What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-20 · 276 added, 192 removed, 1175 unchanged (28% of the section changed)

97 unchanged sentences

Other expense (income)

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

Net interest expense 88.6 118.3 61.8

Other expense (income)

Other (income) expense

( 3.7 ) 2.0 ( 17.1 )

Income from continuing operations before income taxes 718.9 618.9 550.6

(Benefit) provision for income taxes

Provision (benefit) for income taxes

93.3 ( 4.0 ) 67.4

35 unchanged sentences

Current liabilities

Current maturities of short-term borrowings

Accounts payable 272.8 278.9

27 unchanged sentences

Amortization 54.3 55.3 52.5

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

Deferred income taxes ( 11.4 ) ( 92.5 ) ( 44.8 )

5 unchanged sentences

Pension and other post-retirement contributions ( 12.0 ) ( 8.7 ) ( 8.8 )

(Gain) loss on sale of assets ( 3.4 ) ( 2.3 ) 0.7

Gain on sale of assets

— ( 3.4 ) ( 2.3 )

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

12 unchanged sentences

Proceeds from sale of property and equipment 0.6 5.6 4.1

Proceeds from sale of businesses, net — — 1.4

Acquisitions, net of cash acquired ( 108.0 ) ( 0.6 ) ( 1,580.9 )

4 unchanged sentences

Financing activities

Net (repayments) borrowings of revolving long-term debt

Net receipts of short-term borrowings

Net borrowings (repayments) of revolving long-term debt

9.5 ( 320.0 ) 124.5

Proceeds from long-term debt — — 1,391.3

Repayment of long-term debt ( 12.5 ) ( 88.3 ) ( 103.8 )

Repayments of long-term debt

( 362.5 ) ( 12.5 ) ( 88.3 )

Debt issuance costs — — ( 15.8 )

2 unchanged sentences

Dividends paid ( 152.3 ) ( 145.2 ) ( 138.6 )

Receipts (payments) upon the settlement of cross currency swaps — 12.3 ( 14.7 )

(Payments) receipts upon the settlement of cross currency swaps

( 9.1 ) — 12.3

Net cash (used for) provided by financing activities

25 unchanged sentences

Dividends declared — — — ( 147.0 ) — ( 147.0 )

Share repurchases ( 1.0 ) — ( 50.0 ) — — ( 50.0 )

Exercise of options, net of shares tendered for payment 0.4 — 18.3 — — 18.3

6 unchanged sentences

Dividends declared — — — ( 155.5 ) — ( 155.5 )

Share repurchases ( 1.6 ) — ( 150.0 ) — — ( 150.0 )

Exercise of options, net of shares tendered for payment 0.8 — 28.8 — — 28.8

7 unchanged sentences

Basis of Presentation and Summary of Significant Accounting Policies

Pentair plc and its consolidated subsidiaries (“we,” “us,” “our,” “Pentair” or the “Company”) is a water industrial manufacturing company comprised of three reporting segments:

Flow (formerly named Industrial & Flow Technologies), Water Solutions and Pool.

Pentair plc and its consolidated subsidiaries (“we,” “us,” “our,” “Pentair” or the “Company”) is a water industrial manufacturing company comprised of three reportable segments:

Flow, Water Solutions and Pool.

Basis of presentation

30 unchanged sentences

Contract costs include labor, material, overhead and, when appropriate, general and administrative expenses.

Changes to the original estimates may be required during

Changes to the original estimates may be required during the life of the contract, and such estimates are reviewed on a regular basis.

Sales and gross profit are adjusted using the

Pentair plc and Subsidiaries

Notes to consolidated financial statements

the life of the contract, and such estimates are reviewed on a regular basis.

Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs.

cumulative catch-up method for revisions in estimated total contract costs.

These reviews have not resulted in adjustments that were significant to our results of operations.

39 unchanged sentences

Contract liabilities 38.8 53.7 ( 14.9 ) ( 27.7 ) %

Net contract assets (liabilities) $ 17.1 $ ( 9.7 ) $ 26.8 ( 276.3 ) %

The $ 26.8 million increase in net contract assets from December 31, 2022 to December 31, 2023 was primarily the result of timing of milestone payments.

Net contract assets

$ 7.9 $ 17.1 $ ( 9.2 ) ( 53.8 ) %

The $ 9.2 million decrease in net contract assets from December 31, 2023 to December 31, 2024 was primarily the result of timing of milestone payments.

Approximately 95 % of our contract liabilities at December 31, 2023 were recognized in revenue during the twelve months ended December 31, 2024.

There were no impairment losses recognized on our net contract assets for the twelve months ended December 31, 2023.

For the twelve months ended December 31, 2022, there were $ 1.1 million of impairment losses recognized on our net contract liabilities as a result of our exit of business activity and sales in Russia.

There were no impairment losses recognized on our net contract assets for the twelve months ended December 31, 2024 and December 31, 2023.

Practical expedients and exemptions

5 unchanged sentences

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 14 for revenue disaggregated by segment.

Refer to Note 14 for revenue disaggregated by reportable segment.

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

35 unchanged sentences

Beginning balance $ 11.2 $ 10.8 $ 9.1

Bad debt expense

Bad debt (benefit) expense

( 0.2 ) 0.7 3.6

Acquisitions — — 0.3

44 unchanged sentences

However, we may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist.

During 2023, a quantitative assessment was performed.

The fair value of each reporting unit was determined using a discounted cash flow analysis and market approach.

Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate.

Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry.

The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy.

For the 2023 annual impairment test, the estimated fair value significantly exceeded the carrying value in each of our reporting units, therefore, no impairment charge was required.

During 2024, a qualitative assessment was performed.

4 unchanged sentences

We consider positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value exceeds the carrying amount.

During 2023, a quantitative assessment was performed.

The fair value of each reporting unit was determined using a discounted cash flow analysis and market approach.

Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry.

For the 2023 annual impairment test, the estimated fair value significantly exceeded the carrying value in each of our reporting units, therefore, no impairment charge was required.

The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy.

Pentair plc and Subsidiaries

14 unchanged sentences

This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described in Note 9.

The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy.

No impairment charges were recognized in 2024, 2023, or 2022 as a result of our annual impairment assessment.

15 unchanged sentences

The remaining components of pension expense, including service and interest costs and estimated return on plan assets, are recorded on a quarterly basis.

The service costs are recorded within Operating income and the interest costs, expected return on plan assets and net actuarial gain/loss components of net periodic pension and other post-retirement benefit costs are recorded within Other expense (income).

Insurance subsidiary

16 unchanged sentences

The estimated vesting of the PSUs is based on the probability of achieving certain performance metrics over the specified performance period.

The requisite service period for options and RSUs and the performance period for PSUs may be shorter than the vesting period if the employee becomes retirement eligible before the end of the vesting period.

Earnings per ordinary share

17 unchanged sentences

The resultant translation adjustments are included in AOCI, a component of equity.

New accounting standards

New and recently adopted accounting standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting,” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures regarding significant expenses.

We plan to adopt the standard retrospectively beginning with our annual reporting for the year ending December 31, 2024 and interim reporting beginning January 1, 2025.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

We adopted the standard retrospectively beginning with our annual reporting for the year ended December 31, 2024.

Refer to Note 14 for further information on our segment reporting.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

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.

In November 2024, the FASB issued ASU No.

2024-03, “Disaggregation - Income Statement Expenses,” which requires disclosure of disaggregation of certain relevant expenses within the Consolidated Statements of Operations and Comprehensive Income on an annual and interim basis.

We will adopt the standard beginning with our annual reporting for the year ending December 31, 2027.

We are currently evaluating the effect that the updated standard will have on our financial statement disclosures.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

On December 2, 2024, as part of our Pool reportable segment, we completed the acquisition of G & F Manufacturing, LLC for $ 116.0 million in cash, net of cash acquired and subject to customary adjustments.

The net purchase price is comprised of an upfront cash payment of $ 108.0 million, subject to customary adjustments, and the estimated fair value at the acquisition date of contingent earn-out liabilities based upon the achievement of certain defined operating results in the two years following the acquisition.

The excess purchase price over tangible and identifiable intangible net assets acquired has been preliminarily allocated to goodwill in the amount of $ 56.6 million, all of which is expected to be deductible for income tax purposes.

Identifiable intangible assets acquired consisted of $ 51.6 million of definite-lived customer relationships with an estimated useful life of 16 years.

The pro forma impact of the acquisition was not material.

In July 2022, as part of our Water Solutions reportable 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 purchase price allocation was completed in the third quarter of 2023.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The following table summarizes the final allocation of the purchase price to the fair value of assets acquired and liabilities assumed in the Manitowoc Ice acquisition:

17 unchanged sentences

For the year ended December 31, 2022, Manitowoc’s operating income includes $ 28.6 million of identifiable intangible asset amortization expense and $ 5.8 million of amortization of inventory fair market value step-up.

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

Years Ended December 31

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The following table presents unaudited pro forma financial information as if the Manitowoc Ice acquisition had occurred on January 1, 2022, the beginning of the comparable prior annual reporting period:

Year Ended December 31

In millions, except per share data 2022

2 unchanged sentences

Pro forma earnings per ordinary share - continuing operations

Basic $ 2.95 $ 3.16

Diluted 2.94 3.12

The unaudited pro forma net income from continuing operations includes Manitowoc Ice’s identifiable intangible asset amortization expense of $ 34.1 million and $ 48.5 million for the years ended December 31, 2022 and 2021, respectively.

The unaudited pro forma net income from continuing operations for the year ended December 31, 2022 excludes the impact of $ 34.7 million of transaction-related charges, acquisition-related bridge financing costs and non-recurring expense related to the

Pentair plc and Subsidiaries

Notes to consolidated financial statements

fair value adjustment to acquisition-date inventory.

The year ended December 31, 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 $ 34.1 million for the year ended December 31, 2022.

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, 2022.

In October 2021, as part of both of our Flow and Pool 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 allocated to goodwill in the amount of $ 140.6 million, $ 136.4 million of which is 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.

The pro forma impact of this acquisition is not material.

In May 2021, as part of our Water 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 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.

Earnings Per Share

16 unchanged sentences

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

Pentair plc and Subsidiaries

Notes to consolidated financial statements

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 2023, 2022 and 2021, we initiated and continued execution of our Transformation Program as well as certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

During 2024, 2023 and 2022, we initiated and continued execution of activities associated with our Transformation Program as well as initiated and continued certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.

Restructuring and Transformation Program initiatives during the years ended December 31, 2024, 2023 and 2022 included a reduction in hourly and salaried headcount of approximately 575 employees, 475 employees and 625 employees, respectively.

10 unchanged sentences

Severance and related costs 0.7 6.9 3.4

Asset impairment and write-offs (1)

Other transformation costs (3)

2 unchanged sentences

Total restructuring and transformation costs $ 103.3 $ 50.7 $ 83.5

(1) Asset impairment and write-offs consist of inventory, long-lived assets and an identifiable intangible asset, which were impaired as a result of product line exits as well as certain business exits announced in the fourth quarter of 2022.

(2) Other restructuring costs and related adjustments primarily consist of certain accruals and related refinements as well as various contract termination costs associated with product line and business exits.

(3) 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:

(1) Consists of inventory and long-lived asset impairments and write-offs associated with restructuring or transformation activities.

An identifiable intangible asset was also impaired in 2022 as a result of certain business exits.

(3) Other transformation costs primarily consist of professional services and project management related costs, partially offset by gain on sale of assets in 2023.

Restructuring and transformation costs by reportable segment as well as Corporate and other were as follows:

Years ended December 31

3 unchanged sentences

Pool 15.7 9.1 14.3

Other 38.3 25.9 17.3

Consolidated $ 50.7 $ 83.5 $ 19.1

Corporate and other

52.7 38.3 25.9

Total restructuring and transformation costs

$ 103.3 $ 50.7 $ 83.5

Activity related to accrued severance and related costs recorded in Other current liabilities in the Consolidated Balance Sheets is summarized as follows:

9 unchanged sentences

The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 by reportable segment were as follows:

In millions December 31, 2022 Purchase

In millions December 31, 2023 Acquisitions Foreign

translation December 31, 2024

3 unchanged sentences

Total goodwill $ 3,274.6 $ 56.6 $ ( 44.6 ) $ 3,286.6

In millions December 31, 2021 Acquisitions Purchase

In millions December 31, 2022 Purchase

translation December 31, 2023

12 unchanged sentences

88.8 ( 48.4 ) 40.4 89.7 ( 43.2 ) 46.5

Other — — — 14.4 ( 14.4 ) —

Total finite-life intangibles 1,195.9 ( 405.0 ) 790.9 1,204.6 ( 358.9 ) 845.7

Total definite-life intangibles

1,235.3 ( 448.6 ) 786.7 1,195.9 ( 405.0 ) 790.9

Indefinite-life intangibles

69 unchanged sentences

Term Loan Facility 5.850 % 2023 - 2027 825.0 987.5

Term loans (Senior Credit Facility) 6.610 % 2024 200.0 200.0

Term loans (Senior Credit Facility) N/A 2024 — 200.0

Senior notes - fixed rate (1)

4 unchanged sentences

5.900 % 2032 400.0 400.0

5.533 % 2025 9.3 —

Unamortized debt issuance costs and discounts

1 unchanged sentence

Total debt 1,648.0 1,988.3

Current maturities of short-term borrowings

Long-term debt $ 1,638.7 $ 1,988.3

(1) Senior notes are guaranteed as to payment by Pentair plc.

1 unchanged sentence

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

as borrowers, 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.

as borrowers, providing for a $ 900.0 million senior unsecured revolving credit facility.

During 2024, PFSA repaid $ 200.0 million of term loans under the Senior Credit Facility.

The revolving credit facility has a maturity date of December 16, 2026.

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.

2 unchanged sentences

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 2022, Pentair and PFSA entered into a senior unsecured term loan facility (the “Term Loan Facility”), with PFSA, as borrower, Pentair, as guarantor, and the lenders and agents party thereto, providing for 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 which began on the last day of the third quarter of 2023 and increases to $ 12.5 million beginning with the last day of the third quarter of 2024.

In addition, Pentair and PFSA are parties to a senior unsecured term loan facility (the “Term Loan Facility”), with PFSA, as borrower, Pentair, as guarantor, providing for 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 which began on the last day of the third quarter of 2023 and increased to $ 12.5 million on the last day of the third quarter of 2024.

During 2024, PFSA repaid the remaining $ 162.5 million of quarterly installments on the Term Loan Facility, such that PFSA is not required to make any further quarterly installment payments.

As of December 31, 2024, the remaining obligation of $ 825.0 million matures on July 28, 2027.

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 addition to the Term Loan Facility, Pentair, as guarantor, and PFSA, as issuer, completed a public offering in 2022 of $ 400.0 million aggregate principal amount of 5.900 % Senior Notes due 2032 (“2032 Senior Notes”).

We used the net proceeds from the Term Loan Facility and the issuance of the 2032 Senior Notes to finance a portion of the Manitowoc Ice acquisition purchase price and to pay related fees and expenses.

Pentair plc and Subsidiaries

5 unchanged sentences

Borrowings under these credit facilities bear interest at variable rates.

We have $ 37.5 million of Term Loan Facility payments and $ 200.0 million of payments under the senior unsecured term loan facility, associated with the Senior Credit Facility, due in the next twelve months.

We have $ 19.3 million of senior notes maturing in the next twelve months.

We classified this debt as long-term as of December 31, 2024 as we have the intent and ability to refinance such obligations on a long-term basis under the revolving credit facility under the Senior Credit Facility.

15 unchanged sentences

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

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

dollar equivalent amounts of $ 23.9 million and $ 9.4 million, respectively.

At December 31, 2024, there were no outstanding foreign currency derivative contracts.

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

dollar equivalent amounts of $ 23.9 million.

The impact of these contracts on the Consolidated Statements of Operations and Comprehensive Income was not material for any period presented.

8 unchanged sentences

Notes to consolidated financial statements

In December 2024, a cross currency swap agreement, which was accounted for as a cash flow hedge, matured, resulting in a net cash payment of $ 8.3 million, of which $ 9.1 million is included within financing activities and $ 0.8 million of interest income included within operating activities on the Consolidated Statements of Cash Flows.

In November 2024, we entered into transactions to early terminate and cash settle € 450.0 million our cross currency swap agreements, resulting in total net cash received of $ 11.4 million, of which $ 10.6 million is included within investing activities and $ 0.8 million of interest income is included within operating activities on the Consolidated Statements of Cash Flows.

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

In August 2024, we entered into a transaction to early terminate and cash settle a € 150 million cross currency swap agreement, resulting in a net cash payment of $ 16.1 million, of which $ 16.4 million is included in investing activities and $ 0.3 million of interest income is included within operating activities on the Consolidated Statements of Cash Flows.

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

In December 2023, we terminated a € 150.0 million cross currency swap agreement, resulting in a net cash payment of $ 17.6 million, of which $ 18.5 million is included within investing activities and $ 0.9 million of interest income is included within operating activities on the Consolidated Statements of Cash Flows.

Subsequent to the termination, we entered into new cross currency swaps with a combined notional amount of € 300.0 million.

In October 2022, we entered into transactions to early terminate and cash settle € 700.0 million of our cross currency swap agreements due to favorable market conditions.

The termination of the cross currency swap agreements resulted in net cash receipts of $ 84.3 million, of which $ 2.1 million, $ 70.1 million and $ 12.1 million are included within operating activities, investing activities and financing activities, respectively, on the Consolidated Statements of Cash Flows.

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 € 300.0 million 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 Statements of Cash Flows.

Subsequent to the termination, we entered into new cross currency swaps with a combined notional amount of $ 320.0 million to replace the terminated cross currency swap agreements.

Hedging of variable interest rates

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.

Dollar secured overnight financing rate (“SOFR”) of 3.795 %.

They have an effective date of April 4, 2023 and settle monthly through April 2026.

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.

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.

We manage our exposure to certain interest rate risks related to our variable-rate debt through the use of interest rate swaps and collars.

We enter into these agreements to hedge the variability of interest expense and cash flows attributable to changes in interest rates of our variable-rate debt.

As of December 31, 2024, we had an aggregate notional amount of $ 300.0 million and $ 200.0 million in interest rate swaps and collars, respectively, that are 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 Consolidated Balance Sheets.

We had an unrealized gain of $ 0.3 million at December 31, 2023 recorded in Accumulated other comprehensive loss associated with our interest rate swap and collar activity.

We had unrealized gains of $ 1.9 million and $ 0.3 million at December 31, 2024 and 2023, respectively, 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.

11 unchanged sentences

• 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 above;

• 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;

Pentair plc and Subsidiaries

Notes to consolidated financial statements

• 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 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;

• contingent earn-out liabilities — fair value is generally established using a probability-weighted discounted income approach to convert future estimated cash flows to a single present value amount.

The related inputs are classified as Level 3 in the valuation hierarchy defined above.

The recorded amounts and estimated fair values of total debt, excluding unamortized issuance costs and discounts , at December 31 were as follows:

In millions Recorded

Amount Fair Value Recorded

Amount Fair Value

In millions Recorded Amount Fair Value Recorded Amount Fair Value

Variable rate debt $ 843.8 $ 843.8 $ 1,187.5 $ 1,187.5

11 unchanged sentences

Deferred compensation plan assets 15.0 — — 14.4 29.4

Contingent earn-out liabilities

— — 8.0 — 8.0

Total recurring fair value measurements $ 15.0 $ ( 11.9 ) $ 8.0 $ 14.4 $ 25.5

2 unchanged sentences

Recurring fair value measurements

Interest rate contract assets

$ — $ 0.3 $ — $ — $ 0.3

Foreign currency contract assets — 0.2 — — 0.2

Foreign currency contract liabilities — ( 70.0 ) — — ( 70.0 )

1 unchanged sentence

Total recurring fair value measurements $ 12.1 $ ( 69.5 ) $ — $ 14.0 $ ( 43.4 )

In conjunction with the acquisition of G & F Manufacturing, we recorded an estimated fair value of $ 8.0 million of contingent earn-out liabilities, which are considered Level 3 under our fair value hierarchy.

The recorded fair value of the associated contingent earn-out liabilities was reviewed as of December 31, 2024, with no further change in fair value.

The fair value of the contingent earn-out liabilities will be re-measured for each reporting period until resolution of the contingent earn-out payments, and any resulting changes to fair value would be recorded in earnings.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Income from continuing operations before income taxes consisted of the following:

6 unchanged sentences

$ 718.9 $ 618.9 $ 550.6

(1) “Federal” reflects United Kingdom (“U.K.”) loss from continuing operations before income taxes, given U.K.

(1) “Federal” reflects United Kingdom (“U.K.”) income (loss) from continuing operations before income taxes, given U.K.

tax residency.

1 unchanged sentence

income from continuing operations before income taxes.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The (benefit) provision for income taxes consisted of the following:

The provision (benefit) for income taxes consisted of the following:

Years ended December 31

1 unchanged sentence

Currently payable (receivable)

$ 3.0 $ — $ —

International (2)

4 unchanged sentences

Total deferred taxes ( 11.4 ) ( 92.5 ) ( 44.8 )

Total (benefit) provision for income taxes

Total provision (benefit) for income taxes

$ 93.3 $ ( 4.0 ) $ 67.4

(1) “Federal” represents U.K.

(2) “ International” represents non-U.K.

7 unchanged sentences

Change in valuation allowances 2.0 2.2 1.0

Withholding taxes 1.5 — —

Excess tax benefits on stock-based compensation ( 1.5 ) ( 0.1 ) ( 0.2 )

2 unchanged sentences

Change in tax basis in foreign assets (3)

0.2 ( 8.0 ) —

Effective tax rate 13.0 % ( 0.6 ) % 12.2 %

5 unchanged sentences

(3) The 2023 impact primarily represents the initial recognition of tax basis in intangible assets in foreign jurisdictions and the related valuation allowance.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:

6 unchanged sentences

Gross decreases related to settlements with taxing authorities ( 1.3 ) ( 3.0 ) ( 0.6 )

Reductions due to statute expiration — — ( 10.1 )

Ending balance $ 6.0 $ 38.6 $ 39.6

We record gross unrecognized tax benefits in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.

Included in the $ 38.6 million of total gross unrecognized tax benefits as of December 31, 2023 was $ 38.3 million of tax benefits that, if recognized, would impact the effective tax rate.

It is reasonably possible that the gross unrecognized tax benefits as of December 31, 2023 may decrease by a range of zero to $ 33.6 million during 2024, primarily as a result of the expiration of U.S.

statute of limitations, and resolution of Germany and U.S.

state examinations.

The $ 6.0 million of total gross unrecognized tax benefits as of December 31, 2024, if recognized, would impact the effective tax rate.

It is reasonably possible that the gross unrecognized tax benefits as of December 31, 2024 may decrease by a range of zero to $ 1.0 million during 2025, primarily as a result of the resolution of tax audits.

Based on the outcome of these examinations, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in our financial statements.

A number of tax periods from 2009 to present

Pentair plc and Subsidiaries

Notes to consolidated financial statements

are under audit by tax authorities in various jurisdictions, including Belgium, Germany and India.

A number of tax periods from 2009 to present are under audit by tax authorities in various jurisdictions, including Belgium, Germany and India.

We anticipate that several of these audits may be concluded in the foreseeable future.

We record penalties and interest related to unrecognized tax benefits in (Benefit) p rovision for income taxes and Net interest expense , respectively, in the Consolidated Statements of Operations and Comprehensive Income.

At December 31, 2023 and 2022, we have liabilities of $ 0.3 million and $ 0.6 million, respectively, for the possible payment of penalties and $ 6.4 million and $ 4.9 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated Balance Sheets.

We record penalties and interest related to unrecognized tax benefits in Provision (benefit) for income taxes and Net interest expense , respectively, in the Consolidated Statements of Operations and Comprehensive Income.

At December 31, 2024, we have no liabilities for the possible payment of penalties, and at December 31, 2023, we had liabilities of $ 0.3 million for the possible payment of penalties.

At December 31, 2024 and 2023, we had $ 3.9 million and $ 6.4 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated Balance Sheets.

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which we received a tax deduction but the tax impact has not yet been recorded in the Consolidated Statements of Operations and Comprehensive Income).

4 unchanged sentences

Deferred tax liabilities 44.4 40.0

Net deferred tax assets (liabilities)

Net deferred tax assets

$ 85.2 $ 73.2

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The tax effects of the major items recorded as deferred tax assets and liabilities were as follows:

15 unchanged sentences

Total deferred tax liabilities 216.8 183.9

Net deferred tax assets (liabilities)

Net deferred tax assets

$ 85.2 $ 73.2

Included in tax loss and credit carryforwards in the table above is a foreign tax credit deferred tax asset of $ 30.7 million as of December 31, 2023.

The $ 30.7 million foreign tax credit carryover consists of $ 29.6 million from the tax period ended December 31, 2017 related to the transition tax and $ 1.1 million from the tax period ended December 31, 2023.

The foreign tax credit carryover from the tax period ended December 31, 2017 will expire December 31, 2027, and the foreign tax credit carryover from the period ended December 31, 2023 will expire December 31, 2033.

The entire amount of foreign tax credit carryovers generated from both periods are subject to a valuation allowance.

As of December 31, 2024, tax loss carryforwards of $ 2,852.8 million were available to offset future income.

2 unchanged sentences

The tax losses primarily relate to non-U.S.

carryforwards of $ 2,982.3 million of which

Pentair plc and Subsidiaries

Notes to consolidated financial statements

$ 1,857.1 million are located in jurisdictions with unlimited tax loss carryforward periods, while the remainder will begin to expire in 2024.

carryforwards of $ 2,796.5 million of which $ 1,762.4 million are located in jurisdictions with unlimited tax loss carryforward periods, while the remainder will begin to expire in 2025.

In addition, there were $ 56.3 million of U.S.

4 unchanged sentences

It is not practicable to estimate the amount of tax that might be payable if such earnings were to be remitted.

The Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”) for a global 15.0% minimum tax have been adopted by a number of jurisdictions in which we operate.

For the year ended December 31, 2024, the impact of Pillar Two on our consolidated financial statements was not material.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Benefit Plans

7 unchanged sentences

The following tables present reconciliations of plan benefit obligations, fair value of plan assets and the funded status of pension plans and other post-retirement plans as of and for the years ended December 31, 2024 and 2023:

Pension plans Other post-retirement

Pension plans Other post-retirement plans

In millions 2024 2023 2024 2023

4 unchanged sentences

Interest cost 3.9 4.1 0.4 0.5

Actuarial loss (gain)

Settlement (1)

( 6.8 ) — — —

Curtailment (1)

( 2.0 ) — — —

Actuarial (gain) loss (2)

( 2.7 ) 7.4 ( 0.6 ) ( 0.8 )

Foreign currency translation ( 1.1 ) 1.1 — —

6 unchanged sentences

Company contributions 11.2 7.6 0.8 1.1

( 6.8 ) — — —

Foreign currency translation ( 0.9 ) 1.0 — —

5 unchanged sentences

$ ( 55.9 ) $ ( 67.0 ) $ ( 6.6 ) $ ( 7.6 )

The actuarial loss in 2023 was primarily due to declines in the discount rates to reflect economic conditions at December 31, 2023.

The actuarial gain in 2022 was primarily due to increases in the discount rates to reflect economic conditions at December 31, 2022.

(1) The settlement and curtailment in 2024 related to a reduction in headcount in one of our pension plans as a result of ongoing transformation initiatives.

(2) The actuarial gain in 2024 was primarily due to increases in discount rates to reflect economic conditions at December 31, 2024.

The actuarial loss in 2023 was primarily due to declines in discount rates to reflect economic conditions at December 31, 2023.

Amounts recorded in the Consolidated Balance Sheets were as follows:

Pension plans Other post-retirement

Pension plans Other post-retirement plans

In millions 2024 2023 2024 2023

3 unchanged sentences

$ ( 55.9 ) $ ( 67.0 ) $ ( 6.6 ) $ ( 7.6 )

The accumulated benefit obligation for our pension plans was $ 82.6 million and $ 93.4 million at December 31, 2024 and 2023, respectively.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The accumulated benefit obligation for our pension plans was $ 93.4 million and $ 88.7 million at December 31, 2023 and 2022, respectively.

Information for pension plans with an accumulated benefit obligation or projected benefit obligation in excess of plan assets as of December 31 was as follows:

12 unchanged sentences

Expected return on plan assets ( 0.6 ) ( 0.8 ) ( 0.7 )

Net actuarial loss (gain)

Net actuarial (gain) loss

( 2.9 ) 7.1 ( 16.4 )

3 unchanged sentences

The following table provides the weighted-average assumptions used to determine benefit obligations and net periodic benefit cost as they pertain to our pension and other post-retirement plans.

Pension plans Other post-retirement

Pension plans Other post-retirement plans

Percentages 2024 2023 2022 2024 2023 2022

10 unchanged sentences

Discount rates

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date.

The discount rate reflects the current rate at which the pension liabilities could be effectively settled.

The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds rated AA or higher available in the marketplace.

3 unchanged sentences

In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader long-term market indices.

Pension plan assets yielded a gain of 2.82 % in 2023 and losses of 16.86 % and 0.89 % in 2022 and 2021, respectively.

Pension plan assets yielded gains of 1.97 % and 2.82 % in 2024 and 2023, respectively, and a loss of 16.86 % in 2022.

Pentair plc and Subsidiaries

14 unchanged sentences

Alternative 29 % 47 % 29 % 47 %

Cash 1 % — % — % — %

Fair value measurement

8 unchanged sentences

In millions Level 1 Level 2 Level 3 Total

Cash and cash equivalents $ 0.2 $ — $ — $ 0.2

Other investments — — 14.2 14.2

Total investments at fair value $ 0.2 $ — $ 14.2 $ 14.4

Investments measured at NAV 16.1

3 unchanged sentences

Investments in commingled funds that were valued based on unobservable inputs due to liquidation restrictions were classified as Level 3.

Activity for our Level 3 pension plan assets held during the years ended December 31, 2023 and 2022 was not material.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Activity for our Level 3 pension plan assets held during the year ended December 31, 2024 was as follows:

In millions December 31, 2024

Beginning balance $ 14.2

Actual return on plan assets 0.5

Company contributions 0.7

Benefits received 0.3

Settlement ( 6.8 )

Foreign currency translation ( 0.9 )

Ending balance $ 8.0

Activity for our Level 3 pension plan assets held during the year ended December 31, 2023 was not material.

Contributions

2 unchanged sentences

The 2025 expected contributions will equal or exceed our minimum funding requirements.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Estimated future benefit payments

The following benefit payments, which reflect expected future service or payout from termination, as appropriate, are expected to be paid by the plans in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter are as follows:

In millions Pension plans Other post-

In millions Pension plans Other post-retirement plans

2025 $ 8.0 $ 1.0

We have a 401(k) plan (the “401(k) plan”) with an employee share ownership (“ESOP”) bonus component, which covers certain union and all non-union U.S.

employees who met certain age requirements.

employees who meet certain age requirements.

Under the 401(k) plan, eligible U.S.

employees may voluntarily contribute a percentage of their eligible compensation.

We match contributions made by employees who met certain eligibility and service requirements.

We match contributions made by employees who meet certain eligibility and service requirements.

The 401(k) company match contribution is a dollar-for-dollar ( 100 %) matching contribution on up to 5 % of employee eligible earnings, contributed as before-tax contributions.

8 unchanged sentences

This authorization expires on December 31, 2025.

During the year ended December 31, 2022, we repurchased 1.0 million of our ordinary shares for $ 50.0 million.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

During the year ended December 31, 2023, no ordinary shares were repurchased.

During the year ended December 31, 2024, we repurchased 1.6 million of our ordinary shares for $ 150.0 million.

As of December 31, 2024, we had $ 450.0 million available for share repurchases under this authorization.

4 unchanged sentences

Dividends paid per ordinary share were $ 0.92 , $ 0.88 and $ 0.84 for the years ended December 31, 2024, 2023 and 2022, respectively.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Share-based compensation expense

1 unchanged sentence

In millions 2024 2023 2022

Restricted stock units $ 15.0 $ 14.6 $ 13.0

Stock options $ 5.3 $ 4.3 $ 3.7

Restricted stock units 16.1 15.0 14.6

Performance share units 18.3 9.8 6.6

20 unchanged sentences

Restricted shares and restricted stock units are valued at market value on the date of grant and are expensed over the vesting period.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Stock appreciation rights, performance shares and performance units

6 unchanged sentences

The estimated vesting of the PSUs is based on the probability of achieving certain performance metrics during the vesting period.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Stock options

11 unchanged sentences

Fair value of options granted

The weighted average grant date fair value of options granted under Pentair plans in 2023, 2022 and 2021 was estimated to be $ 14.03 , $ 17.88 and $ 12.88 per share, respectively.

The weighted average grant date fair value of options granted under the 2020 Share Plan in 2024, 2023 and 2022 was estimated to be $ 24.84 , $ 14.03 and $ 17.88 per share, respectively.

The total intrinsic value of options that were exercised during 2024, 2023 and 2022 was $ 32.0 million, $ 5.3 million and $ 0.7 million, respectively.

15 unchanged sentences

The tax benefit related to options exercised was $ 6.7 million, $ 1.0 million and $ 0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Restricted stock units

5 unchanged sentences

Vested ( 0.3 ) 54.93

Forfeited ( 0.1 ) 62.86

Outstanding as of December 31, 2024 0.5 $ 62.93

Pentair plc and Subsidiaries

Notes to consolidated financial statements

As of December 31, 2024, there was $ 18.4 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2020 Plan and previous plans.

That cost is expected to be recognized over a weighted-average period of one year .

That cost is expected to be recognized over a weighted-average period of 0.8 years.

The total fair value of shares vested during the years ended December 31, 2024, 2023 and 2022, was $ 14.9 million, $ 17.6 million and $ 11.7 million, respectively.

11 unchanged sentences

That cost is expected to be recognized over a weighted-average period of 1.2 years.

The tax benefits related to performance share units were $ 0.9 million, $ 0.3 million and $ 0.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The tax benefits related to performance share units were $ 0.9 million for the years ended December 31, 2024 and 2023, and $ 0.3 million for the year ended 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 Flow (formerly named the Industrial & Flow Technologies) segment remains the same.

We classify our operations into the following reporting segments:

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

At Pentair, our chief operating decision maker (“CODM”) is our President and Chief Executive Officer.

We define our reportable segments on the basis of the way in which internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions and allocate resources.

Based on this, we classify our operations into the following reportable segments:

• Flow — The focus of this segment is to deliver water where it is needed, when it is needed, more efficiently and to transform 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.

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.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

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

4 unchanged sentences

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.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

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

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

Our CODM evaluates our reportable segments’ performance based on net sales and reportable segment income and uses certain ratios, particularly return on sales, to measure their performance.

Additionally, these measures are used to evaluate reinvestment of profits into our reportable segments or into other parts of the Company, such as for acquisitions, debt repayments, dividend payments or share repurchases.

These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

Segment income (loss) represents equity income of unconsolidated subsidiaries and operating income exclusive of intangible amortization, certain acquisition related expenses, costs of restructuring and transformation activities, impairments and other unusual non-operating items.

Financial information by reportable segment is as follows:

Reportable segment income represents operating income of each reportable segment inclusive of equity income of unconsolidated subsidiaries and exclusive of intangible amortization, certain acquisition related expenses, costs of restructuring and transformation activities, impairments, legal accrual adjustments and settlements and other unusual non-operating items.

“Corporate and other” activity primarily consists of corporate expenses not allocated to the segments, including executive office, board of directors, and centrally-managed corporate functional or shared service costs related to finance, human resources, communications and corporate development.

These activities do not meet the criteria for a stand-alone reportable segment under accounting standards codification (“ASC”) 280.

Financial information by reportable segment as well as a reconciliation of reportable segment income to consolidated income from continuing operations before income taxes is as follows:

2024 2023 2022 2024 2023 2022 2024 2023 2022

In millions Net sales Segment income (loss)

In millions Identifiable assets (1)

Capital expenditures Depreciation

$ 1,590.7 $ 1,709.7 $ 1,722.4 $ 20.1 $ 19.6 $ 24.0 $ 21.4 $ 21.1 $ 19.5

2 unchanged sentences

1,801.3 1,679.8 1,710.3 17.1 17.3 28.8 13.1 11.4 8.9

Other 1.6 1.5 1.5 ( 91.8 ) ( 85.7 ) ( 81.8 )

Reportable segment total

6,005.5 6,084.7 6,219.1 59.5 59.9 77.5 51.6 50.6 46.8

Corporate and other

441.0 478.6 228.4 14.9 16.1 7.7 8.7 8.9 7.3

Consolidated $ 6,446.5 $ 6,563.3 $ 6,447.5 $ 74.4 $ 76.0 $ 85.2 $ 60.3 $ 59.5 $ 54.1

(1) All cash and cash equivalents are included in “Corporate and other.”

Pentair plc and Subsidiaries

Notes to consolidated financial statements

In millions Flow

Water Solutions

$ 1,514.0 $ 1,131.0 $ 1,436.1 $ 4,081.1

(1) One customer in the Pool business represented approximately 15 % of our consolidated net sales in 2023 and 20 % of our consolidated net sales in both 2022 and 2021.

Reconciliation of consolidated net sales

Corporate and other

Total consolidated net sales (1)

Cost of goods sold (2)(4)

( 965.1 ) ( 706.8 ) ( 799.3 )

In millions Identifiable assets (1)

Capital expenditures Depreciation

Operating expenses (2)(3)(4)

( 230.8 ) ( 169.1 ) ( 160.3 )

Reportable segment income

$ 318.1 $ 255.1 $ 476.5 $ 1,049.7

Corporate and other

Restructuring and other ( 37.0 )

Transformation costs ( 52.1 )

Pension and other post-retirement mark-to-market gain

Asset impairment and write-offs ( 17.6 )

Legal accrual adjustments and settlements 7.5

Intangible amortization

Interest expense, net

Other expense

Income from continuing operations before income taxes $ 718.9

(1) One customer in the Pool business represented approximately 15 % of our consolidated net sales in 2024.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM, which includes certain corporate overhead allocations directly attributable to each of the segments.

(3) Operating expenses include selling, general, administrative, research and development costs which primarily consist of non-manufacturing employee compensation, non-manufacturing overhead and professional service costs as well as depreciation expense.

(4) These costs exclude certain expenses reported in the Consolidated Statements of Operations and Comprehensive Income, including costs that are reflected in “Corporate and other” and expenses excluded from reportable segment income as defined above.

In millions Flow

Water Solutions

$ 1,582.1 $ 1,177.2 $ 1,343.6 $ 4,102.9

Reconciliation of consolidated net sales

Corporate and other

Total consolidated net sales (1)

Cost of goods sold (2)(4)

( 1,054.7 ) ( 752.5 ) ( 775.2 )

Other 478.6 228.4 214.2 16.1 7.7 4.7 8.9 7.3 6.1

Consolidated $ 6,563.3 $ 6,447.5 $ 4,753.6 $ 76.0 $ 85.2 $ 60.2 $ 59.5 $ 54.1 $ 51.2

(1) All cash and cash equivalents are included in “Other.”

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

In millions 2023 2022 2021

Segment income $ 855.1 $ 767.7 $ 685.9

Operating expenses (2)(3)(4)

( 245.1 ) ( 177.1 ) ( 151.4 )

Reportable segment income

$ 282.3 $ 247.6 $ 417.0 $ 946.9

Corporate and other

Restructuring and other ( 3.4 )

Transformation costs ( 44.3 )

Inventory step-up — ( 5.8 ) ( 2.3 )

Pension and other post-retirement mark-to-market (loss) gain

Pension and other post-retirement mark-to-market loss

Asset impairment and write-offs ( 7.9 )

Legal accrual adjustments and settlements

Intangible amortization

Interest expense, net

Income from continuing operations before income taxes $ 618.9

(1) One customer in the Pool business represented approximately 15 % of our consolidated net sales in 2023.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

In millions Flow

Water Solutions

$ 1,500.8 $ 986.8 $ 1,632.7 $ 4,120.3

Reconciliation of consolidated net sales

Corporate and other

Total consolidated net sales (1)

Cost of goods sold (2)(4)

( 1,041.5 ) ( 672.5 ) ( 1,009.8 )

Operating expenses (2)(3)(4)

( 217.0 ) ( 165.3 ) ( 160.8 )

Reportable segment income

$ 242.3 $ 149.0 $ 462.1 $ 853.4

Corporate and other

Restructuring and other ( 32.4 )

Transformation costs ( 27.2 )

Inventory step-up ( 5.8 )

Pension and other post-retirement mark-to-market gain

Asset impairment and write-offs ( 25.6 )

Gain on sale of businesses

Russia business exit impact ( 4.7 )

Deal-related costs and expenses

— ( 22.2 ) ( 7.9 )

Legal accrual adjustments and settlements

Intangible amortization

( 55.3 ) ( 52.5 ) ( 26.3 )

Interest expense, net

( 118.3 ) ( 61.8 ) ( 12.5 )

Other income (expense)

1.3 ( 2.4 ) ( 2.3 )

Other expense

Income from continuing operations before income taxes $ 550.6

Pentair plc and Subsidiaries

Notes to consolidated financial statements

(1) One customer in the Pool business represented approximately 20 % of our consolidated net sales in 2022.

Commitments and Contingencies

10 unchanged sentences

As of December 31, 2024 and 2023, our recorded reserves for environmental matters were not material.

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Product liability claims

16 unchanged sentences

The components of lease cost were as follows:

In millions December 31,

2023 December 31,

In millions 2024 2023

Operating lease cost $ 50.3 $ 49.7

1 unchanged sentence

Total lease cost $ 49.4 $ 48.8

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Supplemental cash flow information related to leases was as follows:

In millions December 31,

2023 December 31,

In millions 2024 2023

Operating cash flows from operating leases $ 36.3 $ 35.5

1 unchanged sentence

Other information related to leases was as follows:

2023 December 31,

Weighted-average remaining lease term of operating leases (years) 6.0 6.2

Weighted-average discount rate of operating leases 5.6 % 5.7 %

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Future minimum lease commitments under non-cancelable operating leases as of December 31, 2024 were as follows:

16 unchanged sentences

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

Pentair plc and Subsidiaries

Notes to consolidated financial statements

The changes in the carrying amount of service and product warranties from continuing operations were as follows:

7 unchanged sentences

Ending balance $ 67.2 $ 65.0 $ 63.1

Pentair plc and Subsidiaries

Notes to consolidated financial statements

Stand-by letters of credit, bank guarantees and bonds

8 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data