Financial Statements of Parent Company Guarantor (Tables)

12 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2014

In millions	Parent Company Guarantor			Subsidiary Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	—		$	7,039.0		$	—		$	7,039.0
Cost of goods sold	—			—			—			4,576.0			—			4,576.0
Gross profit	—			—			—			2,463.0			—			2,463.0
Selling, general and administrative	25.3			2.6			7.7			1,458.2			—			1,493.8
Research and development	—			—			—			117.3			—			117.3
Operating (loss) income	(25.3		)	(2.6		)	(7.7		)	887.5			—			851.9
Loss (earnings) from continuing operations of investment in subsidiaries	(615.5		)	(619.7		)	(611.1		)	—			1,846.3			—
Other (income) expense:
Loss on sale of businesses, net	—			—			—			0.2			—			0.2
Equity income of unconsolidated subsidiaries	—			—			—			(1.2		)	—			(1.2		)
Interest income	—			—			(92.3		)	(40.2		)	128.8			(3.7		)
Interest expense	0.7			2.1			95.6			102.7			(128.8		)	72.3
Income (loss) from continuing operations before income taxes	589.5			615.0			600.1			826.0			(1,846.3		)	784.3
Provision (benefit) for income taxes	(17.5		)	(0.5		)	(2.4		)	197.7			—			177.3
Net income (loss) from continuing operations	607.0			615.5			602.5			628.3			(1,846.3		)	607.0
Loss from discontinued operations, net of tax	—			—			—			(6.4		)	—			(6.4		)
Loss from sale / impairment of discontinued operations, net of tax	—			—			—			(385.7		)	—			(385.7		)
Earnings (loss) from discontinued operations of investment in subsidiaries	(392.1		)	(392.1		)	(392.1		)	—			1,176.3			—
Net income (loss) attributable to Pentair plc	$	214.9		$	223.4		$	210.4		$	236.2		$	(670.0	)	$	214.9
Comprehensive income (loss), net of tax
Net income (loss) attributable to Pentair plc	$	214.9		$	223.4		$	210.4		$	236.2		$	(670.0	)	$	214.9
Changes in cumulative translation adjustment	(336.3		)	(336.3		)	(336.3		)	(336.3		)	1,008.9			(336.3		)
Changes in market value of derivative financial instruments	(0.4		)	(0.4		)	(0.4		)	(0.4		)	1.2			(0.4		)
Comprehensive income (loss) attributable to Pentair plc	$	(121.8	)	$	(113.3	)	$	(126.3	)	$	(100.5	)	$	340.1		$	(121.8	)

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	6,999.7		$	—		$	6,999.7
Cost of goods sold	—			—			4,629.6			—			4,629.6
Gross profit	—			—			2,370.1			—			2,370.1
Selling, general and administrative	21.0			13.3			1,459.4			—			1,493.7
Research and development	—			—			122.8			—			122.8
Impairment of trade names	—			—			11.0			—			11.0
Operating (loss) income	(21.0		)	(13.3		)	776.9			—			742.6
Loss (earnings) from continuing operations of investment in subsidiaries	(539.0		)	(508.6		)	—			1,047.6			—
Other (income) expense:
Gain on sale of businesses, net	—			—			(20.8		)	—			(20.8		)
Equity income of unconsolidated subsidiaries	—			—			(2.0		)	—			(2.0		)
Interest income	—			(99.2		)	(53.4		)	148.2			(4.4		)
Interest expense	5.6			106.0			111.9			(148.2		)	75.3
Income (loss) from continuing operations before income taxes and noncontrolling interest	512.4			488.5			741.2			(1,047.6		)	694.5
Provision for income taxes	0.7			1.4			174.9			—			177.0
Net income (loss) from continuing operations before noncontrolling interest	511.7			487.1			566.3			(1,047.6		)	517.5
Income from discontinued operations, net of tax	—			—			25.9			—			25.9
Loss from sale of discontinued operations, net of tax	—			—			(0.8		)	—			(0.8		)
Earnings (loss) from discontinued operations of investment in subsidiaries	25.1			25.1			—			(50.2		)	—
Net income (loss) before noncontrolling interest	536.8			512.2			591.4			(1,097.8		)	542.6
Noncontrolling interest	—			—			5.8			—			5.8
Net income (loss) attributable to Pentair plc	$	536.8		$	512.2		$	585.6		$	(1,097.8	)	$	536.8
Net income (loss) from continuing operations attributable to Pentair plc	$	511.7		$	487.1		$	560.5		$	(1,047.6	)	$	511.7
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	536.8		$	512.2		$	591.4		$	(1,097.8	)	$	542.6
Changes in cumulative translation adjustment	(31.3		)	(31.3		)	(29.1		)	62.6			(29.1		)
Amortization of pension and other post-retirement prior service cost	(0.4		)	(0.4		)	(0.4		)	0.8			(0.4		)
Changes in market value of derivative financial instruments	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Total comprehensive income (loss)	504.8			480.2			561.6			(1,033.8		)	512.8
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			8.0			—			8.0
Comprehensive income (loss) attributable to Pentair plc	$	504.8		$	480.2		$	553.6		$	(1,033.8	)	$	504.8

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Net sales	$	—		$	—		$	4,306.8		$	—		$	4,306.8
Cost of goods sold	—			—			3,040.9			—			3,040.9
Gross profit	—			—			1,265.9			—			1,265.9
Selling, general and administrative	5.0			(3.8		)	1,116.5			—			1,117.7
Research and development	—			—			92.3			—			92.3
Impairment of trade names	—			—			60.7			—			60.7
Operating (loss) income	(5.0		)	3.8			(3.6		)	—			(4.8		)
Loss (earnings) from continuing operations of investment in subsidiaries	75.7			76.6			—			(152.3		)	—
Other (income) expense:
Loss on early extinguishment of debt	—			—			75.4			—			75.4
Equity income of unconsolidated subsidiaries	—			—			(2.3		)	—			(2.3		)
Interest income	—			(9.2		)	(2.0		)	9.2			(2.0		)
Interest expense	0.1			10.2			69.1			(9.2		)	70.2
Income (loss) from continuing operations before income taxes and noncontrolling interest	(80.8		)	(73.8		)	(143.8		)	152.3			(146.1		)
Provision (benefit) for income taxes	0.7			1.1			(69.0		)	—			(67.2		)
Net income (loss) from continuing operations before noncontrolling interest	(81.5		)	(74.9		)	(74.8		)	152.3			(78.9		)
Loss from discontinued operations, net of tax	—			—			(25.7		)	—			(25.7		)
Earnings (loss) from discontinued operations of investment in subsidiaries	(25.7		)	(25.7		)	—			51.4			—
Net income (loss) before noncontrolling interest	(107.2		)	(100.6		)	(100.5		)	203.7			(104.6		)
Noncontrolling interest	—			—			2.6			—			2.6
Net income (loss) attributable to Pentair plc	$	(107.2	)	$	(100.6	)	$	(103.1	)	$	203.7		$	(107.2	)
Net income (loss) from continuing operations attributable to Pentair plc	$	(81.5	)	$	(74.9	)	$	(77.4	)	$	152.3		$	(81.5	)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	(107.2	)	$	(100.6	)	$	(100.5	)	$	203.7		$	(104.6	)
Changes in cumulative translation adjustment	30.0			30.0			31.4			(60.0		)	31.4
Amortization of pension and other post-retirement prior service cost	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Changes in market value of derivative financial instruments	(3.6		)	(3.6		)	(3.6		)	7.2			(3.6		)
Total comprehensive income (loss)	(81.1		)	(74.5		)	(73.0		)	151.5			(77.1		)
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			4.0			—			4.0
Comprehensive income (loss) attributable to Pentair plc	$	(81.1	)	$	(74.5	)	$	(77.0	)	$	151.5		$	(81.1	)

Condensed Consolidating Balance Sheet

Pentair plc and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2014

In millions	Parent Company Guarantor		Subsidiary Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Consolidated Total
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	0.1	$	110.3	$	—		$	110.4
Accounts and notes receivable, net	—		—		—		1,206.8		(0.9		)	1,205.9
Inventories	—		—		—		1,130.4		—			1,130.4
Other current assets	—		17.6		2.0		367.6		(20.4		)	366.8
Current assets held for sale	—		—		—		80.6		—			80.6
Total current assets	—		17.6		2.1		2,895.7		(21.3		)	2,894.1
Property, plant and equipment, net	—		—		—		950.0		—			950.0
Other assets
Investments in subsidiaries	4,733.0		4,893.8		7,612.2		—		(17,239.0		)	—
Goodwill	—		—		—		4,741.9		—			4,741.9
Intangibles, net	—		—		—		1,608.1		—			1,608.1
Other non-current assets	80.2		—		1,381.8		345.0		(1,370.8		)	436.2
Non-current assets held for sale	—		—		—		24.9		—			24.9
Total other assets	4,813.2		4,893.8		8,994.0		6,719.9		(18,609.8		)	6,811.1
Total assets	$	4,813.2	$	4,911.4	$	8,996.1	$	10,565.6	$	(18,631.1	)	$	10,655.2
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	—	$	6.7	$	—		$	6.7
Accounts payable	0.9		—		—		583.1		(0.9		)	583.1
Employee compensation and benefits	0.2		0.6		—		304.7		—			305.5
Other current liabilities	120.6		2.2		10.9		595.8		(20.4		)	709.1
Current liabilities held for sale	—		—		—		35.1		—			35.1
Total current liabilities	121.7		2.8		10.9		1,525.4		(21.3		)	1,639.5
Other liabilities
Long-term debt	11.4		175.6		2,860.6		1,320.6		(1,370.8		)	2,997.4
Pension and other post-retirement compensation and benefits	—		—		—		322.0		—			322.0
Deferred tax liabilities	—		—		2.9		525.4		—			528.3
Other non-current liabilities	16.3		—		—		481.4		—			497.7
Non-current liabilities held for sale	—		—		—		6.5		—			6.5
Total liabilities	149.4		178.4		2,874.4		4,181.3		(1,392.1		)	5,991.4
Equity	4,663.8		4,733.0		6,121.7		6,384.3		(17,239.0		)	4,663.8
Total liabilities and equity	$	4,813.2	$	4,911.4	$	8,996.1	$	10,565.6	$	(18,631.1	)	$	10,655.2

Pentair plc and Subsidiaries

Condensed 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

Condensed Consolidating Statement of Cash Flows

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2014

In millions	Parent Company Guarantor			Guarantor Subsidiary			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Operating activities
Net cash provided by (used for) operating activities	$	169.0		$	208.6		$	207.0		$	1,093.8		$	(670.0	)	$	1,008.4
Investing activities
Capital expenditures	—			—			—			(129.6		)	—			(129.6		)
Proceeds from sale of property and equipment	—			—			—			13.1			—			13.1
Proceeds from sale of businesses, net	—			—			—			0.3			—			0.3
Acquisitions, net of cash acquired	—			—			—			(12.3		)	—			(12.3		)
Net intercompany loan activity	—			—			37.8			112.2			(150.0		)	—
Other	—			—			—			0.2			—			0.2
Net cash provided by (used for) investing activities	—			—			37.8			(16.1		)	(150.0		)	(128.3		)
Financing activities
Net receipts of short-term borrowings	—			—			—			0.5			—			0.5
Net receipts of commercial paper and revolving long-term debt	—			—			458.7			9.9			—			468.6
Proceeds from long-term debt	—			—			—			2.2			—			2.2
Repayment of long-term debt	—			—			—			(16.8		)	—			(16.8		)
Debt issuance costs	—			—			(3.1		)	—			—			(3.1		)
Net change in advances to subsidiaries	741.1			(208.6		)	(747.3		)	(605.2		)	820.0			—
Excess tax benefits from share-based compensation	—			—			—			12.6			—			12.6
Shares issued to employees, net of shares withheld	—			—			—			37.0			—			37.0
Repurchases of ordinary shares	(699.2		)	—			—			(450.8		)	—			(1,150.0		)
Dividends paid	(211.4		)	—			—			—			—			(211.4		)
Purchase of noncontrolling interest	—			—			—			(134.7		)	—			(134.7		)
Net cash provided by (used for) financing activities	(169.5		)	(208.6		)	(291.7		)	(1,145.3		)	820.0			(995.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(30.6		)	—			(30.6		)
Change in cash and cash equivalents	(0.5		)	—			(46.9		)	(98.2		)	—			(145.6		)
Cash and cash equivalents, beginning of year	0.5			—			47.0			208.5			—			256.0
Cash and cash equivalents, end of year	$	—		$	—		$	0.1		$	110.3		$	—		$	110.4

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Operating activities
Net cash provided by (used for) operating activities	$	534.2		$	514.0		$	977.5		$	(1,097.8	)	$	927.9
Investing activities
Capital expenditures	—			—			(170.0		)	—			(170.0		)
Proceeds from sale of property and equipment	—			—			6.0			—			6.0
Proceeds from sale of businesses, net	—			—			43.5			—			43.5
Acquisitions, net of cash acquired	—			—			(92.4		)	—			(92.4		)
Other	—			—			1.7			—			1.7
Net cash provided by (used for) investing activities	—			—			(211.2		)	—			(211.2		)
Financing activities
Net receipts of commercial paper and revolving long-term debt	—			104.2			—			—			104.2
Proceeds from long-term debt	—			—			0.7			—			0.7
Repayment of long-term debt	—			—			(7.4		)	—			(7.4		)
Debt issuance costs	—			(1.4		)	—			—			(1.4		)
Net change in advances to subsidiaries	(339.5		)	(569.8		)	(188.5		)	1,097.8			—
Excess tax benefits from share-based compensation	—			—			16.8			—			16.8
Shares issued to employees, net of shares withheld	—			—			80.0			—			80.0
Repurchases of ordinary shares	—			—			(715.8		)	—			(715.8		)
Dividends paid	(194.2		)	—			—			—			(194.2		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(533.7		)	(467.0		)	(816.2		)	1,097.8			(719.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			21.0			—			21.0
Change in cash and cash equivalents	0.5			47.0			(28.9		)	—			18.6
Cash and cash equivalents, beginning of year	—			—			237.4			—			237.4
Cash and cash equivalents, end of year	$	0.5		$	47.0		$	208.5		$	—		$	256.0

Pentair plc and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Consolidated Total
Operating activities
Net cash provided by (used for) operating activities	$	(109.0	)	$	(88.2	)	$	37.2		$	203.7		$	43.7
Investing activities
Capital expenditures	—			—			(94.5		)	—			(94.5		)
Proceeds from sale of property and equipment	—			—			5.5			—			5.5
Acquisitions, net of cash acquired	—			300.1			170.4			—			470.5
Other	—			—			(5.9		)	—			(5.9		)
Net cash provided by (used for) investing activities	—			300.1			75.5			—			375.6
Financing activities
Net repayments of short-term borrowings	—			—			(3.7		)	—			(3.7		)
Net receipts (repayments) of commercial paper and revolving long-term debt	—			424.7			(170.9		)	—			253.8
Proceeds from long-term debt	—			594.3			—			—			594.3
Repayment of long-term debt	—			—			(617.2		)	—			(617.2		)
Debt issuance costs	—			(8.7		)	(1.0		)	—			(9.7		)
Debt extinguishment costs	—			—			(74.8		)	—			(74.8		)
Net change in advances to subsidiaries	157.0			(1,222.2		)	1,268.9			(203.7		)	—
Excess tax benefits from share-based compensation	—			—			5.0			—			5.0
Shares issued to employees, net of shares withheld	—			—			68.2			—			68.2
Repurchases of ordinary shares	—			—			(334.2		)	—			(334.2		)
Dividends paid	(48.0		)	—			(64.4		)	—			(112.4		)
Distributions to noncontrolling interest	—			—			(1.6		)	—			(1.6		)
Net cash provided by (used for) financing activities	109.0			(211.9		)	74.3			(203.7		)	(232.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			0.3			—			0.3
Change in cash and cash equivalents	—			—			187.3			—			187.3
Cash and cash equivalents, beginning of year	—			—			50.1			—			50.1
Cash and cash equivalents, end of year	$	—		$	—		$	237.4		$	—		$	237.4