under the Term Loan Facility to finance a portion of the purchase price in the Manitowoc Ice acquisition and to pay related fees and expenses.

The aggregate principal amount of the commitments under the Term Loan Facility have replaced a corresponding amount of the commitments in respect of the Bridge Facility in accordance with the terms of the Commitment Letter.

As a result, the remaining commitment under the Bridge Facility was $ 1.0 billion as of March 31, 2022.

No borrowings or loans were outstanding under the Bridge Facility or the Term Loan Facility as of March 31, 2022.

As a result, the remaining commitment under the Bridge Facility was $ 600.0 million as of June 30, 2022.

No borrowings or loans were outstanding under the Bridge Facility or the Term Loan Facility as of June 30, 2022.

On July 8, 2022, in contemplation of the acquisition of Manitowoc Ice, Pentair, as guarantor, and PFSA, as issuer, completed a public offering of $ 400.0 million aggregate principal amount of 5.900 % Senior Notes due 2032 (“2032 Senior Notes”).

PFSA and Pentair intend to use the net proceeds from the issuance of the 2032 Senior Notes to finance a portion of the purchase price in the Manitowoc Ice acquisition and to pay related fees and expenses.

The net proceeds from the issuance of the 2032 Senior Notes have replaced a corresponding amount of the commitments in respect of the Bridge Facility in accordance with the terms of the Commitment Letter.

On July 8, 2022, Pentair and PFSA voluntarily eliminated the remaining $ 200.0 million of commitments under the Bridge Facility.

As a result, there are no remaining commitments under the Bridge Facility.

Our debt agreements contain various financial covenants, but the most restrictive covenants are contained in the Senior Credit Facility and the Term Loan Facility.

1 unchanged sentence

For purposes of the Leverage Ratio, the Senior Credit Facility and the Term Loan Facility provide for the calculation of EBITDA giving pro forma effect to certain acquisitions, divestitures and liquidations during the period to which such calculation relates.

In addition to the Senior Credit Facility and the Term Loan Facility, we have various other credit facilities with an aggregate availability of $ 21.5 million, of which there were no outstanding borrowings at March 31, 2022.

Borrowings under these credit facilities bear interest at variable rates.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

We have $ 88.3 million of fixed rate senior notes maturing in the next twelve months.

We classified this debt as long-term as of March 31, 2022 as we have the intent and ability to refinance such obligation on a long-term basis under the Senior Credit Facility.

Debt outstanding, excluding unamortized issuance costs and discounts, at March 31, 2022 matures on a calendar year basis as follows:

We classified this debt as long-term as of June 30, 2022 as we have the intent and ability to refinance such obligation on a long-term basis under the Senior Credit Facility.

Debt outstanding, excluding unamortized issuance costs and discounts, at June 30, 2022 matures on a calendar year basis as follows:

In millions 2022 2023 2024 2025 2026 2027 Thereafter Total

1 unchanged sentence

$ 88.3 $ — $ 200.0 $ 19.3 $ 215.0 $ — $ 400.0 $ 922.6

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Derivatives and Financial Instruments

11 unchanged sentences

The majority of our foreign currency contracts have an original maturity date of less than one year.

At March 31, 2022 and December 31, 2021, we had outstanding foreign currency derivative contracts with gross notional U.S.

At June 30, 2022 and December 31, 2021, we had outstanding foreign currency derivative contracts with gross notional U.S.

dollar equivalent amounts of $ 8.4 million and $ 14.7 million, respectively.

1 unchanged sentence

Cross Currency Swaps

At March 31, 2022 and December 31, 2021, we had outstanding cross currency swap agreements with a combined notional amount of $ 776.0 million and $ 794.4 million, respectively.

At June 30, 2022 and December 31, 2021, we had outstanding cross currency swap agreements with a combined notional amount of $ 736.3 million and $ 794.4 million, respectively.

The agreements are accounted for as either cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt, or as net investment hedges to manage our exposure to fluctuations in the Euro-U.S.

Dollar exchange rate.

We had deferred foreign currency gains of $ 13.9 million and $ 7.3 million at March 31, 2022 and December 31, 2021, respectively, in Accumulated other comprehensive loss associated with our cross currency swap activity.

We had deferred foreign currency gains of $ 36.5 million and $ 7.3 million at June 30, 2022 and December 31, 2021, respectively, in Accumulated other comprehensive loss associated with our cross currency swap activity.

The periodic interest settlements related to our cross currency swap agreements are classified as operating activities.

The cash flows that relate to principal balances are classified as financing activities for the cash flow hedges on intercompany debt and investing activities for the net investment hedges.

In June 2022, we terminated two of our cross currency swap agreements, resulting in total net cash received of $ 9.0 million, of which $ 8.8 million is included within investing activities and $ 0.2 million is included within financing activities on the Consolidated Statement of Cash Flows.

We entered new cross currency swaps with a combined notional amount of $ 320.0 million to replace the terminated cross currency swap agreements.

In January 2021, one of our cross currency swap agreements which was accounted for as a cash flow hedge matured, resulting in a net cash payment of $ 14.7 million.

3 unchanged sentences

Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.

6 unchanged sentences

• short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

• long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance;

10 unchanged sentences

Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows:

March 31, 2022

June 30, 2022

In millions Level 1 Level 2 Level 3 NAV Total

1 unchanged sentence

Foreign currency contract assets $ — $ 39.0 $ — $ — $ 39.0

Foreign currency contract liabilities — ( 1.1 ) — — ( 1.1 )

Deferred compensation plan assets 9.8 — — 10.9 20.7

Total recurring fair value measurements $ 9.8 $ 39.0 $ — $ 10.9 $ 59.7

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

December 31, 2021

10 unchanged sentences

Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.

The effective income tax rate for the three months ended March 31, 2022 was 15.4 %, compared to 13.5 % for the three months ended March 31, 2021.

The effective income tax rate for the six months ended June 30, 2022 was 15.6 %, compared to 14.7 % for the six months ended June 30, 2021.

We continue to actively pursue initiatives to reduce our effective tax rate.

The tax rate in any quarter can be affected positively or negatively by the mix of global earnings or adjustments that are required to be reported in the specific quarter of resolution.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

The total gross liability for uncertain tax positions was $ 36.7 million and $ 37.3 million at March 31, 2022 and December 31, 2021, respectively.

The total gross liability for uncertain tax positions was $ 36.4 million and $ 37.3 million at June 30, 2022 and December 31, 2021, respectively.

We record penalties and interest related to unrecognized tax benefits in Provision for income taxes and Net interest expense , respectively, on the Condensed Consolidated Statements of Operations and Comprehensive Income, which is consistent with our past practices.

Benefit Plans

Components of net periodic benefit expense for our pension plans for the three months ended March 31, 2022 and 2021 were as follows:

Three months ended

In millions March 31,

2022 March 31,

Components of net periodic benefit expense for our pension plans for the three and six months ended June 30, 2022 and 2021 were as follows:

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Service cost $ 0.6 $ 0.7 $ 1.2 $ 1.4

2 unchanged sentences

Net periodic benefit expense $ 1.1 $ 1.1 $ 2.2 $ 2.2

Components of net periodic benefit expense for our other post-retirement plans for the three months ended March 31, 2022 and 2021 were not material .

Components of net periodic benefit expense for our other post-retirement plans for the three and six months ended June 30, 2022 and 2021 were not material .

Shareholders’ Equity

2 unchanged sentences

The authorization expires on December 31, 2025 .

During the three months ended March 31, 2022, no ordinary shares were repurchased.

As of March 31, 2022, we had $ 650.0 million available for share repurchases under this authorization.

During the three and six months ended June 30, 2022, we repurchased 0.9 million of our ordinary shares for $ 50.0 million.

As of June 30, 2022, we had $ 600.0 million available for share repurchases under this authorization.

Dividends payable

On February 21, 2022, the Board of Directors declared a quarterly cash dividend of $ 0.21 , payable on May 6, 2022 to shareholders of record at the close of business on April 22, 2022.

As a result, the balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $ 34.7 million at March 31, 2022, compared to $ 33.0 million at December 31, 2021.

On May 16, 2022, the Board of Directors declared a quarterly cash dividend of $ 0.21 , payable on August 5, 2022 to shareholders of record at the close of business on July 22, 2022.

As a result, the balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $ 34.5 million at June 30, 2022, compared to $ 33.0 million at December 31, 2021.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Segment Information

3 unchanged sentences

Financial information by reportable segment is as follows:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Consumer Solutions $ 686.2 $ 576.9 $ 1,327.4 $ 1,098.3

7 unchanged sentences

Consolidated $ 205.9 $ 174.9 $ 378.0 $ 339.3

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

The following table presents a reconciliation of consolidated segment income to consolidated income from continuing operations before income taxes:

Three months ended

In millions March 31,

2022 March 31,

Three months ended Six months ended

In millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Segment income $ 205.9 $ 174.9 $ 378.0 $ 339.3

4 unchanged sentences

Russia business exit costs — — ( 5.9 ) —

Legal accrual adjustments 0.7 2.4

Legal accrual adjustments and settlements ( 0.5 ) — 0.2 2.4

Net interest expense ( 9.2 ) ( 3.8 ) ( 14.9 ) ( 8.9 )

1 unchanged sentence

Income from continuing operations before income taxes $ 181.5 $ 157.7 $ 321.5 $ 309.3

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Commitments and Contingencies

13 unchanged sentences

In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known.

As of March 31, 2022 and December 31, 2021, our recorded reserves for environmental matters were not material.

As of June 30, 2022 and December 31, 2021, our recorded reserves for environmental matters were not material.

Product liability claims

5 unchanged sentences

We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Warranties and guarantees

11 unchanged sentences

Adjustments are made to accruals as claim data and historical experience warrant.

The changes in the carrying amount of service and product warranties of continuing operations for the three months ended March 31, 2022 were as follows:

In millions March 31,

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

The changes in the carrying amount of service and product warranties of continuing operations for the six months ended June 30, 2022 were as follows:

In millions June 30,

Beginning balance $ 40.5

1 unchanged sentence

Payments ( 29.4 )

Foreign currency translation ( 0.5 )

Ending balance $ 43.2

6 unchanged sentences

In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs.

As of March 31, 2022 and December 31, 2021, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 101.7 million and $ 104.5 million, respectively.

As of June 30, 2022 and December 31, 2021, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 106.1 million and $ 104.5 million, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements