Pentair plc (NYSE:PNR) Files An 8-K Results of Operations and Financial Condition

Pentair plc (NYSE:PNR) Files An 8-K Results of Operations and Financial Condition
Item 2.02 Results of Operations and Financial Condition

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On January29, 2019, Pentair plc (the “Company”) issued a press release announcing its earnings for the fourth quarter and full year of 2018 and a conference call in connection therewith. A copy of the release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

This press release refers to certain non-GAAP financial measures (core sales, segment income, return on sales, adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow) and a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in the Company’s financial statements prepared in accordance with generally accepted accounting principles.

The 2018 segment income, return on sales, adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations (“EPS”) include equity income from unconsolidated subsidiaries and eliminate intangible amortization, certain targeted restructuring activities, impairments, corporate allocations, deal related costs, loss on sale of business, interest expense adjustments, pension and other post-retirement mark-to-market loss, loss on early extinguishment of debt and certain tax items. The 2017 segment income, return on sales, adjusted net income from continuing operations and adjusted diluted EPS from continuing operations include equity income from unconsolidated subsidiaries and eliminate intangible amortization, certain targeted restructuring activities, corporate allocations, impairments, loss on sale of business, interest expense adjustments, pension and other post-retirement mark-to-market loss, loss on early extinguishment of debt and certain tax items.

We use the term “core sales” to refer to GAAP net sales from continuing operations excluding (1) the impact of currency translation and (2) the impact of revenue from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to divested product lines not considered discontinued operations (“acquisition sales”). The portion of GAAP net sales attributable to currency translation is calculated as the difference between (a) the period-to-period change in net sales (excluding acquisition sales) and (b) the period-to-period change in net sales (excluding acquisition sales) after applying current period foreign exchange rates to the prior year period. We use the term “core sales growth” to refer to the measure of comparing current period core net sales with the corresponding period of the prior year.

Management utilizes these adjusted financial measures to assess the run-rate of its continuing operations against those of prior periods without the distortion of these factors. The Company believes that these non-GAAP financial measures will be useful to investors as well to assess the continuing strength of the Company’s underlying operations. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of liquidity because it provides the Company and its investors a measurement of cash generated from operations that is available to pay dividends and repay debt. In addition, free cash flow is used as criterion to measure and pay compensation-based incentives. The Company’s measure of free cash flow may not be comparable to similarly titled measures reported by other companies.

Item 2.02 Financial Statements and Exhibits

(a)

Financial Statements of Businesses Acquired

Not applicable.

(b)

Pro Forma Financial Information

Not applicable.

(c)

Shell Company Transactions

Not applicable

The exhibit listed in the following Exhibit Index is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:

EXHIBIT INDEX

Exhibit

Description

Pentair plc press release dated January 29, 2019 announcing earnings results for the fourth quarter and full year of 2018

PENTAIR plc Exhibit
EX-99.1 2 a2018q4pressrelease.htm EXHIBIT 99.1 Exhibit 1Exhibit 99.1News ReleasePentair Reports Fourth Quarter and Full Year 2018 Results•Fourth quarter sales of $741 million; full year 2018 sales of $2.97 billion.•Fourth quarter GAAP EPS of $0.54 and adjusted EPS of $0.60; full year 2018 GAAP EPS of $1.81 and adjusted EPS of $2.35.•The company introduces its 2019 GAAP EPS guidance of approximately $2.29 to $2.39 and on an adjusted basis of approximately $2.50 to $2.60.Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.LONDON,…
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