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Form 8-K PENTAIR plc For: Apr 26

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April 26, 2016 7:05 AM EDT


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 26, 2016
Commission file number 001-11625
 
 
Pentair plc
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
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)
Registrant's telephone number, including area code: 44-161-703-1885
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




ITEM 2.02 Results of Operations and Financial Condition
On April 26, 2016, Pentair plc (the "Company") issued a press release announcing its earnings for the first quarter of 2016 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 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 2016 segment income, return on sales and adjusted earnings per share from continuing operations ("EPS") include equity income from unconsolidated subsidiaries and eliminate intangible amortization, certain targeted restructuring activities and certain tax items. The 2015 segment income, return on sales and adjusted EPS include equity income from unconsolidated subsidiaries and eliminate intangible amortization, certain targeted restructuring activities, acquisition-related expenses, "mark-to-market" gain for pension and other post-retirement plans, loss on sale of a business and certain tax items.
We use the term "core sales" to refer to GAAP net sales 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. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
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.
The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of operating performance because it provides the Company and its investors a measurement of cash generated from continuing 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 9.01 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
(d)
Exhibits
The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:
Exhibit
 
Description
99.1
  
Pentair plc press release dated April 26, 2016 announcing earnings results for the first quarter of 2016.





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 26, 2016.
 
PENTAIR PLC
 
Registrant
 
 
 
 
By
/s/ John L. Stauch
 
 
John L. Stauch
 
 
Executive Vice President and Chief Financial Officer





PENTAIR PLC
Exhibit Index to Current Report on Form 8-K
Dated April 26, 2016 
Exhibit Number
 
Description
99.1
  
Pentair plc press release dated April 26, 2016 announcing earnings results for the first quarter of 2016.



1

Exhibit 99.1
News Release
Pentair Reports First Quarter 2016 Results
•
First quarter sales of $1.6 billion.
•
First quarter adjusted EPS of $0.76.
•
Free cash flow usage of $47 million in the quarter. The company expects to deliver full year free cash flow of approximately 100 percent of adjusted net income.
•
The company confirms adjusted 2016 EPS guidance of $4.05 - $4.25.
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
MANCHESTER, United Kingdom — April 26, 2016— Pentair plc (NYSE: PNR) today announced first quarter 2016 sales of $1.6 billion. Sales were up 7 percent compared to sales for the same period last year. Excluding the unfavorable impact of currency translation ("FX") and the positive contribution from acquisitions, core sales grew 1 percent in the first quarter. Adjusted first quarter 2016 earnings per diluted share from continuing operations ("EPS") were $0.76, equal to the first quarter of last year. On a GAAP basis, the company reported EPS of $0.59 compared to $0.65 in the first quarter of 2015. Segment income, adjusted net income, and adjusted EPS are described in the attached schedules.
First quarter 2016 segment income was $210 million, up 5 percent compared to segment income for first quarter 2015, and return on sales ("ROS") was 13.3 percent, a decrease of 20 basis points when compared to the first quarter in 2015. On a GAAP basis, the company reported operating income of $171 million for the quarter.
Free cash flow usage was $47 million for the quarter, reflecting normal seasonality and timing of cash flows. Free cash flow in the first quarter improved over $100 million compared to the first quarter in 2015. The company expects to deliver full year free cash flow of approximately 100 percent of adjusted net income.
Pentair paid dividends of $0.33 per share in the first quarter of 2016. Pentair previously announced on December 8, 2015 that its Board of Directors approved a 5 percent increase in the company's regular annual cash dividend rate for 2016 to $1.34 from $1.28. 2016 will mark the 40th consecutive year that Pentair has increased its dividend.
"We delivered first quarter results that exceeded our previously communicated expectations as a result of strong execution across the board," said Randall J. Hogan, Pentair Chairman and Chief Executive Officer. "Our Residential & Commercial businesses remain strong, and we have begun to see signs of stabilization in our Industrial businesses. The integration of ERICO is on track and we remain committed to delivering full year synergies of greater than $10 million. We have a new leader in place in our Valves & Controls business, and we are confident that we will realize our previously announced cost-out benefits in this segment. Free cash flow is anticipated to be approximately $750 million or greater for the year as we remain focused on cash and execution as evidenced by our stronger than expected performance in the first quarter."
FIRST QUARTER BUSINESS HIGHLIGHTS
All references to changes in core sales exclude the impact of FX and acquisitions. See attached reconciliations of these Non-GAAP measures.
Water Quality Systems delivered first quarter 2016 sales of $332 million, up 8 percent versus the prior year quarter. Core sales grew 9 percent in the first quarter and FX was negative 1 percent.
•
Core sales in the Aquatic & Environmental Systems Strategic Business Group, which accounted for approximately 60 percent of Water Quality Systems revenue in the quarter, increased 13 percent.
•
Core sales in the Water Filtration Strategic Business Group, which accounted for approximately 40 percent of Water Quality Systems revenue in the quarter, increased 5 percent.
Water Quality Systems first quarter segment income of $62 million represented a 19 percent increase as compared to $52 million in the same quarter last year. First quarter 2016 ROS increased 170 basis points to 18.6 percent.


(more)
2

Flow & Filtration Solutions delivered first quarter sales of $338 million, down 4 percent versus the prior year quarter. Core sales declined 2 percent in the first quarter and FX was negative 2 percent.
•
Core sales in the Water Technologies Strategic Business Group, which accounted for approximately 60 percent of Flow & Filtration Solutions revenue in the quarter, decreased 1 percent.
•
Core sales in the Fluid Solutions Strategic Business Group, which accounted for approximately 25 percent of Flow & Filtration Solutions revenue in the quarter, decreased 5 percent.
•
Core sales in the Process Filtration Strategic Business Group, which accounted for approximately 15 percent of Flow & Filtration Solutions revenue in the quarter, increased 4 percent.
Flow & Filtration Solutions delivered first quarter segment income of $40 million, up 9 percent compared to $36 million in the same quarter last year. First quarter 2016 ROS increased 130 basis points to 11.7 percent.
Technical Solutions delivered first quarter 2016 sales of $525 million, up 33 percent versus the prior year quarter. Core sales grew 5 percent in the first quarter, ERICO added 30 percent and FX was a negative 2 percent.
•
Core sales in the Enclosures Strategic Business Group, which accounted for approximately 45 percent of Technical Solutions revenue in the quarter, decreased 5 percent.
•
Core sales in the Thermal Management Strategic Business Group, which accounted for approximately 35 percent of Technical Solutions revenue in the quarter, increased 22 percent.
Technical Solutions delivered first quarter segment income of $113 million, up 45 percent compared to $78 million in the same quarter last year. First quarter 2016 ROS increased 190 basis points to 21.5 percent.
Valves & Controls delivered first quarter 2016 sales of $387 million, down 10 percent versus the prior year quarter. Core sales declined 7 percent in the first quarter and FX was negative 3 percent. Backlog declined 2 percent to $1.1 billion compared to the end of fourth quarter 2015.
•
Core sales in the Aftermarket/MRO Strategic Business Group, which accounted for approximately 50 percent of Valves & Controls revenue in the quarter, decreased 9 percent.
•
Core sales in the Engineered Projects Strategic Business Group, which accounted for approximately 50 percent of Valves & Controls revenue in the quarter, decreased 4 percent.
Valves & Controls delivered first quarter segment income of $25 million, down 54 percent compared to $55 million in the same quarter last year. First quarter 2016 ROS decreased 640 basis points to 6.5 percent.
OUTLOOK
The company reiterated its full year 2016 adjusted EPS outlook of $4.05 - $4.25. The company anticipates full year 2016 sales of $6.7 billion, or up approximately 3 percent on a reported basis and down approximately 1 percent on a core sales basis. The company expects to deliver full year free cash flow of approximately 100 percent of adjusted net income.
In addition, the company introduced second quarter 2016 adjusted EPS guidance of $1.08 - $1.11, up approximately 2 percent on an adjusted basis versus the same quarter last year's adjusted EPS. The company expects second quarter revenue to be approximately $1.7 billion, which would be up approximately 4 percent on a reported basis and down approximately 3 percent on a core basis compared to second quarter 2015 revenue.












(more)
3

EARNINGS CONFERENCE CALL
Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company's performance, first quarter 2016 results on a two-way conference call with investors at 8:00 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 overall global economic and business conditions, including worldwide demand for oil and gas; the ability to achieve the benefits of our restructuring plans; the ability to successfully identify, finance, complete and integrate acquisitions, including the ability to successfully integrate and achieve the expected benefits of the acquisition of ERICO Global Company; 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 ("SEC"), including in our 2015 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this report. We assume no obligation, and disclaim any obligation, to update the information contained in this report.

ABOUT PENTAIR PLC
Pentair plc (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 2015 revenues of $6.4 billion, Pentair employs approximately 30,000 people worldwide.

PENTAIR CONTACTS:
Jim Lucas
Vice President, Investor Relations & Strategic Planning
Direct: 763-656-5575

Rebecca Osborn
Senior Manager, External Communications
Direct: 763-656-5589


(more)
4


Pentair plc and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
 
 
 
 
Three months ended
In millions, except per-share data
March 31,
2016
March 28,
2015
Net sales
$
1,575.5

$
1,475.0

Cost of goods sold
1,040.1

964.8

Gross profit
535.4

510.2

% of net sales
34.0
%
34.6
%
Selling, general and administrative
331.6

309.2

% of net sales
21.1
%
21.0
%
Research and development
33.2

29.8

% of net sales
2.1
%
2.0
%
Operating income
170.6

171.2

% of net sales
10.8
%
11.6
%
Other (income) expense:
 
 
Equity income of unconsolidated subsidiaries
(0.9
)
(0.5
)
Net interest expense
36.4

18.2

% of net sales
2.3
%
1.2
%
Income from continuing operations before income taxes
135.1

153.5

Provision for income taxes
27.7

35.3

Effective tax rate
20.5
%
23.0
%
Net income from continuing operations
107.4

118.2

Loss from discontinued operations, net of tax
—

(4.3
)
Net income
$
107.4

$
113.9

Earnings (loss) per ordinary share
 
 
Basic
 
 
Continuing operations
$
0.59

$
0.66

Discontinued operations
—

(0.03
)
Basic earnings per ordinary share
$
0.59

$
0.63

Diluted
 
 
Continuing operations
$
0.59

$
0.65

Discontinued operations
—

(0.03
)
Diluted earnings per ordinary share
$
0.59

$
0.62

Weighted average ordinary shares outstanding
 
 
Basic
180.7

180.1

Diluted
182.4

182.7

Cash dividends paid per ordinary share
$
0.33

$
0.32



(more)
5

Pentair plc and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
 
 
 
 
March 31,
2016
December 31,
2015
In millions
Assets
Current assets
 
 
Cash and cash equivalents
$
158.1

$
126.3

Accounts and notes receivable, net
1,268.7

1,167.7

Inventories
1,197.7

1,174.3

Other current assets
381.4

309.3

Total current assets
3,005.9

2,777.6

Property, plant and equipment, net
951.8

942.8

Other assets
 
 
Goodwill
5,250.0

5,255.4

Intangibles, net
2,461.0

2,490.1

Other non-current assets
361.5

367.6

Total other assets
8,072.5

8,113.1

Total assets
$
12,030.2

$
11,833.5

Liabilities and Equity
Current liabilities
 
 
Current maturities of long-term debt and short-term borrowings
$
0.7

$
0.7

Accounts payable
579.0

578.8

Employee compensation and benefits
222.6

262.9

Other current liabilities
665.3

644.1

Total current liabilities
1,467.6

1,486.5

Other liabilities
 
 
Long-term debt
4,837.1

4,685.8

Pension and other post-retirement compensation and benefits
285.9

287.2

Deferred tax liabilities
828.7

844.2

Other non-current liabilities
526.7

521.0

Total liabilities
7,946.0

7,824.7

Equity
4,084.2

4,008.8

Total liabilities and equity
$
12,030.2

$
11,833.5


(more)
6

Pentair plc and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
 
Three months ended
In millions
March 31,
2016
March 28,
2015
Operating activities
 
 
Net income
$
107.4

$
113.9

Loss from discontinued operations, net of tax
—

4.3

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities of continuing operations
 
 
Equity income of unconsolidated subsidiaries
(0.9
)
(0.5
)
Depreciation
33.5

32.4

Amortization
37.6

27.6

Deferred income taxes
(13.6
)
5.7

Share-based compensation
16.1

9.7

Excess tax benefits from share-based compensation
(0.5
)
(2.8
)
Gain on sale of assets
(2.3
)
(1.2
)
Changes in assets and liabilities, net of effects of business acquisitions
 
 
Accounts and notes receivable
(90.7
)
(85.8
)
Inventories
(11.7
)
(88.2
)
Other current assets
(51.2
)
(71.0
)
Accounts payable
(4.2
)
(60.2
)
Employee compensation and benefits
(43.7
)
(33.7
)
Other current liabilities
22.3

38.8

Other non-current assets and liabilities
(13.1
)
(15.2
)
Net cash provided by (used for) operating activities of continuing operations
(15.0
)
(126.2
)
Net cash provided by (used for) operating activities of discontinued operations
—

(7.0
)
Net cash provided by (used for) operating activities
(15.0
)
(133.2
)
Investing activities
 
 
Capital expenditures
(38.2
)
(34.8
)
Proceeds from sale of property and equipment
6.3

2.3

Acquisitions, net of cash acquired
(0.1
)
(3.0
)
Net cash provided by (used for) investing activities of continuing operations
(32.0
)
(35.5
)
Net cash provided by (used for) investing activities of discontinued operations
—

54.9

Net cash provided by (used for) investing activities
(32.0
)
19.4

Financing activities
 
 
Net receipts of short-term borrowings
0.7

—

Net receipts of commercial paper and revolving long-term debt
138.4

406.0

Repayment of long-term debt
(0.7
)
(0.4
)
Excess tax benefits from share-based compensation
0.5

2.8

Shares issued to employees, net of shares withheld
(1.6
)
8.7

Repurchases of ordinary shares
—

(200.0
)
Dividends paid
(60.1
)
(57.5
)
Net cash provided by (used for) financing activities
77.2

159.6

Effect of exchange rate changes on cash and cash equivalents
1.6

(25.1
)
Change in cash and cash equivalents
31.8

20.7

Cash and cash equivalents, beginning of year
126.3

110.4

Cash and cash equivalents, end of year
$
158.1

$
131.1

 
 
 
Free cash flow
 
 
Net cash provided by (used for) operating activities of continuing operations
$
(15.0
)
$
(126.2
)
Capital expenditures
(38.2
)
(34.8
)
Proceeds from sale of property and equipment
6.3

2.3

Free cash flow
$
(46.9
)
$
(158.7
)

(more)
7

Pentair plc and Subsidiaries
Supplemental Financial Information by Reportable Segment (Unaudited)
 
 
 
 
 
2016
 
2015
In millions
First
Quarter
 
First
Quarter
Net sales
 
 
 
Water Quality Systems
$
331.5

 
$
306.9

Flow & Filtration Solutions
337.7

 
350.1

Technical Solutions
524.6

 
395.8

Valves & Controls
387.0

 
429.2

Other
(5.3
)
 
(7.0
)
Consolidated
$
1,575.5

 
$
1,475.0

Segment income (loss)
 
 

Water Quality Systems
$
61.7

 
$
51.8

Flow & Filtration Solutions
39.5

 
36.4

Technical Solutions
112.8

 
77.6

Valves & Controls
25.3

 
55.4

Other
(29.5
)
 
(21.9
)
Consolidated
$
209.8

 
$
199.3

Return on sales
 
 
 
Water Quality Systems
18.6
%
 
16.9
%
Flow & Filtration Solutions
11.7
%
 
10.4
%
Technical Solutions
21.5
%
 
19.6
%
Valves & Controls
6.5
%
 
12.9
%
Consolidated
13.3
%
 
13.5
%


(more)
8


Pentair plc and Subsidiaries
Reconciliation of the GAAP year ended December 31, 2016 to the non-GAAP
excluding the effect of 2016 adjustments (Unaudited)
 
 
 
 
 
 
 
 
Actual
 
Forecast
In millions, except per-share data
First
Quarter
 
Second
Quarter
Full
Year
Total Pentair
 
 
 
 
 
 
Net sales
$
1,575.5

 
approx
$
1,720

approx
$
6,700

Operating income
170.6

 
approx
246

approx
945

% of net sales
10.8
%
 
approx
14.3
%
approx
14.1
%
Adjustments:


 
 
 
 
 
Restructuring and other
0.7

 
approx
—

approx
1

Intangible amortization
37.6

 
approx
38

approx
150

Equity income of unconsolidated subsidiaries
0.9

 
approx
1

approx
4

Segment income
209.8

 
approx
285

approx
1,100

% of net sales
13.3
%
 
approx
16.5
%
approx
16.5
%
Net income from continuing operations—as reported
107.4

 
approx
170

approx
637

Adjustments, net of tax
30.5

 
approx
30

approx
120

Net income from continuing operations—as adjusted
$
137.9

 
approx
$
200

approx
$
757

Continuing earnings per ordinary share—diluted


 
 
 
 
 
Diluted earnings per ordinary share—as reported
$
0.59

 
approx
$ 0.91 - 0.94

approx
$ 3.39 - 3.59

Adjustments
0.17

 
approx
0.17

approx
0.66

Diluted earnings per ordinary share—as adjusted
$
0.76

 
approx
$ 1.08 - 1.11

approx
$ 4.05 - 4.25



(more)
9

Pentair plc and Subsidiaries
Reconciliation of Net Sales Growth to Core Net Sales Growth by Strategic Business Group
for the quarter ending March 31, 2016
 
 
Q1 Net Sales Growth
 
Core
Currency
Acq. / Div.
Total
Water Quality Systems
9.2
 %
(1.2
)%
—
%
8.0
 %
Aquatic & Environmental Systems
12.6
 %
(0.9
)%
—
%
11.7
 %
Water Filtration
4.7
 %
(1.6
)%
—
%
3.1
 %
Flow & Filtration Solutions
(1.5
)%
(2.0
)%
—
%
(3.5
)%
Water Technologies
(0.6
)%
(1.5
)%
—
%
(2.1
)%
Fluid Solutions
(5.0
)%
(2.8
)%
—
%
(7.8
)%
Process Filtration
3.9
 %
(2.6
)%
—
%
1.3
 %
Technical Solutions
5.0
 %
(2.4
)%
29.9
%
32.5
 %
Enclosures
(5.4
)%
(1.7
)%
—
%
(7.1
)%
Thermal Management
21.7
 %
(4.6
)%
—
%
17.1
 %
Engineered Fastening Solutions
—
 %
—
 %
100.0
%
100.0
 %
Valves & Controls
(6.5
)%
(3.3
)%
—
%
(9.8
)%
Aftermarket/MRO
(8.7
)%
(4.1
)%
—
%
(12.8
)%
Engineered Projects
(4.2
)%
(2.4
)%
—
%
(6.6
)%
Total Pentair
1.2
 %
(2.4
)%
8.0
%
6.8
 %








(more)
10

Pentair plc and Subsidiaries
Reconciliation of the GAAP year ended December 31, 2015 to the non-GAAP
excluding the effect of 2015 adjustments (Unaudited)
 
 
 
 
 
 
 
In millions, except per-share data
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
 
Full
Year
Total Pentair
 
 
 
 
 
 
Net sales
$
1,475.0

$
1,661.2

$
1,552.1

$
1,760.7

 
$
6,449.0

Operating income (loss)
171.2

217.9

180.0

(391.9
)
 
177.2

% of net sales
11.6
%
13.1
%
11.6
%
(22.3
)%
 
2.7
%
Adjustments:
 
 
 
 
 
 
Restructuring and other
—

25.5

25.3

70.1

 
120.9

Pension and other post-retirement mark-to-market gain
—

—

—

(23.0
)
 
(23.0
)
Intangible amortization
27.6

28.0

28.2

37.6

 
121.4

Inventory step-up
—

1.5

1.4

32.8

 
35.7

Deal related costs and expenses
—

—

14.3

—

 
14.3

Goodwill and tradename impairment
—

—

—

554.7

 
554.7

Equity income of unconsolidated subsidiaries
0.5

0.6

0.9

0.8

 
2.8

Segment income
199.3

273.5

250.1

281.1

 
1,004.0

% of net sales
13.5
%
16.5
%
16.1
%
16.0
 %
 
15.6
%
Net income (loss) from continuing operations—as reported
118.2

153.9

115.2

(452.3
)
 
(65.0
)
Loss on sale of businesses, net of tax
—

—

—

2.7

 
2.7

Amortization of bridge financing fees, net of tax
—

—

8.3

—

 
8.3

Adjustments, net of tax
21.2

42.4

53.2

656.0

 
772.8

Net income from continuing operations—as adjusted
$
139.4

$
196.3

$
176.7

$
206.4

 
$
718.8

Continuing earnings per ordinary share—diluted
 
 
 
 
 
 
Diluted earnings (loss) per ordinary share—as reported
$
0.65

$
0.84

$
0.63

$
(2.51
)
 
$
(0.36
)
Adjustments
0.11

0.24

0.34

3.64

 
4.30

Diluted earnings per ordinary share—as adjusted
$
0.76

$
1.08

$
0.97

$
1.13

 
$
3.94




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