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Financial Statements of Parent Company Guarantor
 3 Months Ended
Mar. 29, 2014
Financial Statements of Parent Company Guarantor
Financial Statements of Parent Company Guarantor
Pentair Ltd. (the “Parent Company Guarantor”), fully and unconditionally, guarantees the Notes of Pentair Finance S.A. (the “Subsidiary Issuer”). The Subsidiary Issuer is a Luxembourg public limited liability company formed in January 2012 and 100 percent-owned subsidiary of the Parent Company Guarantor.
The following supplemental financial information sets forth the Company’s Condensed Consolidating Statement of Operations and Comprehensive Income (Loss), Condensed Consolidating Balance Sheets and Condensed Consolidating Statement of Cash Flows of:
•
Parent Company Guarantor;
•
Subsidiary Issuer;
•
Non-guarantor subsidiaries of Pentair Ltd. on a combined basis;
•
Consolidating entries and eliminations representing adjustments to:
a.
eliminate intercompany transactions between or among the Parent Company Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries;
b.
eliminate the investments in subsidiaries; and
c.
record consolidating entries.
•
Pentair Ltd. and subsidiaries on a consolidated basis.
Pentair Ltd. and Subsidiaries
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Three months ended March 29, 2014
In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Net sales
$
—

$
—

$
1,725.2

$
—

$
1,725.2

Cost of goods sold
—

—

1,146.9

—

1,146.9

Gross profit
—

—

578.3

—

578.3

Selling, general and administrative
(0.3
)
3.3

365.4

—

368.4

Research and development
—

—

30.0

—

30.0

Operating income (loss)
0.3

(3.3
)
182.9

—

179.9

Loss (earnings) from investment in subsidiaries
(118.6
)
(127.1
)
—

245.7

—

Other (income) expense:





Equity income of unconsolidated subsidiaries
—

—

(0.4
)
—

(0.4
)
Loss on sale of business
—

—

8.0

—

8.0

Net interest expense
0.3

0.9

14.5

—

15.7

Income (loss) before income taxes
118.6

122.9

160.8

(245.7
)
156.6

Provision for income taxes
—

—

38.0

—

38.0

Net income (loss) attributable to Pentair Ltd.
$
118.6

$
122.9

$
122.8

$
(245.7
)
$
118.6

Comprehensive income (loss), net of tax





Net income (loss) attributable to Pentair Ltd.
$
118.6

$
122.9

$
122.8

$
(245.7
)
$
118.6

Changes in cumulative translation adjustment
(27.9
)
(27.9
)
(27.9
)
55.8

(27.9
)
Changes in market value of derivative financial instruments
0.2

0.2

0.2

(0.4
)
0.2

Comprehensive income (loss) attributable to Pentair Ltd.
$
90.9

$
95.2

$
95.1

$
(190.3
)
$
90.9


 
 
 
 
 
 
Pentair Ltd. and Subsidiaries
Condensed Consolidating Balance Sheet
March 29, 2014
In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Assets
Current assets





Cash and cash equivalents
$
0.2

$
0.4

$
210.5

$
—

$
211.1

Accounts and notes receivable, net
14.7

10.2

1,522.1

(136.3
)
1,410.7

Inventories
—

—

1,271.6

—

1,271.6

Other current assets
0.9

1.2

409.8

—

411.9

Total current assets
15.8

11.8

3,414.0

(136.3
)
3,305.3

Property, plant and equipment, net
—

—

1,162.0

—

1,162.0

Other assets





Investments in subsidiaries
6,064.8

8,105.1

—

(14,169.9
)
—

Goodwill
—

—

5,098.9

—

5,098.9

Intangibles, net
—

—

1,747.7

—

1,747.7

Other non-current assets
31.6

1,700.8

415.3

(1,695.1
)
452.6

Total other assets
6,096.4

9,805.9

7,261.9

(15,865.0
)
7,299.2

Total assets
$
6,112.2

$
9,817.7

$
11,837.9

$
(16,001.3
)
$
11,766.5

Liabilities and Equity
Current liabilities





Current maturities of long-term debt and short-term borrowings
$
—

$
—

$
2.8

$
—

$
2.8

Accounts payable
108.5

2.9

600.3

(136.3
)
575.4

Employee compensation and benefits
0.1

—

294.5

—

294.6

Other current liabilities
49.7

13.9

591.7

—

655.3

Total current liabilities
158.3

16.8

1,489.3

(136.3
)
1,528.1

Other liabilities





Long-term debt
—

2,769.3

1,859.6

(1,695.1
)
2,933.8

Pension and other post-retirement compensation and benefits
—

—

318.6

—

318.6

Deferred tax liabilities
—

2.9

596.6

—

599.5

Other non-current liabilities
17.6

—

432.6

—

450.2

Total liabilities
175.9

2,789.0

4,696.7

(1,831.4
)
5,830.2

Equity
5,936.3

7,028.7

7,141.2

(14,169.9
)
5,936.3

Total liabilities and equity
$
6,112.2

$
9,817.7

$
11,837.9

$
(16,001.3
)
$
11,766.5

Pentair Ltd. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Three months ended March 29, 2014
In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Operating activities





Net cash provided by (used for) operating activities
$
118.0

$
125.6

$
2.7

$
(245.7
)
$
0.6

Investing activities





Capital expenditures
—

—

(27.2
)
—

(27.2
)
Proceeds from sale of property and equipment
—

—

0.4

—

0.4

Other
—

—

(0.5
)
—

(0.5
)
Net cash provided by (used for) investing activities
—

—

(27.3
)
—

(27.3
)
Financing activities





Net receipts (repayments) of short-term borrowings
—

—

0.3

—

0.3

Net receipts (repayments) of commercial paper and revolving long-term debt
—

367.4

14.5

—

381.9

Repayments of long-term debt
—

—

(0.9
)
—

(0.9
)
Net change in advances to subsidiaries
(69.1
)
(539.6
)
363.0

245.7

—

Excess tax benefits from share-based compensation
—

—

6.1

—

6.1

Shares issued to employees, net of shares withheld
—

—

24.0

—

24.0

Repurchases of common shares
—

—

(252.2
)
—

(252.2
)
Dividends paid
(49.2
)
—

—

—

(49.2
)
Purchase of noncontrolling interest
—

—

(134.7
)
—

(134.7
)
Net cash provided by (used for) financing activities
(118.3
)
(172.2
)
20.1

245.7

(24.7
)
Effect of exchange rate changes on cash and cash equivalents
—

—

(2.6
)
—

(2.6
)
Change in cash and cash equivalents
(0.3
)
(46.6
)
(7.1
)
—

(54.0
)
Cash and cash equivalents, beginning of period
0.5

47.0

217.6

—

265.1

Cash and cash equivalents, end of period
$
0.2

$
0.4

$
210.5

$
—

$
211.1

 Pentair Ltd. and Subsidiaries
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Three months ended March 30, 2013
In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Net sales
$
—

$
—

$
1,774.5

$
—

$
1,774.5

Cost of goods sold
—

—

1,250.7

—

1,250.7

Gross profit
—

—

523.8

—

523.8

Selling, general and administrative
(1.0
)
3.6

413.4

—

416.0

Research and development
—

—

33.5

—

33.5

Operating income (loss)
1.0

(3.6
)
76.9

—

74.3

Loss (earnings) from investment in subsidiaries
(50.7
)
(54.9
)
—

105.6

—

Other (income) expense:





Equity income of unconsolidated subsidiaries
—

—

(0.2
)
—

(0.2
)
Gain on sale of business
—

—

(16.7
)
—

(16.7
)
Net interest expense
0.3

2.6

14.1

—

17.0

Income (loss) before income taxes and noncontrolling interest
51.4

48.7

79.7

(105.6
)
74.2

Provision (benefit) for income taxes
(0.3
)
—

21.2

—

20.9

Net income (loss) before noncontrolling interest
51.7

48.7

58.5

(105.6
)
53.3

Noncontrolling interest
—

—

1.6

—

1.6

Net income (loss) attributable to Pentair Ltd.
$
51.7

$
48.7

$
56.9

$
(105.6
)
$
51.7

Comprehensive income (loss), net of tax
 
 
 
 
 
Net income (loss) before noncontrolling interest
$
51.7

$
48.7

$
58.5

$
(105.6
)
$
53.3

Changes in cumulative translation adjustment
(76.0
)
(76.0
)
(76.9
)
152.0

(76.9
)
Changes in market value of derivative financial instruments
0.7

0.7

0.7

(1.4
)
0.7

Total comprehensive income (loss)
(23.6
)
(26.6
)
(17.7
)
45.0

(22.9
)
Less: Comprehensive income attributable to noncontrolling interest
—

—

0.7

—

0.7

Comprehensive income (loss) attributable to Pentair Ltd.
$
(23.6
)
$
(26.6
)
$
(18.4
)
$
45.0

$
(23.6
)
Pentair Ltd. and Subsidiaries
Condensed Consolidating Balance Sheet
December 31, 2013
In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Assets
Current assets





Cash and cash equivalents
$
0.5

$
47.0

$
217.6

$
—

$
265.1

Accounts and notes receivable, net
2.9

4.0

1,391.0

(63.6
)
1,334.3

Inventories
—

—

1,243.3

—

1,243.3

Other current assets
1.4

0.6

387.4

—

389.4

Total current assets
4.8

51.6

3,239.3

(63.6
)
3,232.1

Property, plant and equipment, net
—

—

1,170.0

—

1,170.0

Other assets





Investments in subsidiaries
6,224.7

8,066.6

—

(14,291.3
)
—

Goodwill
—

—

5,134.2

—

5,134.2

Intangibles, net
—

—

1,776.1

—

1,776.1

Other non-current assets
31.6

1,302.7

393.3

(1,296.7
)
430.9

Total other assets
6,256.3

9,369.3

7,303.6

(15,588.0
)
7,341.2

Total assets
$
6,261.1

$
9,420.9

$
11,712.9

$
(15,651.6
)
$
11,743.3

Liabilities and Equity
Current liabilities





Current maturities of long-term debt and short-term borrowings
$
—

$
—

$
2.5

$
—

$
2.5

Accounts payable
48.1

8.6

603.5

(63.6
)
596.6

Employee compensation and benefits
0.5

—

346.6

—

347.1

Other current liabilities
99.6

11.7

552.7

—

664.0

Total current liabilities
148.2

20.3

1,505.3

(63.6
)
1,610.2

Other liabilities





Long-term debt
—

2,401.9

1,447.4

(1,296.7
)
2,552.6

Pension and other post-retirement compensation and benefits
—

—

324.8

—

324.8

Deferred tax liabilities
—

2.2

578.4

—

580.6

Other non-current liabilities
17.6

—

439.8

—

457.4

Total liabilities
165.8

2,424.4

4,295.7

(1,360.3
)
5,525.6

Equity





Shareholders’ equity attributable to Pentair Ltd. and subsidiaries
6,095.3

6,996.5

7,294.8

(14,291.3
)
6,095.3

Noncontrolling interest
—

—

122.4

—

122.4

Total equity
6,095.3

6,996.5

7,417.2

(14,291.3
)
6,217.7

Total liabilities and equity
$
6,261.1

$
9,420.9

$
11,712.9

$
(15,651.6
)
$
11,743.3

Pentair Ltd. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Three months ended March 30, 2013

In millions
Parent
Company
Guarantor
Subsidiary
Issuer
Non-guarantor
Subsidiaries
Eliminations
Pentair Ltd.
and
Subsidiaries
Consolidated
Operating activities
 
 
 
 
 
Net cash provided by (used for) operating activities
$
95.1

$
50.9

$
(20.1
)
$
(106.0
)
$
19.9

Investing activities





Capital expenditures
—

—

(49.7
)
—

(49.7
)
Proceeds from sale of property and equipment
—

—

0.9

—

0.9

Proceeds from sale of businesses, net
—

—

30.0

—

30.0

Other
—

—

0.3

—

0.3

Net cash provided by (used for) investing activities
—

—

(18.5
)
—

(18.5
)
Financing activities





Net receipts (repayments) of short-term borrowings
—

—

2.9

—

2.9

Net receipts (repayments) of commercial paper and revolving long-term debt
—

102.6

37.0

—

139.6

Repayments of long-term debt
—

—

(1.7
)
—

(1.7
)
Debt issuance costs
—

(1.1
)
(0.2
)
—

(1.3
)
Net change in advances to subsidiaries
(47.9
)
(152.4
)
94.3

106.0

—

Shares issued to employees, net of shares withheld
—

—

11.8

—

11.8

Repurchases of common shares
—

—

(140.3
)
—

(140.3
)
Dividends paid
(47.2
)
—

—

—

(47.2
)
Distributions to noncontrolling interest
—

—

(2.0
)
—

(2.0
)
Net cash provided by (used for) financing activities
(95.1
)
(50.9
)
1.8

106.0

(38.2
)
Effect of exchange rate changes on cash and cash equivalents
—

—

(10.0
)
—

(10.0
)
Change in cash and cash equivalents
—

—

(46.8
)
—

(46.8
)
Cash and cash equivalents, beginning of period
—

—

261.3

—

261.3

Cash and cash equivalents, end of period
$
—

$
—

$
214.5

$
—

$
214.5