Investor Relations

News Release Details

Home Investor Relations News Releases News Release Details
//
Pentair Reports Second Quarter 2013 Results
07.23.2013

 

  • Second quarter adjusted EPS of $0.92 per share and sales of $2.0 billion. 

  • Organic sales growth was 4 percent and adjusted operating margins expanded 120 basis points to 13.7 percent. 

  • Free cash flow exceeded $300 million in the quarter and full year expectation continues to be greater than 100 percent of net income. 

  • The company updates 2013 adjusted EPS guidance to $3.15 - $3.25 from $3.10 - $3.30 and raises its 2013 synergies expectations to $105 million from $100 million. 

 Reconciliations of GAAP to Non-GAAP are in the attached financial tables.

SCHAFFHAUSEN, Switzerland - July 23, 2013- Pentair Ltd. (NYSE: PNR) today announced second quarter 2013 sales of $2.0 billion. Sales were up 4 percent compared to adjusted pro forma sales for the same period last year. Adjusted second quarter 2013 earnings per diluted share ("EPS") were $0.92, up 19 percent from adjusted pro forma EPS of $0.77 in the second quarter of last year. On a GAAP basis, the company reported EPS of $0.75 compared to EPS of $0.72 in the second quarter of 2012. Adjusted EPS and operating income exclude acquisition-related expenses, repositioning costs, gain on sale of business, certain tax items, and interest expense.

Second quarter 2013 adjusted operating income was $268 million, up 13 percent compared to adjusted pro forma operating income for second quarter 2012, and adjusted operating margins were 13.7 percent, an expansion of 120 basis points when compared to adjusted pro forma 2012 operating margins. On a GAAP basis, the company reported operating income of $226 million.

Free cash flow in the quarter was $331 million and $302 million for the first half of 2013. The company expects to deliver full year free cash flow greater than 100 percent of net income.

Pentair paid dividends of $0.23 per share in each of the first and second quarters of 2013. Pentair had previously announced on April 29, 2013 the approval by its shareholders of an ordinary cash dividend of $1.00 per share to be paid out of Pentair's capital contribution reserve in four equal quarterly installments of $0.25 in each of the third and fourth quarters of 2013 and the first and second quarters of 2014. Pentair has increased its dividend for 37 consecutive years.

"Our strong second quarter performance highlighted the diversity of the Pentair portfolio as a North American residential recovery and strength in the food and beverage and energy verticals helped to offset challenges in the infrastructure and industrial verticals," said Randall J. Hogan, Pentair Chairman and Chief Executive Officer.  "Our robust margin expansion demonstrated both productivity and delivering on our integration and standardization synergies."

SECOND QUARTER BUSINESS HIGHLIGHTS
Unless otherwise indicated, all comparisons are year-over-year against 2012 adjusted results on a pro forma basis for the Flow Control acquisition. See attached reconciliations of these Non-GAAP measures.

Water & Fluid Solutions second quarter sales grew to $950 million, up 8 percent versus the prior year quarter.

  • Sales in the Residential & Commercial vertical, which accounted for roughly 45 percent of Water & Fluid Solutions revenue in the quarter, grew 8 percent. The North American residential recovery continued and helped offset ongoing weakness in Europe. 

  • Sales in the Infrastructure vertical, which accounted for nearly 25 percent of Water & Fluid Solutions revenue in the quarter, were up 2 percent. Sales in North America were strong and backlogs remain steady while Europe remains challenging. 

  • Sales in the Food & Beverage vertical, which accounted for roughly 20 percent of Water & Fluid Solutions revenue in the quarter, grew 25 percent. Sales to agriculture, beverage, and food service were all strong in the quarter. 

Water & Fluid Solutions second quarter adjusted operating income of $143 million represented an 18 percent increase as compared to $121 million in the same period last year. Adjusted operating margins increased by 120 basis points to 15.0 percent. Price and productivity more than offset inflation in the quarter. Including inventory step-up and customer backlog, repositioning and other charges, Water & Fluid Solutions reported a GAAP operating income of $136 million.

Valves & Controls delivered second quarter 2013 sales of $620 million, up 4 percent versus the prior year quarter. Backlog was flat at $1.4 billion compared to first quarter 2013.

  • Sales in the Energy vertical, which accounted for roughly 60 percent of Valves & Controls revenue in the quarter, grew 8 percent. Sales to the oil & gas industry grew 12 percent while sales to the mining industry grew 13 percent.  Sales to the power industry were flat. 

  • Sales in the Industrial vertical, which accounted for nearly 35 percent of Valves & Controls revenue in the quarter, declined 2 percent. 

Valves & Controls delivered second quarter adjusted operating income of $84 million, up 18 percent compared to $71 million in the same quarter last year. Second quarter 2013 adjusted operating margins increased 160 basis points to 13.5 percent. Price and productivity more than offset inflation during the quarter. Including inventory step-up and customer backlog, repositioning and other charges, Valves & Controls reported a GAAP operating income of $57 million in the second quarter.

Technical Solutions delivered second quarter 2013 sales of $397 million, down 4 percent versus the prior year quarter.

  • Sales in the Industrial vertical, which accounted for roughly 50 percent of Technical Solutions revenue in the quarter, declined 2 percent. 

  • Sales in the Energy vertical, which accounted for nearly 25 percent of Technical Solutions revenue in the quarter, declined 9 percent. 

  • Sales in the Residential & Commercial vertical, which accounted for roughly 15 percent of Technical Solutions revenue in the quarter, grew 9 percent. 

Technical Solutions delivered second quarter adjusted operating income of $70 million, up 9 percent compared to $65 million in the same quarter last year. Second quarter 2013 adjusted operating margins increased 200 basis points to 17.6 percent. Pricing and productivity gains driven by a better mix of standard products offset material and labor inflation. Including repositioning and other charges, Technical Solutions' second quarter reported GAAP operating income was $65 million.

OUTLOOK
The company is updating its full year 2013 adjusted EPS outlook to a range of $3.15 - $3.25 from a range of $3.10 - $3.30.  This represents an increase of 24 to 28 percent over 2012 adjusted pro forma EPS of $2.54.  The company anticipates full year 2013 sales of $7.5 billion, or up approximately 2 to 3 percent over 2012 adjusted pro forma sales.  The company expects to generate free cash flow in excess of 100 percent of net income in 2013.

"Pentair's proven operational track record was demonstrated in the first half as productivity in the core business remained strong and we continue to see more opportunities in the Flow Control integration as evidenced by our raising the synergy targets again," said Hogan.  "Despite the economic challenges that are weighing on the top line, we continue to execute on the areas within our control and are on track to deliver strong double-digit adjusted EPS growth for the full year."

In addition, the company is introducing third quarter 2013 EPS guidance of $0.83 - $0.87, up 20 to 26 percent versus the same quarter last year's pro forma adjusted EPS.  The company expects third quarter  revenue to be approximately $1.9 billion, which is up slightly compared to third quarter 2012 adjusted pro forma revenue.  Synergies driven by repositioning actions and functional standardization efforts are on track to deliver $105 million for the full year of 2013 and are expected to ramp to $35 million by fourth quarter 2013.

EARNINGS CONFERENCE CALL
Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company's performance and second quarter 2013 results on a two-way conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investors section of the company's website, www.pentair.com, shortly before the call begins. Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentation, both of which can be found on Pentair's website. The webcast and presentation will be archived at the company's website following the conclusion of the event.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "positioned," "strategy," "future" or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to successfully integrate Pentair, Inc. and the Flow Control business and achieve expected benefits from the Merger; overall global economic and business conditions; competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including in our Quarterly Report on Form 10-Q for the quarter ended June 29, 2013 and our 2012 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this communication. Pentair Ltd. assumes no obligation, and disclaims any obligation, to update the information contained in this communication.

ABOUT PENTAIR LTD.
Pentair Ltd. (www.pentair.com) delivers industry-leading products, services and solutions for its customers' diverse needs in water and other fluids, thermal management and equipment protection. With pro forma revenues of approximately $8 billion, Pentair employs more than 30,000 people worldwide.

PENTAIR CONTACTS:
Jim Lucas
Vice President, Investor Relations
Direct: 763-656-5575
Email: jim.lucas@pentair.com

Rebecca Osborn
Senior Manager, External Communications
Direct: 763-656-5589
Email: rebecca.osborn@pentair.com

Pentair Ltd. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended Six months ended
In millions, except per-share data June 29,
2013
June 30,
2012
June 29,
2013
June 30,
2012
Net sales $ 1,963.7 $ 941.5 $ 3,738.2 $ 1,799.7
Cost of goods sold 1,296.3 629.4 2,547.0 1,206.9
Gross profit 667.4 312.1 1,191.2 592.8
% of net sales 34.0 % 33.2 %   31.9 % 32.9 %
Selling, general and administrative 409.4 172.0 825.4 345.4
% of net sales 20.9 % 18.3 %   22.1 % 19.2 %
Research and development 32.1 20.8 65.6 41.6
% of net sales 1.6 % 2.2 %   1.8 % 2.3 %
Operating income 225.9 119.3 300.2 205.8
% of net sales 11.5 % 12.7 %   8.0 % 11.4 %
Other (income) expense:
Equity income of unconsolidated subsidiaries (0.9 ) (0.6 ) (1.1 ) (1.7 )
Gain on sale of business - - (16.7 ) -
Net interest expense 18.4 16.1 35.4 30.9
% of net sales 0.9 % 1.7 %   0.9 % 1.7 %
Income before income taxes and noncontrolling interest 208.4 103.8 282.6 176.6
Provision for income taxes 53.0 29.4 73.9 39.1
effective tax rate 25.4 % 28.3 %   26.2 % 22.1 %
Net income before noncontrolling interest 155.4 74.4 208.7 137.5
Noncontrolling interest 1.3 1.7 2.9 3.0
Net income attributable to Pentair Ltd. $ 154.1 $ 72.7 $ 205.8 $ 134.5
Earnings per common share attributable to Pentair Ltd.
Basic $ 0.76 $ 0.73 $ 1.01 $ 1.36
Diluted $ 0.75 $ 0.72 $ 0.99 $ 1.33
Weighted average common shares outstanding
Basic 202.1 99.0 203.5 98.9
Diluted 205.5 101.2 206.9 100.8
Cash dividends paid per common share $ 0.23 $ 0.22 $ 0.46 $ 0.44
Pentair Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
June 29,
2013
December 31,
2012
In millions, except per-share data
Assets
Current assets
Cash and cash equivalents $ 253.1 $ 261.3
Accounts and notes receivable, net 1,305.5 1,293.9
Inventories 1,318.3 1,379.0
Other current assets 339.6 325.5
Total current assets 3,216.5 3,259.7
Property, plant and equipment, net 1,186.1 1,209.8
Other assets
Goodwill 4,964.6 4,983.5
Intangibles, net 1,836.6 1,926.9
Other non-current assets 462.8 489.3
Total other assets 7,264.0 7,399.7
Total assets $ 11,666.6 $ 11,869.2
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings $ 2.9 $ 3.1
Accounts payable 593.9 568.2
Employee compensation and benefits 292.6 295.5
Other current liabilities 797.4 758.9
Total current liabilities 1,686.8 1,625.7
Other liabilities
Long-term debt 2,737.4 2,454.3
Pension and other post-retirement compensation and benefits 374.5 378.1
Deferred tax liabilities 498.0 490.3
Other non-current liabilities 427.0 441.6
Total liabilities 5,723.7 5,390.0
Equity 5,942.9 6,479.2
Total liabilities and equity $ 11,666.6 $ 11,869.2
Pentair Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended
In millions June 29,
2013
June 30,
2012
Operating activities
Net income before noncontrolling interest $ 208.7 $ 137.5
Adjustments to reconcile net income before noncontrolling interest to net cash provided by (used for) operating activities
Equity income of unconsolidated subsidiaries (1.1 ) (1.7 )
Depreciation 73.7 32.7
Amortization 80.7 19.7
Deferred income taxes 17.3 3.7
Gain on sale of business (16.7 ) -
Share-based compensation 18.1 10.1
Excess tax benefits from share-based compensation (6.2 ) (1.7 )
(Gain) loss on sale of assets 1.2 (3.1 )
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable (55.0 ) (5.5 )
Inventories 22.4 (12.3 )
Other current assets (1.3 ) (1.0 )
Accounts payable 35.1 (4.3 )
Employee compensation and benefits 6.6 (18.7 )
Other current liabilities 2.8 31.6
Other non-current assets and liabilities (0.2 ) (20.2 )
Net cash provided by (used for) operating activities 386.1 166.8
Investing activities
Capital expenditures (88.0 ) (31.3 )
Proceeds from sale of property and equipment 3.6 4.9
Proceeds from sale of business, net 30.0 -
Acquisitions, net of cash acquired (84.4 ) (19.9 )
Other (0.6 ) (3.1 )
Net cash provided by (used for) investing activities (139.4 ) (49.4 )
Financing activities
Net receipts (repayments) of short-term borrowings - (3.5 )
Net receipts (repayments) of commercial paper and revolving long-term debt 289.6 41.6
Proceeds from long-term debt - 34.8
Repayments of long-term debt (5.8 ) (144.7 )
Debt issuance costs (1.4 ) -
Excess tax benefits from share-based compensation 6.2 1.7
Shares issued to employees, net of shares withheld 40.1 16.3
Repurchases of common shares (483.6 ) -
Dividends paid (94.0 ) (44.3 )
Distribution to noncontrolling interest (2.0 ) -
Net cash provided by (used for) financing activities (250.9 ) (98.1 )
Effect of exchange rate changes on cash and cash equivalents (4.0 ) (8.8 )
Change in cash and cash equivalents (8.2 ) 10.5
Cash and cash equivalents, beginning of period 261.3 50.1
Cash and cash equivalents, end of period $ 253.1 $ 60.6
Free cash flow
Net cash provided by (used for) operating activities $ 386.1 $ 166.8
Capital expenditures (88.0 ) (31.3 )
Proceeds from sale of property and equipment 3.6 4.9
Free cash flow $ 301.7 $ 140.4
Pentair Ltd. and Subsidiaries
Supplemental Financial Information by Reportable Segment (Unaudited)
2013 2012
In millions First
Quarter
Second
Quarter
Six
Months
First
Quarter
Second
Quarter
Six
Months
Net sales
Water & Fluid Solutions $ 782.0 $ 949.8 $ 1,731.8 $ 587.1 $ 675.4 $ 1,262.5
Valves & Controls 585.8 619.9 1,205.7 - - -
Technical Solutions 410.0 397.4 807.4 272.6 267.5 540.1
Other (3.3 ) (3.4 ) (6.7 ) (1.5 ) (1.4 ) (2.9 )
Consolidated $ 1,774.5 $ 1,963.7 $ 3,738.2 $ 858.2 $ 941.5 $ 1,799.7
Operating income (loss)
Water & Fluid Solutions $ 74.8 $ 136.1 $ 210.9 $ 63.7 $ 92.0 $ 155.7
Valves & Controls (18.6 ) 56.9 38.3 - - -
Technical Solutions 53.3 65.1 118.4 50.5 50.6 101.1
Other (35.2 ) (32.2 ) (67.4 ) (27.7 ) (23.3 ) (51.0 )
Consolidated $ 74.3 $ 225.9 $ 300.2 $ 86.5 $ 119.3 $ 205.8
Operating income as a percent of net sales
Water & Fluid Solutions 9.6 % 14.3 % 12.2 % 10.8 % 13.6 % 12.3 %
Valves & Controls (3.2 )% 9.2 % 3.2 % - % - % - %
Technical Solutions 13.0 % 16.4 % 14.7 % 18.5 % 18.9 % 18.7 %
Consolidated 4.2 % 11.5 % 8.0 % 10.1 % 12.7 % 11.4 %

Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ended December 31, 2013 to the "Adjusted" non-GAAP
excluding the effect of 2013 adjustments (Unaudited)
Total Pentair Actual Forecast
In millions, except per-share data First
Quarter
Second
Quarter
Third
Quarter
Full
Year
Net sales $ 1,774.5 $ 1,963.7 approx $ 1,900 approx $ 7,500
Operating income-as reported 74.3 225.9 approx 245 approx 793
% of net sales 4.2 % 11.5 % approx 12.9 % approx 10.6 %
Adjustments:
Inventory step-up and customer backlog 76.8 10.1 approx - approx 87
Restructuring and other 27.4 32.4 approx - approx 60
Operating income-as adjusted 178.5 268.4 approx 245 approx 940
% of net sales 10.1 % 13.7 % approx 12.9 % approx 12.5 %
Net income attributable to Pentair Ltd.-as reported 51.7 154.1 approx 171 approx 550
Gain on sale of business, net of tax (12.5 ) - - approx (13 )
Interest expense, net of tax - 1.6 - approx 2
Adjustments, net of tax 80.8 33.5 - approx 114
Net income attributable to Pentair Ltd.-as adjusted 120.0 189.2 approx 171 approx 653
Earnings per common share attributable to Pentair Ltd.-diluted
Diluted earnings per common share-as reported $ 0.25 $ 0.75 approx $0.83 - $0.87 approx $2.65 - $2.75
Adjustments 0.33 0.17 approx - approx 0.50
Diluted earnings per common share-as adjusted $ 0.58 $ 0.92 approx $0.83 - $0.87 approx $3.15 - $3.25
Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ended December 31, 2013 to the "Adjusted" non-GAAP
excluding the effect of 2013 adjustments (Unaudited)
Actual Forecast
In millions, except per-share data First
Quarter
Second
Quarter
Third
Quarter
Full
Year
Water & Fluid Solutions
Net sales $ 782.0 $ 949.8 approx $ 840 approx $ 3,400
Operating income-as reported 74.8 136.1 approx 105-110 approx 425-430
% of net sales 9.6 % 14.3 %   approx 13.1 % approx 12.6 %
Adjustments:
Restructuring 7.5 6.6 - approx 14
Inventory step-up and customer backlog 0.6 0.2 - approx 1
Operating income-as adjusted 82.9 142.9 approx 105-110 approx 440-445
% of net sales 10.6 % 15.0 %   approx 13.1 % approx 13.1 %
Valves & Controls
Net sales $ 585.8 $ 619.9 approx $ 625 approx $ 2,400
Operating income (loss)-as reported (18.6 ) 56.9 approx 76-81 approx 182-187
% of net sales (3.2 )% 9.2 %   approx 13.0 % approx 7.8 %
Adjustments:
Restructuring 7.3 17.0 - approx 24
Inventory step-up and customer backlog 70.6 10.0 - approx 81
Operating income-as adjusted 59.3 83.9 approx 76-81 approx 287-292
% of net sales 10.1 % 13.5 %   approx 13.0 % approx 12.2 %
Technical Solutions
Net sales $ 410.0 $ 397.4 approx $ 438 approx $ 1,700
Operating income-as reported 53.3 65.1 approx 79-84 approx 296-301
% of net sales 13.0 % 16.4 %   approx 19.2 % approx 17.7 %
Adjustments:
Restructuring 10.7 4.9 - approx 16
Inventory step-up and customer backlog 5.7 - - approx 6
Operating income-as adjusted 69.7 70.0 approx 79-84 approx 318-323
% of net sales 17.0 % 17.6 %   approx 19.2 % approx 19.0 %

Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ended December 31, 2012 to the "Adjusted" non-GAAP
excluding the effect of 2012 adjustments (Unaudited)
Total Pentair
In millions, except per-share data First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Year
Net sales $ 858.2 $ 941.5 $ 865.5 $ 1,750.9 $ 4,416.1
Operating income (loss) -as reported 86.5 119.3 55.2 (304.1 ) (43.1 )
% of net sales 10.1 % 12.7 % 6.4 % (17.4 )%   (1.0 )%
Adjustments:
Deal related costs and expenses 11.8 6.3 52.7 12.0 82.8
Inventory step-up and customer backlog - - - 179.6 179.6
Restructuring - 10.4 1.1 55.3 66.8
Trade name impairment - - - 60.7 60.7
Change in accounting method - pension and post-retirement (1.5 ) (1.5 ) (1.5 ) 146.2 141.7
Operating income-as adjusted 96.8 134.5 107.5 149.7 488.5
% of net sales 11.3 % 14.3 % 12.4 % 8.5 %   11.1 %
Net income (loss) attributable to Pentair Ltd.-as reported 61.8 72.8 31.4 (273.1 ) (107.1 )
Bond redemption and interest expense (0.8 ) - 1.8 51.9 52.9
Other adjustments net of tax 3.0 10.9 32.3 320.9 367.1
Net income attributable to Pentair Ltd.-as adjusted 64.0 83.7 65.5 99.7 312.9
Earnings per common share attributable to Pentair Ltd.-diluted
Diluted earnings (loss) per common share-as reported $ 0.62 $ 0.72 $ 0.31 $ (1.31 ) $ (0.84 )
Adjustments 0.02 0.11 0.33 1.78 3.23
Diluted earnings per common share-as adjusted $ 0.64 $ 0.83 $ 0.64 $ 0.47 $ 2.39

Pentair Ltd. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ended December 31, 2012 to the "Adjusted" non-GAAP
excluding the effect of 2012 adjustments (Unaudited)
 
In millions, except per-share data First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Year
Water & Fluid Solutions
Net sales $ 587.1 $ 675.4 $ 605.5 $ 771.2 $ 2,639.2
Operating income-as reported 63.7 92.0 69.2 (56.9 ) 168.0
% of net sales 10.8 % 13.6 % 11.4 % (7.4 )%   6.4 %
Adjustments:
Restructuring - 6.9 1.1 42.5 50.5
Inventory step-up and customer backlog - - - 23.4 23.4
Trade name impairment - - - 49.1 49.1
Operating income-as adjusted 63.7 98.9 70.3 58.1 291.0
% of net sales 10.8 % 14.6 % 11.6 % 7.5 %   11.0 %
Valves & Controls
Net sales $ - $ - $ - $ 548.6 $ 548.6
Operating income-as reported - - - (76.8 ) (76.8 )
% of net sales - % - % - % (14.0 )%   (14.0 )%
Adjustments:
Restructuring - - - 5.1 5.1
Inventory step-up and customer backlog - - - 113.5 113.5
Operating income-as adjusted - - - 41.8 41.8
% of net sales - % - % - % 7.6 %   7.6 %
Technical Solutions
Net sales $ 272.6 $ 267.5 $ 261.5 $ 434.8 $ 1,236.4
Operating income-as reported 50.5 50.6 52.3 11.6 165.0
% of net sales 18.5 % 18.9 % 20.0 % 2.7 %   13.3 %
Adjustments:
Restructuring - 3.1 - 9.7 12.8
Inventory step-up and customer backlog - - - 42.7 42.7
Trade name impairment - - - 11.6 11.6
Operating income-as adjusted 50.5 53.7 52.3 75.6 232.1
% of net sales 18.5 % 20.1 % 20.0 % 17.4 %   18.8 %

Pro Forma Reconciliation
Pro Forma Adjustments
2012 Total Pentair
(in millions, except EPS)
Historical
Adjusted
Results
Historical
Flow Control
Acquisition
Depreciation
&
Amortization
Other
Adjustments
Adjusted
Pro Forma
Results
First Quarter
Sales $ 858.2 $ 995.9 $ - $ (74.0 ) $ 1,780.1
Operating Income 96.8 124.9 (17.1 ) (32.2 ) 172.4
Net Income 64.0 93.7 (12.8 ) (28.1 ) 116.8
Diluted EPS 0.64 0.44 (0.06 ) (0.48 ) 0.54
Second Quarter
Sales 941.5 980.8 - (33.2 ) 1,889.1
Operating Income 134.5 143.5 (17.2 ) (24.0 ) 236.8
Net Income 83.7 107.6 (12.9 ) (14.0 ) 164.4
Diluted EPS 0.83 0.50 (0.06 ) (0.50 ) 0.77
Third Quarter
Sales 865.5 1,019.8 - (16.0 ) 1,869.3
Operating Income 107.5 119.9 (17.3 ) 5.5 215.6
Net Income 65.5 89.9 (13.0 ) 6.4 148.8
Diluted EPS 0.64 0.42 (0.06 ) (0.31 ) 0.69
Fourth Quarter
Sales 1,750.9 - - (7.1 ) 1,743.8
Operating Income 149.7 - - 16.6 166.3
Net Income 99.7 - - 12.7 112.4
Diluted EPS 0.47 - - 0.06 0.53
Full Year
Sales 4,416.1 2,996.5 - (130.3 ) 7,282.3
Operating Income 488.5 388.3 (51.6 ) (34.1 ) 791.1
Net Income 312.9 291.3 (38.7 ) (23.1 ) 542.4
Diluted EPS 2.39 1.36 (0.18 ) (1.03 ) 2.54

Note: "Other" adjustments represent the elimination of certain large projects and sales to sanctioned countries (which were terminated prior to the completion of the Flow Control acquisition), changes in corporate allocation assumptions, income taxes and share count.

Pro Forma Reconciliation
Pro Forma Adjustments
2012 Water & Fluid Solutions Segment
(in millions)
Historical
Adjusted
Results
Historical
Flow Control
Acquisition
Depreciation
&
Amortization
Other
Adjustments
Adjusted
Pro Forma
Results
First Quarter
Sales $ 587.1 $ 163.4 $ - $ (0.1 ) $ 750.4
Operating Income 63.7 11.1 (0.1 ) (1.8 ) 72.9
Second Quarter
Sales 675.4 202.3 - 0.1 877.8
Operating Income 98.9 24.3 (0.1 ) (1.7 ) 121.4
Third Quarter
Sales 605.5 202.1 - (0.1 ) 807.5
Operating Income 70.3 14.9 (0.1 ) 0.6 85.7
Fourth Quarter
Sales 771.2 - - (0.7 ) 770.5
Operating Income 58.1 - - 14.2 72.3
Full Year
Sales 2,639.2 567.8 - (0.8 ) 3,206.2
Operating Income 291.0 50.3 (0.3 ) 11.2 352.2

Note: "Other" adjustments represent changes in corporate allocation assumptions.

Pro Forma Reconciliation
Pro Forma Adjustments
2012 Valves & Controls Segment
(in millions)
Historical
Adjusted
Results
Historical
Flow Control
Acquisition
Depreciation
&
Amortization
Other
Adjustments
Adjusted
Pro Forma
Results
First Quarter
Sales $ - $ 621.3 $ - $ (12.7 ) $ 608.6
Operating Income - 83.7 (12.3 ) (10.6 ) 60.8
Second Quarter
Sales - 602.4 - (5.0 ) 597.4
Operating Income - 93.1 (12.4 ) (9.8 ) 70.9
Third Quarter
Sales - 629.6 - (9.5 ) 620.1
Operating Income - 70.9 (12.5 ) 11.3 69.7
Fourth Quarter
Sales 548.6 - - (1.9 ) 546.7
Operating Income 41.8 - - 0.4 42.2
Full Year
Sales 548.6 1,853.3 - (29.1 ) 2,372.8
Operating Income 41.8 247.7 (37.2 ) (8.7 ) 243.6

Note: "Other" adjustments represent the elimination of sales to sanctioned countries (which were terminated prior to the completion of the Flow Control acquisition) and changes in corporate allocation assumptions.

Pro Forma Reconciliation
Pro Forma Adjustments
2012 Technical Solutions Segment
(in millions)
Historical
Adjusted
Results
Historical
Flow Control
Acquisition
Depreciation
&
Amortization
Other
Adjustments
Adjusted
Pro Forma
Results
First Quarter
Sales $ 272.6 $ 211.2 $ - $ (62.7 ) $ 421.1
Operating Income 50.5 35.8 (4.7 ) (19.7 ) 61.9
Second Quarter
Sales 267.5 176.1 - (29.8 ) 413.8
Operating Income 53.7 27.9 (4.7 ) (12.4 ) 64.5
Third Quarter
Sales 261.5 188.1 - (7.9 ) 441.7
Operating Income 52.3 39.0 (4.7 ) (6.4 ) 80.2
Fourth Quarter
Sales 434.8 - - (8.3 ) 426.5
Operating Income 75.6 - - 2.0 77.6
Full Year
Sales 1,236.4 575.4 - (108.6 ) 1,703.2
Operating Income 232.1 102.7 (14.1 ) (36.6 ) 284.1

Note: "Other" adjustments represent the elimination of certain large projects and changes in corporate allocation assumptions.


HUG#1717973
Categories: Press Releases