Exhibit 99.1
News Release
Pentair Reports Fourth Quarter and Full Year 2012 Results;
| | • | | Fourth quarter adjusted EPS of $0.47 per share and sales of $1.8 billion. |
| | • | | Integration, standardization, and repositioning continue to gain momentum and company is on track for $90 million in targeted synergies in 2013. |
| | • | | Adjusted free cash flow exceeded 100 percent of adjusted net income. |
| | • | | The company affirms 2013 adjusted EPS guidance of $3.10-$3.30. |
Reconciliations of GAAP to Non-GAAP are in the attached financial tables.
SCHAFFHAUSEN, Switzerland — January 29, 2013 — Pentair Ltd. (NYSE: PNR) today announced fourth quarter 2012 sales of $1.8 billion, an increase of 103 percent from the prior year quarter excluding 1 point of foreign exchange impact, reflecting the Flow Control acquisition. Adjusted fourth quarter 2012 earnings per diluted share (“EPS”) were $0.47, down 16 percent from adjusted EPS of $0.56 in the fourth quarter of last year. On a GAAP basis, the company reported a loss per share of $1.31 compared to a loss per share of $1.77 in the fourth quarter last year. Adjusted EPS and operating income exclude certain costs related to transformational activities in 2012, including the Flow Control merger. These costs include acquisition-related expenses, repositioning costs, “mark-to-market” pension expense, impairments, debt extinguishment expense, and certain tax items.
Fourth quarter 2012 adjusted operating income was $150 million, up 59 percent, and operating margins contracted 240 basis points to 8.5 percent. Excluding transition costs, pricing and productivity gains offset material inflation and higher labor costs. On a GAAP basis, the company reported an operating loss of $304 million.
For the full year, the company reported sales of $4.4 billion, adjusted operating income of $489 million, and adjusted EPS of $2.39. On a GAAP basis, the company reported an operating loss of $43 million and a loss per share of $0.84.
During the fourth quarter the company elected to change to a more preferable method of accounting for pension and postretirement benefits. Historically, the company recognized actuarial gains and losses annually as a component of Stockholders’ Equity, amortizing them into operating results over future periods. The company has now elected to immediately recognize these gains and losses in its operating results in the year in which they occur. These gains and losses will be measured annually as of December 31 and will be recorded in the fourth quarter of each year. For the fourth quarter of 2012, the Company recorded a charge of $146 million for actuarial losses. This change in accounting principle will be applied retrospectively. The impact to prior periods is summarized in a schedule attached to this press release.
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During the year, Pentair generated $318 million in adjusted free cash flow; this represented 100 percent conversion of adjusted net income. Adjusted free cash flow excludes the impact of acquisition-related payments, accelerated pension funding, and repositioning costs.
The company paid approximately $112 million in dividends in 2012, or $0.88 per share. The new quarterly dividend effective for the first and second quarters of 2013 is $0.23 per share per quarter. The company intends to seek authorization from its shareholders at its 2013 annual general meeting of shareholders to increase the dividend further for the remainder of 2013. If approved by the shareholders, the 2013 dividend increase will mark the 37th consecutive year in which Pentair has increased its dividend.
“The fourth quarter results were in line with expectations and marked the end of a historic transformational year for Pentair,” said Randall J. Hogan, Pentair chairman and chief executive officer. “The integration of the Flow Control businesses continues to gain momentum as the teams have come together and are building upon each other’s strengths. While many of our end markets faced some softness in the latter half of 2012, our businesses continued to deliver on the elements within our control, notably price and productivity, capabilities that have become hallmarks of Pentair.”
FOURTH QUARTER BUSINESS HIGHLIGHTS
ALLYEAROVERYEARCOMPARISONSAGAINST 2011ADJUSTEDRESULTSONAPROFORMABASISFORTHE FLOW CONTROLACQUISITION. SEEATTACHEDRECONCILIATIONSOFTHESE NON-GAAPMEASURES.
Water & Fluid Solutions sales grew 1 percent year-over-year to $771 million as the impact of foreign exchange was minimal in the quarter. In fast growth regions, Water & Fluid Solutions sales grew 4 percent driven by strength in Latin America and the Middle East.
| | • | | Residential & Commercial sales, which accounted for roughly 45 percent of Water & Fluid Solution sales, grew 2 percent. While there was continued weakness in western Europe and distributors guarded inventory levels closely, an improving North American residential market gained momentum. |
| | • | | Infrastructure sales, which includes the former Flow Control WES business, and which accounted for nearly 25 percent of Water & Fluid Solutions sales, were down 3 percent percent as the European infrastructure markets remained weak. However, the backlog in North American infrastructure projects continued to grow. |
| | • | | Food & Beverage sales, which accounted for nearly 15 percent of Water & Fluid Solutions sales, grew 2 percent led by continued gains with food service customers. Global agriculture sales were down in the quarter due to the timing of orders, but the company believes the 2013 outlook for global agriculture remains sound. There were several project delays from beverage customers in the quarter with most of this work moved to 2013. |
Water & Fluid Solutions’ fourth quarter adjusted operating income of $58 million represented a 24 percent decline as compared to $77 million in the same period last year. Adjusted operating margins decreased by 250 basis points to 7.5 percent. While price and productivity largely offset inflation in the quarter, the segment incurred substantial transition costs. Including repositioning, impairment, and acquisition related charges, Water & Fluid Solutions reported a fourth quarter GAAP operating loss of $57 million.
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Valves & Controlsdelivered fourth quarter 2012 sales of $547 million, up 3 percent versus the prior year quarter, excluding a 1 percent unfavorable impact from foreign exchange. Backlog increased 2 percent to $1.4 billion compared to third quarter 2012.
| | • | | Energy sales, which accounted for roughly 60 percent of Valves & Controls sales, grew 2 percent. Oil & gas industry sales had strong double-digit growth in the quarter, but some project delays impacted orders in the quarter. Power industry sales remained weak and mining industry sales had continued growth. |
| | • | | Industrial sales, which accounted for roughly 30 percent of Valves & Controls sales, grew 2 percent. Process sales in Asia were weak, but orders and backlog grew in the quarter. |
Valves & Controls delivered fourth quarter adjusted operating income of $42 million down 3 percent compared to $43 million in the same quarter last year. Fourth quarter 2012 adjusted operating margins decreased 40 basis points to 7.6 percent. Price and productivity generally offset inflation, but mix and transition costs contributed to margin contraction in the quarter. Including repositioning and acquisition related charges, Valves & Controls reported a GAAP operating loss of $77 million in the fourth quarter.
Technical Solutionsdelivered fourth quarter 2012 sales of $434 million, up 1 percent versus the prior year quarter including modest unfavorable impact from foreign exchange.
| | • | | Industrial sales, which accounted for roughly 50 percent of Technical Solutions sales, declined 2 percent. |
| | • | | Energy sales, which accounted for roughly 30 percent of Technical Solutions sales, grew 6 percent. |
| | • | | Residential & Commercial sales, which accounted for roughly 15 percent of Technical Solutions sales, grew 1 percent percent. |
Technical Solutions delivered adjusted fourth quarter operating income of $76 million, up 1 percent compared to $75 million in the same quarter last year. Fourth quarter 2012 adjusted operating margins were flat at 17.4 percent compared to the prior year quarter. Pricing and productivity gains driven by a better mix of standard products more than offset material and labor inflation. Transition costs impacted the year-over-year comparison negatively. Including repositioning, impairment, and acquisition related charges, Technical Solutions’ fourth quarter reported GAAP operating income was $12 million.
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OUTLOOK
Pentair continues to expect full year 2013 adjusted EPS to be between $3.10 and $3.30, which represents an increase of approximately 22 to 30 percent from 2012 adjusted pro forma EPS of $2.54. The company anticipates full year 2013 sales to be approximately $7.6 billion, or up approximately 3 to 5 percent over 2012 adjusted pro forma sales. The company expects to generate free cash flow in excess of 100 percent of net income once again.
Pentair is initiating first quarter 2013 adjusted EPS guidance of $0.54 to $0.56. This compares to first quarter 2012 adjusted pro-forma EPS of $0.54 and historical adjusted EPS of $0.64. The company expects first quarter 2013 revenue to be about $1.8 billion, which is up slightly compared to first quarter 2012 adjusted pro-forma revenue and up significantly versus historical first quarter 2012 revenue of $858 million. These results include around $10 million of costs associated to drive synergy benefits and only around $5 million of expected realized synergies. Synergies driven by fourth quarter 2012 repositioning actions and functional standardization efforts are on track to deliver $90 million for the full year of 2013 and are expected to ramp to $35 million by fourth quarter 2013.
“Despite much of the global economic uncertainty that persists, we are seeing signs of momentum building in several end markets, such as global energy and North American residential, which combined are just under half of Pentair’s revenue,” said Hogan. “Our focus remains on driving PIMS and improving our cost structure while continuing to invest in our businesses for growth. We remain committed to delivering $90 million in synergies in 2013 and $230 million cumulatively by the end of 2015, in addition to our goal of $5.00 of EPS in 2015.”
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EARNINGS CONFERENCE CALL
Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company’s performance and fourth quarter 2012 results on a two-way conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investors section of the company’s website shortly before the call begins. Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentation, both of which can be found on Pentair’s website. The webcast and presentation will be archived at the company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that Pentair believes to be “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the anticipated benefits of the merger or Pentair’s anticipated financial results, are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets”, “plans”, “believes”, “expects”, “intends”, “will”, “likely”, “may”, “anticipates”, “estimates”, “projects”, “should”, “would”, “expect”, “positioned”, “strategy”, “future”, “outlook”, guidance” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond Pentair’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to successfully integrate Pentair and the flow control business and achieve expected benefits from the merger; overall global economic and business conditions; competition and pricing pressures in the markets Pentair serves; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of market to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve Pentair’s long-term strategic operating goals. Additional information concerning these and other factors is contained in Pentair’s filings with the U.S. Securities and Exchange Commission (“SEC”), including in Pentair’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2012. All forward-looking statements speak only as of the date of this press release. Pentair assumes no obligation, and disclaims any obligation, to update the information contained in this press release.
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ABOUT PENTAIR LTD.
Pentair Ltd. (www.pentair.com) delivers industry-leading products, services and solutions for its customers’ diverse needs in water and other fluids, thermal management and equipment protection. With pro forma revenues of $7.3 billion, Pentair employs more than 30,000 people worldwide.
PENTAIR CONTACTS:
Investors:
Jim Lucas, Vice President of Investor Relations
Direct: 763-656-5575
Email:jim.lucas@pentair.com
Media:
Betsy Day, Corporate Communications Manager
Direct: 763-656-5537
Email:betsy.day@pentair.com
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Pentair Ltd. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended | | | Twelve months ended | |
| | | December 31, | | | December 31, | | | December 31, | | | December 31, | |
In thousands, except per-share data | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Net sales | | $ | 1,750,932 | | | $ | 865,692 | | | $ | 4,416,146 | | | $ | 3,456,686 | |
Cost of goods sold | | | 1,352,264 | | | | 600,827 | | | | 3,146,554 | | | | 2,382,964 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 398,668 | | | | 264,865 | | | | 1,269,592 | | | | 1,073,722 | |
% of net sales | | | 22.8 | % | | | 30.6 | % | | | 28.7 | % | | | 31.1 | % |
Selling, general and administrative | | | 609,882 | | | | 230,457 | | | | 1,158,436 | | | | 694,841 | |
% of net sales | | | 34.8 | % | | | 26.6 | % | | | 26.2 | % | | | 20.1 | % |
Research and development | | | 32,174 | | | | 20,063 | | | | 93,557 | | | | 78,158 | |
% of net sales | | | 1.8 | % | | | 2.3 | % | | | 2.1 | % | | | 2.3 | % |
Impairment of tradenames and goodwill | | | 60,718 | | | | 200,520 | | | | 60,718 | | | | 200,520 | |
% of net sales | | | 3.5 | % | | | 23.2 | % | | | 1.4 | % | | | 5.8 | % |
| | | | | | | | | | | | | | | | |
Operating income (loss) | | | (304,106 | ) | | | (186,175 | ) | | | (43,119 | ) | | | 100,203 | |
% of net sales | | | -17.4 | % | | | -21.5 | % | | | -1.0 | % | | | 2.9 | % |
Other (income) expense: | | | | | | | | | | | | | | | | |
Loss on early extinguishment of debt | | | 75,367 | | | | — | | | | 75,367 | | | | — | |
Equity (income) losses of unconsolidated subsidiaries | | | 145 | | | | (417 | ) | | | (2,156 | ) | | | (1,898 | ) |
Net interest expense | | | 18,168 | | | | 17,524 | | | | 67,635 | | | | 58,835 | |
% of net sales | | | 1.0 | % | | | 2.0 | % | | | 1.5 | % | | | 1.7 | % |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes and noncontrolling interest | | | (397,786 | ) | | | (203,282 | ) | | | (183,965 | ) | | | 43,266 | |
Provision (benefit) for income taxes | | | (123,050 | ) | | | (29,214 | ) | | | (79,353 | ) | | | 46,417 | |
effective tax rate | | | 30.9 | % | | | 14.4 | % | | | 43.1 | % | | | 107.3 | % |
| | | | | | | | | | | | | | | | |
Net loss before noncontrolling interest | | | (274,736 | ) | | | (174,068 | ) | | | (104,612 | ) | | | (3,151 | ) |
Noncontrolling interest | | | (1,653 | ) | | | 419 | | | | 2,574 | | | | 4,299 | |
| | | | | | | | | | | | | | | | |
Net loss attributable to Pentair Ltd. | | $ | (273,083 | ) | | $ | (174,487 | ) | | $ | (107,186 | ) | | $ | (7,450 | ) |
| | | | | | | | | | | | | | | | |
Loss per common share attributable to Pentair Ltd. | | | | | | | | | | | | | | | | |
Basic | | $ | (1.31 | ) | | $ | (1.77 | ) | | $ | (0.84 | ) | | $ | (0.08 | ) |
Diluted | | $ | (1.31 | ) | | $ | (1.77 | ) | | $ | (0.84 | ) | | $ | (0.08 | ) |
| | | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 208,402 | | | | 98,395 | | | | 127,368 | | | | 98,233 | |
Diluted | | | 208,402 | | | | 98,395 | | | | 127,368 | | | | 98,233 | |
| | | | |
Cash dividends paid per common share | | $ | 0.22 | | | $ | 0.20 | | | $ | 0.88 | | | $ | 0.80 | |
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Pentair Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
| | | | | | | | |
| | | December 31 | |
In thousands | | 2012 | | | 2011 | |
| Assets | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 261,341 | | | $ | 50,077 | |
Accounts and notes receivable, net | | | 1,292,648 | | | | 569,204 | |
Inventories | | | 1,380,271 | | | | 449,863 | |
Deferred taxes | | | 77,661 | | | | 60,899 | |
Prepaid expenses and other current assets | | | 248,447 | | | | 107,792 | �� |
| | | | | | | | |
Total current assets | | | 3,260,368 | | | | 1,237,835 | |
| | |
Property, plant and equipment, net | | | 1,224,488 | | | | 387,525 | |
| | |
Other assets | | | | | | | | |
Goodwill | | | 4,894,512 | | | | 2,273,918 | |
Intangibles, net | | | 1,909,656 | | | | 592,285 | |
Other non-current assets | | | 506,287 | | | | 94,750 | |
| | | | | | | | |
Total other assets | | | 7,310,455 | | | | 2,960,953 | |
| | | | | | | | |
Total assets | | $ | 11,795,311 | | | $ | 4,586,313 | |
| | | | | | | | |
| Liabilities and Equity | |
Current liabilities | | | | | | | | |
Current maturities of long-term debt | | $ | 3,096 | | | $ | 4,862 | |
Accounts payable | | | 569,596 | | | | 294,858 | |
Dividends payable | | | 94,966 | | | | — | |
Employee compensation and benefits | | | 295,067 | | | | 118,413 | |
Accrued product claims and warranties | | | 67,046 | | | | 42,630 | |
Accrued rebates and sales incentives | | | 36,522 | | | | 37,009 | |
Other current liabilities | | | 471,628 | | | | 144,069 | |
| | | | | | | | |
Total current liabilities | | | 1,537,921 | | | | 641,841 | |
| | |
Other liabilities | | | | | | | | |
Long-term debt | | | 2,454,278 | | | | 1,304,225 | |
Pension and other post-retirement compensation and benefits | | | 378,066 | | | | 280,389 | |
Deferred tax liabilities | | | 488,102 | | | | 188,957 | |
Other non-current liabilities | | | 453,587 | | | | 123,509 | |
| | | | | | | | |
Total liabilities | | | 5,311,954 | | | | 2,538,921 | |
| | |
Equity | | | 6,483,357 | | | | 2,047,392 | |
| | | | | | | | |
Total liabilities and equity | | $ | 11,795,311 | | | $ | 4,586,313 | |
| | | | | | | | |
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Pentair Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
| | | | | | | | |
| | | Years ended December 31 | |
In thousands | | 2012 | | | 2011 | |
Operating activities | | | | | | | | |
Net loss before noncontrolling interest | | $ | (104,612 | ) | | $ | (3,151 | ) |
Adjustments to reconcile net loss to net cash provided by (used for) operating activities | | | | | | | | |
Equity income of unconsolidated subsidiaries | | | (2,156 | ) | | | (1,898 | ) |
Depreciation | | | 87,835 | | | | 66,235 | |
Amortization | | | 75,957 | | | | 41,897 | |
Deferred income taxes | | | (175,816 | ) | | | (5,583 | ) |
Share-based compensation | | | 35,847 | | | | 19,489 | |
Impairment of trade names and goodwill | | | 60,718 | | | | 200,520 | |
Loss on early extinguishment of debt | | | 75,367 | | | | — | |
Excess tax benefits from share-based compensation | | | (4,976 | ) | | | (3,310 | ) |
Pension and other post-retirement expense | | | 167,237 | | | | 84,549 | |
Pension and post-retirement contributions, net | | | (237,532 | ) | | | (67,473 | ) |
Loss (gain) on sale of assets | | | (2,276 | ) | | | 933 | |
Changes in assets and liabilities, net of effects of business acquisitions | | | | | | | | |
Accounts and notes receivable | | | 55,720 | | | | 1,348 | |
Inventories | | | 125,099 | | | | 18,263 | |
Prepaid expenses and other current assets | | | (6,696 | ) | | | 10,032 | |
Accounts payable | | | (61,990 | ) | | | (24,330 | ) |
Employee compensation and benefits | | | (81,313 | ) | | | (20,486 | ) |
Accrued product claims and warranties | | | (11,594 | ) | | | (1,984 | ) |
Income taxes | | | 8,060 | | | | 10,084 | |
Other current liabilities | | | 59,449 | | | | 10,921 | |
Other assets and liabilities | | | 5,632 | | | | (15,830 | ) |
| | | | | | | | |
Net cash provided by (used for) operating activities | | | 67,960 | | | | 320,226 | |
Investing activities | | | | | | | | |
Capital expenditures | | | (94,532 | ) | | | (73,348 | ) |
Proceeds from sale of property and equipment | | | 5,508 | | | | 1,310 | |
Acquisitions, net of cash acquired | | | 470,459 | | | | (733,105 | ) |
Other | | | (5,858 | ) | | | (2,943 | ) |
| | | | | | | | |
Net cash provided by (used for) investing activities | | | 375,577 | | | | (808,086 | ) |
Financing activities | | | | | | | | |
Net short-term borrowings | | | (3,700 | ) | | | (1,239 | ) |
Proceeds from long-term debt | | | 1,536,146 | | | | 1,421,602 | |
Repayment of long-term debt | | | (1,305,339 | ) | | | (832,147 | ) |
Debt issuance costs | | | (9,704 | ) | | | (8,973 | ) |
Debt termination costs | | | (74,752 | ) | | | — | |
Excess tax benefits from share-based compensation | | | 4,976 | | | | 3,310 | |
Shares issued to employees, net of shares withheld | | | 68,177 | | | | 13,322 | |
Repurchases of common shares | | | (334,159 | ) | | | (12,785 | ) |
Dividends paid | | | (112,397 | ) | | | (79,537 | ) |
Distributions to noncontrolling interest | | | (1,554 | ) | | | — | |
| | | | | | | | |
Net cash provided by (used for) financing activities | | | (232,306 | ) | | | 503,553 | |
Effect of exchange rate changes on cash and cash equivalents | | | 33 | | | | (11,672 | ) |
| | | | | | | | |
Change in cash and cash equivalents | | | 211,264 | | | | 4,021 | |
Cash and cash equivalents, beginning of year | | | 50,077 | | | | 46,056 | |
| | | | | | | | |
Cash and cash equivalents, end of year | | $ | 261,341 | | | $ | 50,077 | |
| | | | | | | | |
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Pentair Ltd. and Subsidiaries
Supplemental Financial Information by Reportable Segment (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Twelve Months | |
In thousands | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
Net sales to external customers | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 586,978 | | | $ | 675,522 | | | $ | 605,390 | | | $ | 770,513 | | | $ | 2,638,403 | |
Valves & Controls | | | — | | | | — | | | | — | | | | 546,707 | | | | 546,707 | |
Technical Solutions | | | 271,199 | | | | 266,003 | | | | 260,122 | | | | 433,712 | | | | 1,231,036 | |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 858,177 | | | $ | 941,525 | | | $ | 865,512 | | | $ | 1,750,932 | | | $ | 4,416,146 | |
| | | | | | | | | | | | | | | | | | | | |
Intersegment sales | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 73 | | | $ | (116 | ) | | $ | 60 | | | $ | 773 | | | $ | 790 | |
Valves & Controls | | | — | | | | — | | | | — | | | | 1,919 | | | | 1,919 | |
Technical Solutions | | | 1,359 | | | | 1,535 | | | | 1,400 | | | | 1,094 | | | | 5,388 | |
Other | | | (1,432 | ) | | | (1,419 | ) | | | (1,460 | ) | | | (3,786 | ) | | | (8,097 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 63,677 | | | $ | 91,989 | | | $ | 69,228 | | | $ | (56,851 | ) | | $ | 168,043 | |
Valves & Controls | | | — | | | | — | | | | — | | | | (76,843 | ) | | | (76,843 | ) |
Technical Solutions | | | 50,459 | | | | 50,624 | | | | 52,320 | | | | 11,614 | | | | 165,017 | |
Other | | | (27,662 | ) | | | (23,299 | ) | | | (66,349 | ) | | | (182,026 | ) | | | (299,336 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 86,474 | | | $ | 119,314 | | | $ | 55,199 | | | $ | (304,106 | ) | | $ | (43,119 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income as a percent of net sales | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | | 10.8 | % | | | 13.6 | % | | | 11.4 | % | | | -7.4 | % | | | 6.4 | % |
Valves & Controls | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % | | | -14.1 | % | | | -14.1 | % |
Technical Solutions | | | 18.6 | % | | | 19.0 | % | | | 20.1 | % | | | 2.7 | % | | | 13.4 | % |
Consolidated | | | 9.9 | % | | | 12.5 | % | | | 6.2 | % | | | -17.4 | % | | | -1.0 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Twelve Months | |
In thousands | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
Net sales to external customers | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 515,368 | | | $ | 631,994 | | | $ | 614,557 | | | $ | 607,885 | | | $ | 2,369,804 | |
Valves & Controls | | | — | | | | — | | | | — | | | | — | | | | — | |
Technical Solutions | | | 274,905 | | | | 278,181 | | | | 275,989 | | | | 257,807 | | | | 1,086,882 | |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 790,273 | | | $ | 910,175 | | | $ | 890,546 | | | $ | 865,692 | | | $ | 3,456,686 | |
| | | | | | | | | | | | | | | | | | | | |
Intersegment sales | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 455 | | | $ | 316 | | | $ | 426 | | | $ | 390 | | | $ | 1,587 | |
Valves & Controls | | | — | | | | — | | | | — | | | | — | | | | — | |
Technical Solutions | | | 999 | | | | 1,559 | | | | 1,755 | | | | 1,313 | | | | 5,626 | |
Other | | | (1,454 | ) | | | (1,875 | ) | | | (2,181 | ) | | | (1,703 | ) | | | (7,213 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | $ | 56,528 | | | $ | 84,521 | | | $ | 59,608 | | | $ | (142,346 | ) | | $ | 58,311 | |
Valves & Controls | | | — | | | | — | | | | — | | | | — | | | | — | |
Technical Solutions | | | 48,087 | | | | 48,261 | | | | 48,611 | | | | 40,281 | | | | 185,240 | |
Other | | | (19,146 | ) | | | (24,068 | ) | | | (16,024 | ) | | | (84,110 | ) | | | (143,348 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated | | $ | 85,469 | | | $ | 108,714 | | | $ | 92,195 | | | $ | (186,175 | ) | | $ | 100,203 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income as a percent of net sales | | | | | | | | | | | | | | | | | | | | |
Water & Fluid Solutions | | | 11.0 | % | | | 13.4 | % | | | 9.7 | % | | | -23.4 | % | | | 2.5 | % |
Valves & Controls | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % |
Technical Solutions | | | 17.5 | % | | | 17.3 | % | | | 17.6 | % | | | 15.6 | % | | | 17.0 | % |
Consolidated | | | 10.9 | % | | | 12.0 | % | | | 10.4 | % | | | -21.5 | % | | | 2.9 | % |
(more)
– 11 –
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2012 to the “Adjusted” non-GAAP
excluding the effect of 2012 adjustments (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions, except per-share data | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
Total Pentair | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 858.2 | | | $ | 941.5 | | | $ | 865.5 | | | $ | 1,750.9 | | | $ | 4,416.1 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as reported | | | 86.5 | | | | 119.3 | | | | 55.2 | | | | (304.1 | ) | | | (43.1 | ) |
% of net sales | | | 10.1 | % | | | 12.7 | % | | | 6.4 | % | | | (17.4 | %) | | | (1.0 | %) |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Deal related costs and expenses | | | 11.8 | | | | 6.3 | | | | 52.7 | | | | 12.0 | | | | 82.8 | |
Inventory step-up and customer backlog | | | — | | | | — | | | | — | | | | 179.6 | | | | 179.6 | |
Restructuring | | | — | | | | 10.4 | | | | 1.1 | | | | 55.3 | | | | 66.8 | |
Trade name impairment | | | — | | | | — | | | | — | | | | 60.7 | | | | 60.7 | |
Change in accounting method—pension and post-retirement | | | (1.5 | ) | | | (1.5 | ) | | | (1.5 | ) | | | 146.2 | | | | 141.7 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 96.8 | | | | 134.5 | | | | 107.5 | | | | 149.7 | | | | 488.5 | |
% of net sales | | | 11.3 | % | | | 14.3 | % | | | 12.4 | % | | | 8.5 | % | | | 11.1 | % |
| | | | | |
Net income (loss) attributable to Pentair Ltd.—as reported | | | 61.8 | | | | 72.8 | | | | 31.4 | | | | (273.1 | ) | | | (107.1 | ) |
Bond redemption and interest expense | | | (0.8 | ) | | | — | | | | 1.8 | | | | 51.9 | | | | 52.9 | |
Other adjustments net of tax | | | 3.0 | | | | 10.9 | | | | 32.3 | | | | 320.9 | | | | 367.1 | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations attributable to Pentair Ltd.—as adjusted | | | 64.0 | | | | 83.7 | | | | 65.5 | | | | 99.7 | | | | 312.9 | |
| | | | | | | | | | | | | | | | | | | | |
Continuing earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share—as reported | | $ | 0.62 | | | $ | 0.72 | | | $ | 0.31 | | | $ | (1.31 | ) | | $ | (0.84 | ) |
Adjustments | | | 0.02 | | | | 0.11 | | | | 0.33 | | | | 1.78 | | | | 3.23 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as adjusted | | $ | 0.64 | | | $ | 0.83 | | | $ | 0.64 | | | $ | 0.47 | | | $ | 2.39 | |
| | | | | | | | | | | | | | | | | | | | |
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2011 to the “Adjusted” non-GAAP
excluding the effect of 2011 adjustments (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions, except per-share data | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
Total Pentair | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 790.3 | | | $ | 910.2 | | | $ | 890.5 | | | $ | 865.7 | | | $ | 3,456.7 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as reported | | | 85.5 | | | | 108.7 | | | | 92.2 | | | | (186.2 | ) | | | 100.2 | |
% of net sales | | | 10.8 | % | | | 11.9 | % | | | 10.4 | % | | | (21.5 | %) | | | 2.9 | % |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Deal related costs and expenses | | | 1.7 | | | | 6.1 | | | | — | | | | 0.5 | | | | 8.3 | |
Inventory step-up and customer backlog | | | 0.2 | | | | 5.3 | | | | 5.8 | | | | 2.2 | | | | 13.5 | |
Restructuring | | | — | | | | — | | | | 2.1 | | | | 10.8 | | | | 12.9 | |
Goodwill impairment | | | — | | | | — | | | | — | | | | 200.5 | | | | 200.5 | |
Change in accounting method—pension and post-retirement | | | 0.7 | | | | 0.7 | | | | 0.7 | | | | 66.2 | | | | 68.3 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 88.1 | | | | 120.8 | | | | 100.8 | | | | 94.0 | | | | 403.7 | |
% of net sales | | | 11.1 | % | | | 13.3 | % | | | 11.3 | % | | | 10.9 | % | | | 11.7 | % |
| | | | | |
Net income (loss) attributable to Pentair Ltd.—as reported | | | 50.1 | | | | 66.3 | | | | 50.6 | | | | (174.5 | ) | | | (7.5 | ) |
Adjustments net of tax | | | 1.7 | | | | 9.2 | | | | 7.1 | | | | 230.2 | | | | 248.2 | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations attributable to Pentair Ltd.—as adjusted | | | 51.8 | | | | 75.5 | | | | 57.7 | | | | 55.7 | | | | 240.7 | |
| | | | | | | | | | | | | | | | | | | | |
Continuing earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share—as reported | | $ | 0.50 | | | $ | 0.66 | | | $ | 0.50 | | | $ | (1.77 | ) | | $ | (0.08 | ) |
Adjustments | | | 0.02 | | | | 0.09 | | | | 0.08 | | | | 2.33 | | | | 2.49 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as adjusted | | $ | 0.52 | | | $ | 0.75 | | | $ | 0.58 | | | $ | 0.56 | | | $ | 2.41 | |
| | | | | | | | | | | | | | | | | | | | |
(more)
– 12 –
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2012 to the “Adjusted” non-GAAP
excluding the effect of 2012 adjustments (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
Water & Fluid Solutions | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 587.0 | | | $ | 675.5 | | | $ | 605.4 | | | $ | 770.5 | | | $ | 2,638.4 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as reported | | | 63.7 | | | $ | 92.0 | | | $ | 69.2 | | | $ | (56.9 | ) | | $ | 168.0 | |
% of net sales | | | 10.9 | % | | | 13.6 | % | | | 11.4 | % | | | (7.4 | %) | | | 6.4 | % |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Restructuring | | | — | | | | 6.9 | | | | 1.1 | | | | 42.5 | | | | 50.5 | |
Inventory step-up and customer backlog | | | — | | | | — | | | | — | | | | 23.4 | | | | 23.4 | |
Trade name impairment | | | — | | | | — | | | | — | | | | 49.1 | | | | 49.1 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 63.7 | | | | 98.9 | | | | 70.3 | | | | 58.1 | | | | 291.0 | |
% of net sales | | | 10.9 | % | | | 14.7 | % | | | 11.6 | % | | | 7.5 | % | | | 11.0 | % |
| | | | | |
Valves & Controls | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | — | | | $ | — | | | $ | — | | | $ | 546.7 | | | $ | 546.7 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as reported | | | — | | | | — | | | | — | | | | (76.8 | ) | | | (76.8 | ) |
% of net sales | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % | | | (14.0 | %) | | | (14.0 | %) |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Restructuring | | | — | | | | — | | | | — | | | | 5.1 | | | | 5.1 | |
Inventory step-up and customer backlog | | | — | | | | — | | | | — | | | | 113.5 | | | | 113.5 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | — | | | | — | | | | — | | | | 41.8 | | | | 41.8 | |
% of net sales | | | 0.0 | % | | | 0.0 | % | | | 0.0 | % | | | 7.6 | % | | | 7.6 | % |
| | | | | |
Technical Solutions | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 271.2 | | | $ | 266.0 | | | $ | 260.1 | | | $ | 433.7 | | | $ | 1,231.0 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as reported | | | 50.5 | | | | 50.6 | | | | 52.3 | | | | 11.6 | | | | 165.0 | |
% of net sales | | | 18.6 | % | | | 19.0 | % | | | 20.1 | % | | | 2.7 | % | | | 13.4 | % |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Restructuring | | | — | | | | 3.1 | | | | — | | | | 9.7 | | | | 12.8 | |
Inventory step-up and customer backlog | | | — | | | | — | | | | — | | | | 42.7 | | | | 42.7 | |
Trade name impairment | | | — | | | | — | | | | — | | | | 11.6 | | | | 11.6 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 50.5 | | | | 53.7 | | | | 52.3 | | | | 75.6 | | | | 232.1 | |
% of net sales | | | 18.6 | % | | | 20.3 | % | | | 20.1 | % | | | 17.4 | % | | | 18.9 | % |
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2011 to the “Adjusted” non-GAAP
excluding the effect of 2011 adjustments (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
Water & Fluid Solutions | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 515.4 | | | $ | 632.0 | | | $ | 614.6 | | | $ | 607.9 | | | $ | 2,369.8 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as reported | | $ | 56.5 | | | $ | 84.5 | | | $ | 59.6 | | | $ | (142.3 | ) | | $ | 58.3 | |
% of net sales | | | 11.0 | % | | | 13.4 | % | | | 9.7 | % | | | (23.4 | %) | | | 2.5 | % |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Restructuring | | | — | | | | — | | | | 2.0 | | | | 7.8 | | | | 9.8 | |
Inventory step-up and customer backlog | | | 0.2 | | | | 5.3 | | | | 5.8 | | | | 2.2 | | | | 13.5 | |
Goodwill impairment | | | — | | | | — | | | | — | | | | 200.5 | | | | 200.5 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 56.7 | | | | 89.8 | | | | 67.4 | | | | 68.2 | | | | 282.1 | |
% of net sales | | | 11.0 | % | | | 14.2 | % | | | 11.0 | % | | | 11.2 | % | | | 11.9 | % |
| | | | | |
Technical Solutions | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 274.9 | | | $ | 278.2 | | | $ | 276.0 | | | $ | 257.8 | | | $ | 1,086.9 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as reported | | $ | 48.1 | | | $ | 48.3 | | | $ | 48.6 | | | $ | 40.3 | | | $ | 185.3 | |
% of net sales | | | 17.5 | % | | | 17.3 | % | | | 17.6 | % | | | 15.6 | % | | | 17.0 | % |
Adjustments—restructuring | | | — | | | | — | | | | 0.1 | | | | 2.0 | | | | 2.1 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as adjusted | | | 48.1 | | | | 48.3 | | | | 48.7 | | | | 42.3 | | | | 187.4 | |
% of net sales | | | 17.5 | % | | | 17.3 | % | | | 17.7 | % | | | 16.4 | % | | | 17.2 | % |
(more)
– 13 –
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2013 to the “Adjusted” non-GAAP
excluding the effect of 2013 adjustments (Unaudited)
| | | | | | | | |
| | | Forecast | | | Forecast | |
| | | First Quarter | | | Year | |
In millions, except per-share data | | 2013 | | | 2013 | |
Total Pentair | | | | | | | | |
Net sales | | approx | $1,800 | | | approx | $7,600 | |
| | | | | | | | |
Operating income—as reported | | approx | 97 | | | approx | 865 | |
% of net sales | | approx | 5.4 | % | | approx | 11.4 | % |
Adjustments: | | | | | | | | |
Inventory step-up and customer backlog | | approx | 78 | | | approx | 85 | |
| | | | | | | | |
Operating income—as adjusted | | approx | 175 | | | approx | 950 | |
% of net sales | | approx | 9.7 | % | | approx | 12.5 | % |
| | |
Net income attributable to Pentair Ltd.—as reported | | approx | 58 | | | approx | 591 | |
Adjustments net of tax | | approx | 59 | | | approx | 64 | |
| | | | | | | | |
Net income from continuing operations attributable to Pentair Ltd.—as adjusted | | approx | 117 | | | approx | 655 | |
| | | | | | | | |
Continuing earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | |
Diluted earnings per common share—as reported | | | $0.26-$0.28 | | | | $2.79-$2.99 | |
Adjustments | | | 0.28 | | | | 0.31 | |
| | | | | | | | |
Diluted earnings per common share—as adjusted | | | $0.54-$0.56 | | | | $3.10-$3.30 | |
| | | | | | | | |
(more)
– 14 –
Pentair Ltd. and Subsidiaries
Reconciliation of Net Cash Provided By (Used For) Operating Activities
to Adjusted Free Cash Flow
For the Year Ended December 31, 2012
(in millions)
| | | | |
Net cash provided by (used for) operating activities | | $ | 68.0 | |
Capital expenditures | | | (94.5 | ) |
Proceeds from sale of property and equipment | | | 5.5 | |
| | | | |
Free cash flow | | | (21.0 | ) |
Adjustments: | | | | |
Accelerated pension funding | | | 193.0 | |
Acquisition related payments | | | 126.0 | |
Repositioning | | | 20.0 | |
| | | | |
Adjusted Free Cash Flow | | $ | 318.0 | |
| | | | |
(more)
– 15 –
Pentair Ltd. and Subsidiaries
Schedule of “As Reported” to “As Restated”
for the Change in Accounting for Pension and Post-retirement Benefits
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions, except per-share data | | 2012 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
Operating income (loss)—as reported | | | 85.0 | | | | 117.8 | | | | 53.7 | | | | (157.9 | ) | | | 98.6 | |
Change in accounting principle | | | 1.5 | | | | 1.5 | | | | 1.5 | | | | (146.2 | ) | | | (141.7 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as restated | | | 86.5 | | | | 119.3 | | | | 55.2 | | | | (304.1 | ) | | | (43.1 | ) |
| | | | | |
Net income (loss) attributable to Pentair Ltd.—as reported | | | 60.8 | | | | 71.8 | | | | 30.4 | | | | (183.9 | ) | | | (20.9 | ) |
Change in accounting principle | | | 1.0 | | | | 1.0 | | | | 1.0 | | | | (89.2 | ) | | | (86.2 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to Pentair Ltd.—as restated | | | 61.8 | | | | 72.8 | | | | 31.4 | | | | (273.1 | ) | | | (107.1 | ) |
| | | | | | | | | | | | | | | | | | | | |
Earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as reported | | $ | 0.61 | | | $ | 0.71 | | | $ | 0.30 | | | $ | (0.88 | ) | | $ | (0.16 | ) |
Change in accounting principle | | | 0.01 | | | | 0.01 | | | | 0.01 | �� | | | (0.43 | ) | | | (0.68 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as restated | | $ | 0.62 | | | $ | 0.72 | | | $ | 0.31 | | | $ | (1.31 | ) | | $ | (0.84 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |
In millions, except per-share data | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
Operating income (loss)—as reported | | | 86.2 | | | | 109.4 | | | | 92.9 | | | | (120.0 | ) | | | 168.5 | |
Change in accounting principle | | | (0.7 | ) | | | (0.7 | ) | | | (0.7 | ) | | | (66.2 | ) | | | (68.3 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss)—as restated | | | 85.5 | | | | 108.7 | | | | 92.2 | | | | (186.2 | ) | | | 100.2 | |
| | | | | |
Net income (loss) attributable to Pentair Ltd.—as reported | | | 50.5 | | | | 66.7 | | | | 51.1 | | | | (134.1 | ) | | | 34.2 | |
Change in accounting principle | | | (0.4 | ) | | | (0.4 | ) | | | (0.4 | ) | | | (40.5 | ) | | | (41.7 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to Pentair Ltd.—as restated | | | 50.1 | | | | 66.3 | | | | 50.7 | | | | (174.6 | ) | | | (7.5 | ) |
| | | | | | | | | | | | | | | | | | | | |
Earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as reported | | $ | 0.51 | | | $ | 0.67 | | | $ | 0.51 | | | $ | (1.36 | ) | | $ | 0.34 | |
Change in accounting principle | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.41 | ) | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as restated | | $ | 0.50 | | | $ | 0.66 | | | $ | 0.50 | | | $ | (1.77 | ) | | $ | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
In millions, except per-share data | | 2010 | | | 2009 | | | 2008 | | | | | | | |
Operating income—as reported | | | 334.2 | | | | 219.9 | | | | 324.7 | | | | | | | | | |
Change in accounting principle | | | (21.2 | ) | | | (0.9 | ) | | | (109.9 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Operating income—as restated | | | 313.0 | | | | 219.0 | | | | 214.8 | | | | | | | | | |
| | | | | |
Net income from continuing operations attributable to Pentair Ltd.—as reported | | | 198.5 | | | | 115.5 | | | | 256.4 | | | | | | | | | |
Change in accounting principle | | | (12.9 | ) | | | (0.5 | ) | | | (67.0 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations attributable to Pentair Ltd.—as restated | | | 185.6 | | | | 115.0 | | | | 189.4 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Continuing earnings per common share attributable to Pentair Ltd.—diluted | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as reported | | $ | 2.00 | | | $ | 1.17 | | | $ | 2.59 | | | | | | | | | |
Change in accounting principle | | | (0.13 | ) | | | (0.01 | ) | | | (0.68 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Diluted earnings per common share—as restated | | $ | 1.87 | | | $ | 1.16 | | | $ | 1.91 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
(more)
– 16 –
Pro Forma Reconciliation
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2011 Total Pentair (in millions, except EPS) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 790.3 | | | $ | 798.1 | | | $ | — | | | $ | (21.2 | ) | | $ | 1,567.2 | |
Operating Income | | $ | 88.1 | | | $ | 99.2 | | | $ | (19.7 | ) | | $ | (21.2 | ) | | $ | 146.4 | |
Net Income | | $ | 51.8 | | | $ | 74.4 | | | $ | (14.8 | ) | | $ | (9.9 | ) | | $ | 101.5 | |
Diluted EPS | | $ | 0.52 | | | $ | 0.35 | | | $ | (0.07 | ) | | $ | (0.33 | ) | | $ | 0.47 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 910.2 | | | $ | 922.6 | | | $ | — | | | $ | (30.8 | ) | | $ | 1,802.0 | |
Operating Income | | $ | 120.8 | | | $ | 119.9 | | | $ | (19.7 | ) | | $ | (19.6 | ) | | $ | 201.4 | |
Net Income | | $ | 75.5 | | | $ | 89.9 | | | $ | (14.8 | ) | | $ | (11.5 | ) | | $ | 139.2 | |
Diluted EPS | | $ | 0.75 | | | $ | 0.42 | | | $ | (0.07 | ) | | $ | (0.45 | ) | | $ | 0.65 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 890.5 | | | $ | 1,079.1 | | | $ | — | | | $ | (42.4 | ) | | $ | 1,927.2 | |
Operating Income | | $ | 100.8 | | | $ | 136.8 | | | $ | (17.2 | ) | | $ | (20.4 | ) | | $ | 200.0 | |
Net Income | | $ | 57.7 | | | $ | 102.6 | | | $ | (12.9 | ) | | $ | (11.0 | ) | | $ | 136.4 | |
Diluted EPS | | $ | 0.58 | | | $ | 0.48 | | | $ | (0.06 | ) | | $ | (0.36 | ) | | $ | 0.64 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 865.7 | | | $ | 923.0 | | | $ | — | | | $ | (55.1 | ) | | $ | 1,733.6 | |
Operating Income | | $ | 94.0 | | | $ | 125.6 | | | $ | (17.3 | ) | | $ | (28.8 | ) | | $ | 173.5 | |
Net Income | | $ | 55.7 | | | $ | 94.2 | | | $ | (13.0 | ) | | $ | (20.0 | ) | | $ | 116.9 | |
Diluted EPS | | $ | 0.56 | | | $ | 0.44 | | | $ | (0.06 | ) | | $ | (0.39 | ) | | $ | 0.55 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 3,456.7 | | | $ | 3,722.8 | | | $ | — | | | $ | (149.5 | ) | | $ | 7,030.0 | |
Operating Income | | $ | 403.7 | | | $ | 481.5 | | | $ | (73.9 | ) | | $ | (90.0 | ) | | $ | 721.3 | |
Net Income | | $ | 240.7 | | | $ | 361.1 | | | $ | (55.4 | ) | | $ | (52.4 | ) | | $ | 494.0 | |
Diluted EPS | | $ | 2.41 | | | $ | 1.68 | | | $ | (0.26 | ) | | $ | (1.53 | ) | | $ | 2.30 | |
Note: “Other” adjustments represent the elimination of certain large projects and sales to sanctioned countries (which were terminated prior to the completion of the Flow Control acquisition), changes in corporate allocation assumptions, income taxes and share count.
(more)
– 17 –
Pro Forma Reconciliation
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2012 Total Pentair (in millions, except EPS) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 858.2 | | | $ | 995.9 | | | $ | — | | | $ | (74.0 | ) | | $ | 1,780.1 | |
Operating Income | | $ | 96.8 | | | $ | 124.9 | | | $ | (17.1 | ) | | $ | (32.2 | ) | | $ | 172.4 | |
Net Income | | $ | 64.0 | | | $ | 93.7 | | | $ | (12.8 | ) | | $ | (28.1 | ) | | $ | 116.8 | |
Diluted EPS | | $ | 0.64 | | | $ | 0.44 | | | $ | (0.06 | ) | | $ | (0.48 | ) | | $ | 0.54 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 941.5 | | | $ | 980.8 | | | $ | — | | | $ | (33.2 | ) | | $ | 1,889.1 | |
Operating Income | | $ | 134.5 | | | $ | 143.5 | | | $ | (17.2 | ) | | $ | (24.0 | ) | | $ | 236.8 | |
Net Income | | $ | 83.7 | | | $ | 107.6 | | | $ | (12.9 | ) | | $ | (14.0 | ) | | $ | 164.4 | |
Diluted EPS | | $ | 0.83 | | | $ | 0.50 | | | $ | (0.06 | ) | | $ | (0.50 | ) | | $ | 0.77 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 865.5 | | | $ | 1,019.8 | | | $ | — | | | $ | (16.0 | ) | | $ | 1,869.3 | |
Operating Income | | $ | 107.5 | | | $ | 119.9 | | | $ | (17.3 | ) | | $ | 5.5 | | | $ | 215.6 | |
Net Income | | $ | 65.5 | | | $ | 89.9 | | | $ | (13.0 | ) | | $ | 6.3 | | | $ | 148.8 | |
Diluted EPS | | $ | 0.64 | | | $ | 0.42 | | | $ | (0.06 | ) | | $ | (0.31 | ) | | $ | 0.69 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 1,750.9 | | | $ | — | | | $ | — | | | $ | (7.1 | ) | | $ | 1,743.8 | |
Operating Income | | $ | 149.7 | | | $ | — | | | $ | — | | | $ | 16.6 | | | $ | 166.3 | |
Net Income | | $ | 99.7 | | | $ | — | | | $ | — | | | $ | 12.7 | | | $ | 112.4 | |
Diluted EPS | | $ | 0.47 | | | $ | — | | | $ | — | | | $ | 0.06 | | | $ | 0.53 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 4,416.1 | | | $ | 2,996.5 | | | $ | — | | | $ | (130.3 | ) | | $ | 7,282.3 | |
Operating Income | | $ | 488.5 | | | $ | 388.3 | | | $ | (51.6 | ) | | $ | (34.1 | ) | | $ | 791.1 | |
Net Income | | $ | 312.9 | | | $ | 291.3 | | | $ | (38.7 | ) | | $ | (23.1 | ) | | $ | 542.4 | |
Diluted EPS | | $ | 2.39 | | | $ | 1.36 | | | $ | (0.18 | ) | | $ | (1.03 | ) | | $ | 2.54 | |
Note: “Other” adjustments represent the elimination of certain large projects and sales to sanctioned countries (which were terminated prior to the completion of the Flow Control acquisition), changes in corporate allocation assumptions, income taxes and share count.
(more)
– 18 –
Pro Forma Reconciliation
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2011 Water & Fluid Solutions Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 515.4 | | | $ | 129.7 | | | $ | — | | | $ | — | | | $ | 645.1 | |
Operating Income | | $ | 56.7 | | | $ | 9.7 | | | $ | (0.1 | ) | | $ | (1.8 | ) | | $ | 64.5 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 632.0 | | | $ | 168.7 | | | $ | — | | | $ | — | | | $ | 800.7 | |
Operating Income | | $ | 89.8 | | | $ | 14.5 | | | $ | (0.1 | ) | | $ | (1.7 | ) | | $ | 102.5 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 614.6 | | | $ | 201.0 | | | $ | — | | | $ | — | | | $ | 815.6 | |
Operating Income | | $ | 67.4 | | | $ | 5.8 | | | $ | (0.1 | ) | | $ | (1.7 | ) | | $ | 71.4 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 607.9 | | | $ | 158.5 | | | $ | — | | | $ | — | | | $ | 766.4 | |
Operating Income | | $ | 68.2 | | | $ | 10.1 | | | $ | (0.1 | ) | | $ | (1.7 | ) | | $ | 76.5 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 2,369.8 | | | $ | 658.0 | | | $ | — | | | $ | — | | | $ | 3,027.8 | |
Operating Income | | $ | 282.1 | | | $ | 40.0 | | | $ | (0.3 | ) | | $ | (6.8 | ) | | $ | 315.0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2012 Water & Fluid Solutions Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 587.0 | | | $ | 163.4 | | | $ | — | | | $ | — | | | $ | 750.4 | |
Operating Income | | $ | 63.7 | | | $ | 11.1 | | | $ | (0.1 | ) | | $ | (1.8 | ) | | $ | 72.9 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 675.5 | | | $ | 202.3 | | | $ | — | | | $ | — | | | $ | 877.8 | |
Operating Income | | $ | 98.9 | | | $ | 24.3 | | | $ | (0.1 | ) | | $ | (1.7 | ) | | $ | 121.4 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 605.4 | | | $ | 202.1 | | | $ | — | | | $ | — | | | $ | 807.5 | |
Operating Income | | $ | 70.3 | | | $ | 14.9 | | | $ | (0.1 | ) | | $ | 0.6 | | | $ | 85.7 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 770.5 | | | $ | — | | | $ | — | | | $ | — | | | $ | 770.5 | |
Operating Income | | $ | 58.1 | | | $ | — | | | $ | — | | | $ | 14.2 | | | $ | 72.3 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 2,638.4 | | | $ | 567.8 | | | $ | — | | | $ | — | | | $ | 3,206.2 | |
Operating Income | | $ | 291.0 | | | $ | 50.3 | | | $ | (0.3 | ) | | $ | 11.2 | | | $ | 352.2 | |
Note: “Other” adjustments represent changes in corporate allocation assumptions
(more)
– 19 –
Pro Forma Reconciliation
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2011 Valves & Controls Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 506.2 | | | $ | — | | | $ | (0.2 | ) | | $ | 506.0 | |
Operating Income | | $ | — | | | $ | 66.4 | | | $ | (14.9 | ) | | $ | (9.3 | ) | | $ | 42.2 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 575.4 | | | $ | — | | | $ | (0.9 | ) | | $ | 574.5 | |
Operating Income | | $ | — | | | $ | 87.9 | | | $ | (14.9 | ) | | $ | (9.4 | ) | | $ | 63.6 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 661.1 | | | $ | — | | | $ | (0.1 | ) | | $ | 661.0 | |
Operating Income | | $ | — | | | $ | 101.9 | | | $ | (12.4 | ) | | $ | (6.2 | ) | | $ | 83.3 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 539.7 | | | $ | — | | | $ | (3.0 | ) | | $ | 536.7 | |
Operating Income | | $ | — | | | $ | 68.9 | | | $ | (12.5 | ) | | $ | (13.3 | ) | | $ | 43.1 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 2,282.4 | | | $ | — | | | $ | (4.2 | ) | | $ | 2,278.2 | |
Operating Income | | $ | — | | | $ | 328.2 | | | $ | (54.4 | ) | | $ | (41.6 | ) | | $ | 232.2 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2012 Valves & Controls Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 621.3 | | | $ | — | | | $ | (12.7 | ) | | $ | 608.6 | |
Operating Income | | $ | — | | | $ | 83.7 | | | $ | (12.3 | ) | | $ | (10.6 | ) | | $ | 60.8 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 602.4 | | | $ | — | | | $ | (5.0 | ) | | $ | 597.4 | |
Operating Income | | $ | — | | | $ | 93.1 | | | $ | (12.4 | ) | | $ | (9.8 | ) | | $ | 70.9 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | — | | | $ | 629.6 | | | $ | — | | | $ | (9.5 | ) | | $ | 620.1 | |
Operating Income | | $ | — | | | $ | 70.9 | | | $ | (12.5 | ) | | $ | 11.3 | | | $ | 69.7 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 546.7 | | | $ | — | | | $ | — | | | $ | — | | | $ | 546.7 | |
Operating Income | | $ | 41.8 | | | $ | — | | | $ | — | | | $ | 0.4 | | | $ | 42.2 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 546.7 | | | $ | 1,853.3 | | | $ | — | | | $ | (27.2 | ) | | $ | 2,372.8 | |
Operating Income | | $ | 41.8 | | | $ | 247.7 | | | $ | (37.2 | ) | | $ | (8.7 | ) | | $ | 243.6 | |
Note: “Other” adjustments represent the elimination of sales to sanctioned countries (which were terminated prior to the completion of the Flow Control acquisition), and changes in corporate allocation assumptions.
(more)
– 20 –
Pro Forma Reconciliation
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2011 Technical Solutions Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 274.9 | | | $ | 162.2 | | | $ | — | | | $ | (21.0 | ) | | $ | 416.1 | |
Operating Income | | $ | 48.1 | | | $ | 29.4 | | | $ | (4.7 | ) | | $ | (10.1 | ) | | $ | 62.7 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 278.2 | | | $ | 178.5 | | | $ | — | | | $ | (29.9 | ) | | $ | 426.8 | |
Operating Income | | $ | 48.3 | | | $ | 20.2 | | | $ | (4.7 | ) | | $ | (8.5 | ) | | $ | 55.3 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 276.0 | | | $ | 217.0 | | | $ | — | | | $ | (42.3 | ) | | $ | 450.7 | |
Operating Income | | $ | 48.7 | | | $ | 33.6 | | | $ | (4.7 | ) | | $ | (12.3 | ) | | $ | 65.3 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 257.8 | | | $ | 224.8 | | | $ | — | | | $ | (52.2 | ) | | $ | 430.4 | |
Operating Income | | $ | 42.3 | | | $ | 51.0 | | | $ | (4.7 | ) | | $ | (13.8 | ) | | $ | 74.8 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 1,086.9 | | | $ | 782.5 | | | $ | — | | | $ | (145.4 | ) | | $ | 1,724.0 | |
Operating Income | | $ | 187.4 | | | $ | 134.1 | | | $ | (18.8 | ) | | $ | (44.7 | ) | | $ | 258.0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Pro Forma Adjustments | | | | |
2012 Technical Solutions Segment (in millions) | | Historical
Adjusted
Results | | | Historical Flow
Control
Acquisition | | | Depreciation
&
Amortization | | | Other
Adjustments | | | Adjusted Pro
Forma Results | |
First Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 271.2 | | | $ | 211.2 | | | $ | — | | | $ | (61.3 | ) | | $ | 421.1 | |
Operating Income | | $ | 50.5 | | | $ | 35.8 | | | $ | (4.7 | ) | | $ | (19.7 | ) | | $ | 61.9 | |
| | | | | |
Second Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 266.0 | | | $ | 176.1 | | | $ | — | | | $ | (28.3 | ) | | $ | 413.8 | |
Operating Income | | $ | 53.7 | | | $ | 27.9 | | | $ | (4.7 | ) | | $ | (12.4 | ) | | $ | 64.5 | |
| | | | | |
Third Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 260.1 | | | $ | 188.1 | | | $ | — | | | $ | (6.5 | ) | | $ | 441.7 | |
Operating Income | | $ | 52.3 | | | $ | 39.0 | | | $ | (4.7 | ) | | $ | (6.4 | ) | | $ | 80.2 | |
| | | | | |
Fourth Quarter | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 433.7 | | | $ | — | | | $ | — | | | $ | (7.2 | ) | | $ | 426.5 | |
Operating Income | | $ | 75.6 | | | $ | — | | | $ | — | | | $ | 2.0 | | | $ | 77.6 | |
| | | | | |
Full Year | | | | | | | | | | | | | | | | | | | | |
Sales | | $ | 1,231.0 | | | $ | 575.4 | | | $ | — | | | $ | (103.2 | ) | | $ | 1,703.2 | |
Operating Income | | $ | 232.1 | | | $ | 102.7 | | | $ | (14.1 | ) | | $ | (36.6 | ) | | $ | 284.1 | |
Note: “Other” adjustments represent the elimination of certain large projects and changes in corporate allocation assumptions.
