| Financial Statements of Parent Company Guarantor |
Supplemental Guarantor Information Pentair plc (the "Parent Company Guarantor") and PISG (the "Subsidiary Guarantor"), fully and unconditionally, guarantee the Notes of PFSA (the "Subsidiary Issuer"). The Subsidiary Guarantor is a Switzerland limited liability company and 100 percent-owned subsidiary of the Parent Company Guarantor. The Subsidiary Issuer is a Luxembourg private limited liability company and 100 percent-owned subsidiary of the Subsidiary Guarantor. The guarantees provided by the Parent Company Guarantor and Subsidiary Guarantor are joint and several. 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 by relevant group within the Company: Pentair plc and PISG as the guarantors, PFSA as issuer of the debt and all other non-guarantor subsidiaries. Condensed consolidating financial information for Pentair plc, PISG and PFSA on a stand-alone basis is presented using the equity method of accounting for subsidiaries. Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three months ended March 31, 2018 | | | | | | | | | | | | | | | | | | | | In millions | Parent Company Guarantor | Subsidiary
Guarantor | Subsidiary Issuer | Non-guarantor Subsidiaries | Eliminations | Consolidated
Total | Net sales | $ | — |
| $ | — |
| $ | — |
| $ | 1,269.7 |
| $ | — |
| $ | 1,269.7 |
| Cost of goods sold | — |
| — |
| — |
| 807.7 |
| — |
| 807.7 |
| Gross profit | — |
| — |
| — |
| 462.0 |
| — |
| 462.0 |
| Selling, general and administrative | 7.1 |
| — |
| 0.1 |
| 272.4 |
| — |
| 279.6 |
| Research and development | — |
| — |
| — |
| 30.1 |
| — |
| 30.1 |
| Operating income (loss) | (7.1 | ) | — |
| (0.1 | ) | 159.5 |
| — |
| 152.3 |
| Loss (earnings) from continuing operations of investment in subsidiaries | (111.3 | ) | (110.7 | ) | (123.7 | ) | — |
| 345.7 |
| — |
| Other (income) expense: | | | | | | | Loss on sale of business | — |
| — |
| — |
| 5.3 |
| — |
| 5.3 |
| Net interest (income) expense | — |
| (0.3 | ) | 12.6 |
| 1.5 |
| — |
| 13.8 |
| Other expense | — |
| — |
| — |
| 1.4 |
| — |
| 1.4 |
| Income (loss) from continuing operations before income taxes | 104.2 |
| 111.0 |
| 111.0 |
| 151.3 |
| (345.7 | ) | 131.8 |
| Provision for income taxes | — |
| — |
| — |
| 27.6 |
| — |
| 27.6 |
| Net income (loss) from continuing operations | 104.2 |
| 111.0 |
| 111.0 |
| 123.7 |
| (345.7 | ) | 104.2 |
| Loss from discontinued operations, net of tax | — |
| — |
| — |
| (1.3 | ) | — |
| (1.3 | ) | Earnings (loss) from discontinued operations of investment in subsidiaries | (1.3 | ) | (1.3 | ) | (1.3 | ) | — |
| 3.9 |
| — |
| Net income (loss) | $ | 102.9 |
| $ | 109.7 |
| $ | 109.7 |
| $ | 122.4 |
| $ | (341.8 | ) | $ | 102.9 |
| Comprehensive income (loss), net of tax | | | | | | | Net income (loss) | $ | 102.9 |
| $ | 109.7 |
| $ | 109.7 |
| $ | 122.4 |
| $ | (341.8 | ) | $ | 102.9 |
| Changes in cumulative translation adjustment | 2.4 |
| 2.4 |
| 2.4 |
| 2.4 |
| (7.2 | ) | 2.4 |
| Changes in market value of derivative financial instruments, net of tax | (3.8 | ) | (3.8 | ) | (3.8 | ) | (3.8 | ) | 11.4 |
| (3.8 | ) | Comprehensive income (loss) | $ | 101.5 |
| $ | 108.3 |
| $ | 108.3 |
| $ | 121.0 |
| $ | (337.6 | ) | $ | 101.5 |
|
Condensed Consolidating Balance Sheet March 31, 2018 | | | | | | | | | | | | | | | | | | | | In millions | Parent Company Guarantor | Subsidiary
Guarantor | Subsidiary Issuer | Non-guarantor Subsidiaries | Eliminations | Consolidated
Total | Assets | Current assets | | | | | | | Cash and cash equivalents | $ | 0.2 |
| $ | — |
| $ | — |
| $ | 907.3 |
| $ | — |
| $ | 907.5 |
| Accounts and notes receivable, net | — |
| — |
| — |
| 985.2 |
| — |
| 985.2 |
| Inventories | — |
| — |
| — |
| 593.5 |
| — |
| 593.5 |
| Other current assets | 0.9 |
| 0.2 |
| 5.1 |
| 236.1 |
| (9.5 | ) | 232.8 |
| Total current assets | 1.1 |
| 0.2 |
| 5.1 |
| 2,722.1 |
| (9.5 | ) | 2,719.0 |
| Property, plant and equipment, net | — |
| — |
| — |
| 546.5 |
| — |
| 546.5 |
| Other assets | | | | | | | Investments in subsidiaries | 5,104.8 |
| 5,009.0 |
| 7,068.3 |
| — |
| (17,182.1 | ) | — |
| Goodwill | — |
| — |
| — |
| 4,380.1 |
| — |
| 4,380.1 |
| Intangibles, net | — |
| — |
| — |
| 1,536.5 |
| — |
| 1,536.5 |
| Other non-current assets | 2.2 |
| 96.0 |
| 870.6 |
| 1,283.4 |
| (2,066.2 | ) | 186.0 |
| Total other assets | 5,107.0 |
| 5,105.0 |
| 7,938.9 |
| 7,200.0 |
| (19,248.3 | ) | 6,102.6 |
| Total assets | $ | 5,108.1 |
| $ | 5,105.2 |
| $ | 7,944.0 |
| $ | 10,468.6 |
| $ | (19,257.8 | ) | $ | 9,368.1 |
| Liabilities and Equity | Current liabilities | | | | | | | Current maturities of long-term debt and short-term borrowings | $ | — |
| $ | — |
| $ | — |
| $ | 0.2 |
| $ | — |
| $ | 0.2 |
| Accounts payable | 1.5 |
| — |
| — |
| 402.5 |
| — |
| 404.0 |
| Employee compensation and benefits | 0.4 |
| — |
| — |
| 142.3 |
| — |
| 142.7 |
| Other current liabilities | 69.8 |
| 0.4 |
| 12.5 |
| 407.4 |
| (9.5 | ) | 480.6 |
| Total current liabilities | 71.7 |
| 0.4 |
| 12.5 |
| 952.4 |
| (9.5 | ) | 1,027.5 |
| Other liabilities | | | | | | | Long-term debt | 286.5 |
| — |
| 2,922.7 |
| 1,530.1 |
| (2,066.2 | ) | 2,673.1 |
| Pension and other post-retirement compensation and benefits | — |
| — |
| — |
| 291.9 |
| — |
| 291.9 |
| Deferred tax liabilities | — |
| — |
| — |
| 369.1 |
| — |
| 369.1 |
| Other non-current liabilities | 30.2 |
| — |
| — |
| 256.6 |
| — |
| 286.8 |
| Total liabilities | 388.4 |
| 0.4 |
| 2,935.2 |
| 3,400.1 |
| (2,075.7 | ) | 4,648.4 |
| Equity | 4,719.7 |
| 5,104.8 |
| 5,008.8 |
| 7,068.5 |
| (17,182.1 | ) | 4,719.7 |
| Total liabilities and equity | $ | 5,108.1 |
| $ | 5,105.2 |
| $ | 7,944.0 |
| $ | 10,468.6 |
| $ | (19,257.8 | ) | $ | 9,368.1 |
|
Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2018 | | | | | | | | | | | | | | | | | | | | 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 | $ | 83.4 |
| $ | 111.3 |
| $ | 109.1 |
| $ | (129.7 | ) | $ | (341.7 | ) | $ | (167.6 | ) | Investing activities | | | | | | | Capital expenditures | — |
| — |
| — |
| (16.8 | ) | — |
| (16.8 | ) | Proceeds from sale of property and equipment | — |
| — |
| — |
| 2.3 |
| — |
| 2.3 |
| Payments due to sale of businesses, net | — |
| — |
| — |
| (13.8 | ) | — |
| (13.8 | ) | Acquisitions, net of cash acquired | — |
| — |
| — |
| (2.9 | ) | — |
| (2.9 | ) | Net intercompany loan activity | — |
| (1.9 | ) | (262.6 | ) | 103.1 |
| 161.4 |
| — |
| Net cash provided by (used for) investing activities | — |
| (1.9 | ) | (262.6 | ) | 71.9 |
| 161.4 |
| (31.2 | ) | Financing activities | | | | | | | Net receipts of short-term borrowings | — |
| — |
| — |
| 0.2 |
| — |
| 0.2 |
| Net repayments of commercial paper and revolving long-term debt | — |
| — |
| 223.8 |
| 193.7 |
| — |
| 417.5 |
| Proceeds from long-term debt | — |
| — |
| — |
| 800.0 |
| — |
| 800.0 |
| Debt issuance costs | — |
| — |
| — |
| (7.5 | ) | — |
| (7.5 | ) | Net change in advances to subsidiaries | 129.2 |
| (109.4 | ) | (91.4 | ) | (108.7 | ) | 180.3 |
| — |
| Shares issued to employees, net of shares withheld | 0.9 |
| — |
| — |
| — |
| — |
| 0.9 |
| Repurchases of ordinary shares | (150.0 | ) | — |
| — |
| — |
| — |
| (150.0 | ) | Dividends paid | (63.3 | ) | — |
| — |
| — |
| — |
| (63.3 | ) | Net cash provided by (used for) financing activities | (83.2 | ) | (109.4 | ) | 132.4 |
| 877.7 |
| 180.3 |
| 997.8 |
| Effect of exchange rate changes on cash and cash equivalents | — |
| — |
| 21.1 |
| (25.9 | ) | — |
| (4.8 | ) | Change in cash and cash equivalents | 0.2 |
| — |
| — |
| 794.0 |
| — |
| 794.2 |
| Cash and cash equivalents, beginning of period | — |
| — |
| — |
| 113.3 |
| — |
| 113.3 |
| Cash and cash equivalents, end of period | $ | 0.2 |
| $ | — |
| $ | — |
| $ | 907.3 |
| $ | — |
| $ | 907.5 |
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three months ended March 31, 2017 | | | | | | | | | | | | | | | | | | | | In millions | Parent
Company
Guarantor | Subsidiary
Guarantor | Subsidiary
Issuer | Non-guarantor
Subsidiaries | Eliminations | Consolidated
Total | Net sales | $ | — |
| $ | — |
| $ | — |
| $ | 1,183.5 |
| $ | — |
| $ | 1,183.5 |
| Cost of goods sold | — |
| — |
| — |
| 761.2 |
| — |
| 761.2 |
| Gross profit | — |
| — |
| — |
| 422.3 |
| — |
| 422.3 |
| Selling, general and administrative | (11.0 | ) | 0.1 |
| 0.4 |
| 262.2 |
| — |
| 251.7 |
| Research and development | — |
| — |
| — |
| 30.0 |
| — |
| 30.0 |
| Operating income (loss) | 11.0 |
| (0.1 | ) | (0.4 | ) | 130.1 |
| — |
| 140.6 |
| Loss (earnings) from continuing operations of investment in subsidiaries | (69.7 | ) | (69.7 | ) | (98.5 | ) | — |
| 237.9 |
| — |
| Other (income) expense: | | | | | | | Net interest expense (income) | — |
| (0.1 | ) | 28.4 |
| 6.7 |
| — |
| 35.0 |
| Other expense | — |
| — |
| — |
| 2.0 |
|
| 2.0 |
| Income (loss) from continuing operations before income taxes | 80.7 |
| 69.7 |
| 69.7 |
| 121.4 |
| (237.9 | ) | 103.6 |
| Provision for income taxes | — |
| — |
| — |
| 22.9 |
| — |
| 22.9 |
| Net income (loss) from continuing operations | 80.7 |
| 69.7 |
| 69.7 |
| 98.5 |
| (237.9 | ) | 80.7 |
| Income from discontinued operations, net of tax | — |
| — |
| — |
| 7.1 |
| — |
| 7.1 |
| Earnings (loss) from discontinued operations of investment in subsidiaries | 7.1 |
| 7.1 |
| 7.1 |
| — |
| (21.3 | ) | — |
| Net income (loss) | $ | 87.8 |
| $ | 76.8 |
| $ | 76.8 |
| $ | 105.6 |
| $ | (259.2 | ) | $ | 87.8 |
| Comprehensive income (loss), net of tax | | | | | | | Net income (loss) | $ | 87.8 |
| $ | 76.8 |
| $ | 76.8 |
| $ | 105.6 |
| $ | (259.2 | ) | $ | 87.8 |
| Changes in cumulative translation adjustment | 75.7 |
| 75.7 |
| 75.7 |
| 75.7 |
| (227.1 | ) | 75.7 |
| Changes in market value of derivative financial instruments, net of tax | 1.6 |
| 1.6 |
| 1.6 |
| 1.6 |
| (4.8 | ) | 1.6 |
| Comprehensive income (loss) | $ | 165.1 |
| $ | 154.1 |
| $ | 154.1 |
| $ | 182.9 |
| $ | (491.1 | ) | $ | 165.1 |
|
Condensed Consolidating Balance Sheet December 31, 2017 | | | | | | | | | | | | | | | | | | | | In millions | Parent Company Guarantor | Subsidiary
Guarantor | Subsidiary Issuer | Non-guarantor Subsidiaries | Eliminations | Consolidated
Total | Assets | Current assets | | | | | | | Cash and cash equivalents | $ | — |
| $ | — |
| $ | — |
| $ | 113.3 |
| $ | — |
| $ | 113.3 |
| Accounts and notes receivable, net | — |
| — |
| — |
| 831.6 |
| — |
| 831.6 |
| Inventories | — |
| — |
| — |
| 581.0 |
| — |
| 581.0 |
| Other current assets | 10.8 |
| 1.8 |
| 1.5 |
| 239.3 |
| (30.5 | ) | 222.9 |
| Total current assets | 10.8 |
| 1.8 |
| 1.5 |
| 1,765.2 |
| (30.5 | ) | 1,748.8 |
| Property, plant and equipment, net | — |
| — |
| — |
| 545.5 |
| — |
| 545.5 |
| Other assets | | | | | | | Investments in subsidiaries | 5,205.1 |
| 5,109.6 |
| 7,156.1 |
| — |
| (17,470.8 | ) | — |
| Goodwill | — |
| — |
| — |
| 4,351.1 |
| — |
| 4,351.1 |
| Intangibles, net | — |
| — |
| — |
| 1,558.4 |
| — |
| 1,558.4 |
| Long-term intercompany debt | — |
| 94.1 |
| 614.0 |
| (708.1 | ) | — |
| — |
| Other non-current assets | 2.2 |
| — |
| — |
| 2,317.1 |
| (1,889.4 | ) | 429.9 |
| Total other assets | 5,207.3 |
| 5,203.7 |
| 7,770.1 |
| 7,518.5 |
| (19,360.2 | ) | 6,339.4 |
| Total assets | $ | 5,218.1 |
| $ | 5,205.5 |
| $ | 7,771.6 |
| $ | 9,829.2 |
| $ | (19,390.7 | ) | $ | 8,633.7 |
| Liabilities and Equity | Current liabilities | | | | | | | Accounts payable | $ | 1.4 |
| $ | — |
| $ | — |
| $ | 494.3 |
| $ | — |
| $ | 495.7 |
| Employee compensation and benefits | 0.4 |
| — |
| — |
| 186.2 |
| — |
| 186.6 |
| Other current liabilities | 99.6 |
| 0.4 |
| 9.4 |
| 438.2 |
| (30.5 | ) | 517.1 |
| Total current liabilities | 101.4 |
| 0.4 |
| 9.4 |
| 1,118.7 |
| (30.5 | ) | 1,199.4 |
| Other liabilities | | | | | | | Long-term debt | 48.4 |
| — |
| 2,652.8 |
| 628.9 |
| (1,889.4 | ) | 1,440.7 |
| Pension and other post-retirement compensation and benefits | — |
| — |
| — |
| 285.6 |
| — |
| 285.6 |
| Deferred tax liabilities | — |
| — |
| — |
| 394.8 |
| — |
| 394.8 |
| Other non-current liabilities | 30.5 |
| — |
| — |
| 244.9 |
| — |
| 275.4 |
| Total liabilities | 180.3 |
| 0.4 |
| 2,662.2 |
| 2,672.9 |
| (1,919.9 | ) | 3,595.9 |
| Equity | 5,037.8 |
| 5,205.1 |
| 5,109.4 |
| 7,156.3 |
| (17,470.8 | ) | 5,037.8 |
| Total liabilities and equity | $ | 5,218.1 |
| $ | 5,205.5 |
| $ | 7,771.6 |
| $ | 9,829.2 |
| $ | (19,390.7 | ) | $ | 8,633.7 |
|
Condensed Consolidating Statement of Cash Flows Three months ended March 31, 2017 | | | | | | | | | | | | | | | | | | | | 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 | $ | 49.8 |
| $ | 75.1 |
| $ | 69.5 |
| $ | (41.0 | ) | $ | (259.4 | ) | $ | (106.0 | ) | Investing activities | | | | | | | Capital expenditures | — |
| — |
| — |
| (23.6 | ) | — |
| (23.6 | ) | Acquisitions, net of cash acquired | — |
| — |
| — |
| (56.7 | ) | — |
| (56.7 | ) | Net intercompany loan activity | — |
| — |
| (530.4 | ) | (290.2 | ) | 820.6 |
| — |
| Net cash provided by (used for) investing activities of continuing operations | — |
| — |
| (530.4 | ) | (370.5 | ) | 820.6 |
| (80.3 | ) | Net cash provided by (used for) investing activities of discontinued operations | — |
| — |
| — |
| (3.7 | ) | — |
| (3.7 | ) | Net cash provided by (used for) investing activities | — |
| — |
| (530.4 | ) | (374.2 | ) | 820.6 |
| (84.0 | ) | Financing activities | | | | | | | Net repayments of short-term borrowings | — |
| — |
| — |
| (0.1 | ) | — |
| (0.1 | ) | Net receipts (repayments) of commercial paper and revolving long-term debt | — |
| — |
| 234.0 |
| (4.9 | ) | — |
| 229.1 |
| Net change in advances to subsidiaries | 10.2 |
| (75.1 | ) | 206.9 |
| 419.2 |
| (561.2 | ) | — |
| Shares issued to employees, net of shares withheld | 2.8 |
| — |
| — |
| — |
| — |
| 2.8 |
| Dividends paid | (62.8 | ) | — |
| — |
| — |
| — |
| (62.8 | ) | Net cash provided by (used for) financing activities | (49.8 | ) | (75.1 | ) | 440.9 |
| 414.2 |
| (561.2 | ) | 169.0 |
| Effect of exchange rate changes on cash and cash equivalents | — |
| — |
| 20.1 |
| 0.5 |
| — |
| 20.6 |
| Change in cash and cash equivalents | — |
| — |
| 0.1 |
| (0.5 | ) | — |
| (0.4 | ) | Cash and cash equivalents, beginning of period | — |
| — |
| — |
| 238.5 |
| — |
| 238.5 |
| Cash and cash equivalents, end of period | $ | — |
| $ | — |
| $ | 0.1 |
| $ | 238.0 |
| $ | — |
| $ | 238.1 |
|
|