PENTAIR plc

Previous wording

The terms “us,” “we,” “our” or “Pentair” refer to Pentair plc and its consolidated subsidiaries. At Pentair, we believe the health of our world depends on reliable access to clean water. We deliver a comprehensive range of smart, sustainable water solutions to homes, businesses and industries around the world. Our industry-leading and proven portfolio of solutions enables our customers to access clean, safe water; reduce water consumption; and recover and reuse water. Whether it’s moving, improving or helping people enjoy water, we help manage life’s most essential resource. We are comprised of three reportable segments: Flow, Water Solutions and Pool. For the first three months of 2025, the Flow, Water Solutions and Pool reportable segments represented approximately 36%, 26% and 38% of total consolidated net sales, respectively. We classify our operations into reportable segments based primarily on types of products offered and markets served:

Current wording

The terms “us,” “we,” “our” or “Pentair” refer to Pentair plc and its consolidated subsidiaries. At Pentair, we believe the health of our world depends on reliable access to clean water. We deliver a comprehensive range of smart, sustainable water solutions to homes, businesses and industries around the world. Our industry-leading and proven portfolio of solutions enables our customers to access clean, safe water; reduce water consumption; and recover and reuse water. Whether it’s moving, improving or helping people enjoy water, we help manage life’s most essential resource. We are comprised of three reportable segments: Flow, Water Solutions and Pool. For the first six months of 2025, the Flow, Water Solutions and Pool reportable segments represented approximately 36%, 26% and 38% of total consolidated net sales, respectively. We classify our operations into reportable segments based primarily on types of products offered and markets served:

Previous wording

The following trends and uncertainties affected our financial performance in the first three months of 2025 and are reasonably likely to impact our results in the future:

Current wording

The following trends and uncertainties affected our financial performance in the first six months of 2025 and are reasonably likely to impact our results in the future:

Previous wording

•We have a Transformation Program designed to accelerate growth and drive margin expansion by driving operational excellence, reducing complexity and streamlining our processes. During 2024 and the first three months of 2025, we made strategic progress on our Transformation Program initiatives with a focus on our four key themes of pricing excellence, strategic sourcing, operations excellence and organizational effectiveness. We expect to continue to execute on our key Transformation Program initiatives to drive margin expansion and to continue to incur transformation costs throughout the remainder of 2025 and beyond.

Current wording

•We have a Transformation Program designed to accelerate growth and drive margin expansion by driving operational excellence, reducing complexity and streamlining our processes. During 2024 and the first six months of 2025, we made strategic progress on our Transformation Program initiatives with a focus on our four key themes of pricing excellence, sourcing excellence, operations excellence and organizational effectiveness. We expect to continue to execute on our key Transformation Program initiatives to drive margin expansion and to continue to incur transformation costs throughout the remainder of 2025 and beyond.

Previous wording

•During 2024 and the first three months of 2025, we implemented 80/20 guiding principles to enable our Transformation Program. This 80/20 analysis is expected to create value by focusing on key customers and products through quadrant-based strategies. We expect the analysis to result in actions to improve operating performance by driving growth with our highest value customers, reducing lower margin sales and removing complexity in the future.

Current wording

•During 2024 and the first six months of 2025, we implemented 80/20 guiding principles to enable our Transformation Program. This 80/20 analysis is expected to create value by focusing on key customers and products through quadrant-based strategies. We expect the analysis to result in actions to improve operating performance by driving growth with our highest value customers, reducing lower margin sales and removing complexity in the future.

Previous wording

•During 2024 and the first three months of 2025, we executed certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. We expect these actions to continue throughout the remainder of 2025 and to drive margin growth.

Current wording

•During 2024 and the first six months of 2025, we executed certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. We expect these actions to continue throughout the remainder of 2025 and to drive margin growth.

Previous wording

•During 2024 and the first three months of 2025, we experienced inflationary cost increases for certain raw materials as well as logistics and transportation costs. The ongoing volatile market for commodities has the potential to continue to drive price increases in our supply chain. In addition, the current U.S. administration has recently implemented tariffs and has announced the possibility of implementing additional, or increasing current, tariffs. We expect these actions and reactionary tariff adjustments by other countries to impact our business and contribute to inflationary cost increases. As a result, we have taken actions to mitigate the impact of tariffs such as pricing increases, inventory pre-buys and capping orders to manage supply chain, inventory and production, which may continue going forward. In addition, our Transformation Program initiatives are intended to improve productivity and offset cost increases. We anticipate supply chain pressures as well as inflationary cost increases due to these tariffs and any resulting impact on macroeconomic conditions and our business to continue throughout the remainder of 2025.

Current wording

•During 2024 and the first six months of 2025, we experienced inflationary cost increases for certain raw materials as well as logistics and transportation costs. The ongoing volatile market for commodities has the potential to continue to drive price increases in our supply chain. In addition, the current U.S. administration has recently implemented tariffs and has announced the possibility of implementing additional, or increasing current, tariffs. We expect these actions and reactionary tariff adjustments by other countries to continue to impact our business and contribute to inflationary cost increases. As a result, we have taken actions to mitigate the impact of tariffs such as pricing increases, inventory pre-buys and capping orders to manage supply chain, inventory and production, which may continue going forward. In addition, our Transformation Program initiatives are intended to improve productivity and offset cost increases. We anticipate supply chain pressures as well as inflationary cost increases due to these tariffs and any resulting impact on macroeconomic conditions and our business to continue throughout the remainder of 2025.

Previous wording

•increased sales volume within our Pool segment due to higher demand compared to the same period of the prior year.

Current wording

•increased sales volume within our Pool segment due to higher demand compared to the same periods of the prior year.

Previous wording

•decreased sales volume within our Water Solutions segment compared to the same period of the prior year;

Current wording

•decreased sales volume within our Flow and Water Solutions segments compared to the same periods of the prior year; and

Previous wording

The 1.5 percentage point increase in gross profit as a percentage of net sales in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 0.9 and 1.2 percentage point increases in gross profit as a percentage of net sales in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

•asset impairment and write-offs of $5.2 million recorded in the first quarter of 2025, compared to $0.8 million in the first quarter of 2024.

Current wording

•asset impairment and write-offs of $10.3 million in the second quarter of 2025, compared to none in the second quarter of 2024, and $15.5 million in the first half of 2025, compared to $0.8 million in the first half of 2024.

Previous wording

The 0.7 percentage point decrease in SG&A as a percentage of net sales in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 4.0 and 1.7 percentage point increases in SG&A as a percentage of net sales in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

The 27.8 percent decrease in net interest expense in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 31.9 and 29.9 percent decreases in net interest expense in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

•lower debt levels compared to the same period of the prior year.

Current wording

•lower debt levels compared to the same periods of the prior year.

Previous wording

The 2.3 percentage point increase in the effective tax rate in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 1.9 percentage point decrease in the effective tax rate in the second quarter of 2025 from 2024 was primarily driven by:

Previous wording

•the unfavorable mix of global earnings; and

Current wording

•the favorable mix of global earnings; and

Previous wording

The 6.8 percent increase in net sales for Pool in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 0.1 percent increase in net sales for Flow in the second quarter of 2025 from 2024 was primarily driven by:

Previous wording

The 4.3 percent decrease in net sales for Flow in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 2.0 percent decrease in net sales for Flow in the first half of 2025 from 2024 was primarily driven by:

Previous wording

•decreased sales volume in our residential flow and industrial solutions businesses within our Flow segment compared to the same period of the prior year;

Current wording

•decreased sales volume compared to the same period of the prior year.

Previous wording

The 2.6 percentage point increase in segment income for Flow as a percentage of net sales in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 2.1 and 2.4 percentage point increases in segment income for Flow as a percentage of net sales in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

The 5.5 percent decrease in net sales for Water Solutions in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 3.9 and 4.6 percent decreases in net sales for Water Solutions in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

•unfavorable foreign currency effects compared to the same period of the prior year.

Current wording

•unfavorable foreign currency effects compared to the second quarter of the prior year.

Previous wording

The 3.1 percentage point increase in segment income for Water Solutions as a percentage of net sales in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 1.5 percentage point increase in segment income for Water Solutions as a percentage of net sales in the first half of 2025 from 2024 was primarily driven by:

Previous wording

•increased sales due to the acquisition of G & F Manufacturing completed in the fourth quarter of 2024;

Current wording

•increased sales due to the acquisition of G & F Manufacturing completed in the fourth quarter of 2024; and

Previous wording

•increased sales volume due to higher demand compared to the same period of the prior year.

Current wording

•increased sales volume due to higher demand compared to the same periods of the prior year.

Previous wording

The 2.0 percentage point increase in segment income for Pool as a percentage of net sales in the first quarter of 2025 from 2024 was primarily driven by:

Current wording

The 1.6 and 1.9 percentage point increases in segment income for Pool as a percentage of net sales in the second quarter and first half, respectively, of 2025 from 2024 were primarily driven by:

Previous wording

We experience seasonal cash flows primarily due to seasonal demand in a number of markets. Consistent with historical trends, we experienced seasonal cash usage in the first quarter of 2025 and drew on our revolving credit facility to fund our operations. This cash usage typically reverses in the second quarter as the seasonality of our businesses peak. We expect historical seasonal patterns to continue and the second quarter of 2025 to generate significant cash to fund our operations.

Current wording

We experience seasonal cash flows primarily due to seasonal demand in a number of markets. Consistent with historical trends, we experienced seasonal cash usage in the first quarter of 2025 and drew on our revolving credit facility to fund our operations. This cash usage reversed in the second quarter as the seasonality of our businesses peaked and generated significant cash to fund our operations.

Previous wording

Net cash used for operating activities of continuing operations in the first three months of 2025 primarily reflects a cash outflow of $255.5 million as a result of changes in net working capital, primarily due to an increase in accounts receivable largely related to certain advance sale programs in anticipation of our distributors’ peak sales season in the second and third quarters. The outflow related to net working capital was partially offset by net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization, share-based compensation and asset impairment, of $201.7 million.

Current wording

Net cash provided by operating activities of continuing operations in the first six months of 2025 primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization, share-based compensation, loss on sale of business and asset impairment, of $455.8 million. Additionally, we had a cash inflow of $83.3 million as a result of changes in net working capital, primarily due to decreased accounts receivable and increased accounts payable balances. The decrease in accounts receivable was attributed to an increase in cash collections during the period. The increased accounts payable balance was primarily due to an increase in purchases for our peak sales season in the second quarter of 2025.

Previous wording

Net cash used for operating activities of continuing operations in the first three months of 2024 primarily reflects a cash outflow of $287.9 million as a result of changes in net working capital, primarily due to an increase in accounts receivable largely related to certain advance sale programs in anticipation of our distributors’ peak sales season in the second and third quarters. The outflow related to net working capital was partially offset by net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization and asset impairment, of $162.7 million.

Current wording

Net cash provided by operating activities of continuing operations in the first six months of 2024 primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization, share-based compensation and asset impairment, of $394.0 million. Additionally, we had a cash inflow of $15.4 million as a result of changes in net working capital, primarily due to lower inventory and increased accounts payable balances. The decrease in inventory was primarily related to supply chain efficiencies and improved lead times. The higher accounts payable balance was attributed to inventory purchases for our peak sales season in the second quarter of 2024.

Previous wording

Net cash used for investing activities in the first three months of 2024 reflects capital expenditures of $19.3 million.

Current wording

Net cash used for investing activities in the first six months of 2025 primarily reflects capital expenditures of $27.7 million and the purchase of investments of $18.0 million.

Previous wording

Net cash used for investing activities in the first three months of 2025 reflects capital expenditures of $16.8 million.

Current wording

Net cash used for investing activities in the first six months of 2024 primarily reflects capital expenditures of $36.3 million.

Previous wording

Net cash provided by financing activities in the first three months of 2025 primarily relates to net borrowings of revolving long-term debt of $196.2 million, partially offset by share repurchases of $50.0 million and dividend payments of $41.2 million.

Current wording

Net cash used for financing activities in the first six months of 2025 primarily relates to the repayment of $250.0 million of the remaining principal under the Term Loan Facility, share repurchases of $125.0 million and dividend payments of $82.4 million.

Previous wording

Pentair, Pentair Finance S.à r.l (“PFSA”) and Pentair, Inc. are parties to a credit agreement (the “Senior Credit Facility”), with Pentair as guarantor and PFSA and Pentair, Inc. as borrowers, providing for a $900.0 million senior unsecured revolving credit facility. The revolving credit facility has a maturity date of December 16, 2026. Borrowings under the Senior Credit Facility bear interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, adjusted euro interbank offered rate, adjusted daily simple secured overnight financing rate or central bank rate, plus, in each case, an applicable margin. The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating.

Current wording

Pentair, Pentair Finance S.à r.l (“PFSA”) and Pentair, Inc. are parties to a credit agreement (the “Senior Credit Facility”), with Pentair as guarantor and PFSA and Pentair, Inc. as borrowers, which was amended and restated in May 2025, providing for a $900.0 million senior unsecured revolving credit facility. The Senior Credit Facility has a maturity date of May 5, 2030. Borrowings under the Senior Credit Facility bear interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, adjusted euro interbank offered rate, adjusted daily simple secured overnight financing rate or central bank rate, plus, in each case, an applicable margin. The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating.

Previous wording

As of March 31, 2025, total availability under the Senior Credit Facility was $694.3 million. In addition, PFSA has the option to request to increase the revolving credit facility and/or to enter into one or more tranches of term loans in an aggregate amount of up to $300.0 million, subject to customary conditions, including the commitment of the participating lenders.

Current wording

As of June 30, 2025, total availability under the Senior Credit Facility was $880.6 million. In addition, PFSA has the option to request to increase the revolving credit facility and/or to enter into one or more tranches of term loans in an aggregate amount of up to $450.0 million, subject to customary conditions, including the commitment of the participating lenders.

Previous wording

In addition, Pentair and PFSA are parties to a senior unsecured term loan facility (the “Term Loan Facility”), with PFSA, as borrower, Pentair, as guarantor, providing for an aggregate principal amount of $1.0 billion. The Term Loan Facility has a maturity date of July 28, 2027, with required quarterly installment payments of $6.3 million which began on the last day of the third quarter of 2023 and increased to $12.5 million on the last day of the third quarter of 2024. During 2024, PFSA repaid the remaining $162.5 million of quarterly installments on the Term Loan Facility, such that PFSA is not required to make any further quarterly installment payments. As of March 31, 2025, the remaining obligation of $825.0 million matures on July 28, 2027. The Term Loan Facility bears interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, or adjusted daily simple secured overnight financing rate, plus, in each case, an applicable margin. The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating.

Current wording

In addition, Pentair and PFSA are parties to a senior unsecured term loan facility (the “Term Loan Facility”), with PFSA, as borrower, Pentair, as guarantor, providing for an aggregate principal amount of $1.0 billion. The Term Loan Facility has a maturity date of July 28, 2027, with required quarterly installment payments of $6.3 million which began on the last day of the third quarter of 2023 and increased to $12.5 million on the last day of the third quarter of 2024. During 2024, PFSA repaid the remaining $162.5 million of quarterly installments on the Term Loan Facility, such that PFSA is not required to make any further quarterly installment payments. As of June 30, 2025, the remaining obligation of $575.0 million matures on July 28, 2027. The Term Loan Facility bears interest at a rate equal to an alternate base rate, adjusted term secured overnight financing rate, or adjusted daily simple secured overnight financing rate, plus, in each case, an applicable margin. The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating.

Previous wording

Our debt agreements contain various financial covenants, but the most restrictive covenants are contained in the Senior Credit Facility and the Term Loan Facility. The Senior Credit Facility and the Term Loan Facility contain covenants requiring us not to permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash and cash equivalents in excess of $5.0 million but not to exceed $250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense (“EBITDA”) on the last day of any period of four consecutive fiscal quarters (each, a “testing period”) to exceed 3.75 to 1.00 (or, at PFSA’s election and subject to certain conditions, 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) (the “Leverage Ratio”) and (ii) the ratio of our EBITDA to our consolidated interest expense, for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter. For purposes of the Leverage Ratio, the Senior Credit Facility and the Term Loan Facility provide for the calculation of EBITDA giving pro forma effect to certain acquisitions, divestitures and liquidations during the period to which such calculation relates.

Current wording

Our debt agreements contain various financial covenants, but the most restrictive covenants are contained in the Senior Credit Facility and the Term Loan Facility. The Senior Credit Facility and the Term Loan Facility contain covenants requiring us not to permit (i) the ratio of our consolidated debt (net of our consolidated unrestricted cash and cash equivalents in excess of $5.0 million but not to exceed $250.0 million) to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense (“EBITDA”) on the last day of any period of four consecutive fiscal quarters (each, a “testing period”) to exceed 3.75 to 1.00 (or, at PFSA’s election and subject to certain conditions, 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) (the “Leverage Ratio”) and (ii) the ratio of our EBITDA to our consolidated interest expense, for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter. For purposes of the Leverage Ratio, the Senior Credit Facility and the Term

Previous wording

In addition to the Senior Credit Facility and the Term Loan Facility, we have various other credit facilities with an aggregate availability of $20.8 million, of which there were no outstanding borrowings at March 31, 2025. Borrowings under these credit facilities bear interest at variable rates.

Current wording

In addition to the Senior Credit Facility and the Term Loan Facility, we have various other credit facilities with an aggregate availability of $20.9 million, of which there were no outstanding borrowings at June 30, 2025. Borrowings under these credit facilities bear interest at variable rates.

Previous wording

As of March 31, 2025, we had $103.8 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.

Current wording

As of June 30, 2025, we had $99.9 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.

Previous wording

In December 2020, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $750.0 million. This authorization expires on December 31, 2025. During the three months ended March 31, 2025, we repurchased 0.6 million of our ordinary shares for $50.0 million. As of March 31, 2025, we had $400.0 million available for share repurchases under this authorization.

Current wording

In December 2020, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $750.0 million. This authorization expires on December 31, 2025. During the six months ended June 30, 2025, we repurchased 1.3 million of our ordinary shares for $125.0 million. As of June 30, 2025, we had $325.0 million available for share repurchases under this authorization.

Previous wording

On February 24, 2025, the Board of Directors declared a quarterly cash dividend of $0.25 per share, payable on May 2, 2025 to shareholders of record at the close of business on April 18, 2025. As a result, the balance of dividends payable included in Other current liabilitieson our Condensed Consolidated Balance Sheets was $41.2 million at both March 31, 2025 and December 31, 2024.

Current wording

On May 5, 2025, the Board of Directors declared a quarterly cash dividend of $0.25 per share, payable on August 1, 2025 to shareholders of record at the close of business on July 18, 2025. As a result, the balance of dividends payable included in Other current liabilitieson our Condensed Consolidated Balance Sheets was $41.0 million at June 30, 2025, compared to $41.2 million at December 31, 2024.

Previous wording

We paid dividends in the first three months of 2025 of $41.2 million, or $0.25 per ordinary share compared with $38.0 million, or $0.23 per ordinary share, in the prior year period.

Current wording

We paid dividends in the first six months of 2025 of $82.4 million, or $0.50 per ordinary share compared with $76.2 million, or $0.46 per ordinary share, in the prior year period.