What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-24 compared with 2023-07-27 · 141 added, 113 removed, 566 unchanged (31% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

Three months ended Six months ended

In millions, except per-share data June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions, except per-share data September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Net sales $ 1,008.8 $ 1,055.1 $ 3,119.9 $ 3,118.9

5 unchanged sentences

Other (income) expense

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

Net interest expense 27.5 19.3 91.7 34.2

Other (income) expense

( 0.3 ) 0.3 ( 4.4 ) 0.5

Income from continuing operations before income taxes 152.9 127.7 484.9 449.2

21 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, 165.1 and 164.5 issued at June 30, 2023 and December 31, 2022, respectively

Ordinary shares $ 0.01 par value, 426.0 authorized, 165.3 and 164.5 issued at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,585.2 1,554.9

6 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six months ended

In millions June 30,

2023 June 30,

Nine months ended

In millions September 30,

2023 September 30,

Operating activities

6 unchanged sentences

Deferred income taxes ( 45.0 ) ( 37.5 )

Gain on sale of businesses — ( 0.2 )

Share-based compensation 21.3 20.6

18 unchanged sentences

Acquisitions, net of cash acquired ( 0.6 ) ( 1,592.8 )

Other 4.1 0.3

Net cash used for investing activities ( 45.9 ) ( 1,643.9 )

1 unchanged sentence

Net (repayments) borrowings of revolving long-term debt

( 320.0 ) 256.1

Proceeds from long-term debt — 1,391.3

Repayments of long-term debt ( 6.3 ) ( 88.3 )

Debt issuance costs — ( 15.7 )

3 unchanged sentences

Receipts upon the maturity of cross currency swaps — 0.2

Net cash used for financing activities ( 276.0 ) ( 113.8 )

Net cash (used for) provided by financing activities

( 426.2 ) 1,385.5

Effect of exchange rate changes on cash and cash equivalents ( 0.5 ) 12.2

26 unchanged sentences

Balance - June 30, 2023 165.1 $ 1.7 $ 1,569.8 $ 1,600.4 $ ( 236.6 ) $ 2,935.3

Net income — — — 132.1 — 132.1

Other comprehensive loss, net of tax — — — — ( 5.5 ) ( 5.5 )

Dividends declared, $ 0.22 per share

— — — ( 36.4 ) — ( 36.4 )

Exercise of options, net of shares tendered for payment 0.2 — 8.4 — — 8.4

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

Share-based compensation — — 7.2 — — 7.2

Balance - September 30, 2023 165.3 $ 1.7 $ 1,585.2 $ 1,696.1 $ ( 242.1 ) $ 3,040.9

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

20 unchanged sentences

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

See accompanying notes to condensed consolidated financial statements.

14 unchanged sentences

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

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

$ 696.6 $ 752.1 $ 2,170.0 $ 2,215.1

8 unchanged sentences

Vertical market net sales information was as follows:

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Residential $ 513.1 $ 637.0 $ 1,615.5 $ 2,050.1

3 unchanged sentences

Performance obligations

On June 30, 2023, we had $ 121.4 million of remaining performance obligations on contracts with an original expected duration of one year or more.

On September 30, 2023, we had $ 122.4 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.

3 unchanged sentences

Contract assets and liabilities consisted of the following:

In millions June 30,

In millions September 30,

2023 December 31,

2 unchanged sentences

Contract liabilities 60.8 58.1 2.7 4.6 %

Net contract liabilities $ ( 3.5 ) $ ( 9.7 ) $ 6.2 ( 63.9 ) %

The $ 6.2 million decrease in net contract liabilities from December 31, 2022 to June 30, 2023 was primarily the result of timing of milestone payments.

Approximately 80 % of our contract liabilities at December 31, 2022 were recognized in revenue in the first half of 2023.

Net contract assets (liabilities)

$ 4.8 $ ( 9.7 ) $ 14.5 ( 149.5 ) %

The $ 14.5 million increase in net contract assets from December 31, 2022 to September 30, 2023 was primarily the result of timing of milestone payments.

Approximately 85 % of our contract liabilities at December 31, 2022 were recognized in revenue in the first nine months 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.

2 unchanged sentences

The acquisition of Manitowoc Ice allows us to enhance and deliver our total water management offerings to an expanded network of channel partners and customers.

The purchase price has been preliminarily allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the Manitowoc Ice acquisition.

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 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 as previously reported as of December 31, 2022 and revised as of June 30, 2023:

The purchase price has been allocated based on the fair value of assets acquired and liabilities assumed at the date of the Manitowoc Ice acquisition.

The purchase price allocation was completed in the third quarter of 2023.

The following table summarizes 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 September 30, 2023:

In millions As Previously Reported As Revised

12 unchanged sentences

Notes to condensed consolidated financial statements (unaudited)

The excess of purchase price over tangible net assets and identified intangible assets acquired has been preliminarily allocated to goodwill in the amount of $ 791.0 million, all of which is expected to be deductible for income tax purposes.

The excess of purchase price over tangible net assets and identified intangible assets acquired has been allocated to goodwill in the amount of $ 789.7 million, all of which is expected to be deductible for income tax purposes.

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

3 unchanged sentences

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

Three months ended Six months ended

In millions, except per share data June 30, 2022 June 30, 2022

Three months ended Nine months ended

In millions, except per share data September 30, 2022 September 30, 2022

Pro forma net sales $ 1,084.6 $ 3,325.7

3 unchanged sentences

Diluted 0.80 2.52

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 June 30, 2022, and $ 17.1 million for the six months ended June 30, 2022.

The unaudited pro forma net income from continuing operations for the three and six months ended June 30, 2022 excludes the impact of $ 6.6 million and $ 15.5 million, respectively, of transaction-related charges and acquisition-related bridge financing costs.

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 $ 25.6 million for the nine months ended September 30, 2022.

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

4 unchanged sentences

Notes to condensed consolidated financial statements (unaudited)

Total share-based compensation expense for the three and six months ended June 30, 2023 and 2022 was as follows:

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Total share-based compensation expense for the three and nine months ended September 30, 2023 and 2022 was as follows:

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Restricted stock units $ 3.9 $ 4.1 $ 11.3 $ 11.0

19 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 six months ended June 30, 2023, we initiated and continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.

During the nine months ended September 30, 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 220 employees during the six months ended June 30, 2023.

These initiatives included a reduction in hourly and salaried headcount of approximately 350 employees during the nine months ended September 30, 2023.

Pentair plc and Subsidiaries

1 unchanged sentence

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 Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Restructuring Initiatives

10 unchanged sentences

(1) Other restructuring costs and related adjustments primarily consist of certain accruals, various contract termination costs, asset impairments 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, partially offset by gain on sale of assets.

(2) Other transformation costs primarily consist of professional services, project management related costs and asset impairments, partially offset by gain on sale of assets.

Restructuring and transformation costs by reportable segment were as follows:

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Industrial & Flow Technologies $ 1.6 $ 0.3 $ 2.8 $ 1.5

3 unchanged sentences

Consolidated $ 16.6 $ 21.0 $ 35.0 $ 34.6

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, 2023:

In millions June 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 nine months ended September 30, 2023:

In millions September 30,

Beginning balance $ 23.2

6 unchanged sentences

Basic and diluted earnings per share were calculated as follows:

Three months ended Six months ended

In millions, except per-share data June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions, except per-share data September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Net income $ 132.1 $ 115.4 $ 414.7 $ 385.9

22 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 six months ended June 30, 2023:

In millions June 30,

Activity related to our allowance for credit losses is summarized as follows for the nine months ended September 30, 2023:

In millions September 30,

Beginning balance $ 10.8

6 unchanged sentences

Supplemental Balance Sheet Information

In millions June 30,

In millions September 30,

2023 December 31,

49 unchanged sentences

2022 Purchase Accounting Adjustments Foreign Currency

Translation June 30,

Translation September 30,

Industrial & Flow Technologies $ 747.6 $ — $ ( 6.8 ) $ 740.8

3 unchanged sentences

Identifiable intangible assets consisted of the following:

September 30,

2023 December 31,

10 unchanged sentences

Total intangibles $ 1,435.1 $ ( 383.4 ) $ 1,051.7 $ 1,453.5 $ ( 358.9 ) $ 1,094.6

Identifiable intangible asset amortization expense was $ 13.9 million and $ 6.3 million for the three months ended June 30, 2023 and 2022 and $ 27.7 million and $ 12.9 million for the six months ended June 30, 2023 and 2022, respectively.

Identifiable intangible asset amortization expense was $ 13.8 million and $ 18.5 million for the three months ended September 30, 2023 and 2022 and $ 41.5 million and $ 31.4 million for the nine months ended September 30, 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 June 30, 2023 Maturity

Year June 30,

In millions Average interest rate as of September 30, 2023 Maturity

Year September 30,

2023 December 31,

17 unchanged sentences

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

As of June 30, 2023, total availability under the Senior Credit Facility was $ 784.3 million.

As of September 30, 2023, total availability under the Senior Credit Facility was $ 900.0 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.

1 unchanged sentence

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 has a maturity date of July 28, 2027, with required quarterly installment payments of $ 6.3 million that began on the last day of the third quarter of 2023 and increase 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.

3 unchanged sentences

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 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)

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 $ 20.8 million, of which there were no outstanding borrowings at June 30, 2023.

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.

Borrowings under these credit facilities bear interest at variable rates.

We have $ 31.3 million of Term Loan Facility payments due in the next twelve months.

We classified this debt as long-term as of June 30, 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 June 30, 2023 matures on a calendar year basis as follows:

We classified this debt as long-term as of September 30, 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 September 30, 2023 matures on a calendar year basis as follows:

In millions 2023 2024 2025 2026 2027 2028 Thereafter Total

14 unchanged sentences

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

At June 30, 2023 and December 31, 2022, we had outstanding foreign currency derivative contracts with gross notional U.S.

At September 30, 2023 and December 31, 2022, we had outstanding foreign currency derivative contracts with gross notional U.S.

dollar equivalent amounts of $ 22.8 million and $ 9.4 million, respectively.

1 unchanged sentence

Cross currency swaps

At June 30, 2023 and December 31, 2022, we had outstanding cross currency swap agreements with a combined notional amount of $ 763.9 million and $ 746.3 million, respectively.

At September 30, 2023 and December 31, 2022, we had outstanding cross currency swap agreements with a combined notional amount of $ 739.6 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 losses of $ 47.9 million and $ 40.3 million at June 30, 2023 and December 31, 2022, respectively, recorded in Accumulated other comprehensive loss associated with our cross currency swap activity.

We had deferred foreign currency losses of $ 38.6 million and $ 40.3 million at September 30, 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.

1 unchanged sentence

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.

On March 31, 2023, we entered into floating-to-fixed interest rate swap agreements to hedge the interest rate movements related to a portion of our variable rate debt.

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

3 unchanged sentences

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.

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 movements on our variable rate debt.

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

1 unchanged sentence

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.

The interest rate swaps and 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.

We had a gain of $ 6.4 million at June 30, 2023 recorded in Accumulated other comprehensive loss associated with our interest rate swap and collar activity.

We had a gain of $ 9.4 million at September 30, 2023 recorded in Accumulated other comprehensive loss associated with our interest rate swap and collar activity.

The periodic interest settlements related to our interest rate swaps and collars are classified as operating activities.

17 unchanged sentences

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

September 30,

2023 December 31,

5 unchanged sentences

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

June 30, 2023

September 30, 2023

In millions Level 1 Level 2 Level 3 NAV Total

15 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 six months ended June 30, 2023 was 14.8 %, compared to 15.6 % for the six months ended June 30, 2022.

The effective income tax rate for the nine months ended September 30, 2023 was 14.5 %, compared to 13.9 % for the nine months ended September 30, 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 $ 37.0 million and $ 39.6 million at June 30, 2023 and December 31, 2022, respectively.

The total gross liability for uncertain tax positions was $ 37.2 million and $ 39.6 million at September 30, 2023 and December 31, 2022, 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.

2 unchanged sentences

Benefit Plans

Components of net periodic benefit expense for our pension plans for the three and six months ended June 30, 2023 and 2022 were as follows:

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Components of net periodic benefit expense for our pension plans for the three and nine months ended September 30, 2023 and 2022 were as follows:

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Service cost $ 0.4 $ 0.6 $ 1.2 $ 1.8

2 unchanged sentences

Net periodic benefit expense $ 1.2 $ 1.1 $ 3.6 $ 3.3

Components of net periodic benefit expense for our other post-retirement plans for the three and six months ended June 30, 2023 and 2022 were not material .

Components of net periodic benefit expense for our other post-retirement plans for the three and nine months ended September 30, 2023 and 2022 were not material .

Shareholders’ Equity

2 unchanged sentences

The authorization expires on December 31, 2025 .

During the three and six months ended June 30, 2023, no ordinary shares were repurchased.

As of June 30, 2023, we had $ 600.0 million available for share repurchases under this authorization.

During the three and nine months ended September 30, 2023, no ordinary shares were repurchased.

As of September 30, 2023, we had $ 600.0 million available for share repurchases under this authorization.

Dividends payable

On May 8, 2023, the Board of Directors declared a quarterly cash dividend of $ 0.22 per share, payable on August 4, 2023 to shareholders of record at the close of business on July 21, 2023.

As a result, the balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $ 36.4 million at June 30, 2023, compared to $ 36.2 million at December 31, 2022.

On September 18, 2023, the Board of Directors declared a quarterly cash dividend of $ 0.22 per share, payable on November 3, 2023 to shareholders of record at the close of business on October 20, 2023.

As a result, the balance of dividends payable included in Other current liabilities on our Condensed Consolidated Balance Sheets was $ 36.4 million at September 30, 2023, compared to $ 36.2 million at December 31, 2022.

Segment Information

6 unchanged sentences

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.

These products and systems are used in a range of applications, including 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.

11 unchanged sentences

Financial information by reportable segment is as follows:

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Industrial & Flow Technologies $ 400.2 $ 389.5 $ 1,203.6 $ 1,125.0

10 unchanged sentences

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

Three months ended Six months ended

In millions June 30,

2023 June 30,

2022 June 30,

2023 June 30,

Three months ended Nine months ended

In millions September 30,

2023 September 30,

2022 September 30,

2023 September 30,

Segment income $ 212.1 $ 206.9 $ 657.3 $ 584.9

Deal-related costs and expenses — ( 13.4 ) — ( 21.4 )

Inventory step-up — ( 5.8 ) — ( 5.8 )

Asset impairment and write-offs ( 1.8 ) — ( 6.2 ) —

2 unchanged sentences

Intangible amortization ( 13.8 ) ( 18.5 ) ( 41.5 ) ( 31.4 )

Gain on sale of businesses — 0.2 — 0.2

Russia business exit impact — 0.8 — ( 5.1 )

1 unchanged sentence

Interest expense, net ( 27.5 ) ( 19.3 ) ( 91.7 ) ( 34.2 )

Other income (expense) 4.2 ( 0.5 ) 3.3 ( 1.1 )

Other (expense) income

( 1.0 ) ( 0.6 ) 2.3 ( 1.7 )

Income from continuing operations before income taxes $ 152.9 $ 127.7 $ 484.9 $ 449.2

5 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 from continuing operations for the six months ended June 30, 2023 were as follows:

In millions June 30,

The changes in the carrying amount of service and product warranties from continuing operations for the nine months ended September 30, 2023 were as follows:

In millions September 30,

Beginning balance $ 63.1

1 unchanged sentence

Payments ( 67.6 )

Foreign currency translation ( 0.3 )

Ending balance $ 67.3

3 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 June 30, 2023 and December 31, 2022, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 100.4 million and $ 99.7 million, respectively.

As of September 30, 2023 and December 31, 2022, the outstanding value of bonds, letters of credit and bank guarantees totaled $ 106.9 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