What changed in this filing

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Item 1. Financial Statements

2023-04-27 compared with 2022-10-25 · 164 added, 274 removed, 461 unchanged (49% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

Three months ended Nine months ended

In millions, except per-share data September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Three months ended

In millions, except per-share data March 31,

2023 March 31,

Net sales $ 1,028.6 $ 999.6

4 unchanged sentences

Operating income 183.6 145.8

Other (income) expense:

Gain on sale of businesses ( 0.2 ) ( 1.4 ) ( 0.2 ) ( 1.4 )

Other expense

Net interest expense 32.4 5.7

3 unchanged sentences

Net income from continuing operations 128.5 118.5

Loss from discontinued operations, net of tax — ( 0.1 ) ( 1.0 ) ( 3.1 )

Income (loss) from discontinued operations, net of tax 1.2 ( 0.9 )

Net income $ 129.7 $ 117.6

17 unchanged sentences

Condensed Consolidated Balance Sheets (Unaudited)

September 30,

2023 December 31,

25 unchanged sentences

Commitments and contingencies (Note 16)

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

Ordinary shares $ 0.01 par value, 426.0 authorized, 165.0 and 164.5 issued at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,558.0 1,554.9

6 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine months ended

In millions September 30,

2022 September 30,

Three months ended

In millions March 31,

2023 March 31,

Operating activities

Net income $ 129.7 $ 117.6

Loss from discontinued operations, net of tax 1.0 3.1

Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities of continuing operations

(Income) loss from discontinued operations, net of tax ( 1.2 ) 0.9

Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities

Equity income of unconsolidated subsidiaries ( 0.2 ) ( 0.5 )

2 unchanged sentences

Deferred income taxes ( 14.0 ) ( 3.7 )

Gain on sale of businesses ( 0.2 ) ( 1.4 )

Share-based compensation 7.2 6.9

Asset impairment and write-offs 4.1 —

Amortization of bridge financing fees — 2.6

(Gain) loss on sale of assets ( 2.3 ) 0.7

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

6 unchanged sentences

Other non-current assets and liabilities 1.9 ( 0.7 )

Net cash provided by operating activities of continuing operations 271.5 540.4

Net cash used for operating activities of discontinued operations ( 1.0 ) ( 0.3 )

Net cash provided by operating activities 270.5 540.1

Net cash used for operating activities ( 106.6 ) ( 131.5 )

Investing activities

1 unchanged sentence

Proceeds from sale of property and equipment 0.2 —

Proceeds from the sale of businesses, net — 1.4

Acquisitions, net of cash acquired 0.2 ( 1.4 )

Settlement of net investment hedges 8.8 —

Other 0.3 2.7

Net cash used for investing activities ( 16.2 ) ( 19.1 )

Financing activities

Net borrowings (repayments) of revolving long-term debt 256.1 ( 36.1 )

Proceeds from long-term debt 1,391.3 —

Repayments of long-term debt ( 88.3 ) ( 103.8 )

Net borrowings of revolving long-term debt 173.6 199.6

Debt issuance costs — ( 5.8 )

Shares issued to employees, net of shares withheld ( 4.1 ) ( 5.3 )

Repurchases of ordinary shares ( 50.0 ) ( 100.0 )

Dividends paid ( 36.2 ) ( 34.7 )

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

Net cash provided by (used for) financing activities 1,385.5 ( 341.8 )

Net cash provided by financing activities 133.3 153.8

Effect of exchange rate changes on cash and cash equivalents ( 0.2 ) 4.6

10 unchanged sentences

Net income — — — 129.7 — 129.7

Other comprehensive loss, net of tax — — — — ( 0.8 ) ( 0.8 )

Other comprehensive income, net of tax — — — — 4.9 4.9

Dividends declared, $ 0.22 per share

5 unchanged sentences

Balance - March 31, 2023 165.0 $ 1.7 $ 1,558.0 $ 1,483.9 $ ( 234.1 ) $ 2,809.5

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

Net income — — — 115.4 — 115.4

Other comprehensive loss, net of tax — — — — ( 13.5 ) ( 13.5 )

Dividends declared, $ 0.21 per share

— — — ( 34.5 ) — ( 34.5 )

Exercise of options, net of shares tendered for payment — — 1.4 — — 1.4

Share-based compensation — — 7.4 — — 7.4

Balance - September 30, 2022 164.5 $ 1.7 $ 1,549.3 $ 1,331.8 $ ( 243.6 ) $ 2,639.2

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

6 unchanged sentences

— — — ( 36.4 ) — ( 36.4 )

Share repurchases ( 0.2 ) — ( 9.6 ) — — ( 9.6 )

Exercise of options, net of shares tendered for payment — — 0.5 — — 0.5

3 unchanged sentences

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

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

Net income — — — 143.6 — 143.6

Other comprehensive income, net of tax — — — — ( 6.9 ) ( 6.9 )

Dividends declared, $ 0.20 per share

— — — ( 33.1 ) — ( 33.1 )

Share repurchase ( 0.6 ) — ( 50.0 ) — — ( 50.0 )

Exercise of options, net of shares tendered for payment 0.2 — 8.9 — — 8.9

Shares surrendered by employees to pay taxes — — ( 0.2 ) — — ( 0.2 )

Share-based compensation — — 4.2 — — 4.2

Balance - September 30, 2021 165.5 $ 1.7 $ 1,614.2 $ 935.8 $ ( 213.6 ) $ 2,338.1

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Basis of Presentation and Responsibility for Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements of Pentair plc and its subsidiaries (“we,” “us,” “our,” “Pentair,” or the “Company”) have been prepared following the requirements of the U.S.

Securities and Exchange Commission (“SEC”) for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“GAAP”) can be condensed or omitted.

4 unchanged sentences

Therefore, the results and trends in these interim financial statements may not be indicative of those for a full year.

In 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic.

The COVID-19 pandemic has had and may continue to have an unfavorable impact on certain parts of our business.

The broader implications of the COVID-19 pandemic on our business, financial condition and results of operations remain uncertain and will depend on certain developments, including the duration and severity of the COVID-19 pandemic, the impact of virus variants, the effectiveness of vaccinations, the COVID-19 pandemic’s impact on our customers and suppliers and the range of governmental and community reactions to the pandemic.

We may continue to experience reduced customer demand in certain parts of our business, impacts to our operations, or constrained labor and/or supply that could materially and adversely impact our business, financial condition, results of operations, liquidity and cash flows in future periods.

Our fiscal year ends on December 31.

We report our interim quarterly periods on a calendar quarter basis.

We disaggregate our revenue from contracts with customers by segment, geographic location and vertical, as we believe these best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

We disaggregate our revenue from contracts with customers by segment, geographic location and vertical market, as we believe these best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Refer to Note 15 for revenue disaggregated by segment.

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

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Three months ended

In millions March 31,

2023 March 31,

$ 715.8 $ 706.0

1 unchanged sentence

Developing (1)

140.3 123.7 378.3 349.6

Other Developed (2)

64.8 61.1 193.8 180.5

Consolidated net sales $ 1,028.6 $ 999.6

1 unchanged sentence

(2) Other Developed includes Australia, Canada and Japan.

Vertical net sales information was as follows:

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Vertical market net sales information was as follows:

Three months ended

In millions March 31,

2023 March 31,

Residential $ 566.4 $ 682.8

2 unchanged sentences

Consolidated net sales $ 1,028.6 $ 999.6

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Performance obligations

On September 30, 2022, we had $ 111.1 million of remaining performance obligations on contracts with an original expected duration of one year or more.

On March 31, 2023, we had $ 98.1 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.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Contract assets and liabilities

Contract assets and liabilities consisted of the following:

In millions September 30,

In millions March 31,

2023 December 31,

2 unchanged sentences

Contract liabilities 54.1 58.1 ( 4.0 ) ( 6.9 ) %

Net contract (liabilities) assets $ ( 5.1 ) $ 9.4 $ ( 14.5 ) ( 154.3 ) %

The $ 14.5 million change in net contract liabilities from December 31, 2021 to September 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 85 % of our contract liabilities at December 31, 2021 were recognized in revenue in the first nine months of 2022.

On July 28, 2022, as part of our Consumer Solutions reporting segment, we acquired the issued and outstanding equity securities of certain subsidiaries of Welbilt, Inc.

Net contract liabilities $ ( 1.1 ) $ ( 9.7 ) $ 8.6 ( 88.7 ) %

The $ 8.6 million decrease in net contract liabilities from December 31, 2022 to March 31, 2023 was primarily the result of timing of milestone payments.

Approximately 60 % of our contract liabilities at December 31, 2022 were recognized in revenue in the first quarter of 2023.

In July 2022, as part of our Water Solutions reporting segment, we acquired the issued and outstanding equity securities of certain subsidiaries of Welbilt, Inc.

(“Welbilt”) and certain other assets, rights, and properties, and assumed certain liabilities, comprising Welbilt’s Manitowoc Ice business (“Manitowoc Ice”), for approximately $ 1.6 billion in cash.

3 unchanged sentences

The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation.

These changes will primarily relate to the fair value of tangible assets and the related income tax impacts.

These changes will primarily relate to income tax-related items.

We expect the final purchase price allocation to be completed by the third quarter of 2023.

There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation.

The following table summarizes our preliminary estimates of the fair values of the assets acquired and liabilities assumed in the Manitowoc Ice acquisition:

The following table summarizes our preliminary estimates of the fair values of the assets acquired and liabilities assumed in the Manitowoc Ice acquisition as previously reported as of December 31, 2022 and revised as of March 31, 2023:

In millions As Previously Reported As Revised

Cash $ 33.8 $ 33.8

Accounts receivable 36.7 36.7

12 unchanged sentences

Goodwill recognized from the Manitowoc Ice acquisition primarily reflects the future economic benefit resulting from synergies of our combined operations.

Identifiable intangible assets acquired as part of the Manitowoc Ice acquisition include $ 78.4 million of indefinite-lived trade name intangible assets, $ 588.4 million of definite-lived customer relationships with an estimated useful life of 20 years, $ 47.1 million of definite-lived proprietary technology intangible assets with an estimated useful life of 10 years and $ 14.4 million of other definite-lived intangible assets with an estimated useful life of four months .

Identifiable intangible assets acquired as part of the Manitowoc Ice acquisition include $ 78.4 million of indefinite-lived trade name intangible assets, $ 588.4 million of definite-lived customer relationships with a weighted-average estimated useful life of 20 years, $ 47.1 million of definite-lived proprietary technology intangible assets with a weighted-average estimated useful life of 10 years and $ 14.4 million of other definite-lived intangible assets with a weighted-average estimated useful life of four months .

The fair values of trade names and proprietary technology acquired in the acquisition were determined using a relief-from-royalty method, and customer relationships and other definite-lived intangible assets acquired were determined using a multi-period excess earnings method.

These methods utilize unobservable inputs that are significant to these fair value measurements and thus classified as Level 3 of the fair value hierarchy.

Manitowoc Ice’s net sales and operating income for the period from the acquisition date to September 30, 2022 were $ 66.5 million and $ 1.3 million, respectively.

Manitowoc’s operating income includes $ 12.9 million of identifiable intangible asset amortization expense and $ 5.8 million of amortization of inventory fair market value step-up.

These methods utilize unobservable inputs that are significant to these fair value measurements and thus classified as Level 3 of the fair value hierarchy described in Note 11.

The following table presents unaudited pro forma financial information as if the Manitowoc Ice acquisition had occurred on January 1, 2021:

Three months ended Nine months ended

In millions, except per-share data September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Three months ended

In millions, except per share data March 31, 2022

Pro forma net sales $ 1,074.5

1 unchanged sentence

Pro forma earnings per ordinary share - continuing operations

Basic $ 0.80 $ 0.88 $ 2.53 $ 2.28

Diluted 0.80 0.87 2.52 2.25

The unaudited pro forma net income from continuing operations includes Manitowoc Ice’s identifiable intangible asset amortization expense of $ 8.5 million for the three months ended September 30, 2022 and 2021, respectively, and $ 25.6 million and $ 40.0 million for the nine months ended September 30, 2022 and 2021, respectively.

The unaudited pro forma net income from continuing operations for the three and nine months ended September 30, 2022 excludes the impact of $ 18.8 million and $ 34.2 million, respectively, of transaction-related charges, acquisition-related bridge financing costs and non-recurring expense related to the fair value adjustment to acquisition-date inventory.

The nine months ended September 30, 2021 was adjusted to include transaction-related charges and non-recurring expense related to the fair value adjustment to acquisition-date inventory.

The unaudited pro forma net income from continuing operations includes Manitowoc Ice’s identifiable intangible asset amortization expense of $ 8.5 million for the three months ended March 31, 2022.

The unaudited pro forma net income from continuing operations for the three months ended March 31, 2022 excludes the impact of $ 8.9 million of transaction-related charges and acquisition-related bridge financing costs.

The pro forma condensed consolidated financial information has been prepared for comparative purposes only and includes certain adjustments, as noted above.

2 unchanged sentences

The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the Manitowoc Ice acquisition occurred on January 1, 2021.

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.

The excess of purchase price over tangible net assets acquired has been preliminarily allocated to goodwill in the amount of $ 140.1 million, $ 136.4 million of which is expected to be deductible for income tax purposes.

Identifiable intangible assets acquired consisted of $ 97.9 million of definite-lived customer relationships with an estimated useful life of 17 years.

We expect the final purchase price allocation to be completed in the fourth quarter of 2022.

The pro forma impact of this acquisition is not material.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

In May 2021, as part of our Consumer Solutions reporting segment, we completed the acquisition of Ken’s Beverage, Inc.

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 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 this acquisition is not material.

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

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Total share-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows:

Three months ended

In millions March 31,

2023 March 31,

Restricted stock units $ 3.7 $ 3.6

14 unchanged sentences

For purposes of determining expected share price volatility, we considered a rolling average of historical volatility measured over a period approximately equal to the expected option term.

The risk-free interest rate for periods that coincide with the expected life of the options is based on the United States (“U.S.”) Treasury Department yield curve in effect at the time of grant.

The risk-free interest rate for periods that coincide with the expected life of the options is based on the U.S.

Treasury Department yield curve in effect at the time of grant.

Restructuring and Transformation Program

1 unchanged sentence

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 nine months ended September 30, 2022, we initiated and continued execution of restructuring actions aimed at reducing our fixed cost structure and realigning our business as well as certain initiatives associated with the Transformation Program.

These actions included a reduction in hourly and salaried headcount of approximately 400 employees.

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

During the three months ended March 31, 2023, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.

In addition, we have continued to execute certain initiatives associated with the Transformation Program.

These initiatives included a reduction in hourly and salaried headcount of approximately 200 employees during the three months ended March 31, 2023.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Restructuring and transformation-related costs included within Cost of goods sold and 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,

2023 March 31,

Restructuring Initiatives

1 unchanged sentence

Other restructuring costs (1)

2.4 — 2.6 0.2

Total restructuring costs 3.1 1.9

2 unchanged sentences

Other transformation costs (2)

7.0 4.0 17.7 5.9

Total transformation costs 8.5 5.5

Total restructuring and transformation costs $ 11.6 $ 7.4

(1) Other restructuring costs primarily consist of asset impairment and various contract termination costs.

(1) Other restructuring costs primarily consist of certain accruals, various contract termination costs and inventory write-offs associated with business and product line exits.

(2) Other transformation costs primarily consist of professional services and project management and related costs.

Restructuring and transformation costs by reportable segment were as follows:

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Consumer Solutions $ 12.0 $ 0.1 $ 13.8 $ 0.8

Three months ended

In millions March 31,

2023 March 31,

Industrial & Flow Technologies $ 0.4 $ 0.6

Water Solutions 1.5 0.3

Other 6.4 5.5

Consolidated $ 11.6 $ 7.4

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 nine months ended September 30, 2022:

In millions September 30,

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, 2023:

In millions March 31,

Beginning balance $ 23.2

6 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three months ended Nine months ended

In millions, except per-share data September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Three months ended

In millions, except per-share data March 31,

2023 March 31,

Net income $ 129.7 $ 117.6

4 unchanged sentences

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

0.7 1.9 1.0 1.7

Diluted 165.8 166.5

7 unchanged sentences

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

1.0 — 0.7 0.1

Accounts Receivable

5 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 nine months ended September 30, 2022:

In millions September 30,

Activity related to our allowance for credit losses is summarized as follows for the three months ended March 31, 2023:

In millions March 31,

Beginning balance $ 10.8

Bad debt expense 0.1

Acquisitions 0.3

Write-offs, net of recoveries ( 0.1 )

4 unchanged sentences

Supplemental Balance Sheet Information

In millions September 30,

In millions March 31,

2023 December 31,

21 unchanged sentences

Deferred compensation plan assets 22.7 21.7

Foreign currency contract assets 96.2 7.2

Other non-current assets 71.7 71.0

9 unchanged sentences

Accrued restructuring 19.8 23.2

Interest payable 23.9 32.9

Other current liabilities 107.8 112.3

13 unchanged sentences

In millions December 31,

2021 Purchase

Adjustments Acquisitions Foreign

translation September 30,

Consumer Solutions $ 1,722.5 $ 1.4 $ 796.7 $ ( 20.0 ) $ 2,500.6

2022 Purchase Accounting Adjustments Foreign

Translation March 31,

Industrial & Flow Technologies $ 747.6 $ — $ 8.1 $ 755.7

Water Solutions 1,398.1 0.5 2.0 1,400.6

Pool 1,106.9 — — 1,106.9

Total goodwill $ 3,252.6 $ 0.5 $ 10.1 $ 3,263.2

Identifiable intangible assets consisted of the following:

September 30,

2023 December 31,

6 unchanged sentences

Other — — — 14.4 ( 14.4 ) —

Total definite-life intangibles 1,193.8 ( 326.2 ) 867.6 605.1 ( 352.2 ) 252.9

Total finite-life intangibles 1,192.2 ( 360.3 ) 831.9 1,204.6 ( 358.9 ) 845.7

Indefinite-life intangibles

1 unchanged sentence

Total intangibles $ 1,442.2 $ ( 360.3 ) $ 1,081.9 $ 1,453.5 $ ( 358.9 ) $ 1,094.6

Identifiable intangible asset amortization expense was $ 18.5 million and $ 6.0 million for the three months ended September 30, 2022 and 2021, respectively, and $ 31.4 million and $ 19.4 million for the nine months ended September 30, 2022 and 2021, respectively.

Identifiable intangible asset amortization expense was $ 13.8 million and $ 6.6 million for the three months ended March 31, 2023 and 2022, respectively.

Estimated future amortization expense for identifiable intangible assets during the remainder of 2023 and the next five years is as follows:

4 unchanged sentences

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

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

Year September 30,

In millions Average interest rate as of March 31, 2023 Maturity

Year March 31,

2023 December 31,

Revolving credit facility 3.940 % 2026 $ 451.6 $ 195.0

Revolving credit facility (Senior Credit Facility) 6.080 % 2026 $ 493.6 $ 320.0

Term Loan Facility 6.114 % 2023 - 2027 1,000.0 1,000.0

Term loans 4.358 % 2024 200.0 200.0

Senior notes - fixed rate (1)

3.150 % 2022 — 88.3

Term loans (Senior Credit Facility) 6.102 % 2024 200.0 200.0

Senior notes - fixed rate (1)

9 unchanged sentences

are parties to a credit agreement (the “Senior Credit Facility”), with Pentair as guarantor and PFSA and Pentair, Inc.

as borrowers, which was amended and restated in December 2021, providing for a $ 900.0 million senior unsecured revolving credit facility and a $ 200.0 million senior unsecured term loan facility.

as borrowers, which was amended and restated in December 2021 and further amended in December 2022, providing for a $ 900.0 million senior unsecured revolving credit facility and a $ 200.0 million senior unsecured term loan facility.

The revolving credit facility has a maturity date of December 16, 2026 and the term loan facility has a maturity date of December 16, 2024.

Borrowings under the Senior Credit Facility bear interest at a rate equal to an adjusted base rate, the London interbank offered rate, the euro interbank offered rate or the central bank rate, plus, in each case, an applicable margin.

Borrowings under the Senior Credit Facility bear interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, adjusted euro interbank offered rate, adjusted daily simple secured overnight financing rate or central bank rate, plus, in each case, an applicable margin.

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

As of September 30, 2022, total availability under the Senior Credit Facility was $ 448.4 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.

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”).

As of March 31, 2023, total availability under the Senior Credit Facility was $ 406.4 million.

In addition, PFSA has the option to request to increase the revolving credit facility and/or to 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.

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 $ 600.0 million senior unsecured term loan facility (the “Term Loan Facility”).

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

The Term Loan Facility has a maturity date of July 28, 2027, with required quarterly installment payments of $ 6.3 million beginning on the last day of the third quarter of 2023 and increasing to $ 12.5 million beginning with the last day of the third quarter of 2024.

The Term Loan Facility bears interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, or adjusted daily simple secured overnight financing rate, plus, in each case, an applicable margin.

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

In July 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”).

1 unchanged sentence

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

The Senior Credit Facility and the Term Loan Facility contain covenants requiring us not to permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash in excess of $ 5.0 million but not to exceed $ 250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense (“EBITDA”) on the last day of any period of four consecutive fiscal quarters (each, a “testing period”) to exceed 3.75 to 1.00 (or, at PFSA’s election and subject to certain conditions, 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) (the “Leverage Ratio”) and (ii) the ratio of our EBITDA to our consolidated interest expense, for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter.

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.

The Senior Credit Facility and the Term Loan Facility contain covenants requiring us not to permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash and cash equivalents in excess of $ 5.0 million but not to exceed $ 250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense (“EBITDA”) on the last day of any period of four consecutive fiscal quarters (each, a “testing period”) to exceed 3.75 to 1.00 (or, at PFSA’s election and subject to certain conditions, 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) (the “Leverage Ratio”) and (ii) the ratio of our EBITDA to our consolidated interest expense, for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter.

For purposes of the Leverage Ratio, the Senior Credit Facility and the Term

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

In addition to the Senior Credit Facility and the Term Loan Facility, we have various other credit facilities with an aggregate availability of $ 20.9 million, of which there were no outstanding borrowings at September 30, 2022.

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 $ 21.1 million, of which there were no outstanding borrowings at March 31, 2023.

Borrowings under these credit facilities bear interest at variable rates.

We have no fixed rate senior notes maturing in the next twelve months.

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

We have $ 18.8 million of Term Loan Facility payments due in the next twelve months.

We classified this debt as long-term as of March 31, 2023 as we have the intent and ability to refinance such obligation on a long-term basis under the revolving credit facility under the Senior Credit Facility.

Debt outstanding, excluding unamortized issuance costs and discounts, at March 31, 2023 matures on a calendar year basis as follows:

In millions 2023 2024 2025 2026 2027 2028 Thereafter Total

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Derivative financial instruments

We are exposed to market risk related to changes in foreign currency exchange rates.

To manage the volatility related to this exposure, we periodically enter into a variety of derivative financial instruments.

Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates.

We are exposed to market risk related to changes in foreign currency exchange rates and interest rates on our variable rate indebtedness.

To manage the volatility related to these exposures, we periodically enter into a variety of derivative financial instruments.

Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates or variable interest rates.

The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements.

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

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

At March 31, 2023 and December 31, 2022, we had outstanding foreign currency derivative contracts with gross notional U.S.

dollar equivalent amounts of $ 17.1 million and $ 9.4 million, respectively.

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Cross currency swaps

At September 30, 2022 and December 31, 2021, we had outstanding cross currency swap agreements with a combined notional amount of $ 681.5 million and $ 794.4 million, respectively.

At March 31, 2023 and December 31, 2022, we had outstanding cross currency swap agreements with a combined notional amount of $ 759.1 million and $ 746.3 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 $ 82.0 million and $ 7.3 million at September 30, 2022 and December 31, 2021, respectively, in Accumulated other comprehensive loss associated with our cross currency swap activity.

We had deferred foreign currency losses of $ 47.6 million and $ 40.3 million at March 31, 2023 and December 31, 2022, respectively, recorded 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 October 2022, we entered into transactions to early terminate and cash settle € 700 million of our cross currency swap agreements due to favorable market conditions.

The termination of the cross currency swap agreements resulted in cash proceeds of $ 85.3 million.

Subsequent to the termination, we entered into new cross currency swap agreements with euro notional amounts matching the original swap agreements.

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 into 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.

The net cash payment is included within financing activities on the Condensed Consolidated Statements of Cash Flows.

Hedging of variable interest rates

On March 31, 2023, we entered into floating-to-fixed interest rate swap agreements to hedge the interest rate variability related to a portion of our Senior Credit Facility and Term Loan Facility referenced in Note 10.

The swaps have a combined notional amount of $ 300.0 million, an average fixed one-month U.S.

Dollar secured overnight financing rate (“SOFR”) of 3.795 % and settle monthly through April 2026.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

On April 3, 2023, we entered into five-year interest rate collar agreements with a combined notional value of $ 200.0 million to hedge the cash flows related to the interest rate variability on our Senior Credit Facility and Term Loan Facility referenced in Note 10.

In these collar agreements, the Company and counterparty financial institutions agreed to a one-month U.S.

Dollar SOFR floor of 1.875 % and a cap of 5.000 %.

The collars have an effective date of April 4, 2023 and settle monthly through April 2028.

The interest rate swaps and the collars were designated as cash flow hedges.

Unrealized gains and losses related to the fair value of the interest rate swaps are recorded in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets.

Fair value measurements

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Fair value of financial instruments

The following methods were used to estimate the fair values of each class of financial instruments:

• 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;

• 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;

• foreign currency contract agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance;

• deferred compensation plan assets (mutual funds, common/collective trusts and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees) — fair value of mutual funds and cash equivalents are based on quoted market prices in active markets that are classified as Level 1 in the valuation hierarchy defined by the accounting guidance;

The following methods were used to estimate the fair values of each class of financial instrument:

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

• foreign currency contracts, interest rate swap and collar agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined above;

fair value of common/collective trusts are valued at net asset value (“NAV”), which is based on the fair value of the underlying securities owned by the fund and divided by the number of shares outstanding.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

The recorded amounts and estimated fair values of total debt, excluding unamortized issuance costs and discounts, were as follows:

September 30,

2023 December 31,

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

September 30, 2022

March 31, 2023

In millions Level 1 Level 2 Level 3 NAV Total

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Foreign currency contract assets $ — $ 0.5 $ — $ — $ 0.5

Foreign currency contract liabilities — ( 62.3 ) — — ( 62.3 )

Deferred compensation plan assets 10.7 — — 12.0 22.7

Total recurring fair value measurements $ 10.7 $ ( 61.8 ) $ — $ 12.0 $ ( 39.1 )

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

December 31, 2022

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Recurring fair value measurements

Foreign currency contract assets $ — $ 7.2 $ — $ — $ 7.2

Foreign currency contract liabilities $ — $ ( 52.2 ) $ — $ — $ ( 52.2 )

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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 nine months ended September 30, 2022 was 13.9 %, compared to 14.2 % for the nine months ended September 30, 2021.

The effective income tax rate for the three months ended March 31, 2023 was 14.6 %, compared to 15.4 % for the three months ended March 31, 2022.

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.

The total gross liability for uncertain tax positions was $ 36.5 million and $ 37.3 million at September 30, 2022 and December 31, 2021, respectively.

The total gross liability for uncertain tax positions was $ 39.6 million at March 31, 2023 and December 31, 2022.

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.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Benefit Plans

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

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Components of net periodic benefit expense for our pension plans for the three months ended March 31, 2023 and 2022 were as follows:

Three months ended

In millions March 31,

2023 March 31,

Service cost $ 0.4 $ 0.6

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Net periodic benefit expense $ 1.2 $ 1.1

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

Components of net periodic benefit expense for our other post-retirement plans for the three months ended March 31, 2023 and 2022 were not material .

Shareholders’ Equity

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The authorization expires on December 31, 2025 .

During the nine months ended September 30, 2022, we repurchased 0.9 million of our ordinary shares for $ 50.0 million.

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

During the three months ended March 31, 2023, no ordinary shares were repurchased.

As of March 31, 2023, we had $ 600.0 million available for share repurchases under this authorization.

Dividends payable

On September 19, 2022, the Board of Directors declared a quarterly cash dividend of $ 0.21 , payable on November 4, 2022 to shareholders of record at the close of business on October 21, 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 September 30, 2022, compared to $ 33.0 million at December 31, 2021.

On February 20, 2023, the Board of Directors declared a quarterly cash dividend of $ 0.22 , payable on May 5, 2023 to shareholders of record at the close of business on April 21, 2023.

As a result, the balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $ 36.3 million at March 31, 2023, compared to $ 36.2 million at December 31, 2022.

Segment Information

Effective January 1, 2023, we reorganized our reporting segments to reflect how we are managing our business and to help us accelerate our efforts to improve customer experience, differentiate our products and drive profitability for our shareholders.

All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation.

As part of this reorganization, the legacy Consumer Solutions segment was divided into a Pool segment and a Water Solutions segment.

The Industrial & Flow Technologies segment remains the same.

We classify our operations into the following reporting segments:

• Industrial & Flow Technologies — The focus of this segment is to deliver water where it is needed, when it is needed and more efficiently and transforming waste into value.

This segment designs, manufactures and sells a variety of fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles, while serving the global residential, commercial and industrial markets.

These products and systems are used in a range of applications, fluid delivery, ion exchange, desalination, food and beverage, separation technologies for the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation and crop spray.

• Water Solutions — The focus of this segment is to provide great tasting, higher-quality water and ice while helping end-users use water more productively.

This segment designs, manufactures and sells commercial and residential water treatment products and systems including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems.

These water treatment products and systems are used in residential whole home water filtration, drinking water filtration and water softening solutions in addition to commercial total water management and filtration in foodservice operations.

In addition, our water solutions business also provides installation and preventative services for water management solutions for commercial operators.

Pentair plc and Subsidiaries

Notes to condensed consolidated financial statements (unaudited)

Segment Information

• Pool — The focus of this segment is to provide innovative, energy efficient pool solutions to help end-users more sustainably enjoy water.

This segment designs, manufactures and sells a complete line of energy-efficient residential and commercial pool equipment and accessories including pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment and pool accessories.

Applications for our pool products include residential and commercial pool maintenance, pool repair, renovation, service and construction and aquaculture solutions.

We evaluate performance based on net sales and segment income (loss) and use a variety of ratios to measure performance of our reporting segments.

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Financial information by reportable segment is as follows:

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Consumer Solutions $ 665.3 $ 613.6 $ 1,992.7 $ 1,711.9

Three months ended

In millions March 31,

2023 March 31,

Industrial & Flow Technologies $ 391.8 $ 358.1

Water Solutions 272.0 205.8

Pool 364.3 435.4

Other 0.5 0.3

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Segment income (loss)

Consumer Solutions $ 158.6 $ 144.2 $ 466.3 $ 418.6

Industrial & Flow Technologies $ 65.0 $ 52.2

Water Solutions 52.4 22.2

Pool 116.2 116.3

Other ( 22.6 ) ( 18.6 )

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

Three months ended Nine months ended

In millions September 30,

2022 September 30,

2021 September 30,

2022 September 30,

Three months ended

In millions March 31,

2023 March 31,

Segment income $ 211.0 $ 172.1

Deal-related costs and expenses — ( 6.4 )

Inventory step-up ( 5.8 ) — ( 5.8 ) —

Asset impairment and write-offs ( 3.9 ) —

Restructuring and other ( 2.9 ) ( 2.1 )

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Intangible amortization ( 13.8 ) ( 6.6 )

Gain on sale of businesses 0.2 1.4 0.2 1.4

Russia business exit impact — ( 5.9 )

Legal accrual adjustments and settlements 1.9 0.7

Net interest expense ( 19.3 ) ( 2.6 ) ( 34.2 ) ( 11.5 )

Interest expense, net ( 32.4 ) ( 5.7 )

Other expense ( 0.9 ) ( 0.6 )

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Commitments and Contingencies

Legal proceedings

We have been, and in the future may be, made parties to a number of actions filed, or have been, and in the future may be, given notice of potential claims relating to the conduct of our business, including those relating to commercial, regulatory or contractual disputes with suppliers, authorities, customers or parties to acquisitions and divestitures;

intellectual property matters;

environmental, asbestos, safety and health matters;

product liability matters, including those relating to the use or installation of our products;

consumer matters and employment and labor matters.

While we believe that a material impact on our consolidated financial position, results of operations or cash flows from any such future claims or potential claims is unlikely, given the inherent uncertainty of litigation, a remote possibility exists that a future adverse ruling or unfavorable development could result in future charges that could have a material adverse impact.

We do and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and make appropriate adjustments to such estimates based on experience and developments in litigation.

As a result, the current estimates of the potential impact on our consolidated financial position, results of operations and cash flows for the proceedings and claims described in the notes to our consolidated financial statements could change in the future.

Environmental matters

We have been named as defendant, target or a potentially responsible party in a number of environmental clean-ups relating to our current or former business units.

Accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies.

It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors.

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

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

Product liability claims

We are subject to various product liability lawsuits and personal injury claims.

A substantial number of these lawsuits and claims are insured and accrued for by Penwald, our captive insurance subsidiary.

Penwald records a liability for these claims based on actuarial projections of ultimate losses.

For all other claims, accruals covering the claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information.

The accruals are adjusted periodically as additional information becomes available.

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

Warranties and guarantees

In connection with our disposition of businesses or product lines, we may agree to indemnify purchasers for various potential liabilities relating to the sold business, such as pre-closing tax, product liability, warranty, environmental, or other obligations.

The subject matter, amounts and duration of any such indemnification obligations vary for each type of liability indemnified and may vary widely from transaction to transaction.

Generally, the maximum obligations under such indemnifications are not explicitly stated and as a result, the overall amount of these obligations cannot be reasonably estimated.

Historically, we have not made significant payments for these indemnifications.

We believe that if we were to incur a loss in any of these matters, the loss would not have a material adverse effect on our financial position, results of operations or cash flows.

We recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.

In connection with the disposition of the Valves & Controls business, we agreed to indemnify Emerson Electric Co.

for certain pre-closing tax liabilities.

We have recorded a liability representing the fair value of our expected future obligation for this matter.

We provide service and warranty policies on our products.

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

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 nine months ended September 30, 2022 were as follows:

In millions September 30,

The changes in the carrying amount of service and product warranties from continuing operations for the three months ended March 31, 2023 were as follows:

In millions March 31,

Beginning balance $ 63.1

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Payments ( 18.0 )

Acquisitions 7.9

Foreign currency translation 0.1

1 unchanged sentence

Stand-by letters of credit, bank guarantees and bonds

In certain situations, Tyco International Ltd., Pentair Ltd.’s former parent company (“Tyco”), guaranteed performance by the flow control business of Pentair Ltd.

(“Flow Control”) to third parties or provided financial guarantees for financial commitments of Flow Control.

In situations where Flow Control and Tyco were unable to obtain a release from these guarantees in connection with the spin-off of Flow Control from Tyco, we will indemnify Tyco for any losses it suffers as a result of such guarantees.

In the ordinary course of business, we are required to commit to bonds, letters of credit and bank guarantees that require payments to our customers for any non-performance.

1 unchanged sentence

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

As of September 30, 2022 and December 31, 2021, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 99.2 million and $ 104.5 million, respectively.

As of March 31, 2023 and December 31, 2022, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 101.6 million and $ 99.7 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