Financial Statements of Parent Company Guarantor (Tables)

9 Months Ended

Sep. 27, 2014

Sep. 28, 2013

Schedule of Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three months ended September 27, 2014

In millions	Parent Company Guarantor			Subsidiary Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	—		$	1,758.4		$	—		$	1,758.4
Cost of goods sold	—			—			—			1,133.7			—			1,133.7
Gross profit	—			—			—			624.7			—			624.7
Selling, general and administrative	3.2			1.5			0.8			323.3			—			328.8
Research and development	—			—			—			28.5			—			28.5
Operating income (loss)	(3.2		)	(1.5		)	(0.8		)	272.9			—			267.4
Loss (earnings) from continuing operations of investment in subsidiaries	(195.7		)	(198.1		)	(206.3		)	—			600.1			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			—			(0.3		)	—			(0.3		)
Net interest expense	—			0.9			1.0			15.2			—			17.1
Income (loss) from continuing operations before income taxes	192.5			195.7			204.5			258.0			(600.1		)	250.6
Provision for income taxes	—			—			—			58.1			—			58.1
Net income (loss) from continuing operations	192.5			195.7			204.5			199.9			(600.1		)	192.5
Income from discontinued operations, net of tax	—			—			—			1.6			—			1.6
Loss from impairment of discontinued operations, net of tax	—			—			—			(380.1		)	—			(380.1		)
Earnings (loss) from discontinued operations of investment in subsidiaries	(378.5		)	(378.5		)	(378.5		)	—			1,135.5			—
Net income (loss) attributable to Pentair plc	$	(186.0	)	$	(182.8	)	$	(174.0	)	$	(178.6	)	$	535.4		$	(186.0	)
Net income (loss) from continuing operations attributable to Pentair plc	$	192.5		$	195.7		$	204.5		$	199.9		$	(600.1	)	$	192.5
Comprehensive income (loss), net of tax
Net income (loss) attributable to Pentair plc	$	(186.0	)	$	(182.8	)	$	(174.0	)	$	(178.6	)	$	535.4		$	(186.0	)
Changes in cumulative translation adjustment	(178.8		)	(178.8		)	(178.8		)	(178.8		)	536.4			(178.8		)
Changes in market value of derivative financial instruments	0.8			0.8			0.8			0.8			(2.4		)	0.8
Comprehensive income (loss) attributable to Pentair plc	$	(364.0	)	$	(360.8	)	$	(352.0	)	$	(356.6	)	$	1,069.4		$	(364.0	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Nine months ended September 27, 2014

In millions	Parent Company Guarantor			Subsidiary Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	—		$	5,236.5		$	—		$	5,236.5
Cost of goods sold	—			—			—			3,401.4			—			3,401.4
Gross profit	—			—			—			1,835.1			—			1,835.1
Selling, general and administrative	10.6			4.2			6.8			1,049.4			—			1,071.0
Research and development	—			—			—			88.2			—			88.2
Operating income (loss)	(10.6		)	(4.2		)	(6.8		)	697.5			—			675.9
Loss (earnings) from continuing operations of investment in subsidiaries	(488.5		)	(493.9		)	(484.0		)	—			1,466.4			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			—			(0.9		)	—			(0.9		)
Loss on sale of business	—			—			—			0.2			—			0.2
Net interest expense	0.7			1.2			2.0			47.2			—			51.1
Income (loss) from continuing operations before income taxes	477.2			488.5			475.2			651.0			(1,466.4		)	625.5
Provision for income taxes	—			—			1.0			147.3			—			148.3
Net income (loss) from continuing operations	477.2			488.5			474.2			503.7			(1,466.4		)	477.2
Income from discontinued operations, net of tax	—			—			—			2.6			—			2.6
Loss from sale / impairment of discontinued operations, net of tax	—			—			—			(385.7		)	—			(385.7		)
Earnings (loss) from discontinued operations of investment in subsidiaries	(383.1		)	(383.1		)	(383.1		)	—			1,149.3			—
Net income (loss) attributable to Pentair plc	$	94.1		$	105.4		$	91.1		$	120.6		$	(317.1	)	$	94.1
Net income (loss) from continuing operations attributable to Pentair plc	$	477.2		$	488.5		$	474.2		$	503.7		$	(1,466.4	)	$	477.2
Comprehensive income (loss), net of tax
Net income (loss) attributable to Pentair plc	$	94.1		$	105.4		$	91.1		$	120.6		$	(317.1	)	$	94.1
Changes in cumulative translation adjustment	(190.3		)	(190.3		)	(190.3		)	(190.3		)	570.9			(190.3		)
Changes in market value of derivative financial instruments	1.2			1.2			1.2			1.2			(3.6		)	1.2
Comprehensive income (loss) attributable to Pentair plc	$	(95.0	)	$	(83.7	)	$	(98.0	)	$	(68.5	)	$	250.2		$	(95.0	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three months ended September 28, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	1,713.3		$	—		$	1,713.3
Cost of goods sold	—			—			1,098.6			—			1,098.6
Gross profit	—			—			614.7			—			614.7
Selling, general and administrative	(0.7		)	3.1			351.0			—			353.4
Research and development	—			—			31.3			—			31.3
Operating income (loss)	0.7			(3.1		)	232.4			—			230.0
Loss (earnings) from continuing operations of investment in subsidiaries	(165.5		)	(169.5		)	—			335.0			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			(0.5		)	—			(0.5		)
Gain on sale of business	—			—			(0.1		)	—			(0.1		)
Net interest expense	1.3			0.6			15.6			—			17.5
Income (loss) from continuing operations before income taxes and noncontrolling interest	164.9			165.8			217.4			(335.0		)	213.1
Provision (benefit) for income taxes	(0.1		)	1.3			45.5			—			46.7
Net income (loss) from continuing operations before noncontrolling interest	165.0			164.5			171.9			(335.0		)	166.4
Income from discontinued operations, net of tax	—			—			7.8			—			7.8
Earnings (loss) from discontinued operations of investment in subsidiaries	7.8			7.8			—			(15.6		)	—
Net income (loss) before noncontrolling interest	172.8			172.3			179.7			(350.6		)	174.2
Noncontrolling interest	—			—			1.4			—			1.4
Net income (loss) attributable to Pentair plc	$	172.8		$	172.3		$	178.3		$	(350.6	)	$	172.8
Net income (loss) from continuing operations attributable to Pentair plc	$	165.0		$	164.5		$	170.5		$	(335.0	)	$	165.0
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	172.8		$	172.3		$	179.7		$	(350.6	)	$	174.2
Changes in cumulative translation adjustment	87.9			87.9			89.1			(175.8		)	89.1
Changes in market value of derivative financial instruments	(0.6		)	(0.6		)	(0.6		)	1.2			(0.6		)
Total comprehensive income (loss)	260.1			259.6			268.2			(525.2		)	262.7
Less: Comprehensive income attributable to noncontrolling interest	—			—			2.6			—			2.6
Comprehensive income (loss) attributable to Pentair plc	$	260.1		$	259.6		$	265.6		$	(525.2	)	$	260.1

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Nine months ended September 28, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	5,168.7		$	—		$	5,168.7
Cost of goods sold	—			—			3,429.1			—			3,429.1
Gross profit	—			—			1,739.6			—			1,739.6
Selling, general and administrative	(1.5		)	10.1			1,134.9			—			1,143.5
Research and development	—			—			94.8			—			94.8
Operating income (loss)	1.5			(10.1		)	509.9			—			501.3
Loss (earnings) from continuing operations of investment in subsidiaries	(351.3		)	(366.6		)	—			717.9			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			(1.7		)	—			(1.7		)
Gain on sale of business	—			—			(16.8		)	—			(16.8		)
Net interest expense	4.4			6.7			42.7			—			53.8
Income (loss) from continuing operations before income taxes and noncontrolling interest	348.4			349.8			485.7			(717.9		)	466.0
Provision (benefit) for income taxes	(0.4		)	1.3			112.0			—			112.9
Net income (loss) from continuing operations before noncontrolling interest	348.8			348.5			373.7			(717.9		)	353.1
Income from discontinued operations, net of tax	—			—			29.8			—			29.8
Earnings (loss) from discontinued operations of investment in subsidiaries	29.8			29.8			—			(59.6		)	—
Net income (loss) before noncontrolling interest	378.6			378.3			403.5			(777.5		)	382.9
Noncontrolling interest	—			—			4.3			—			4.3
Net income (loss) attributable to Pentair plc	$	378.6		$	378.3		$	399.2		$	(777.5	)	$	378.6
Net income (loss) from continuing operations attributable to Pentair plc	$	348.8		$	348.5		$	369.4		$	(717.9	)	$	348.8
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	378.6		$	378.3		$	403.5		$	(777.5	)	$	382.9
Changes in cumulative translation adjustment	(29.8		)	(29.8		)	(29.1		)	59.6			(29.1		)
Changes in market value of derivative financial instruments	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Total comprehensive income (loss)	348.5			348.2			374.1			(717.3		)	353.5
Less: Comprehensive income attributable to noncontrolling interest	—			—			5.0			—			5.0
Comprehensive income (loss) attributable to Pentair plc	$	348.5		$	348.2		$	369.1		$	(717.3	)	$	348.5

Schedule of Condensed Consolidating Balance Sheet

Consolidating Balance Sheet

September 27, 2014

In millions	Parent Company Guarantor		Subsidiary Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	0.2	$	156.4	$	—		$	156.6
Accounts and notes receivable, net	—		—		—		1,180.9		—			1,180.9
Inventories	—		—		—		1,199.4		—			1,199.4
Other current assets	0.1		16.3		8.0		402.5		(40.6		)	386.3
Current assets held for sale	—		—		—		129.2		—			129.2
Total current assets	0.1		16.3		8.2		3,068.4		(40.6		)	3,052.4
Property, plant and equipment, net	—		—		—		990.8		—			990.8
Other assets
Investments in subsidiaries	5,589.5		5,751.6		7,830.7		—		(19,171.8		)	—
Goodwill	—		—		—		4,792.6		—			4,792.6
Intangibles, net	—		—		—		1,648.6		—			1,648.6
Other non-current assets	31.6		—		1,979.7		370.6		(1,975.6		)	406.3
Non-current assets held for sale	—		—		—		36.2		—			36.2
Total other assets	5,621.1		5,751.6		9,810.4		6,848.0		(21,147.4		)	6,883.7
Total assets	$	5,621.2	$	5,767.9	$	9,818.6	$	10,907.2	$	(21,188.0	)	$	10,926.9
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	—	$	2.5	$	—		$	2.5
Accounts payable	—		—		—		527.2		—			527.2
Employee compensation and benefits	—		0.7		—		286.7		—			287.4
Other current liabilities	173.4		4.5		14.2		639.6		(40.6		)	791.1
Current liabilities held for sale	—		—		—		60.5		—			60.5
Total current liabilities	173.4		5.2		14.2		1,516.5		(40.6		)	1,668.7
Other liabilities
Long-term debt	462.8		173.2		2,818.6		1,481.7		(1,975.6		)	2,960.7
Pension and other post-retirement compensation and benefits	—		—		—		279.1		—			279.1
Deferred tax liabilities	—		—		2.2		556.2		—			558.4
Other non-current liabilities	17.6		—		—		463.1		—			480.7
Non-current liabilities held for sale	—		—		—		11.9		—			11.9
Total liabilities	653.8		178.4		2,835.0		4,308.5		(2,016.2		)	5,959.5
Equity	4,967.4		5,589.5		6,983.6		6,598.7		(19,171.8		)	4,967.4
Total liabilities and equity	$	5,621.2	$	5,767.9	$	9,818.6	$	10,907.2	$	(21,188.0	)	$	10,926.9

Consolidating Balance Sheet

December 31, 2013

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	0.5	$	47.0	$	208.5	$	—		$	256.0
Accounts and notes receivable, net	2.9		4.0		1,341.7		(63.6		)	1,285.0
Inventories	—		—		1,195.1		—			1,195.1
Other current assets	1.4		0.6		359.6		—			361.6
Current assets held for sale	—		—		134.4		—			134.4
Total current assets	4.8		51.6		3,239.3		(63.6		)	3,232.1
Property, plant and equipment, net	—		—		1,044.3		—			1,044.3
Other assets
Investments in subsidiaries	6,224.7		8,066.6		—		(14,291.3		)	—
Goodwill	—		—		4,860.7		—			4,860.7
Intangibles, net	—		—		1,749.9		—			1,749.9
Other non-current assets	31.6		1,302.7		352.4		(1,296.7		)	390.0
Non-current assets held for sale	—		—		466.3		—			466.3
Total other assets	6,256.3		9,369.3		7,429.3		(15,588.0		)	7,466.9
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		583.8		(63.6		)	576.9
Employee compensation and benefits	0.5		—		311.9		—			312.4
Other current liabilities	99.6		11.7		534.6		—			645.9
Current liabilities held for sale	—		—		72.5		—			72.5
Total current liabilities	148.2		20.3		1,505.3		(63.6		)	1,610.2
Other liabilities
Long-term debt	—		2,401.9		1,442.7		(1,296.7		)	2,547.9
Pension and other post-retirement compensation and benefits	—		—		320.2		—			320.2
Deferred tax liabilities	—		2.2		554.8		—			557.0
Other non-current liabilities	17.6		—		438.8		—			456.4
Non-current liabilities held for sale	—		—		33.9		—			33.9
Total liabilities	165.8		2,424.4		4,295.7		(1,360.3		)	5,525.6
Equity
Shareholders’ equity attributable to Pentair plc 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

Schedule of Condensed Consolidating Statement of Cash Flows

Consolidating Statement of Cash Flows

Nine months endedSeptember 27, 2014

In millions	Parent Company Guarantor			Subsidiary Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Operating activities
Net cash provided by (used for) operating activities	$	99.4		$	94.2		$	88.1		$	718.8		$	(317.1	)	$	683.4
Investing activities
Capital expenditures	—			—			—			(92.5		)	—			(92.5		)
Proceeds from sale of property and equipment	—			—			—			4.1			—			4.1
Proceeds from sale of businesses, net	—			—			—			0.3			—			0.3
Other	—			—			—			0.6			—			0.6
Net cash provided by (used for) investing activities	—			—			—			(87.5		)	—			(87.5		)
Financing activities
Net receipts (repayments) of short-term borrowings	—			—			—			0.3			—			0.3
Net receipts (repayments) of commercial paper and revolving long-term debt	—			—			416.7			9.5			—			426.2
Repayments of long-term debt	—			—			—			(13.2		)	—			(13.2		)
Net change in advances to subsidiaries	455.6			(94.2		)	(551.6		)	(126.9		)	317.1			—
Excess tax benefits from share-based compensation	—			—			—			10.0			—			10.0
Shares issued to employees, net of shares withheld	—			—			—			30.3			—			30.3
Repurchases of ordinary shares	(399.3		)	—			—			(450.7		)	—			(850.0		)
Dividends paid	(156.2		)	—			—			—			—			(156.2		)
Purchase of noncontrolling interest	—			—			—			(134.7		)	—			(134.7		)
Net cash provided by (used for) financing activities	(99.9		)	(94.2		)	(134.9		)	(675.4		)	317.1			(687.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(8.0		)	—			(8.0		)
Change in cash and cash equivalents	(0.5		)	—			(46.8		)	(52.1		)	—			(99.4		)
Cash and cash equivalents, beginning of period	0.5			—			47.0			208.5			—			256.0
Cash and cash equivalents, end of period	$	—		$	—		$	0.2		$	156.4		$	—		$	156.6

Consolidating Statement of Cash Flows

Nine months ended September 28, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Operating activities
Net cash provided by (used for) operating activities	$	369.0		$	383.4		$	659.1		$	(777.5	)	$	634.0
Investing activities
Capital expenditures	—			—			(126.3		)	—			(126.3		)
Proceeds from sale of property and equipment	—			—			3.7			—			3.7
Proceeds from sale of businesses, net	—			—			30.9			—			30.9
Acquisitions, net of cash acquired	(84.4		)	—			—			—			(84.4		)
Other	—			—			(0.8		)	—			(0.8		)
Net cash provided by (used for) investing activities	(84.4		)	—			(92.5		)	—			(176.9		)
Financing activities
Net receipts (repayments) of commercial paper and revolving long-term debt	—			114.9			7.6			—			122.5
Repayments of long-term debt	—			—			(6.2		)	—			(6.2		)
Debt issuance costs	—			(1.4		)	—			—			(1.4		)
Excess tax benefits from share-based compensation	—			—			7.4			—			7.4
Net change in advances to subsidiaries	(140.7		)	(496.7		)	(140.1		)	777.5			—
Shares issued to employees, net of shares withheld	—			—			70.8			—			70.8
Repurchases of ordinary shares	—			—			(540.3		)	—			(540.3		)
Dividends paid	(143.9		)	—			—			—			(143.9		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(284.6		)	(383.2		)	(602.8		)	777.5			(493.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			17.8			—			17.8
Change in cash and cash equivalents	—			0.2			(18.4		)	—			(18.2		)
Cash and cash equivalents, beginning of period	—			—			237.4			—			237.4
Cash and cash equivalents, end of period	$	—		$	0.2		$	219.0		$	—		$	219.2