We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pentair Inc | NYSE:PNR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
2.27 | 2.85% | 81.88 | 81.94 | 80.3345 | 80.59 | 1,086,679 | 22:30:00 |
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the Quarterly Period Ended June 30, 2016
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Ireland
|
|
98-1141328
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification number)
|
|
|
|
P.O. Box 471, Sharp Street, Walkden, Manchester, M28 8BU United Kingdom
|
||
(Address of principal executive offices)
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
Page
|
|
|
|
|
PART I FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 3.
|
||
|
|
|
ITEM 4.
|
||
|
|
|
PART II OTHER INFORMATION
|
|
|
|
|
|
ITEM 1.
|
||
|
|
|
ITEM 1A.
|
||
|
|
|
ITEM 2.
|
||
|
|
|
ITEM 6.
|
||
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions, except per-share data
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Net sales
|
$
|
1,733.3
|
|
$
|
1,661.2
|
|
|
$
|
3,308.8
|
|
$
|
3,136.2
|
|
Cost of goods sold
|
1,134.1
|
|
1,095.0
|
|
|
2,174.2
|
|
2,059.8
|
|
||||
Gross profit
|
599.2
|
|
566.2
|
|
|
1,134.6
|
|
1,076.4
|
|
||||
Selling, general and administrative
|
348.4
|
|
319.3
|
|
|
680.0
|
|
628.5
|
|
||||
Research and development
|
33.9
|
|
29.0
|
|
|
67.1
|
|
58.8
|
|
||||
Operating income
|
216.9
|
|
217.9
|
|
|
387.5
|
|
389.1
|
|
||||
Other (income) expense:
|
|
|
|
|
|
||||||||
Equity income of unconsolidated subsidiaries
|
(1.0
|
)
|
(0.6
|
)
|
|
(1.9
|
)
|
(1.1
|
)
|
||||
Net interest expense
|
35.5
|
|
18.6
|
|
|
71.9
|
|
36.8
|
|
||||
Income from continuing operations before income taxes
|
182.4
|
|
199.9
|
|
|
317.5
|
|
353.4
|
|
||||
Provision for income taxes
|
39.6
|
|
46.0
|
|
|
67.3
|
|
81.3
|
|
||||
Net income from continuing operations
|
142.8
|
|
153.9
|
|
|
250.2
|
|
272.1
|
|
||||
Loss from discontinued operations, net of tax
|
—
|
|
(1.3
|
)
|
|
—
|
|
(5.6
|
)
|
||||
Loss from sale / impairment of discontinued operations, net of tax
|
—
|
|
(4.8
|
)
|
|
—
|
|
(4.8
|
)
|
||||
Net income
|
$
|
142.8
|
|
$
|
147.8
|
|
|
$
|
250.2
|
|
$
|
261.7
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||||
Net income
|
$
|
142.8
|
|
$
|
147.8
|
|
|
$
|
250.2
|
|
$
|
261.7
|
|
Changes in cumulative translation adjustment
|
(25.8
|
)
|
21.6
|
|
|
2.2
|
|
(152.6
|
)
|
||||
Changes in market value of derivative financial instruments, net of $0.0, $0.3, ($0.5), and $0.4, respectively
|
10.9
|
|
(0.8
|
)
|
|
(3.8
|
)
|
(0.9
|
)
|
||||
Comprehensive income
|
$
|
127.9
|
|
$
|
168.6
|
|
|
$
|
248.6
|
|
$
|
108.2
|
|
Earnings (loss) per ordinary share
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.79
|
|
$
|
0.85
|
|
|
$
|
1.38
|
|
$
|
1.51
|
|
Discontinued operations
|
—
|
|
(0.03
|
)
|
|
—
|
|
(0.06
|
)
|
||||
Basic earnings per ordinary share
|
$
|
0.79
|
|
$
|
0.82
|
|
|
$
|
1.38
|
|
$
|
1.45
|
|
Diluted
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.78
|
|
$
|
0.84
|
|
|
1.37
|
|
1.49
|
|
||
Discontinued operations
|
—
|
|
(0.03
|
)
|
|
—
|
|
(0.06
|
)
|
||||
Diluted earnings per ordinary share
|
$
|
0.78
|
|
$
|
0.81
|
|
|
$
|
1.37
|
|
$
|
1.43
|
|
Weighted average ordinary shares outstanding
|
|
|
|
|
|
||||||||
Basic
|
180.9
|
|
179.8
|
|
|
180.8
|
|
180.1
|
|
||||
Diluted
|
183.0
|
|
182.3
|
|
|
182.8
|
|
182.6
|
|
||||
Cash dividends paid per ordinary share
|
$
|
0.33
|
|
$
|
0.32
|
|
|
$
|
0.66
|
|
$
|
0.64
|
|
|
June 30,
2016 |
December 31,
2015 |
||||
In millions, except per-share data
|
||||||
Assets
|
||||||
Current assets
|
|
|
||||
Cash and cash equivalents
|
$
|
173.3
|
|
$
|
126.3
|
|
Accounts and notes receivable, net of allowances of $90.6 and $103.7, respectively
|
1,086.2
|
|
1,167.7
|
|
||
Inventories
|
1,133.2
|
|
1,174.3
|
|
||
Other current assets
|
400.1
|
|
309.3
|
|
||
Total current assets
|
2,792.8
|
|
2,777.6
|
|
||
Property, plant and equipment, net
|
937.6
|
|
942.8
|
|
||
Other assets
|
|
|
||||
Goodwill
|
5,231.5
|
|
5,255.4
|
|
||
Intangibles, net
|
2,419.6
|
|
2,490.1
|
|
||
Other non-current assets
|
362.3
|
|
367.6
|
|
||
Total other assets
|
8,013.4
|
|
8,113.1
|
|
||
Total assets
|
$
|
11,743.8
|
|
$
|
11,833.5
|
|
Liabilities and Equity
|
||||||
Current liabilities
|
|
|
||||
Current maturities of long-term debt and short-term borrowings
|
$
|
—
|
|
$
|
0.7
|
|
Accounts payable
|
531.7
|
|
578.8
|
|
||
Employee compensation and benefits
|
216.3
|
|
262.9
|
|
||
Other current liabilities
|
667.9
|
|
644.1
|
|
||
Total current liabilities
|
1,415.9
|
|
1,486.5
|
|
||
Other liabilities
|
|
|
||||
Long-term debt
|
4,551.7
|
|
4,685.8
|
|
||
Pension and other post-retirement compensation and benefits
|
282.0
|
|
287.2
|
|
||
Deferred tax liabilities
|
815.2
|
|
844.2
|
|
||
Other non-current liabilities
|
512.7
|
|
521.0
|
|
||
Total liabilities
|
7,577.5
|
|
7,824.7
|
|
||
Equity
|
|
|
||||
Ordinary shares $0.01 par value, 426.0 authorized, 181.1 and 180.5 issued at June 30, 2016 and December 31, 2015, respectively
|
1.8
|
|
1.8
|
|
||
Additional paid-in capital
|
2,890.9
|
|
2,860.3
|
|
||
Retained earnings
|
1,920.2
|
|
1,791.7
|
|
||
Accumulated other comprehensive loss
|
(646.6
|
)
|
(645.0
|
)
|
||
Total equity
|
4,166.3
|
|
4,008.8
|
|
||
Total liabilities and equity
|
$
|
11,743.8
|
|
$
|
11,833.5
|
|
|
Six months ended
|
|||||
In millions
|
June 30,
2016 |
June 27,
2015 |
||||
Operating activities
|
|
|
||||
Net income
|
$
|
250.2
|
|
$
|
261.7
|
|
Loss from discontinued operations, net of tax
|
—
|
|
5.6
|
|
||
Loss from sale / impairment of discontinued operations, net of tax
|
—
|
|
4.8
|
|
||
Adjustments to reconcile net income from continuing operations to net cash provided by (used for) operating activities of continuing operations
|
|
|
||||
Equity income of unconsolidated subsidiaries
|
(1.9
|
)
|
(1.1
|
)
|
||
Depreciation
|
68.3
|
|
66.8
|
|
||
Amortization
|
75.2
|
|
55.6
|
|
||
Deferred income taxes
|
(26.6
|
)
|
4.9
|
|
||
Share-based compensation
|
22.3
|
|
19.4
|
|
||
Excess tax benefits from share-based compensation
|
(3.2
|
)
|
(4.6
|
)
|
||
Loss (gain) on sale of assets
|
7.5
|
|
(8.3
|
)
|
||
Changes in assets and liabilities, net of effects of business acquisitions
|
|
|
||||
Accounts and notes receivable
|
89.7
|
|
2.7
|
|
||
Inventories
|
36.7
|
|
(97.6
|
)
|
||
Other current assets
|
(75.9
|
)
|
(35.6
|
)
|
||
Accounts payable
|
(47.3
|
)
|
(43.4
|
)
|
||
Employee compensation and benefits
|
(48.0
|
)
|
(41.2
|
)
|
||
Other current liabilities
|
37.0
|
|
30.3
|
|
||
Other non-current assets and liabilities
|
(14.5
|
)
|
(24.9
|
)
|
||
Net cash provided by (used for) operating activities of continuing operations
|
369.5
|
|
195.1
|
|
||
Net cash provided by (used for) operating activities of discontinued operations
|
—
|
|
(9.6
|
)
|
||
Net cash provided by (used for) operating activities
|
369.5
|
|
185.5
|
|
||
Investing activities
|
|
|
||||
Capital expenditures
|
(74.6
|
)
|
(66.8
|
)
|
||
Proceeds from sale of property and equipment
|
9.5
|
|
23.1
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
(99.0
|
)
|
||
Other
|
(3.0
|
)
|
(0.5
|
)
|
||
Net cash provided by (used for) investing activities of continuing operations
|
(68.1
|
)
|
(143.2
|
)
|
||
Net cash provided by (used for) investing activities of discontinued operations
|
—
|
|
59.0
|
|
||
Net cash provided by (used for) investing activities
|
(68.1
|
)
|
(84.2
|
)
|
||
Financing activities
|
|
|
||||
Net repayments of short-term borrowings
|
—
|
|
(0.3
|
)
|
||
Net (repayments) receipts of commercial paper and revolving long-term debt
|
(139.8
|
)
|
263.4
|
|
||
Repayments of long-term debt
|
(0.7
|
)
|
(4.3
|
)
|
||
Excess tax benefits from share-based compensation
|
3.2
|
|
4.6
|
|
||
Shares issued to employees, net of shares withheld
|
8.3
|
|
17.3
|
|
||
Repurchases of ordinary shares
|
—
|
|
(200.0
|
)
|
||
Dividends paid
|
(119.7
|
)
|
(115.6
|
)
|
||
Net cash provided by (used for) financing activities
|
(248.7
|
)
|
(34.9
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(5.7
|
)
|
(29.5
|
)
|
||
Change in cash and cash equivalents
|
47.0
|
|
36.9
|
|
||
Cash and cash equivalents, beginning of period
|
126.3
|
|
110.4
|
|
||
Cash and cash equivalents, end of period
|
$
|
173.3
|
|
$
|
147.3
|
|
In millions
|
Ordinary shares
|
|
Treasury shares
|
Additional paid-in capital
|
Retained earnings
|
Accumulated
other
comprehensive loss
|
Total
|
||||||||||||||||
Number
|
Amount
|
|
Number
|
Amount
|
|||||||||||||||||||
Balance - December 31, 2015
|
180.5
|
|
$
|
1.8
|
|
|
—
|
|
$
|
—
|
|
$
|
2,860.3
|
|
$
|
1,791.7
|
|
$
|
(645.0
|
)
|
$
|
4,008.8
|
|
Net income
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
250.2
|
|
—
|
|
250.2
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.6
|
)
|
(1.6
|
)
|
||||||
Dividends declared
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(121.7
|
)
|
—
|
|
(121.7
|
)
|
||||||
Exercise of options, net of shares tendered for payment
|
0.4
|
|
—
|
|
|
—
|
|
—
|
|
13.8
|
|
—
|
|
—
|
|
13.8
|
|
||||||
Issuance of restricted shares, net of cancellations
|
0.3
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Shares surrendered by employees to pay taxes
|
(0.1
|
)
|
—
|
|
|
—
|
|
—
|
|
(5.5
|
)
|
—
|
|
—
|
|
(5.5
|
)
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
—
|
|
—
|
|
22.3
|
|
—
|
|
—
|
|
22.3
|
|
||||||
Balance - June 30, 2016
|
181.1
|
|
$
|
1.8
|
|
|
—
|
|
$
|
—
|
|
$
|
2,890.9
|
|
$
|
1,920.2
|
|
$
|
(646.6
|
)
|
$
|
4,166.3
|
|
In millions
|
Ordinary shares
|
|
Treasury shares
|
Additional paid-in capital
|
Retained earnings
|
Accumulated
other
comprehensive loss
|
Total
|
||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
||||||||||||||||||||
Balance - December 31, 2014
|
202.4
|
|
$
|
2.0
|
|
|
(19.9
|
)
|
$
|
(1,251.9
|
)
|
$
|
4,250.0
|
|
$
|
2,044.0
|
|
$
|
(380.3
|
)
|
$
|
4,663.8
|
|
Net income
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
261.7
|
|
—
|
|
261.7
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(153.5
|
)
|
(153.5
|
)
|
||||||
Dividends declared
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1.5
|
|
(58.1
|
)
|
—
|
|
(56.6
|
)
|
||||||
Share repurchase
|
(3.1
|
)
|
—
|
|
|
—
|
|
—
|
|
(200.0
|
)
|
—
|
|
—
|
|
(200.0
|
)
|
||||||
Exercise of options, net of shares tendered for payment
|
—
|
|
—
|
|
|
0.5
|
|
27.7
|
|
(6.8
|
)
|
—
|
|
—
|
|
20.9
|
|
||||||
Issuance of restricted shares, net of cancellations
|
—
|
|
—
|
|
|
0.2
|
|
8.5
|
|
(8.5
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares surrendered by employees to pay taxes
|
—
|
|
—
|
|
|
(0.1
|
)
|
(2.7
|
)
|
(0.9
|
)
|
—
|
|
—
|
|
(3.6
|
)
|
||||||
Share-based compensation
|
—
|
|
—
|
|
|
—
|
|
—
|
|
19.4
|
|
—
|
|
—
|
|
19.4
|
|
||||||
Balance - June 27, 2015
|
199.3
|
|
$
|
2.0
|
|
|
(19.3
|
)
|
$
|
(1,218.4
|
)
|
$
|
4,054.7
|
|
$
|
2,247.6
|
|
$
|
(533.8
|
)
|
$
|
4,552.1
|
|
2.
|
Acquisitions and Divestitures
|
In millions
|
As Previously
Reported
|
As
Revised
|
||||
Cash
|
$
|
11.8
|
|
$
|
11.8
|
|
Accounts receivable
|
75.9
|
|
75.9
|
|
||
Inventories
|
102.4
|
|
101.8
|
|
||
Other current assets
|
2.9
|
|
2.8
|
|
||
Property, plant and equipment
|
53.4
|
|
53.4
|
|
||
Identifiable intangible assets
|
1,033.8
|
|
1,033.8
|
|
||
Goodwill
|
1,061.9
|
|
1,028.6
|
|
||
Current liabilities
|
(97.2
|
)
|
(94.1
|
)
|
||
Deferred income taxes, including current
|
(418.8
|
)
|
(382.8
|
)
|
||
Other liabilities
|
(8.0
|
)
|
(13.1
|
)
|
||
Purchase price
|
$
|
1,818.1
|
|
$
|
1,818.1
|
|
|
Three months ended
|
|
Six months ended
|
||||
In millions, except per-share data
|
June 27,
2015 |
|
June 27,
2015 |
||||
Pro forma net sales
|
$
|
1,804.5
|
|
|
$
|
3,403.6
|
|
Pro forma net income from continuing operations
|
164.2
|
|
|
285.2
|
|
||
Pro forma earnings per ordinary share - continuing operations
|
|
|
|
||||
Basic
|
$
|
0.91
|
|
|
$
|
1.58
|
|
Diluted
|
0.90
|
|
|
1.56
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Net sales
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
18.6
|
|
Cost of goods sold
|
—
|
|
—
|
|
|
—
|
|
18.1
|
|
||||
Gross profit
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
0.5
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
$
|
—
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
$
|
(7.1
|
)
|
Income tax benefit
|
—
|
|
0.3
|
|
|
—
|
|
1.5
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
—
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
$
|
(5.6
|
)
|
|
|
|
|
|
—
|
|
|||||||
Loss from sale / impairment of discontinued operations before income taxes
|
$
|
—
|
|
$
|
(4.8
|
)
|
|
$
|
—
|
|
$
|
(4.8
|
)
|
Income tax benefit
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Loss from sale / impairment of discontinued operations, net of tax
|
$
|
—
|
|
$
|
(4.8
|
)
|
|
$
|
—
|
|
$
|
(4.8
|
)
|
3.
|
Share Plans
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Restricted stock units
|
$
|
3.6
|
|
$
|
6.3
|
|
|
$
|
10.6
|
|
$
|
12.5
|
|
Stock options
|
1.8
|
|
3.4
|
|
|
7.2
|
|
6.9
|
|
||||
Performance share units
|
0.8
|
|
—
|
|
|
4.5
|
|
—
|
|
||||
Total share-based compensation expense
|
$
|
6.2
|
|
$
|
9.7
|
|
|
$
|
22.3
|
|
$
|
19.4
|
|
|
2016
Annual Grant
|
|
Risk-free interest rate
|
1.57
|
%
|
Expected dividend yield
|
2.47
|
%
|
Expected share price volatility
|
27.3
|
%
|
Expected term (years)
|
5.9
|
|
4.
|
Restructuring
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Severance and related costs
|
$
|
23.2
|
|
$
|
20.6
|
|
|
$
|
24.0
|
|
$
|
20.6
|
|
Other
|
3.6
|
|
3.4
|
|
|
3.5
|
|
3.4
|
|
||||
Total restructuring costs
|
$
|
26.8
|
|
$
|
24.0
|
|
|
$
|
27.5
|
|
$
|
24.0
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Water Quality Systems
|
$
|
3.8
|
|
$
|
3.3
|
|
|
$
|
4.3
|
|
$
|
3.3
|
|
Flow & Filtration Solutions
|
3.7
|
|
3.7
|
|
|
2.6
|
|
3.7
|
|
||||
Technical Solutions
|
3.7
|
|
3.4
|
|
|
3.9
|
|
3.4
|
|
||||
Valves & Controls
|
14.7
|
|
13.6
|
|
|
14.9
|
|
13.6
|
|
||||
Other
|
0.9
|
|
—
|
|
|
1.8
|
|
—
|
|
||||
Consolidated
|
$
|
26.8
|
|
$
|
24.0
|
|
|
$
|
27.5
|
|
$
|
24.0
|
|
In millions
|
June 30,
2016 |
||
Beginning balance
|
$
|
91.2
|
|
Costs incurred
|
24.0
|
|
|
Cash payments and other
|
(36.6
|
)
|
|
Ending balance
|
$
|
78.6
|
|
5.
|
Earnings Per Share
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions, except per-share data
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Net income
|
$
|
142.8
|
|
$
|
147.8
|
|
|
$
|
250.2
|
|
$
|
261.7
|
|
Net income from continuing operations
|
$
|
142.8
|
|
$
|
153.9
|
|
|
$
|
250.2
|
|
$
|
272.1
|
|
Weighted average ordinary shares outstanding
|
|
|
|
|
|
||||||||
Basic
|
180.9
|
|
179.8
|
|
|
180.8
|
|
180.1
|
|
||||
Dilutive impact of stock options, restricted stock units and performance share units
|
2.1
|
|
2.5
|
|
|
2.0
|
|
2.5
|
|
||||
Diluted
|
183.0
|
|
182.3
|
|
|
182.8
|
|
182.6
|
|
||||
Earnings (loss) per ordinary share
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.79
|
|
$
|
0.85
|
|
|
$
|
1.38
|
|
$
|
1.51
|
|
Discontinued operations
|
—
|
|
(0.03
|
)
|
|
—
|
|
(0.06
|
)
|
||||
Basic earnings per ordinary share
|
$
|
0.79
|
|
$
|
0.82
|
|
|
$
|
1.38
|
|
$
|
1.45
|
|
Diluted
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.78
|
|
$
|
0.84
|
|
|
$
|
1.37
|
|
$
|
1.49
|
|
Discontinued operations
|
—
|
|
(0.03
|
)
|
|
—
|
|
(0.06
|
)
|
||||
Diluted earnings per ordinary share
|
$
|
0.78
|
|
$
|
0.81
|
|
|
$
|
1.37
|
|
$
|
1.43
|
|
Anti-dilutive stock options excluded from the calculation of diluted earnings per share
|
1.2
|
|
1.1
|
|
|
2.0
|
|
1.1
|
|
6.
|
Supplemental Balance Sheet Information
|
In millions
|
June 30,
2016 |
December 31,
2015 |
||||
Inventories
|
|
|
||||
Raw materials and supplies
|
$
|
427.0
|
|
$
|
433.0
|
|
Work-in-process
|
236.7
|
|
249.2
|
|
||
Finished goods
|
469.5
|
|
492.1
|
|
||
Total inventories
|
$
|
1,133.2
|
|
$
|
1,174.3
|
|
Other current assets
|
|
|
||||
Cost in excess of billings
|
$
|
135.9
|
|
$
|
114.4
|
|
Prepaid expenses
|
130.2
|
|
84.6
|
|
||
Deferred income taxes
|
118.1
|
|
96.7
|
|
||
Other current assets
|
15.9
|
|
13.6
|
|
||
Total other current assets
|
$
|
400.1
|
|
$
|
309.3
|
|
Property, plant and equipment, net
|
|
|
||||
Land and land improvements
|
$
|
157.9
|
|
$
|
161.9
|
|
Buildings and leasehold improvements
|
520.5
|
|
518.8
|
|
||
Machinery and equipment
|
1,236.8
|
|
1,287.6
|
|
||
Construction in progress
|
80.2
|
|
79.3
|
|
||
Total property, plant and equipment
|
1,995.4
|
|
2,047.6
|
|
||
Accumulated depreciation and amortization
|
1,057.8
|
|
1,104.8
|
|
||
Total property, plant and equipment, net
|
$
|
937.6
|
|
$
|
942.8
|
|
Other non-current assets
|
|
|
||||
Asbestos-related insurance receivable
|
$
|
109.0
|
|
$
|
111.0
|
|
Deferred income taxes
|
61.9
|
|
62.8
|
|
||
Other non-current assets
|
191.4
|
|
193.8
|
|
||
Total other non-current assets
|
$
|
362.3
|
|
$
|
367.6
|
|
Other current liabilities
|
|
|
||||
Deferred revenue and customer deposits
|
$
|
77.5
|
|
$
|
94.6
|
|
Dividends payable
|
61.6
|
|
59.6
|
|
||
Accrued warranty
|
59.7
|
|
59.8
|
|
||
Billings in excess of cost
|
23.4
|
|
32.0
|
|
||
Other current liabilities
|
445.7
|
|
398.1
|
|
||
Total other current liabilities
|
$
|
667.9
|
|
$
|
644.1
|
|
Other non-current liabilities
|
|
|
||||
Asbestos-related liabilities
|
$
|
233.0
|
|
$
|
237.9
|
|
Taxes payable
|
70.3
|
|
71.1
|
|
||
Other non-current liabilities
|
209.4
|
|
212.0
|
|
||
Total other non-current liabilities
|
$
|
512.7
|
|
$
|
521.0
|
|
7.
|
Goodwill and Other Identifiable Intangible Assets
|
In millions
|
December 31,
2015 |
Purchase
accounting
adjustments
|
Foreign currency
translation/other
|
June 30,
2016 |
||||||||
Water Quality Systems
|
$
|
1,121.1
|
|
$
|
—
|
|
$
|
3.3
|
|
$
|
1,124.4
|
|
Flow & Filtration Solutions
|
882.7
|
|
—
|
|
3.0
|
|
885.7
|
|
||||
Technical Solutions
|
2,255.2
|
|
(33.3
|
)
|
3.1
|
|
2,225.0
|
|
||||
Valves & Controls
|
996.4
|
|
—
|
|
—
|
|
996.4
|
|
||||
Total goodwill
|
$
|
5,255.4
|
|
$
|
(33.3
|
)
|
$
|
9.4
|
|
$
|
5,231.5
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||||||
In millions
|
Cost
|
Accumulated
amortization
|
Net
|
|
Cost
|
Accumulated
amortization
|
Net
|
||||||||||||
Finite-life intangibles
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
2,083.3
|
|
$
|
(481.6
|
)
|
$
|
1,601.7
|
|
|
$
|
2,078.7
|
|
$
|
(415.8
|
)
|
$
|
1,662.9
|
|
Trade names
|
1.8
|
|
(1.3
|
)
|
0.5
|
|
|
1.8
|
|
(1.2
|
)
|
0.6
|
|
||||||
Proprietary technology and patents
|
249.7
|
|
(124.6
|
)
|
125.1
|
|
|
249.3
|
|
(114.2
|
)
|
135.1
|
|
||||||
Total finite-life intangibles
|
2,334.8
|
|
(607.5
|
)
|
1,727.3
|
|
|
2,329.8
|
|
(531.2
|
)
|
1,798.6
|
|
||||||
Indefinite-life intangibles
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
692.3
|
|
—
|
|
692.3
|
|
|
691.5
|
|
—
|
|
691.5
|
|
||||||
Total intangibles, net
|
$
|
3,027.1
|
|
$
|
(607.5
|
)
|
$
|
2,419.6
|
|
|
$
|
3,021.3
|
|
$
|
(531.2
|
)
|
$
|
2,490.1
|
|
|
Q3-Q4
|
|
|
|
|
|
||||||||||||
In millions
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
||||||||||||
Estimated amortization expense
|
$
|
75.3
|
|
$
|
149.8
|
|
$
|
148.3
|
|
$
|
145.9
|
|
$
|
139.1
|
|
$
|
134.0
|
|
8.
|
Debt
|
In millions
|
Average
interest rate at
June 30, 2016
|
Maturity
Year
|
June 30,
2016 |
December 31,
2015 |
||||
Commercial paper
|
1.713%
|
2019
|
$
|
161.5
|
|
$
|
179.5
|
|
Revolving credit facilities
|
1.964%
|
2019
|
1,059.7
|
|
1,181.4
|
|
||
Senior notes - fixed rate
|
1.875%
|
2017
|
350.0
|
|
350.0
|
|
||
Senior notes - fixed rate
|
2.900%
|
2018
|
500.0
|
|
500.0
|
|
||
Senior notes - fixed rate
|
2.650%
|
2019
|
250.0
|
|
250.0
|
|
||
Senior notes - fixed rate - Euro
|
2.450%
|
2019
|
551.3
|
|
548.4
|
|
||
Senior notes - fixed rate
|
3.625%
|
2020
|
400.0
|
|
400.0
|
|
||
Senior notes - fixed rate
|
5.000%
|
2021
|
500.0
|
|
500.0
|
|
||
Senior notes - fixed rate
|
3.150%
|
2022
|
550.0
|
|
550.0
|
|
||
Senior notes - fixed rate
|
4.650%
|
2025
|
250.0
|
|
250.0
|
|
||
Capital lease obligations and other
|
N/A
|
N/A
|
—
|
|
0.7
|
|
||
Unamortized debt issuance costs and discounts
|
N/A
|
N/A
|
(20.8
|
)
|
(23.5
|
)
|
||
Total debt
|
|
|
4,551.7
|
|
4,686.5
|
|
||
Less: Current maturities and short-term borrowings
|
|
|
—
|
|
(0.7
|
)
|
||
Long-term debt
|
|
|
$
|
4,551.7
|
|
$
|
4,685.8
|
|
9.
|
Derivatives and Financial Instruments
|
Level 1:
|
|
Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.
|
|
|
|
Level 2:
|
|
Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
|
|
Level 3:
|
|
Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
|
•
|
short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;
|
•
|
long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and
|
•
|
foreign currency contract agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance.
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||
In millions
|
Recorded
Amount
|
Fair
Value
|
|
Recorded
Amount
|
Fair
Value
|
||||||||
Variable rate debt
|
$
|
1,221.2
|
|
$
|
1,221.2
|
|
|
$
|
1,360.9
|
|
$
|
1,360.9
|
|
Fixed rate debt
|
3,351.3
|
|
3,472.0
|
|
|
3,349.1
|
|
3,395.4
|
|
||||
Total debt
|
$
|
4,572.5
|
|
$
|
4,693.2
|
|
|
$
|
4,710.0
|
|
$
|
4,756.3
|
|
|
June 30, 2016
|
|||||||||||
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Recurring fair value measurements
|
|
|
|
|
||||||||
Foreign currency contract assets
|
$
|
—
|
|
$
|
2.1
|
|
$
|
—
|
|
$
|
2.1
|
|
Foreign currency contract liabilities
|
—
|
|
(16.8
|
)
|
—
|
|
(16.8
|
)
|
||||
Deferred compensation plan assets
(1)
|
39.7
|
|
6.4
|
|
—
|
|
46.1
|
|
||||
Total recurring fair value measurements
|
$
|
39.7
|
|
$
|
(8.3
|
)
|
$
|
—
|
|
$
|
31.4
|
|
|
December 31, 2015
|
|||||||||||
In millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Recurring fair value measurements
|
|
|
|
|
||||||||
Foreign currency contract assets
|
$
|
—
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
0.1
|
|
Foreign currency contract liabilities
|
—
|
|
(7.6
|
)
|
—
|
|
(7.6
|
)
|
||||
Deferred compensation plan assets
(1)
|
43.8
|
|
7.0
|
|
—
|
|
50.8
|
|
||||
Total recurring fair value measurements
|
$
|
43.8
|
|
$
|
(0.5
|
)
|
$
|
—
|
|
$
|
43.3
|
|
Nonrecurring fair value measurements
|
|
|
|
|
||||||||
Goodwill
(2)
|
$
|
—
|
|
$
|
—
|
|
$
|
996.4
|
|
$
|
996.4
|
|
Trade name intangibles
(3)
|
—
|
|
—
|
|
138.1
|
|
138.1
|
|
||||
Total nonrecurring fair value measurements
|
$
|
—
|
|
$
|
—
|
|
$
|
1,134.5
|
|
$
|
1,134.5
|
|
(1)
|
Deferred compensation plan assets include mutual funds, common/collective trusts and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of mutual funds and cash equivalents were based on quoted market prices in active markets. The underlying investments in the common/collective trusts primarily include intermediate and long-term debt securities, corporate debt securities, equity securities and fixed income securities. The overall fair value of the common/collective trusts are based on observable inputs.
|
(2)
|
During the fourth quarter of 2015, we performed a goodwill impairment test for our Valves & Controls reporting unit using the required two-step process as of December 31, 2015. As a result, we recorded a non-cash goodwill impairment charge of
$515.2 million
. The first step of this process includes comparing the fair value to the carrying value of the reporting unit to which the goodwill is allocated to identify potential impairment. If the fair value of the reporting unit exceeds its carrying value, goodwill allocated to that reporting unit is considered not impaired. If the inverse result is observed, the reporting unit is considered to be impaired and step two of the test to measure the amount of impairment must be completed.
|
(3)
|
During the fourth quarter of 2015, we performed an impairment test for our Valves & Controls trade names. As a result, we recorded a pre-tax, non-cash trade name impairment charge of
$39.5 million
. The fair value of trade names is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.
|
10.
|
Income Taxes
|
11.
|
Benefit Plans
|
|
U.S. pension plans
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Service cost
|
$
|
2.8
|
|
$
|
3.5
|
|
|
$
|
5.6
|
|
$
|
7.0
|
|
Interest cost
|
4.1
|
|
3.7
|
|
|
8.2
|
|
7.4
|
|
||||
Expected return on plan assets
|
(2.9
|
)
|
(2.5
|
)
|
|
(5.8
|
)
|
(5.0
|
)
|
||||
Net periodic benefit cost
|
$
|
4.0
|
|
$
|
4.7
|
|
|
$
|
8.0
|
|
$
|
9.4
|
|
|
Non-U.S. pension plans
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Service cost
|
$
|
2.5
|
|
$
|
2.6
|
|
|
$
|
5.0
|
|
$
|
5.2
|
|
Interest cost
|
3.7
|
|
3.8
|
|
|
7.4
|
|
7.6
|
|
||||
Expected return on plan assets
|
(3.8
|
)
|
(4.1
|
)
|
|
(7.6
|
)
|
(8.2
|
)
|
||||
Net periodic benefit cost
|
$
|
2.4
|
|
$
|
2.3
|
|
|
$
|
4.8
|
|
$
|
4.6
|
|
12.
|
Shareholders’ Equity
|
13.
|
Segment Information
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Net sales
|
|
|
|
|
|
||||||||
Water Quality Systems
|
$
|
397.1
|
|
$
|
387.7
|
|
|
$
|
728.6
|
|
$
|
694.6
|
|
Flow & Filtration Solutions
|
368.7
|
|
374.6
|
|
|
706.4
|
|
724.7
|
|
||||
Technical Solutions
|
540.6
|
|
407.1
|
|
|
1,065.2
|
|
802.9
|
|
||||
Valves & Controls
|
433.6
|
|
496.4
|
|
|
820.6
|
|
925.6
|
|
||||
Other
|
(6.7
|
)
|
(4.6
|
)
|
|
(12.0
|
)
|
(11.6
|
)
|
||||
Consolidated
|
$
|
1,733.3
|
|
$
|
1,661.2
|
|
|
$
|
3,308.8
|
|
$
|
3,136.2
|
|
Segment income (loss)
|
|
|
|
|
|
||||||||
Water Quality Systems
|
$
|
98.2
|
|
$
|
88.2
|
|
|
$
|
159.9
|
|
$
|
140.0
|
|
Flow & Filtration Solutions
|
55.5
|
|
57.1
|
|
|
95.0
|
|
93.5
|
|
||||
Technical Solutions
|
111.6
|
|
86.4
|
|
|
224.4
|
|
164.0
|
|
||||
Valves & Controls
|
43.7
|
|
64.4
|
|
|
69.0
|
|
119.8
|
|
||||
Other
|
(17.6
|
)
|
(22.6
|
)
|
|
(47.1
|
)
|
(44.5
|
)
|
||||
Consolidated
|
$
|
291.4
|
|
$
|
273.5
|
|
|
$
|
501.2
|
|
$
|
472.8
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
June 30,
2016 |
June 27,
2015 |
||||||||
Segment income
|
$
|
291.4
|
|
$
|
273.5
|
|
|
$
|
501.2
|
|
$
|
472.8
|
|
Restructuring and other
|
(35.9
|
)
|
(25.5
|
)
|
|
(36.6
|
)
|
(25.5
|
)
|
||||
Intangible amortization
|
(37.6
|
)
|
(28.0
|
)
|
|
(75.2
|
)
|
(55.6
|
)
|
||||
Inventory step-up
|
—
|
|
(1.5
|
)
|
|
—
|
|
(1.5
|
)
|
||||
Equity income of unconsolidated subsidiaries
|
(1.0
|
)
|
(0.6
|
)
|
|
(1.9
|
)
|
(1.1
|
)
|
||||
Operating income
|
$
|
216.9
|
|
$
|
217.9
|
|
|
$
|
387.5
|
|
$
|
389.1
|
|
14.
|
Commitments and Contingencies
|
In millions
|
June 30,
2016 |
||
Beginning balance
|
$
|
59.8
|
|
Service and product warranty provision
|
30.5
|
|
|
Payments
|
(30.7
|
)
|
|
Foreign currency translation
|
0.1
|
|
|
Ending balance
|
$
|
59.7
|
|
15.
|
Supplemental Guarantor Information
|
In millions
|
Parent
Company
Guarantor
|
Subsidiary
Guarantor |
Subsidiary
Issuer
|
Non-guarantor
Subsidiaries
|
Eliminations
|
Consolidated
Total |
||||||||||||
Net sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,733.3
|
|
$
|
—
|
|
$
|
1,733.3
|
|
Cost of goods sold
|
—
|
|
—
|
|
—
|
|
1,134.1
|
|
—
|
|
1,134.1
|
|
||||||
Gross profit
|
—
|
|
—
|
|
—
|
|
599.2
|
|
—
|
|
599.2
|
|
||||||
Selling, general and administrative
|
1.1
|
|
—
|
|
—
|
|
347.3
|
|
—
|
|
348.4
|
|
||||||
Research and development
|
—
|
|
—
|
|
—
|
|
33.9
|
|
—
|
|
33.9
|
|
||||||
Operating income (loss)
|
(1.1
|
)
|
—
|
|
—
|
|
218.0
|
|
—
|
|
216.9
|
|
||||||
Loss (earnings) from investment in subsidiaries
|
(143.8
|
)
|
(143.8
|
)
|
(172.6
|
)
|
—
|
|
460.2
|
|
—
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
|
||||||||||||
Equity income of unconsolidated subsidiaries
|
—
|
|
—
|
|
—
|
|
(1.0
|
)
|
—
|
|
(1.0
|
)
|
||||||
Net interest expense
|
—
|
|
—
|
|
28.8
|
|
6.7
|
|
—
|
|
35.5
|
|
||||||
Income (loss) before income taxes
|
142.7
|
|
143.8
|
|
143.8
|
|
212.3
|
|
(460.2
|
)
|
182.4
|
|
||||||
Provision (benefit) for income taxes
|
(0.1
|
)
|
—
|
|
—
|
|
39.7
|
|
—
|
|
39.6
|
|
||||||
Net income (loss)
|
$
|
142.8
|
|
$
|
143.8
|
|
$
|
143.8
|
|
$
|
172.6
|
|
$
|
(460.2
|
)
|
$
|
142.8
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
142.8
|
|
$
|
143.8
|
|
$
|
143.8
|
|
$
|
172.6
|
|
$
|
(460.2
|
)
|
$
|
142.8
|
|
Changes in cumulative translation adjustment
|
(25.8
|
)
|
(25.8
|
)
|
(25.8
|
)
|
(25.8
|
)
|
77.4
|
|
(25.8
|
)
|
||||||
Changes in market value of derivative financial instruments
|
10.9
|
|
10.9
|
|
10.9
|
|
10.9
|
|
(32.7
|
)
|
10.9
|
|
||||||
Comprehensive income (loss)
|
$
|
127.9
|
|
$
|
128.9
|
|
$
|
128.9
|
|
$
|
157.7
|
|
$
|
(415.5
|
)
|
$
|
127.9
|
|
In millions
|
Parent
Company
Guarantor
|
Subsidiary
Guarantor |
Subsidiary
Issuer
|
Non-guarantor
Subsidiaries
|
Eliminations
|
Consolidated
Total |
||||||||||||
Net sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,308.8
|
|
$
|
—
|
|
$
|
3,308.8
|
|
Cost of goods sold
|
—
|
|
—
|
|
—
|
|
2,174.2
|
|
—
|
|
2,174.2
|
|
||||||
Gross profit
|
—
|
|
—
|
|
—
|
|
1,134.6
|
|
—
|
|
1,134.6
|
|
||||||
Selling, general and administrative
|
9.5
|
|
—
|
|
0.9
|
|
669.6
|
|
—
|
|
680.0
|
|
||||||
Research and development
|
—
|
|
—
|
|
—
|
|
67.1
|
|
—
|
|
67.1
|
|
||||||
Operating income (loss)
|
(9.5
|
)
|
—
|
|
(0.9
|
)
|
397.9
|
|
—
|
|
387.5
|
|
||||||
Loss (earnings) from continuing operations of investment in subsidiaries
|
(259.6
|
)
|
(259.6
|
)
|
(316.7
|
)
|
—
|
|
835.9
|
|
—
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
|
||||||||||||
Equity income of unconsolidated subsidiaries
|
—
|
|
—
|
|
—
|
|
(1.9
|
)
|
—
|
|
(1.9
|
)
|
||||||
Net interest expense
|
—
|
|
—
|
|
56.2
|
|
15.7
|
|
—
|
|
71.9
|
|
||||||
Income (loss) before income taxes
|
250.1
|
|
259.6
|
|
259.6
|
|
384.1
|
|
(835.9
|
)
|
317.5
|
|
||||||
Provision (benefit) for income taxes
|
(0.1
|
)
|
—
|
|
—
|
|
67.4
|
|
—
|
|
67.3
|
|
||||||
Net income (loss)
|
$
|
250.2
|
|
$
|
259.6
|
|
$
|
259.6
|
|
$
|
316.7
|
|
$
|
(835.9
|
)
|
$
|
250.2
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
250.2
|
|
$
|
259.6
|
|
$
|
259.6
|
|
$
|
316.7
|
|
$
|
(835.9
|
)
|
$
|
250.2
|
|
Changes in cumulative translation adjustment
|
2.2
|
|
2.2
|
|
2.2
|
|
2.2
|
|
(6.6
|
)
|
2.2
|
|
||||||
Changes in market value of derivative financial instruments
|
(3.8
|
)
|
(3.8
|
)
|
(3.8
|
)
|
(3.8
|
)
|
11.4
|
|
(3.8
|
)
|
||||||
Comprehensive income (loss)
|
$
|
248.6
|
|
$
|
258.0
|
|
$
|
258.0
|
|
$
|
315.1
|
|
$
|
(831.1
|
)
|
$
|
248.6
|
|
In millions
|
Parent
Company
Guarantor
|
Subsidiary
Guarantor |
Subsidiary
Issuer
|
Non-guarantor
Subsidiaries
|
Eliminations
|
Consolidated
Total |
||||||||||||
Assets
|
||||||||||||||||||
Current assets
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
173.3
|
|
$
|
—
|
|
$
|
173.3
|
|
Accounts and notes receivable, net
|
—
|
|
—
|
|
—
|
|
1,086.2
|
|
—
|
|
1,086.2
|
|
||||||
Inventories
|
—
|
|
—
|
|
—
|
|
1,133.2
|
|
—
|
|
1,133.2
|
|
||||||
Other current assets
|
7.7
|
|
6.4
|
|
0.1
|
|
398.0
|
|
(12.1
|
)
|
400.1
|
|
||||||
Total current assets
|
7.7
|
|
6.4
|
|
0.1
|
|
2,790.7
|
|
(12.1
|
)
|
2,792.8
|
|
||||||
Property, plant and equipment, net
|
—
|
|
—
|
|
—
|
|
937.6
|
|
—
|
|
937.6
|
|
||||||
Other assets
|
|
|
|
|
|
|
||||||||||||
Investments in subsidiaries
|
4,257.6
|
|
4,241.7
|
|
9,005.2
|
|
—
|
|
(17,504.5
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
—
|
|
—
|
|
5,231.5
|
|
—
|
|
5,231.5
|
|
||||||
Intangibles, net
|
—
|
|
—
|
|
—
|
|
2,419.6
|
|
—
|
|
2,419.6
|
|
||||||
Other non-current assets
|
8.7
|
|
10.9
|
|
682.2
|
|
1,327.7
|
|
(1,667.2
|
)
|
362.3
|
|
||||||
Total other assets
|
4,266.3
|
|
4,252.6
|
|
9,687.4
|
|
8,978.8
|
|
(19,171.7
|
)
|
8,013.4
|
|
||||||
Total assets
|
$
|
4,274.0
|
|
$
|
4,259.0
|
|
$
|
9,687.5
|
|
$
|
12,707.1
|
|
$
|
(19,183.8
|
)
|
$
|
11,743.8
|
|
Liabilities and Equity
|
||||||||||||||||||
Current liabilities
|
|
|
|
|
|
|
||||||||||||
Current maturities of long-term debt and short-term borrowings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Accounts payable
|
0.1
|
|
—
|
|
—
|
|
531.6
|
|
—
|
|
531.7
|
|
||||||
Employee compensation and benefits
|
0.8
|
|
—
|
|
—
|
|
215.5
|
|
—
|
|
216.3
|
|
||||||
Other current liabilities
|
66.8
|
|
1.4
|
|
36.4
|
|
575.4
|
|
(12.1
|
)
|
667.9
|
|
||||||
Total current liabilities
|
67.7
|
|
1.4
|
|
36.4
|
|
1,322.5
|
|
(12.1
|
)
|
1,415.9
|
|
||||||
Other liabilities
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
37.2
|
|
—
|
|
5,406.1
|
|
775.6
|
|
(1,667.2
|
)
|
4,551.7
|
|
||||||
Pension and other post-retirement compensation and benefits
|
—
|
|
—
|
|
—
|
|
282.0
|
|
—
|
|
282.0
|
|
||||||
Deferred tax liabilities
|
—
|
|
—
|
|
3.0
|
|
812.2
|
|
—
|
|
815.2
|
|
||||||
Other non-current liabilities
|
2.8
|
|
—
|
|
—
|
|
509.9
|
|
—
|
|
512.7
|
|
||||||
Total liabilities
|
107.7
|
|
1.4
|
|
5,445.5
|
|
3,702.2
|
|
(1,679.3
|
)
|
7,577.5
|
|
||||||
Equity
|
4,166.3
|
|
4,257.6
|
|
4,242.0
|
|
9,004.9
|
|
(17,504.5
|
)
|
4,166.3
|
|
||||||
Total liabilities and equity
|
$
|
4,274.0
|
|
$
|
4,259.0
|
|
$
|
9,687.5
|
|
$
|
12,707.1
|
|
$
|
(19,183.8
|
)
|
$
|
11,743.8
|
|
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
|
$
|
269.2
|
|
$
|
243.7
|
|
$
|
270.9
|
|
$
|
421.6
|
|
$
|
(835.9
|
)
|
$
|
369.5
|
|
Investing activities
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
—
|
|
—
|
|
(74.6
|
)
|
—
|
|
(74.6
|
)
|
||||||
Proceeds from sale of property and equipment
|
—
|
|
—
|
|
—
|
|
9.5
|
|
—
|
|
9.5
|
|
||||||
Net intercompany loan activity
|
—
|
|
—
|
|
431.2
|
|
(65.4
|
)
|
(365.8
|
)
|
—
|
|
||||||
Other
|
—
|
|
—
|
|
—
|
|
(3.0
|
)
|
—
|
|
(3.0
|
)
|
||||||
Net cash provided by (used for) investing activities
|
—
|
|
—
|
|
431.2
|
|
(133.5
|
)
|
(365.8
|
)
|
(68.1
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||||||||
Net receipts (repayments) of commercial paper and revolving long-term debt
|
—
|
|
—
|
|
(123.1
|
)
|
(16.7
|
)
|
—
|
|
(139.8
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
—
|
|
—
|
|
(0.7
|
)
|
—
|
|
(0.7
|
)
|
||||||
Net change in advances to subsidiaries
|
(157.8
|
)
|
(243.7
|
)
|
(581.9
|
)
|
(218.3
|
)
|
1,201.7
|
|
—
|
|
||||||
Excess tax benefits from share-based compensation
|
—
|
|
—
|
|
—
|
|
3.2
|
|
—
|
|
3.2
|
|
||||||
Shares issued to employees, net of shares withheld
|
8.3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8.3
|
|
||||||
Dividends paid
|
(119.7
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(119.7
|
)
|
||||||
Net cash provided by (used for) financing activities
|
(269.2
|
)
|
(243.7
|
)
|
(705.0
|
)
|
(232.5
|
)
|
1,201.7
|
|
(248.7
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
2.8
|
|
(8.5
|
)
|
—
|
|
(5.7
|
)
|
||||||
Change in cash and cash equivalents
|
—
|
|
—
|
|
(0.1
|
)
|
47.1
|
|
—
|
|
47.0
|
|
||||||
Cash and cash equivalents, beginning of period
|
—
|
|
—
|
|
0.1
|
|
126.2
|
|
—
|
|
126.3
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
173.3
|
|
$
|
—
|
|
$
|
173.3
|
|
In millions
|
Parent
Company Guarantor |
Subsidiary
Guarantor |
Subsidiary
Issuer |
Non-guarantor
Subsidiaries |
Eliminations
|
Consolidated
Total |
||||||||||||
Net sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,661.2
|
|
$
|
—
|
|
$
|
1,661.2
|
|
Cost of goods sold
|
—
|
|
—
|
|
—
|
|
1,095.0
|
|
—
|
|
1,095.0
|
|
||||||
Gross profit
|
—
|
|
—
|
|
—
|
|
566.2
|
|
—
|
|
566.2
|
|
||||||
Selling, general and administrative
|
9.5
|
|
—
|
|
0.9
|
|
308.9
|
|
—
|
|
319.3
|
|
||||||
Research and development
|
—
|
|
—
|
|
—
|
|
29.0
|
|
—
|
|
29.0
|
|
||||||
Operating income (loss)
|
(9.5
|
)
|
—
|
|
(0.9
|
)
|
228.3
|
|
—
|
|
217.9
|
|
||||||
Loss (earnings) from continuing operations of investment in subsidiaries
|
(163.3
|
)
|
(163.8
|
)
|
(161.7
|
)
|
—
|
|
488.8
|
|
—
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
|
||||||||||||
Equity income of unconsolidated subsidiaries
|
—
|
|
—
|
|
—
|
|
(0.6
|
)
|
—
|
|
(0.6
|
)
|
||||||
Net interest expense
|
—
|
|
0.5
|
|
0.4
|
|
17.7
|
|
—
|
|
18.6
|
|
||||||
Income (loss) from continuing operations before income taxes
|
153.8
|
|
163.3
|
|
160.4
|
|
211.2
|
|
(488.8
|
)
|
199.9
|
|
||||||
Provision (benefit) for income taxes
|
(0.1
|
)
|
—
|
|
—
|
|
46.1
|
|
—
|
|
46.0
|
|
||||||
Net income (loss) from continuing operations
|
153.9
|
|
163.3
|
|
160.4
|
|
165.1
|
|
(488.8
|
)
|
153.9
|
|
||||||
Loss from discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
(1.3
|
)
|
—
|
|
(1.3
|
)
|
||||||
Loss from sale of discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
(4.8
|
)
|
—
|
|
(4.8
|
)
|
||||||
Earnings (loss) from discontinued operations of investment in subsidiaries
|
(6.1
|
)
|
(6.1
|
)
|
(6.1
|
)
|
—
|
|
18.3
|
|
—
|
|
||||||
Net income (loss)
|
$
|
147.8
|
|
$
|
157.2
|
|
$
|
154.3
|
|
$
|
159.0
|
|
$
|
(470.5
|
)
|
$
|
147.8
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
147.8
|
|
$
|
157.2
|
|
$
|
154.3
|
|
$
|
159.0
|
|
$
|
(470.5
|
)
|
$
|
147.8
|
|
Changes in cumulative translation adjustment
|
21.6
|
|
21.6
|
|
21.6
|
|
21.6
|
|
(64.8
|
)
|
21.6
|
|
||||||
Changes in market value of derivative financial instruments
|
(0.8
|
)
|
(0.8
|
)
|
(0.8
|
)
|
(0.8
|
)
|
2.4
|
|
(0.8
|
)
|
||||||
Comprehensive income (loss)
|
$
|
168.6
|
|
$
|
178.0
|
|
$
|
175.1
|
|
$
|
179.8
|
|
$
|
(532.9
|
)
|
$
|
168.6
|
|
|
|
|
|
|
|
|
||||||||||||
In millions
|
Parent
Company Guarantor |
Subsidiary
Guarantor |
Subsidiary
Issuer |
Non-guarantor
Subsidiaries |
Eliminations
|
Consolidated
Total |
||||||||||||
Net sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,136.2
|
|
$
|
—
|
|
$
|
3,136.2
|
|
Cost of goods sold
|
—
|
|
—
|
|
—
|
|
2,059.8
|
|
—
|
|
2,059.8
|
|
||||||
Gross profit
|
—
|
|
—
|
|
—
|
|
1,076.4
|
|
—
|
|
1,076.4
|
|
||||||
Selling, general and administrative
|
12.7
|
|
0.1
|
|
1.9
|
|
613.8
|
|
—
|
|
628.5
|
|
||||||
Research and development
|
—
|
|
—
|
|
—
|
|
58.8
|
|
—
|
|
58.8
|
|
||||||
Operating income (loss)
|
(12.7
|
)
|
(0.1
|
)
|
(1.9
|
)
|
403.8
|
|
—
|
|
389.1
|
|
||||||
Loss (earnings) from continuing operations of investment in subsidiaries
|
(284.1
|
)
|
(285.5
|
)
|
(280.2
|
)
|
—
|
|
849.8
|
|
—
|
|
||||||
Other (income) expense:
|
|
|
|
|
|
|
||||||||||||
Equity income of unconsolidated subsidiaries
|
—
|
|
—
|
|
—
|
|
(1.1
|
)
|
—
|
|
(1.1
|
)
|
||||||
Net interest expense
|
—
|
|
1.3
|
|
3.9
|
|
31.6
|
|
—
|
|
36.8
|
|
||||||
Income (loss) from continuing operations before income taxes
|
271.4
|
|
284.1
|
|
274.4
|
|
373.3
|
|
(849.8
|
)
|
353.4
|
|
||||||
Provision for income taxes
|
(0.7
|
)
|
—
|
|
—
|
|
82.0
|
|
—
|
|
81.3
|
|
||||||
Net income (loss) from continuing operations
|
272.1
|
|
284.1
|
|
274.4
|
|
291.3
|
|
(849.8
|
)
|
272.1
|
|
||||||
Income from discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
(5.6
|
)
|
—
|
|
(5.6
|
)
|
||||||
Loss from sale/impairment of discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
(4.8
|
)
|
—
|
|
(4.8
|
)
|
||||||
Earnings (loss) from discontinued operations of investment in subsidiaries
|
(10.4
|
)
|
(10.4
|
)
|
(10.4
|
)
|
—
|
|
31.2
|
|
—
|
|
||||||
Net income (loss)
|
$
|
261.7
|
|
$
|
273.7
|
|
$
|
264.0
|
|
$
|
280.9
|
|
$
|
(818.6
|
)
|
$
|
261.7
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||||||||
Net income (loss) before noncontrolling interest
|
$
|
261.7
|
|
$
|
273.7
|
|
$
|
264.0
|
|
$
|
280.9
|
|
$
|
(818.6
|
)
|
$
|
261.7
|
|
Changes in cumulative translation adjustment
|
(152.6
|
)
|
(152.6
|
)
|
(152.6
|
)
|
(152.6
|
)
|
457.8
|
|
(152.6
|
)
|
||||||
Changes in market value of derivative financial instruments
|
(0.9
|
)
|
(0.9
|
)
|
(0.9
|
)
|
(0.9
|
)
|
2.7
|
|
(0.9
|
)
|
||||||
Comprehensive income (loss)
|
$
|
108.2
|
|
$
|
120.2
|
|
$
|
110.5
|
|
$
|
127.4
|
|
$
|
(358.1
|
)
|
$
|
108.2
|
|
In millions
|
Parent
Company
Guarantor
|
Subsidiary
Guarantor |
Subsidiary
Issuer
|
Non-guarantor
Subsidiaries
|
Eliminations
|
Consolidated
Total |
||||||||||||
Assets
|
||||||||||||||||||
Current assets
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
|
$
|
126.2
|
|
$
|
—
|
|
$
|
126.3
|
|
Accounts and notes receivable, net
|
0.1
|
|
—
|
|
—
|
|
1,167.6
|
|
—
|
|
1,167.7
|
|
||||||
Inventories
|
—
|
|
—
|
|
—
|
|
1,174.3
|
|
—
|
|
1,174.3
|
|
||||||
Other current assets
|
25.2
|
|
12.8
|
|
—
|
|
309.2
|
|
(37.9
|
)
|
309.3
|
|
||||||
Total current assets
|
25.3
|
|
12.8
|
|
0.1
|
|
2,777.3
|
|
(37.9
|
)
|
2,777.6
|
|
||||||
Property, plant and equipment, net
|
—
|
|
—
|
|
—
|
|
942.8
|
|
—
|
|
942.8
|
|
||||||
Other assets
|
|
|
|
|
|
|
||||||||||||
Investments in subsidiaries
|
4,495.6
|
|
4,486.1
|
|
10,151.1
|
|
—
|
|
(19,132.8
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
—
|
|
—
|
|
5,255.4
|
|
—
|
|
5,255.4
|
|
||||||
Intangibles, net
|
—
|
|
—
|
|
—
|
|
2,490.1
|
|
—
|
|
2,490.1
|
|
||||||
Other non-current assets
|
12.6
|
|
—
|
|
190.1
|
|
352.1
|
|
(187.2
|
)
|
367.6
|
|
||||||
Total other assets
|
4,508.2
|
|
4,486.1
|
|
10,341.2
|
|
8,097.6
|
|
(19,320.0
|
)
|
8,113.1
|
|
||||||
Total assets
|
$
|
4,533.5
|
|
$
|
4,498.9
|
|
$
|
10,341.3
|
|
$
|
11,817.7
|
|
$
|
(19,357.9
|
)
|
$
|
11,833.5
|
|
Liabilities and Equity
|
||||||||||||||||||
Current liabilities
|
|
|
|
|
|
|
||||||||||||
Current maturities of long-term debt and short-term borrowings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
Accounts payable
|
0.6
|
|
—
|
|
0.3
|
|
577.9
|
|
—
|
|
578.8
|
|
||||||
Employee compensation and benefits
|
0.4
|
|
0.1
|
|
—
|
|
262.4
|
|
—
|
|
262.9
|
|
||||||
Other current liabilities
|
61.7
|
|
1.5
|
|
27.1
|
|
591.7
|
|
(37.9
|
)
|
644.1
|
|
||||||
Total current liabilities
|
62.7
|
|
1.6
|
|
27.4
|
|
1,432.7
|
|
(37.9
|
)
|
1,486.5
|
|
||||||
Other liabilities
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
453.3
|
|
1.7
|
|
4,535.5
|
|
(117.5
|
)
|
(187.2
|
)
|
4,685.8
|
|
||||||
Pension and other post-retirement compensation and benefits
|
—
|
|
—
|
|
—
|
|
287.2
|
|
—
|
|
287.2
|
|
||||||
Deferred tax liabilities
|
—
|
|
—
|
|
3.1
|
|
841.1
|
|
—
|
|
844.2
|
|
||||||
Other non-current liabilities
|
8.7
|
|
—
|
|
—
|
|
512.3
|
|
—
|
|
521.0
|
|
||||||
Total liabilities
|
524.7
|
|
3.3
|
|
4,566.0
|
|
2,955.8
|
|
(225.1
|
)
|
7,824.7
|
|
||||||
Equity
|
4,008.8
|
|
4,495.6
|
|
5,775.3
|
|
8,861.9
|
|
(19,132.8
|
)
|
4,008.8
|
|
||||||
Total liabilities and equity
|
$
|
4,533.5
|
|
$
|
4,498.9
|
|
$
|
10,341.3
|
|
$
|
11,817.7
|
|
$
|
(19,357.9
|
)
|
$
|
11,833.5
|
|
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
|
$
|
256.9
|
|
$
|
260.3
|
|
$
|
262.7
|
|
$
|
224.2
|
|
$
|
(818.6
|
)
|
$
|
185.5
|
|
Investing activities
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
—
|
|
—
|
|
(66.8
|
)
|
—
|
|
(66.8
|
)
|
||||||
Proceeds from sale of property and equipment
|
—
|
|
—
|
|
—
|
|
23.1
|
|
—
|
|
23.1
|
|
||||||
Acquisitions, net of cash acquired
|
—
|
|
—
|
|
—
|
|
(99.0
|
)
|
—
|
|
(99.0
|
)
|
||||||
Intercompany loan activity
|
—
|
|
—
|
|
(610.8
|
)
|
(397.9
|
)
|
1,008.7
|
|
—
|
|
||||||
Other
|
—
|
|
—
|
|
—
|
|
(0.5
|
)
|
—
|
|
(0.5
|
)
|
||||||
Net cash provided by (used for) investing activities of continuing operations
|
—
|
|
—
|
|
(610.8
|
)
|
(541.1
|
)
|
1,008.7
|
|
(143.2
|
)
|
||||||
Net cash provided by (used for) investing activities of discontinued operations
|
—
|
|
—
|
|
—
|
|
59.0
|
|
—
|
|
59.0
|
|
||||||
Net cash provided by (used for) investing activities
|
—
|
|
—
|
|
(610.8
|
)
|
(482.1
|
)
|
1,008.7
|
|
(84.2
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||||||||
Net receipts of short-term borrowings
|
—
|
|
—
|
|
—
|
|
(0.3
|
)
|
—
|
|
(0.3
|
)
|
||||||
Net receipts (repayments) of commercial paper and revolving long-term debt
|
—
|
|
—
|
|
260.8
|
|
2.6
|
|
—
|
|
263.4
|
|
||||||
Repayments of long-term debt
|
—
|
|
—
|
|
—
|
|
(4.3
|
)
|
—
|
|
(4.3
|
)
|
||||||
Net change in advances to subsidiaries
|
58.7
|
|
(260.3
|
)
|
87.3
|
|
304.4
|
|
(190.1
|
)
|
—
|
|
||||||
Excess tax benefits from share-based compensation
|
—
|
|
—
|
|
—
|
|
4.6
|
|
—
|
|
4.6
|
|
||||||
Shares issued to employees, net of shares withheld
|
—
|
|
—
|
|
—
|
|
17.3
|
|
—
|
|
17.3
|
|
||||||
Repurchases of ordinary shares
|
(200.0
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(200.0
|
)
|
||||||
Dividends paid
|
(115.6
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(115.6
|
)
|
||||||
Net cash provided by (used for) financing activities
|
(256.9
|
)
|
(260.3
|
)
|
348.1
|
|
324.3
|
|
(190.1
|
)
|
(34.9
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
(29.5
|
)
|
—
|
|
(29.5
|
)
|
||||||
Change in cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
36.9
|
|
—
|
|
36.9
|
|
||||||
Cash and cash equivalents, beginning of period
|
—
|
|
—
|
|
0.1
|
|
110.3
|
|
—
|
|
110.4
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
|
$
|
147.2
|
|
$
|
—
|
|
$
|
147.3
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Water Quality Systems
— The Water Quality Systems segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration and fluid management challenges in food and beverage, water, swimming pools and aquaculture applications.
|
•
|
Flow & Filtration Solutions
— The Flow & Filtration Solutions segment designs, manufactures, markets and services solutions for the toughest filtration, separation, flow and fluid management challenges in agriculture, food and beverage processing, water supply and disposal and a variety of industrial applications.
|
•
|
Technical Solutions
— The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electrical and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications and engineered electrical and fastening products for electrical, mechanical and civil applications.
|
•
|
Valves & Controls
— The Valves & Controls segment designs, manufactures, markets and services valves, fittings, automation and controls and actuators for the energy and industrial verticals.
|
•
|
Our results were negatively impacted due to the strengthening of the U.S. dollar against most key global currencies. We expect this trend to continue throughout 2016.
|
•
|
We experienced declines in project orders, particularly within the energy and industrial businesses. We expect headwinds in the energy and industrial business to continue and oil prices to remain depressed throughout 2016.
|
•
|
We initiated restructuring actions to offset the negative earnings impact of foreign exchange and core revenue decline. We expect to continue these actions throughout 2016 and that these actions will contribute to margin growth in 2016.
|
•
|
We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the United States. We are reinforcing our businesses to more effectively address these opportunities through research and development and additional sales and marketing resources. Unless we successfully penetrate these markets, our core sales growth will likely be limited or may decline.
|
•
|
Despite the favorable long-term outlook for our end-markets, we experience differing levels of volatility depending on the end-market and may continue to do so over the medium and longer term. While we believe the general trends are favorable, factors specific to each of our major end-markets may negatively affect the capital spending plans of our customers and lead to lower sales volumes for us.
|
•
|
We have experienced material and other cost inflation. We strive for productivity improvements, and we implement increases in selling prices to help mitigate this inflation. We expect the current economic environment will result in continuing price volatility for many of our raw materials. Commodity prices have declined, but we are uncertain as to the timing and impact of these market changes.
|
•
|
Reducing long-term debt and overall leverage through improved cash flow performance;
|
•
|
Driving operating excellence through lean enterprise initiatives, with specific focus on sourcing and supply management, cash flow management and lean operations;
|
•
|
Achieving differentiated revenue growth through new products and global and market expansion;
|
•
|
Optimizing our technological capabilities to increasingly generate innovative new products; and
|
•
|
Focusing on developing global talent in light of our increased global presence.
|
|
Three months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
$
change
|
% / point
change
|
|||||||
Net sales
|
$
|
1,733.3
|
|
$
|
1,661.2
|
|
$
|
72.1
|
|
4.3
|
%
|
Cost of goods sold
|
1,134.1
|
|
1,095.0
|
|
39.1
|
|
3.6
|
%
|
|||
Gross profit
|
599.2
|
|
566.2
|
|
33.0
|
|
5.8
|
%
|
|||
% of net sales
|
34.6
|
%
|
34.1
|
%
|
|
0.5
|
pts
|
||||
|
|
|
|
|
|
||||||
Selling, general and administrative
|
348.4
|
|
319.3
|
|
29.1
|
|
9.1
|
%
|
|||
% of net sales
|
20.1
|
%
|
19.3
|
%
|
|
0.8
|
pts
|
||||
Research and development
|
33.9
|
|
29.0
|
|
4.9
|
|
16.9
|
%
|
|||
% of net sales
|
2.0
|
%
|
1.7
|
%
|
|
0.3
|
pts
|
||||
|
|
|
|
|
|||||||
Operating income
|
216.9
|
|
217.9
|
|
(1.0
|
)
|
(0.5
|
)%
|
|||
% of net sales
|
12.5
|
%
|
13.1
|
%
|
|
(0.6
|
) pts
|
||||
|
|
|
|
|
|||||||
Net interest expense
|
35.5
|
|
18.6
|
|
16.9
|
|
90.9
|
%
|
|||
|
|
|
|
|
|||||||
Income from continuing operations before income taxes
|
182.4
|
|
199.9
|
|
(17.5
|
)
|
(8.8
|
)%
|
|||
Provision for income taxes
|
39.6
|
|
46.0
|
|
(6.4
|
)
|
(13.9
|
)%
|
|||
Effective tax rate
|
21.7
|
%
|
23.0
|
%
|
|
(1.3
|
) pts
|
|
|
|
|
|
|||||||
|
Six months ended
|
||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
$
change |
% / point
change |
|||||||
Net sales
|
$
|
3,308.8
|
|
$
|
3,136.2
|
|
$
|
172.6
|
|
5.5
|
%
|
Cost of goods sold
|
2,174.2
|
|
2,059.8
|
|
114.4
|
|
5.6
|
%
|
|||
Gross profit
|
1,134.6
|
|
1,076.4
|
|
58.2
|
|
5.4
|
%
|
|||
% of net sales
|
34.3
|
%
|
34.3
|
%
|
|
—
|
|
||||
|
|
|
|
|
|||||||
Selling, general and administrative
|
680.0
|
|
628.5
|
|
51.5
|
|
8.2
|
%
|
|||
% of net sales
|
20.6
|
%
|
20.0
|
%
|
|
0.6
|
pts
|
||||
Research and development
|
67.1
|
|
58.8
|
|
8.3
|
|
14.1
|
%
|
|||
% of net sales
|
2.0
|
%
|
1.9
|
%
|
|
0.1
|
pts
|
||||
|
|
|
|
|
|||||||
Operating income
|
387.5
|
|
389.1
|
|
(1.6
|
)
|
(0.4
|
)%
|
|||
% of net sales
|
11.7
|
%
|
12.4
|
%
|
|
(0.7
|
) pts
|
||||
|
|
|
|
|
|||||||
Net interest expense
|
71.9
|
|
36.8
|
|
35.1
|
|
95.4
|
%
|
|||
|
|
|
|
|
|||||||
Income from continuing operations before income taxes
|
317.5
|
|
353.4
|
|
(35.9
|
)
|
(10.2
|
)%
|
|||
Provision for income taxes
|
67.3
|
|
81.3
|
|
(14.0
|
)
|
(17.2
|
)%
|
|||
Effective tax rate
|
21.2
|
%
|
23.0
|
%
|
|
(1.8
|
) pts
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Volume
|
(3.1
|
)%
|
(1.2
|
)%
|
Price
|
—
|
|
0.1
|
|
Core growth
|
(3.1
|
)
|
(1.1
|
)
|
Acquisition
|
8.3
|
|
8.2
|
|
Currency
|
(0.9
|
)
|
(1.6
|
)
|
Total
|
4.3
|
%
|
5.5
|
%
|
•
|
net sales of $141.9 million and $262.0 million for the
three and six months ended
June 30, 2016
, respectively, as a result of the ERICO Acquisition; and
|
•
|
core sales growth in Water Quality Systems and Technical Solutions, primarily as the result of increased volume in the United States and Canada.
|
•
|
continued slowdown in industrial capital spending, particularly in the oil & gas and energy-related businesses, driving core sales declines in Valves & Controls;
|
•
|
slowing economic activity in certain developing regions, including China and Brazil; and
|
•
|
a strong U.S. dollar causing unfavorable foreign currency effects.
|
•
|
higher contribution margin as a result of savings generated from our Pentair Integrated Management System ("PIMS") initiatives including lean and supply management practices; and
|
•
|
selective increases in selling prices to mitigate inflationary cost increases.
|
•
|
inflationary increases related to raw materials and labor costs.
|
•
|
amortization expense of
$37.6 million
and
$75.2 million
in the
second quarter and first half
of
2016
, respectively, compared to
$28.0 million
and
$55.6 million
in the
second quarter and first half
of
2015
, respectively, as a result of the ERICO Acquisition;
|
•
|
loss from sale of assets in the
second quarter and first half
of
2016
; and
|
•
|
increased investment in sales and marketing to drive growth.
|
•
|
savings generated from back-office consolidation, reduction in personnel and other lean initiatives.
|
•
|
the impact of higher debt levels during the first six months of 2016, compared to the first six months of 2015, primarily as the result of the September 2015 issuance of senior notes to finance the ERICO Acquisition; and
|
•
|
increased overall interest rates in effect on our outstanding debt.
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
||||||||||
Net sales
|
$
|
397.1
|
|
$
|
387.7
|
|
|
2.4
|
%
|
|
$
|
728.6
|
|
$
|
694.6
|
|
|
4.9
|
%
|
Segment income
|
98.2
|
|
88.2
|
|
|
11.3
|
%
|
|
159.9
|
|
140.0
|
|
|
14.2
|
%
|
||||
% of net sales
|
24.7
|
%
|
22.8
|
%
|
|
1.9
|
pts
|
|
21.9
|
%
|
20.2
|
%
|
|
1.7
|
pts
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Volume
|
2.4
|
%
|
5.3
|
%
|
Price
|
0.5
|
|
0.3
|
|
Core growth
|
2.9
|
|
5.6
|
|
Currency
|
(0.5
|
)
|
(0.7
|
)
|
Total
|
2.4
|
%
|
4.9
|
%
|
•
|
core sales growth related to higher sales of certain pool products primarily serving the North American residential housing market for the
second quarter and first half
of
2016
;
|
•
|
core sales growth in the water filtration business in the United States; and
|
•
|
selective increases in selling prices to mitigate inflationary cost increases.
|
•
|
a strong U.S. dollar causing unfavorable foreign currency effects; and
|
•
|
core sales declines in certain developing regions, including China and Latin America.
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Growth
|
0.4
|
pts
|
0.8
|
pts
|
Inflation
|
(0.9
|
)
|
(0.9
|
)
|
Productivity/Price
|
2.4
|
|
1.8
|
|
Total
|
1.9
|
pts
|
1.7
|
pts
|
•
|
favorable material savings and product mix;
|
•
|
selective increases in selling prices to mitigate inflationary cost increases; and
|
•
|
savings generated from our PIMS initiatives including lean and supply management practices.
|
•
|
inflationary increases related to labor costs and certain raw materials; and
|
•
|
increased investment in research & development and sales & marketing.
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
||||||||||
Net sales
|
$
|
368.7
|
|
$
|
374.6
|
|
|
(1.6
|
)%
|
|
$
|
706.4
|
|
$
|
724.7
|
|
|
(2.5
|
)%
|
Segment income
|
55.5
|
|
57.1
|
|
|
(2.8
|
)%
|
|
95.0
|
|
93.5
|
|
|
1.6
|
%
|
||||
% of net sales
|
15.0
|
%
|
15.2
|
%
|
|
(0.2
|
) pts
|
|
13.4
|
%
|
12.9
|
%
|
|
0.5
|
pts
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Volume
|
(1.8
|
)%
|
(2.1
|
)%
|
Price
|
0.7
|
|
0.8
|
|
Core growth
|
(1.1
|
)
|
(1.3
|
)
|
Currency
|
(0.5
|
)
|
(1.2
|
)
|
Total
|
(1.6
|
)%
|
(2.5
|
)%
|
•
|
core sales declines in the food & beverage business due mainly to weak irrigation sales and lower project sales;
|
•
|
continued sales declines in China and Latin America as the result of economic uncertainty; and
|
•
|
a strong U.S. dollar causing unfavorable foreign currency effects.
|
•
|
core sales growth related to higher sales of pump and filtration solutions serving the infrastructure businesses; and
|
•
|
core sales growth in certain developing regions, including Middle East and Eastern Europe.
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Growth
|
(1.1
|
) pts
|
(0.8
|
) pts
|
Inflation
|
(0.9
|
)
|
(1.1
|
)
|
Productivity/Price
|
1.8
|
|
2.4
|
|
Total
|
(0.2
|
) pts
|
0.5
|
pts
|
•
|
lower core sales volumes, which resulted in decreased leverage on operating expenses;
|
•
|
negative product mix and pricing pressure; and
|
•
|
inflationary increases related to labor costs and certain raw materials.
|
•
|
selective increases in selling prices to mitigate inflationary cost increases; and
|
•
|
savings generated from our cost-out actions and PIMS initiatives, including lean and supply management practices.
|
•
|
selective increases in selling prices to mitigate inflationary cost increases; and
|
•
|
savings generated from our cost-out actions and PIMS initiatives, including lean and supply management practices.
|
•
|
inflationary increases related to labor costs and certain raw materials; and
|
•
|
lower core sales volumes, which resulted in decreased leverage on operating expenses.
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
||||||||||
Net sales
|
$
|
540.6
|
|
$
|
407.1
|
|
|
32.8
|
%
|
|
$
|
1,065.2
|
|
$
|
802.9
|
|
|
32.7
|
%
|
Segment income
|
111.6
|
|
86.4
|
|
|
29.2
|
%
|
|
224.4
|
|
164.0
|
|
|
36.8
|
%
|
||||
% of net sales
|
20.6
|
%
|
21.2
|
%
|
|
(0.6
|
) pts
|
|
21.1
|
%
|
20.4
|
%
|
|
0.7
|
pts
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Volume
|
0.7
|
%
|
2.9
|
%
|
Price
|
(0.5
|
)
|
(0.2
|
)
|
Core growth
|
0.2
|
|
2.7
|
|
Acquisition
|
33.9
|
|
32.0
|
|
Currency
|
(1.3
|
)
|
(2.0
|
)
|
Total
|
32.8
|
%
|
32.7
|
%
|
•
|
net sales of $141.9 million and $262.0 million for the
three and six months ended
June 30, 2016
, respectively, as a result of the ERICO Acquisition; and
|
•
|
core sales growth in our industrial and residential & commercial businesses.
|
•
|
core sales declines in our infrastructure business, primarily due to a decline in telecom spending; and
|
•
|
a strong U.S. dollar causing unfavorable foreign currency effects.
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Growth/Acquisition
|
(1.5
|
) pts
|
(0.7
|
) pts
|
Inflation
|
(1.1
|
)
|
(1.1
|
)
|
Productivity/Price
|
2.0
|
|
2.5
|
|
Total
|
(0.6
|
) pts
|
0.7
|
pts
|
•
|
lower margin greenfield project sales not offsetting the decline in higher margin product sales; and
|
•
|
inflationary increases related to labor costs and certain raw materials.
|
•
|
higher core sales volumes in our industrial and residential & commercial businesses, which resulted in increased leverage on operating expenses; and
|
•
|
strong margin contribution and integration synergies as a result of the ERICO Acquisition.
|
•
|
material productivity and indirect spend control more than offsetting inflation;
|
•
|
higher core sales volumes in our industrial and residential & commercial businesses, which resulted in increased leverage on operating expenses; and
|
•
|
strong margin contribution and integration synergies as a result of the ERICO Acquisition.
|
•
|
lower sales in standard products; and
|
•
|
inflationary increases related to labor costs and certain raw materials.
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||
In millions
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
|
June 30,
2016 |
June 27,
2015 |
|
% / point change
|
||||||||||
Net sales
|
$
|
433.6
|
|
$
|
496.4
|
|
|
(12.7
|
)%
|
|
$
|
820.6
|
|
$
|
925.6
|
|
|
(11.3
|
)%
|
Segment income
|
43.7
|
|
64.4
|
|
|
(32.1
|
)%
|
|
69.0
|
|
119.8
|
|
|
(42.4
|
)%
|
||||
% of net sales
|
10.1
|
%
|
13.0
|
%
|
|
(2.9
|
) pts
|
|
8.4
|
%
|
12.9
|
%
|
|
(4.5
|
) pts
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Volume
|
(10.8
|
)%
|
(8.7
|
)%
|
Price
|
(0.4
|
)
|
(0.5
|
)
|
Core growth
|
(11.2
|
)
|
(9.2
|
)
|
Currency
|
(1.5
|
)
|
(2.1
|
)
|
Total
|
(12.7
|
)%
|
(11.3
|
)%
|
•
|
lower shipments and orders within the oil & gas business and broad-based slowing of global capital spending;
|
•
|
continued sales decline in the power and mining industry; and
|
•
|
a strong U.S. dollar causing unfavorable foreign currency effects.
|
|
Three months ended June 30, 2016
|
Six months ended June 30, 2016
|
||
|
over the prior year period
|
over the prior year period
|
||
Growth
|
(9.1
|
) pts
|
(10.8
|
) pts
|
Inflation
|
—
|
|
(0.3
|
)
|
Productivity/Price
|
6.2
|
|
6.6
|
|
Total
|
(2.9
|
) pts
|
(4.5
|
) pts
|
•
|
lower core sales volumes, which resulted in decreased leverage on operating expenses;
|
•
|
negative product mix and pricing pressure in aftermarket business; and
|
•
|
inflationary cost increases.
|
•
|
savings generated from cost-out actions and our PIMS initiatives, including lean and supply management practices.
|
|
Six months ended
|
|||||
In millions
|
June 30,
2016 |
June 27,
2015 |
||||
Net cash provided by (used for) operating activities of continuing operations
|
$
|
369.5
|
|
$
|
195.1
|
|
Capital expenditures
|
(74.6
|
)
|
(66.8
|
)
|
||
Proceeds from sale of property and equipment
|
9.5
|
|
23.1
|
|
||
Free cash flow
|
$
|
304.4
|
|
$
|
151.4
|
|
(a)
|
The purchases in this column include
8,726
shares for the period
April 1 - April 30
,
733
shares for the period
May 1 - May 28
and
1,324
shares for the period
May 29 - June 30
deemed surrendered to us by participants in our 2012 Stock and Incentive Plan (the "2012 Plan") and earlier stock incentive plans that are now outstanding under the 2012 Plan (collectively "the Plans") to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options and vesting of restricted shares.
|
(b)
|
The average price paid in this column includes shares deemed surrendered to us by participants in the Plans to satisfy the exercise price for the exercise price of stock options and withholding tax obligations due upon stock option exercises and vesting of restricted shares.
|
(c)
|
The number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our ordinary shares up to a maximum dollar limit of $1.0 billion.
|
(d)
|
In December 2014, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $1.0 billion. This authorization expires on December 31, 2019.
|
|
|
|
|
Pentair plc
|
|
|
Registrant
|
|
|
|
|
|
By
|
/s/ John L. Stauch
|
|
|
John L. Stauch
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
By
|
/s/ Mark C. Borin
|
|
|
Mark C. Borin
|
|
|
Chief Accounting Officer and Treasurer
|
31.1
|
|
Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following materials from Pentair plc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and June 27, 2015, (ii) the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (iii) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and June 27, 2015, (iv) the Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2016 and June 27, 2015, and (v) Notes to Condensed Consolidated Financial Statements.
|
1 Year Pentair Chart |
1 Month Pentair Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions