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What changed in Pentair's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Pentair's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+296 added−303 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-20)

Top changes in Pentair's 2024 10-K

296 paragraphs added · 303 removed · 263 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCompetition Pool faces numerous domestic and international competitors, some of which have substantially greater resources directed to the vertical markets in which we compete. Competition focuses on brand names, product performance (including energy-efficient offerings and required specifications), quality, service and price. We compete by offering a wide variety of innovative and high-quality products, which are competitively priced.
Biggest changeCompetition focuses on brand names, product performance (including energy-efficient offerings and required specifications), quality, service and price. We compete by offering a wide variety of innovative and high-quality products, which we believe are competitively priced. Water Solutions The Water Solutions segment aims to provide great tasting, higher-quality water and ice while helping people use water more productively.
From our residential and commercial water solutions to industrial water managemen t and everything in between, Pentair is focused on smart, sustainable water solutions that help people and the planet thrive. Pentair strategy Our vision is to be the world’s most valued sustainable water solutions company for our employees, customers and shareholders.
From our residential and commercial water solutions to industrial water managemen t and everything in between, Pentair is focused on smart, sustainable water solutions that help our planet and people thrive. Pentair strategy Our vision is to be the world’s most valued sustainable water solutions company for our employees, customers and shareholders.
This segment designs, manufactures and sells a complete line of energy-efficient residential and commercial pool equipment and accessories including pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment and pool accessories. Applications for our pool products include residential and commercial pool maintenance, pool repair, renovation, service and construction and aquaculture solutions.
This segment designs, manufactures and sells a complete line of energy-efficient residential and commercial pool equipment and accessories including pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment and pool accessories. Applications for our pool products include residential and commercial pool maintenance, pool repair, renovation, service, construction and aquaculture solutions.
We support development annually with a dedicated career week, individual development planning and targeted development experiences supported through live training sessions; on-demand eLearning and virtual classrooms; and downloadable materials. Additionally, our annual talent management process supports employees to set objectives, receive feedback and development, and build development plans with their leaders.
We support development annually with a dedicated career week, individual development planning and targeted development experiences supported through live training sessions; on-demand eLearning, virtual classrooms and downloadable materials. Additionally, our annual talent management process supports employees to set objectives, receive feedback and development, and build development plans with their leaders.
Environmental Matters See ITEM 1A “Risk Factors – We are exposed to potential environmental laws, liabilities and litigation.” Captive insurance subsidiary A portion of our property and casualty insurance program is insured through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses.
Environmental Matters See ITEM 1A “Risk Factors – We are exposed to environmental laws, liabilities and litigation.” Captive insurance subsidiary A portion of our property and casualty insurance program is insured through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses.
We compete by offering a wide variety of innovative and high-quality products, which are competitively priced. We believe our distribution channels and reputation for quality also provide us a competitive advantage. Pool The Pool segment provides innovative, energy-efficient pool solutions to help people more sustainably enjoy water.
We compete by offering a wide variety of innovative and high-quality products, which we believe are competitively priced. We believe our distribution channels and reputation for quality also provide us a competitive advantage. Pool The Pool segment aims to provide innovative, energy-efficient pool solutions to help people more sustainably enjoy water.
Our talent development efforts span across all levels of our organization, including our early career Leadership Development Program, a 36-month program in which future leaders participate in rotations intended to develop their capabilities through organization-wide exposure, and our Growth Manager development programs that prepare our new and experienced managers to be more effective and inclusive leaders at Pentair.
Our talent development efforts span across various levels of our organization, including our early career Leadership Development Program, a 36-month program in which potential future leaders participate in rotations intended to develop their capabilities through organization-wide exposure, and our Growth Manager development programs that prepare our new and experienced managers to be more effective and inclusive leaders at Pentair.
These water treatment products and systems are used in residential whole home water filtration, drinking water filtration and water softening solutions in addition to commercial water management and filtration in foodservice operations. In addition, our water solutions business also provides installation and preventative services for water management solutions for commercial operators.
These water treatment products and systems are for use in residential whole home water filtration, drinking water filtration and water softening solutions in addition to commercial water management and filtration in foodservice operations. In addition, our water solutions business also provides installation and preventative services for water management solutions for commercial operators.
Reports of beneficial ownership filed by our directors and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our website. We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.
Securities and Exchange Commission (the “SEC”). Reports of beneficial ownership filed by our directors and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our website. We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.
We support our Win Right culture by providing dedicated culture training to all our employees globally.
We support our Win Right culture by providing dedicated culture training to our employees globally.
Available information We make available free of charge (other than an investor’s own Internet access charges) through our Internet website ( https://www.pentair.com ) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
Available information We make available free of charge (other than an investor’s own Internet access charges) through our Internet website ( https://www.pentair.com ) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S.
Annually, we publish a corporate responsibility report on our ESG and social responsibility activities and accomplishments, which can be found on our corporate website, and which is not incorporated by reference into this Annual Report on Form 10-K.
Annually, we publish a corporate responsibility/sustainability report on our sustainability activities and accomplishments, which can be found on our corporate website, and which is not incorporated by reference into this Annual Report on Form 10-K.
Training and development To support employees in their career journey, we have developed and shared, through our dedicated development site, a number of tools and resources. We recently rolled out career pathing and development resources for all functions throughout Pentair.
Training and development To support employees in their career journey, we have developed and shared through our dedicated development site, a number of tools and resources. We offer career pathing and development resources for all functions throughout Pentair.
As a company, we: • Focus on growth in our core businesses and strategic initiatives; • Accelerate digital, innovation, technology and environmental, social and governance (“ESG”) investments; • Expedite growth and drive margin expansion through our Transformation Program; and • Build a high performance growth culture and deliver on our commitments while living our Win Right values.
As a company, we: • Focus on growth in our core businesses and strategic initiatives; • Accelerate digital innovation and technology as well as sustainability investments; • Expedite growth and drive margin expansion through our Transformation Program; and • Build a high performance growth culture and deliver on our commitments while living our Win Right values.
The other approximately 33% of Water Solutions sales were associated with our residential business, which primarily focuses on products associated with residential point of entry and point of use filtration and softening systems. Water Solutions brand names include Pentair Water Solutions, Everpure, Fleck, KBI, Manitowoc Ice, Pentek and RainSoft.
The other approximately 34% of Water Solutions sales were associated with our residential business, which primarily focuses on products associated with residential point of entry and point of use filtration and softening systems, pressure tanks and control valves. Water Solutions brand names include Pentair Water Solutions, Everpure, Fleck, KBI, Manitowoc Ice, Pentek and RainSoft.
Certain commodities, such as metals and resins, are subject to commodity market and duty-driven price fluctuations. We manage these fluctuations through several mechanisms, including long-term agreements with price adjustment clauses for significant commodity market movements in certain circumstances. Prices for raw materials, such as metals, may trend higher in the near future due to the volatile market trends.
We manage these fluctuations through several mechanisms, including long-term agreements with price adjustment clauses for significant commodity market movements in certain circumstances. Prices for raw materials, such as metals, may trend higher in the near future due to the volatile market trends.
We engage with our employees and gather feedback about our employee programs, practices and policies through various approaches that include town hall meetings where Pentair leaders share strategies and perspectives; quarterly leadership meetings to help ensure our results and expectations are clearly communicated; and an annual senior leadership meeting to help drive growth and productivity initiatives, share best practices, and invest in our leaders.
We engage with our employees and gather feedback about our employee programs, practices and policies through various approaches that include town hall meetings where Pentair leaders share strategies and perspectives and answer questions; quarterly leadership meetings to communicate our results and expectations; and an annual senior leadership meeting to drive growth and productivity initiatives, share best practices, and invest in our leaders.
A small portion of our U.S. employees are unionized, while outside the U.S., we have employees in certain countries, particularly in Europe, that are represented by an employee representative organization, such as a union, works council or employee association. 3 Employee engagement and development Engaging our employees and developing their careers is important to our long-term success and ties directly to our Win Right culture and values.
Outside the U.S. we have employees in certain countries, primarily in Europe, who are represented by an employee representative organization, such as a union, works council or employee association. 3 Employee engagement and development We believe engaging our employees and developing their careers is important to our long-term success and ties directly to our Win Right culture and values.
The primary brand names associated with the Pool segment are Pentair Pool, Kreepy Krauly, Pleatco and Sta-Rite. Customers Pool customers include businesses engaged in wholesale and retail distribution in the residential and commercial vertical markets.
The primary brand names associated with the Pool segment are Pentair Pool, Kreepy Krauly, Pleatco and Sta-Rite. 2 Customers Pool customers include businesses engaged in wholesale and retail distribution in the residential and commercial vertical markets. Customers in the residential and commercial verticals also include end users and consumers.
For the fiscal year ended December 31, 2023, our residential and irrigation flow businesses, which sell pumps focused on residential and agriculture, comprised approximately 39% of Flow sales. Another approximately 27% of Flow sales were from the commercial & infrastructure flow businesses, which sell larger pumps focused on fire suppression, wastewater and flood control.
For the fiscal year ended December 31, 2024, our residential and irrigation flow businesses, which sell pumps focused on residential and agriculture, comprised approximately 37% of Flow sales. Another approximately 29% of Flow sales were from the commercial & infrastructure flow businesses, which sell larger pumps focused on fire suppression, water supply, wastewater and flood control.
Inclusion and diversity Our commitment to inclusion and diversity is part of living our Win Right values. Our success also depends on our ability to attract, engage and retain a diverse group of employees. We believe an inclusive and diverse workforce contributes different perspectives and innovative ideas that enable us to improve every day.
Inclusion Our commitment to inclusion is part of living our Win Right values. Our success also depends on our ability to attract, engage, develop and retain our employees, which includes diverse employees from an array of backgrounds. We believe an inclusive and diverse workforce contributes different perspectives and innovative ideas that enable us to improve.
For the fiscal year ended December 31, 2023, our commercial business, which products include pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and commercial point-of-entry and point-of-use water treatment systems, comprised approximately 67% of Water Solutions sales. In addition, our commercial business also provides installation and preventative services for water management solutions for commercial operators.
For the fiscal year ended December 31, 2024, our commercial business, which offers products such as conventional filtration products, commercial point-of-entry and point-of-use water treatment systems, activated carbon products and commercial ice machines, comprised approximately 66% of Water Solutions sales. In addition, our commercial business also provides installation and preventative services for water management solutions for commercial operators.
We also believe our Win Right values, positive culture and commitment to inclusion and diversity foster innovation and curiosity, which, in turn, contribute to us being an industry leader. As of December 31, 2023, we had approximately 10,500 employees worldwide, of which approximately 49% are located in the U.S.
We also believe our Win Right values, positive culture and commitment to inclusion and diversity foster innovation and curiosity, which, in turn, can contribute to us being an industry leader. As of December 31, 2024, we had approximately 9,750 employees worldwide, of which approximately 50% are located in the U.S. A small portion of our U.S. employees are unionized.
All locations, enterprise wide, must meet and/or exceed regulatory agency standards as applicable to each site’s location. 4 Compensation and benefits In the U.S., all non-union full-time employees are eligible to receive the following benefits: short-term and long-term disability insurance; flexible and health savings accounts and wellness programs; health insurance (medical, pharmacy, dental); eight weeks paid parental leave for birth, adoptive and foster parents; two weeks paid caregiver leave; legal services; retirement benefits; stock ownership; tuition reimbursement; holidays; vacation and sick time.
Compensation and benefits In the U.S., non-union full-time employees are eligible to receive the following benefits: short-term and long-term disability insurance; flexible and health savings accounts and wellness programs; health insurance (medical, pharmacy, dental); eight weeks paid parental leave for birth, adoptive and foster parents; two weeks paid caregiver leave; legal services; retirement benefits; employee stock purchase plan; tuition reimbursement; holidays; vacation and sick time.
We believe our distribution channels and reputation for quality also provide us a competitive advantage. INFORMATION REGARDING ALL REPORTABLE SEGMENTS Research and development We conduct research and development activities primarily in our own facilities. These efforts consist mostly of the development of new products, product applications and manufacturing processes.
INFORMATION REGARDING ALL REPORTABLE SEGMENTS Research and development We conduct research and development activities primarily in our own facilities. These efforts consist mostly of the development of new products, product applications and manufacturing processes.
Water Solutions The Water Solutions segment provides great tasting, higher-quality water and ice while helping people use water more productively. This segment designs, manufactures and sells commercial and residential water treatment products and systems including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems.
This segment designs, manufactures and sells commercial and residential water treatment products and systems including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems.
Our management office in the United States (“U.S.”) is located at 5500 Wayzata Boulevard, Suite 900, Golden Valley, Minnesota. BUSINESS AND PRODUCTS Pentair is comprised of three reportable business segments: Flow, Water Solutions and Pool. The following is a brief description of each of the Company’s reportable segments and business activities.
Our registered principal office is located at Regal House, 70 London Road, Twickenham, London, TW13QS United Kingdom. Our management office in the United States (“U.S.”) is located at 5500 Wayzata Boulevard, Suite 900, Golden Valley, Minnesota. BUSINESS AND PRODUCTS Pentair is comprised of three reportable segments: Flow, Water Solutions and Pool.
In addition, we promote an inclusive and diverse workplace through: a training called the “The Power of Inclusion” ; Business Resource Groups led by employees; Pentair’s Code of Business Conduct and Ethics; and an Inclusion and Diversity Hub on our company’s intranet. Health, safety and wellness We are committed to providing a safe workplace for all of our employees.
We have various training and organizational approaches dedicated to fostering inclusion, including a training called the “The Power of Inclusion;” Business Resource Groups led by employees; Pentair’s Code of Business Conduct and Ethics; and other resources on our company’s intranet. Health, safety and wellness We are committed to providing a safe workplace for all of our employees.
Additionally, each site maintains a confidential reporting process, and we encourage the use of the Ethics Hotline for employees to report anonymously potential safety concerns.
Additionally, each site maintains a confidential reporting process, and we encourage the use of the Ethics Hotline for employees to report anonymously potential safety concerns. All locations, enterprise wide, are required to meet regulatory agency standards as applicable to each site’s location.
Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have our tax residency in the U.K. In July 2022, as part of our Water Solutions reporting segment, we acquired the issued and outstanding equity securities of certain subsidiaries of Welbilt, Inc.
Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have our tax residency in the U.K.
We expect to use the results of our updated ESG assessment for continued sustainability strategic planning and risk management, as well as to determine future disclosure requirements under CSRD.
Also in alignment with the CSRD, in 2025 we are conducting an updated sustainability assessment, and expect to use the results of this updated assessment for continued sustainability strategic planning and risk management, as well as to determine future focus areas, targets, goals and disclosure requirements under the CSRD.
Union employee benefits vary by contract. ESG (Environmental, Social and Governance) Activities As a leading provider of smart, sustainable water solutions and with a foundation of Win Right values, we recognize that the work we do and the products and services we provide help to improve lives and the environment around the world.
Benefits for union employees and employees of G & F Manufacturing, which was acquired on December 2, 2024, may vary. 4 Sustainability Activities As a leading provider of smart, sustainable water solutions and with a foundation of Win Right values, we recognize that the work we do and the products and services we provide help to improve lives and the environment around the world.
Pentair strives to be a positive influence on the social and environmental issues of today. We are focused on building on our Win Right values and culture by further contributing to the development of a sustainable and responsible society that we believe will also drive our future growth.
We are focused on building on our Win Right values and culture by further contributing to the development of a sustainable and responsible society that we believe will also drive our future growth. We are also focused on further integrating our sustainability goals throughout our business by creating accountability for our sustainability strategy and shared commitments.
In addition, we conduct employee engagement and pulse surveys multiple times a year to gauge the level of engagement and actions needed on culture, the business, employee experience and retention. We provide those insights transparently down to the manager level to drive quick insights, development and action planning to drive change.
In addition, we conduct employee engagement and pulse surveys during the year to gauge the level of engagement and potential actions needed on culture, the business, employee experience and retention. We believe in transparency with our employees and provide the results of those surveys to the manager level and above which drive the development of action plans.
Alternate sources of supply are available for most materials and we believe that the termination of any of these commitments would not have a material adverse effect on our financial position, results of operations or cash flows. Global container transportation delays may also affect raw material availability and lead times.
Alternate sources of supply are available for most materials and we believe that the termination of any of these commitments would not have a material adverse effect on our financial position, results of operations or cash flows. Certain commodities, such as metals and resins, are subject to commodity market and duty-driven price fluctuations.
We believe that every employee should be provided the same opportunity to be heard, respected, have a sense of belonging and contribute to our mission. Race, gender, ethnicity, country of origin, age, personal style, sexual orientation, physical ability, religion, life experiences and many more factors contribute to this diversity.
We believe that every employee should be provided the same opportunity to be heard, respected, have a sense of belonging and contribute to our mission.
Competition Flow faces numerous domestic and international competitors, some of which have substantially greater resources directed to the vertical markets in which we compete. Competition focuses on brand names, product performance (including energy-efficient offerings and required specifications), quality, service and price. We compete by offering a wide variety of innovative and high-quality products, which are competitively priced.
Competition focuses on brand names, product performance (including energy-efficient offerings and required specifications), quality, service and price. We compete by offering a wide variety of innovative and high-quality products, which we believe are competitively priced. We believe our distribution channels and reputation for quality also provide us a competitive advantage.
Customers in the residential and commercial verticals also include end users and consumers. 2 One customer in the Pool business represented approximately 15% and 20% of our consolidated net sales in 2023 and 2022, respectively. Seasonality We have historically experienced seasonal demand with several end customers and end users.
One customer in the Pool business represented approximately 15% of our consolidated net sales in both 2024 and 2023. Seasonality We have historically experienced seasonal demand with several end customers and end users. End-user demand for pool equipment follows warm weather trends and historically has been at seasonal highs from April to August.
The remaining approximately 34% of Flow sales were from the industrial solutions business, comprised of applications focused on industrial process filtration and sustainable gas.
The remaining approximately 34% of Flow sales were from the industrial solutions business, comprised of applications focused on industrial process and air filtration and sustainable gas. 1 Flow brand names include Pentair Flow, Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hydromatic, Hypro, Jung Pumpen, Myers, Sta-Rite, Shurflo, Südmo and X-Flow.
End-user demand for pool equipment follows warm weather trends and historically has been at seasonal highs from April to August. The magnitude of the sales spike has historically been partially mitigated by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts).
The magnitude of the sales spike has historically been partially mitigated by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts). Competition Pool faces numerous domestic and international competitors, some of which have substantially greater resources directed to the vertical markets in which we compete.
Seasonality We have historically experienced increased demand following warm weather trends for residential water supply and agricultural products. Such demand historically has been at seasonal highs from April to August. Seasonal effects may vary from year to year and are impacted by weather patterns, particularly by temperatures, heavy flooding and droughts.
Customers Flow customers include businesses engaged with end users, and wholesale and retail distribution in the residential, agricultural, commercial, food and beverage, and industrial vertical markets. Seasonality We have historically experienced increased demand following warm weather trends for residential water supply and agricultural products. Such demand historically has been at seasonal highs from April to August.
In 2023, Pentair completed a refreshed ESG assessment in alignment with the European Union’s Corporate Sustainability Reporting Directive (“CSRD”). This assessment supported the topics focused on for our Strategic Targets and they remain in effect.
We have established formal sustainability programs to further advance our sustainability goals. In 2023, Pentair completed an Environmental, Social and Governance (“ESG”) assessment in alignment with the European Union’s Corporate Sustainability Reporting Directive (“CSRD”). This assessment supported the topics focused on in our first set of social responsibility strategic targets, which we announced in 2021.
(3) Leadership roles are those of employees who are director level and above. We take an integrated approach to supporting and promoting workplace inclusion and diversity including: ensuring leadership involvement and ownership; attracting and retaining diverse talent at all levels; fostering a globally aware, inclusive culture; and ensuring our practices are fair and nondiscriminatory.
We take an integrated approach to supporting and promoting workplace inclusion by fostering a globally aware, inclusive culture; and reinforcing our practices to be fair and nondiscriminatory.
Flow The Flow segment (formerly named the Industrial & Flow Technologies segment) delivers water where it is needed, when it is needed, more efficiently and transforms waste into value.
The following is a brief description of each of the Company’s reportable segments and business activities. Flow The Flow segment aims to deliver water where it is needed, when it is needed, more efficiently and to transform waste into value.
Our Business Resource Groups have been put into place to help promote a culture of inclusion through employees providing feedback and sponsoring awareness, education and engagement. Our statistics are a measure of our performance, and we are committed to advancing a diverse workplace.
Our Business Resource Groups, which are open to everyone, have been established to help promote a culture of inclusion by providing an additional forum for employee feedback, such as sharing insights that could help the business improve, and sponsoring awareness, education and engagement.
Removed
(“Welbilt”) and certain other assets, rights, and properties, and assumed certain liabilities, comprising Welbilt’s Manitowoc Ice business (“Manitowoc Ice”), for approximately $1.6 billion in cash. Our registered principal office is located at Regal House, 70 London Road, Twickenham, London, TW13QS United Kingdom.
Added
On December 2, 2024, as part of our Pool reportable segment, we completed the acquisition of G & F Manufacturing, LLC (“G & F Manufacturing”) for $116.0 million in cash, net of cash acquired and subject to customary adjustments.
Removed
Flow brand names include Pentair Flow, Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hydromatic, Hypro, Jung Pumpen, Myers, Sta-Rite, Shurflo, Südmo and X-Flow. 1 Customers Flow customers include businesses engaged with end users, and wholesale and retail distribution in the residential, commercial, food and beverage, and industrial vertical markets.
Added
The net purchase price is comprised of an upfront cash payment of $108.0 million, subject to customary adjustments, and the estimated fair value at the acquisition date of a contingent earn-out liability based upon the achievement of certain defined operating results in the two years following the acquisition. G & F Manufacturing manufactures and services pool heat pumps.
Removed
The following sets forth information regarding the diversity of our workforce as of December 31, 2023: Percent of workforce Percent of leadership roles (3) Minorities (1) 38% 24% Women (2) 31% 31% (1) Inclusive of the following racial minority groups: Black/African American, Hispanic/Latino, American Indian/Alaskan Native, Asian, Native Hawaiian/Other Pacific Islander. Data for U.S. employee population only. (2) Global data.
Added
Seasonal effects may vary from year to year and are impacted by weather patterns, particularly by temperatures, heavy flooding and droughts. Competition Flow faces numerous domestic and international competitors, some of which have substantially greater resources directed to the vertical markets in which we compete.
Removed
We are also focused on further integrating our sustainability goals throughout our business by creating accountability for our social responsibility strategy and shared commitments and targets. We have established a formal social responsibility program to further advance our social responsibility goals.
Added
These strategic targets remained in effect through 2024 and reflected the Company’s social responsibility focus areas.
Removed
In 2020, Pentair completed a formal ESG assessment to identify ESG topics of importance to our shareholders, customers, suppliers, employees and communities. Through engagement with these stakeholders, internal business leaders and subject matter experts, we identified key ESG topic areas, which ultimately culminated in Pentair’s Social Responsibility Strategic Targets (“Strategic Targets”), which we announced in 2021.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe laws and regulations regarding ESG disclosures and requirements are rapidly evolving and could have an adverse effect on our operations and the costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our operational costs.
Biggest changeThe laws and regulations regarding sustainability disclosures and requirements, including the Corporate Sustainability Reporting Directive in the European Union and various U.S. state requirements such as in California, are rapidly evolving and could have an adverse effect on our operations and the costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our operational costs. 14 As part of our strategy regarding environmental, climate change and sustainability matters, we have set and may adjust corporate responsibility strategic targets or set additional targets aimed at reducing our impact on the environment and climate change and/or targets relating to other sustainability matters.
The market price of our shares may fluctuate widely, depending on many factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our results of operations due to factors related to our business; • success or failure of our business strategy; • our quarterly or annual earnings, or those of other companies in our industry; • our ability to obtain third-party financing as needed; • announcements by us or our competitors of significant acquisitions or dispositions; • changes in accounting standards, policies, guidance, interpretations or principles; • changes in earnings estimates or guidance by us or securities analysts or our ability to meet those estimates or guidance; • the operating and share price performance of other comparable companies; 17 • investor perception of us; • effect of certain events or occurrences on our reputation; • overall market fluctuations; • results from any material litigation or governmental investigation or environmental liabilities; • natural or other environmental disasters; • changes in laws and regulations affecting our business; and • general economic conditions and other external factors.
The market price of our shares may fluctuate widely, depending on many factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our results of operations due to factors related to our business; 17 • success or failure of our business strategy; • our quarterly or annual earnings, or those of other companies in our industry; • our ability to obtain third-party financing as needed; • announcements by us or our competitors of significant acquisitions or dispositions; • changes in accounting standards, policies, guidance, interpretations or principles; • changes in earnings estimates or guidance by us or securities analysts or our ability to meet those estimates or guidance; • the operating and share price performance of other comparable companies; • investor perception of us; • effect of certain events or occurrences on our reputation; • overall market fluctuations; • results from any material litigation or governmental investigation or environmental liabilities; • natural or other environmental disasters; • changes in laws and regulations affecting our business; and • general economic conditions and other external factors.
These legal proceedings are typically claims that relate to our products or services or to the conduct of our business and include, without limitation, claims relating to commercial regulatory or contractual disputes with suppliers, authorities, customers or parties to acquisitions and divestitures; intellectual property matters; environmental, asbestos, safety and health matters; product quality and liability matters; matters arising from the use or installation of our products; consumer protection matters; and employment and labor matters.
These legal proceedings are typically claims that relate to our products or services or to the conduct of our business and include, without limitation, claims relating to commercial, regulatory or contractual disputes with suppliers, authorities, customers or parties to acquisitions and divestitures; 15 intellectual property matters; environmental, asbestos, safety and health matters; product quality and liability matters; matters arising from the use or installation of our products; consumer protection matters; and employment and labor matters.
If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other cash requirements, we may be required, among other things: • to seek additional financing in the debt or equity markets; • to refinance or restructure all or a portion of our indebtedness; • to sell selected assets or businesses; or • to reduce or delay planned capital or operating expenditures.
If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other cash requirements, we may be required, among other things: • to seek additional financing in the debt or equity markets; • to refinance or restructure all or a portion of our indebtedness; • to sell selected assets or businesses; or 11 • to reduce or delay planned capital or operating expenditures.
Any material interruption in our supply chain, such as material interruption of the supply of raw materials and components due to the casualty loss of any of our manufacturing plants; interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels; unexpected delays in shipping or processing through customs of goods; increased logistics costs, including air freight; lack of availability of marine cargo insurance for shipments in certain geographies due to hostilities; trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions or inspections; or other unexpected or uncontrollable events that cause a material interruption in our supply chain such as pandemics (including COVID-19); social or labor unrest; natural disasters; or political disputes, international hostilities and military conflicts; could negatively affect our ability to produce or deliver our products and have a negative material impact on our business and our profitability.
Any material interruption in our supply chain, such as: material interruption of the supply of raw materials and components due to the casualty loss of any of our manufacturing plants; interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels; unexpected delays in shipping or processing through customs of goods; increased logistics costs, including air freight; lack of availability of marine cargo insurance for shipments in certain geographies due to hostilities; trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions or inspections; or other unexpected or uncontrollable events that cause a material interruption in our supply chain such as pandemics, social or labor unrest, natural disasters, or political disputes, international hostilities, and military conflicts could negatively affect our ability to produce or deliver our products and have a negative material impact on our business and our profitability.
The expenses we record for our employee benefit plans depend on factors such as changes in market interest rates and healthcare cost inflation, and significant unfavorable changes in these factors could increase our 10 expenses and funding requirements. An inability to control costs and funding requirements related to employee benefits could negatively impact our results of operations and financial condition.
The expenses we record for our employee benefit plans depend on factors such as changes in market interest rates and healthcare cost inflation, and significant unfavorable changes in these factors could increase our expenses and funding requirements. An inability to control costs and funding requirements related to employee benefits could negatively impact our results of operations and financial condition.
The MLI has now entered into force for a number of countries, including Ireland and the U.K. Under the Double Tax Convention between Ireland and the U.K., as amended by the MLI, the residency tie-breaker provides that a company will remain dual resident unless there is a determination otherwise by the tax authorities of the two contracting states.
The MLI has now entered into force for a number of countries, including Ireland and the U.K. Under the Double Taxation Convention between Ireland and the U.K., as amended by the MLI, the residency tie-breaker provides that a company will remain dual resident unless there is a determination otherwise by the tax authorities of the two contracting states.
Some of our operations, including our pool business operations in North Carolina and California, are in areas that are more susceptible to natural disasters such as hurricanes, wildfires and earthquakes. These types of events may negatively impact residential, commercial and industrial spending in impacted regions or, depending on the severity, global spending.
Some of our operations, including our pool business operations in North Carolina, Florida and California, are in areas that are more susceptible to natural disasters such as hurricanes, wildfires and earthquakes. These types of events may negatively impact residential, commercial and industrial spending in impacted regions or, depending on the severity, global spending.
Compliance with these environmental, health and safety regulations could require us to satisfy environmental liabilities, increase the cost of manufacturing our products or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows. Any violations of these laws by us could cause us to incur unanticipated liabilities.
Compliance with these environmental, health and safety regulations could require us to satisfy environmental requirements, increase the cost of manufacturing our products or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows. Any violations of these laws by us could cause us to incur unanticipated liabilities.
If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could have a material adverse effect on our business, financial condition, results of operations and cash flows . 7 We may experience cost and other inflation.
If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could have a material adverse effect on our business, financial condition, results of operations and cash flows . 7 We may experience cost increases and other inflation.
In addition, some of our businesses, customers, and dealers are subject to various laws and regulations regarding consumer 15 protection and advertising and sales practices, and we have been named, and may be named in the future, as a defendant in litigation, including class action complaints, arising from alleged violation of these laws and regulations.
In addition, some of our businesses, customers, and dealers are subject to various laws and regulations regarding consumer protection and advertising and sales practices, and we have been named, and may be named in the future, as a defendant in litigation, including class action complaints, arising from alleged violation of these laws and regulations.
In the event that we believe or have reason to believe that our employees, customers, or agents have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management.
In the event that we believe or have reason to believe that our employees, suppliers, customers, or agents have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management.
These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third parties or to which asbestos insulation was applied after installation.
These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third 13 parties or to which asbestos insulation was applied after installation.
Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available at all or on economically favorable terms. Covenants in our debt instruments may adversely affect us.
Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets or businesses might not be available at all or on economically favorable terms. Covenants in our debt instruments may adversely affect us.
If we were to be treated as resident in more than one jurisdiction, we could be subject to taxation in multiple jurisdictions. If, for example, we were considered to be a tax resident of Ireland, we could become liable for Irish corporation tax, and any dividends paid by us could be subject to Irish dividend withholding tax.
If we were to be treated as resident in more than one jurisdiction, we could be subject to 16 taxation in multiple jurisdictions. If, for example, we were considered to be a tax resident of Ireland, we could become liable for Irish corporation tax, and any dividends paid by us could be subject to Irish dividend withholding tax.
Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and, in the case of credit facility lenders, terminate all 11 commitments to extend further credit.
Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and, in the case of credit facility lenders, terminate all commitments to extend further credit.
Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be further delayed.
Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be delayed.
These risks include: • changes in general economic and political conditions in countries where we operate or purchase from, particularly in emerging markets; • relatively more severe economic conditions in some international markets than in the U.S.; • the imposition of sanctions, tariffs, duties, exchange controls, currency restrictions or other trade restrictions; • changes in tax treaties, laws or rulings that could have a material adverse impact on our effective tax rate; • the difficulty of enforcing agreements and collecting receivables through non-U.S. legal systems; • the difficulty of communicating and monitoring evolving standards and directives across our product lines, services, and global facilities; • the difficulty of ensuring that our products, services and supply chains meet ever-changing regional regulations and requirements; 8 • trade protection measures and import or export licensing requirements and restrictions; • the possibility of military conflicts or terrorist action affecting us, our operations, supply chains, our end-markets or economies generally; • the threat of nationalization and expropriation; • changes due to nationalist consumer sentiment; • the difficulty in staffing and managing widespread operations in non-U.S. labor markets; • limitations on repatriation of earnings or other regionally-imposed capital requirements; • the difficulty of protecting intellectual property in non-U.S. countries; and • changes in and required compliance with a variety of non-U.S. laws and regulations, some of which may be incompatible with each other or U.S. laws and regulations.
These risks include: • changes in general economic and political conditions in countries where we operate or purchase from, particularly in emerging markets; • relatively more severe or unpredictable economic conditions in some international markets than in the U.S.; • the imposition of sanctions, tariffs, duties, exchange controls, currency restrictions or other trade restrictions; • changes in tax treaties, laws or rulings that could have a material adverse impact on our effective tax rate; • the difficulty of enforcing agreements and collecting receivables through non-U.S. legal systems; • the difficulty of communicating and monitoring evolving regulations, standards and directives across our sales channels, product lines, services and global facilities; 8 • the difficulty of ensuring that our products, services, sales channels and supply chains meet ever-changing regional regulations and requirements; • trade protection measures and import or export licensing requirements and restrictions; • the possibility of international hostilities, military conflicts or terrorist action affecting us, our operations, supply chains, our end-markets or economies generally; • the threat of nationalization and expropriation; • changes due to nationalist consumer sentiment; • the difficulty in staffing and managing widespread operations in non-U.S. labor markets; • limitations on repatriation of earnings or other regionally-imposed capital requirements; • the difficulty of protecting intellectual property in non-U.S. countries; and • changes in and required compliance with a variety of non-U.S. laws and regulations, some of which may be incompatible with each other or U.S. laws and regulations.
In addition, investors and other stakeholders are increasingly focused on ESG matters, and as stakeholder ESG expectations and standards are evolving, we may not be able to sufficiently respond to these evolving standards and expectations or investors may not view our products and services as sustainable solutions.
In addition, investors and other stakeholders are increasingly focused on these matters, and as stakeholder expectations and standards are evolving, we may not be able to sufficiently respond to these evolving standards and expectations or investors may not view our products and services as sustainable solutions.
As a result of changes to U.S. or foreign government administrative policy, there may be changes to existing trade agreements; greater restrictions on free trade generally; significant increases in tariffs on goods including those imported into the U.S., particularly tariffs on products manufactured in Mexico, China, or other countries where we purchase, have operations or manufacture or sell products; prohibitions or restrictions on doing business with certain entities, including those with certain relationships with China; and adverse responses by foreign governments to U.S. trade policy, among other possible changes.
As a result of changes to U.S. or foreign government administrative policy, there may be changes to existing trade agreements; greater restrictions on free trade generally; imposition of or significant increases in tariffs on goods including those imported into the U.S., particularly tariffs on products manufactured in Mexico, China, Canada, or other countries where we purchase, have operations or manufacture or sell products; prohibitions or restrictions on doing business with certain entities, including those with certain relationships with China; and adverse responses by foreign governments to U.S. trade policy, among other possible changes.
Demand for pool equipment in the Pool segment, water solution products in the Water Solutions segment, and residential water supply and agricultural products within the Flow segment follows warm weather trends, with seasonal highs from April to September.
Demand for pool equipment in the Pool segment, water solution products in the Water Solutions segment, and residential water supply and agricultural products within the Flow segment follows warm weather trends, with seasonal highs ranging from April to September.
Transfers of our ordinary shares effected by means of the transfer of book entry interests in the Depository Trust Company (“DTC”) will not be subject to Irish stamp duty.
Transfers of our ordinary shares may be subject to Irish stamp duty. Transfers of our ordinary shares effected by means of the transfer of book entry interests in the Depository Trust Company (“DTC”) will not be subject to Irish stamp duty.
Further, some of our business involves the sale of our products to customers that are constructing large and complex systems, facilities or other capital projects, and while we generally try to limit our exposure to liquidated damages, consequential damages and other potential damages in the contracts for these projects, we could be exposed to significant monetary damages and other liabilities in connection with the sale of our products for these projects for a variety of reasons.
Additionally, some of our business involves the sale of our products to customers that are constructing large and complex systems, facilities or other capital projects, and while we generally try to limit our exposure to liquidated damages, consequential damages and other potential damages in the contracts for these projects, we could be exposed to significant monetary damages and other liabilities in connection with the sale of our products for these projects for a variety of reasons.
Moreover, we may determine that it is in the best interest of our company and our shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current targets based on economic, regulatory and social factors, business strategy or pressure from investors or other stakeholders.
Moreover, we may determine that it is in the best interest of our company and our shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current targets based on economic, regulatory and social factors, business strategy or feedback from investors or other stakeholders.
As our business increasingly interfaces with employees, customers, dealers and suppliers using information technology systems and networks, we are subject to an increased risk to the secure operation of these systems and networks. Our evolution into smart products and Internet of Things subjects us to increased cyber and technology risks.
As our business increasingly interfaces with employees, customers, dealers and suppliers using information technology systems and networks, we are subject to an increased risk to the secure operation of these systems and networks. Our evolution into smart products subjects us to increased cyber and technology risks.
Any improper actions could subject us to civil or criminal penalties, including material monetary fines, or other adverse actions including denial of import or export privileges, and could damage our reputation and business prospects. We are exposed to environmental laws, liabilities and litigation.
Any improper actions could subject us to civil or criminal penalties, including material monetary fines, or other adverse actions including denial of import or export privileges, and could damage our reputation and business prospects. We are exposed to environmental, and health and safety laws, liabilities and litigation.
These actions could also increase costs associated with our operations, including costs for raw materials and transportation. We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product marketing are inaccurate.
These actions could also increase costs associated with our operations, including costs for raw materials and transportation. We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our sustainability claims relating to product marketing are inaccurate.
Accordingly, our future success depends upon a number of factors, including our ability to transform and adapt our products, services, solutions, organization, workforce and sales strategies to fit localities throughout the world, particularly in high growth emerging markets; identify emerging technological and other trends in our target end markets; and develop or acquire competitive technologies, products, services, and solutions and bring them to market quickly and cost-effectively.
Accordingly, our future success depends upon a number of factors, including our ability to transform and adapt our products, services, solutions, organization, workforce and sales strategies to fit localities throughout the world; identify emerging technological and other trends in our target end markets; and develop or acquire competitive technologies, products, services, and solutions and bring them to market quickly and cost-effectively.
A trade war; other governmental action related to tariffs or international trade agreements; changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently purchase, have operations or manufacture and sell products; and any resulting negative sentiments towards the U.S. as a result of such changes, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
A trade war; other governmental action, including threatened actions and uncertainty, related to tariffs or international trade agreements; changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently purchase, have operations or manufacture and sell products; and any resulting negative sentiments towards the U.S. as a result of such changes, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We operate in global markets that are characterized by customer demand that is often global in scope but localized in delivery. We compete with thousands of smaller regional and local companies that may be positioned to offer products produced at lower cost than ours, or to capitalize on highly localized relationships and knowledge that are difficult for us to replicate.
We operate in global markets that are characterized by customer demand that is often global in scope but localized in delivery. We compete with numerous smaller regional and local companies that may be positioned to offer products produced at lower cost than ours, or to capitalize on highly localized relationships and knowledge that are difficult for us to replicate.
We are in the process of a multi-year implementation of an updated global enterprise resource planning (“ERP”) system in connection with moving to digital processes under our Transformation Program. Ultimately, this ERP system will update our existing operating and transactional financial systems.
We are in the process of a multi-year implementation of an updated global enterprise resource planning (“ERP”) system in connection with moving to digital processes under our Transformation Program. Ultimately, this ERP system will modernize several of our existing operating and transactional financial systems.
If we are unable to meet our targets or successfully implement our strategy or our ESG reporting is inaccurate or incomplete, then we could suffer from reputational damage and incur adverse reaction from investors and other stakeholders, which could adversely impact the perception of our brand and our products and services by current and potential investors and customers, which could in turn adversely impact our business, results of operations, or financial condition.
If we are unable to meet our targets or successfully implement our strategy or our corporate responsibility and sustainability reporting is inaccurate or incomplete, then we could suffer from reputational damage and incur adverse reaction from investors and other stakeholders, which could adversely impact the perception of our brand and our products and services by current and potential investors and customers, which could in turn adversely impact our business, results of operations, or financial condition.
Our increased level of indebtedness and any future increases in our level of indebtedness may have important effects on our future operations, including, without limitation: • we will have additional cash requirements in order to support the payment of interest on our outstanding indebtedness; • increases in our outstanding indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; • our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes may be reduced; • our flexibility in planning for, or reacting to, changes in our business and our industry may be reduced; and • our flexibility to make acquisitions and develop technology may be limited.
Our level of indebtedness and any future increases in our level of indebtedness may have important effects on our future operations, including, without limitation: • additional cash requirements in order to support the payment of interest on our outstanding indebtedness; • increased vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; • reduced ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes; • reduced flexibility in planning for, or reacting to, changes in our business and our industry; and • limited flexibility to make acquisitions and develop technology.
Our ability to make payments of principal and interest on and to refinance our indebtedness, including our existing debt as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or asset sales.
Our ability to make payments of principal and interest on and to refinance our indebtedness, including our existing debt as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or sales of assets or businesses.
If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, political disputes, international hostilities, military conflicts, cybersecurity incidents, adverse weather conditions, labor disputes, public health epidemics (including the COVID-19 pandemic) or other catastrophic events or disruptions outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products.
If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, political disputes, international hostilities, military conflicts, cybersecurity incidents, adverse weather conditions, labor disputes, public health epidemics or pandemics, or other catastrophic events or disruptions outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products.
Continued cost inflation or failure of our initiatives to increase prices, generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows. Interruption of our supply chain could affect our ability to produce or deliver our products and could negatively impact our business and profitability.
Continued cost inflation, new or increased tariffs, or our failure to increase prices, generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows. Interruption of our supply chain could affect our ability to produce or deliver our products and could negatively impact our business and profitability.
We have experienced cybersecurity incidents, and, although we have determined such cybersecurity incidents to be immaterial and such incidents have not had a material adverse effect on our business strategy, financial condition, results of operations or cash flows, there can be no assurance of similar results in the future.
We have experienced cybersecurity incidents, and, although we have determined these cybersecurity incidents to be immaterial and to have had no material adverse effect on our business strategy, financial condition, results of operations or cash flows, there can be no assurance of similar results in the future.
While historically we have attempted to mitigate the magnitude of the sales spikes in the Pool segment by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts), we cannot provide assurance that should we use such programs in the future they will be successful.
While historically we have attempted to mitigate the magnitude of the sales spikes in the Pool segment by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts), we cannot provide assurance that these programs will be successful should we continue to use them in the future.
These disruptions or our failure to effectively respond to them have increased and may continue to increase product, logistics or labor costs, limit availability of raw materials or cause delays in delivering our backlog or may cause an inability to deliver products to our customers or meet customer demand.
These disruptions or our failure to effectively respond to them may increase product, logistics or labor costs, limit availability of raw materials or cause delays in delivering our backlog, or may cause an inability to deliver products to our customers or meet customer demand.
When we receive information alleging improper activity, our policy is to investigate that information and respond appropriately, including, if warranted, reporting our findings to relevant governmental authorities. Nonetheless, our policies and procedures may not always protect us from actions that would violate U.S. and/or non-U.S. laws.
When we receive information alleging improper activity, our policy is to investigate that information and respond appropriately, including, if warranted, reporting our findings to relevant governmental authorities. Nonetheless, our policies and procedures may not always protect us from actions that would violate applicable laws.
The secure operation of our information technology systems and networks is critical to our business operations and strategy. Cybersecurity threats from user error to attacks designed to gain unauthorized access to our systems, networks and data are increasing in frequency and sophistication.
The secure operation of our information technology systems and networks is critical to our business operations and strategy. Cybersecurity threats designed to gain unauthorized access to our systems, networks and data are increasing in frequency and sophistication.
Our strategy has been, and continues to be, to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and settling claims before trial only where appropriate. As of December 31, 2023, there were approximately 590 claims pending against our subsidiaries, substantially all of which relate to our discontinued operations.
Our strategy has been, and continues to be, to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and settling claims before trial only where appropriate. As of December 31, 2024, there were approximately 690 asbestos-related claims pending against our subsidiaries, substantially all of which relate to our discontinued operations.
Important factors for our businesses and the businesses of our customers include the overall strength of the global economy and various regional economies and our customers’ confidence in these economies, industrial and governmental capital spending, the strength of residential and commercial real estate markets, residential housing markets, the commercial business climate, global supply chain stability, unemployment rates, availability of consumer and commercial financing, interest rates, inflation rates, and energy and commodity prices.
Important factors for our businesses and the businesses of our customers and suppliers include the overall strength of the global economy and various regional economies and our customers’ confidence in these economies, industrial and governmental capital spending, the strength of residential and commercial real estate markets, residential housing markets, the food service industry, the commercial business climate, global supply chain stability, possible tariff increases, unemployment rates, availability of consumer and commercial financing, interest rates, inflation rates, and energy and commodity prices.
Gifts and inheritances passing between spouses are exempt from CAT. Children have a tax-free threshold of €335,000 per lifetime in respect of taxable gifts or inheritances received from their parents for periods on or after October 9, 2019. The standard rate of CAT for gifts and inheritances received above this threshold is 33%.
Gifts and inheritances passing between spouses are exempt from CAT. Children have a tax-free threshold of €400,000 per lifetime in respect of taxable gifts or inheritances received from their parents for periods on or after October 2, 2024. The standard rate of CAT for gifts and inheritances received above this threshold is 33%.
The outcome of such legal proceedings cannot be predicted with certainty and some may be disposed of unfavorably to us. Insurance coverage is not available for some of our claims and may be disputed by carriers in others.
The outcome of such legal proceedings cannot be predicted with certainty, and some may be disposed of unfavorably to us. In addition to insurance costs rising and insurers decreasing coverage, insurance coverage is not available for some of our claims and may be disputed by carriers in others.
Risks Relating to Our Debt and Financial Markets Increased leverage may harm our business, financial condition and results of operations. As of December 31, 2023, we had $2,006.8 million of total debt outstanding on a consolidated basis. We and our subsidiaries may incur additional indebtedness in the future, including in connection with acquisitions, subject to restrictions in our debt agreements.
Risks Relating to Our Debt and Financial Markets Increased leverage may harm our business, financial condition and results of operations. As of December 31, 2024, we had $1,663.1 million of total debt outstanding on a consolidated basis. Subject to restrictions in our debt agreements, we and our subsidiaries may incur additional indebtedness in the future, including in connection with acquisitions.
We may increase our debt or raise additional capital, our credit ratings may be downgraded in the future, or our interest rates may increase, each of which could affect our financial condition, and may decrease our profitability. As of December 31, 2023, we had $2,006.8 million of total debt outstanding on a consolidated basis.
We may increase our debt or raise additional capital, our credit ratings may be downgraded in the future, or our interest rates may increase, each of which could affect our financial condition, and may decrease our profitability. As of December 31, 2024, we had $1,663.1 million of total debt outstanding on a consolidated basis.
Therefore, if the U.S. dollar strengthens in relation to the principal non-U.S. currencies from which we derive revenue as compared to a prior period, our U.S. dollar reported revenue and income will effectively be decreased to the extent of the change in currency valuations, and vice-versa.
Our financial statements reflect translation of items denominated in non-U.S. currencies to U.S. dollars. Therefore, if the U.S. dollar strengthens in relation to the principal non-U.S. currencies from which we derive revenue as compared to a prior period, our U.S. dollar reported revenue and income will effectively be decreased to the extent of the change in currency valuations, and vice-versa.
If we are unable to obtain these authorizations from our shareholders, or are otherwise limited by the terms of our authorizations, our ability to issue ordinary shares under our equity compensation plans and, if applicable, to facilitate funding acquisitions or otherwise raise capital could be adversely affected. Transfers of our ordinary shares may be subject to Irish stamp duty.
If we are unable to continue to obtain these authorizations from our shareholders, or are otherwise limited by the terms of our authorizations, our ability to issue ordinary shares under our equity compensation plans and, if applicable, to facilitate funding acquisitions or otherwise raise capital could be adversely affected.
Many foreign data privacy regulations, including the General Data Protection Regulation (the “GDPR”) in the European Union, are more stringent than federal regulations in the United States. Within the United States, many states are considering adopting, or have already adopted privacy regulations, including, for example, the California Consumer Privacy Act.
Many data privacy regulations outside of the U.S., including the General Data Protection Regulation (the “GDPR”) in the European Union, are more stringent than federal regulations in the U.S. Within the U.S., many states are considering adopting, or have already adopted privacy regulations, including, for example, the California Consumer Privacy Act.
These laws and regulations are rapidly evolving and changing, and could have an adverse effect on our operations. Companies’ obligations and requirements under these laws and regulations are subject to uncertainty in how they may be interpreted by courts and governmental authorities.
These laws and regulations are rapidly evolving and changing, and could have an adverse effect on our operations. Companies’ obligations and requirements under these laws and regulations are subject to uncertainty in how courts and governmental authorities may interpret them.
Disruptions in the financial markets have had adverse effects on other areas of the economy and have led to a slowdown in general economic activity that may continue to adversely affect our businesses. One or more of these factors could adversely affect our business, financial condition, results of operations or cash flows.
Disruptions in the financial markets may have adverse effects on various areas of the economy, which could lead to a slowdown in general economic activity and adversely affect our businesses. One or more of these factors could adversely affect our business, financial condition, results of operations or cash flows.
However, even when we are in strict compliance with law and our policies, we may suffer reputational damage if certain of our products are sold through various intermediaries to sanctioned entities or to entities operating in sanctioned countries.
Our policies mandate strict compliance with U.S. and non-U.S. trade laws applicable to our products. However, even when we are in strict compliance with law and our policies, we may suffer reputational damage if certain of our products are sold through various intermediaries to sanctioned entities or to entities operating in sanctioned countries.
Actions we take to achieve our targets or strategy could result in increased costs to our operations. We may not be able to achieve such targets or our desired impact, and any future investments we make in furtherance of achieving such targets and strategy may not meet investor expectations or standards regarding sustainability performance.
We may not be able to achieve such targets or our desired impact, and any future investments we make in furtherance of achieving such targets and our strategy may not meet investor expectations or standards regarding sustainability performance.
We may not be able to achieve accelerated growth and margin expansion or operating efficiencies to reduce costs or realize benefits that we anticipated in connection with these initiatives.
In addition, we may not be able to achieve accelerated growth and margin expansion or operating efficiencies to reduce costs or realize benefits that we anticipate in connection with the foregoing initiatives.
For example, current macroeconomic and political instability caused by global supply chain disruptions, inflation and the strengthening of the U.S. dollar have and could continue to adversely impact our results of operations. In addition, military conflicts, such as those between Russia and Ukraine and Hamas and Israel, and their impact on economies may adversely impact our results of operations.
For example, current macroeconomic and political instability, inflation and the strengthening of the U.S. dollar have and could continue to adversely impact our results of operations. In addition, military conflicts, such as those between Russia and Ukraine and in the Middle East, and their impact on economies, may adversely impact our results of operations.
Changes in U.S. or foreign government administrative policy, including changes to existing trade agreements, could have a material adverse effect on us.
Changes in U.S. or foreign government administrative policy, including the imposition of, or increases in, tariffs and changes to existing trade agreements, could have a material adverse effect on us.
We may not achieve some or all of the expected benefits of our business initiatives. During 2023 and 2022, we initiated and continued execution of certain business initiatives aimed at reducing our fixed cost structure and realigning our business.
We may not achieve some or all of the expected benefits of our business initiatives. During 2024 and 2023, we executed certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.
We must also monitor disruptive technologies, such as artificial intelligence, and business models, and we may not be able to take advantage of such technologies, including if we are not able to attract and retain talent that would enable us to leverage such technologies.
We must also monitor emerging technologies, such as artificial intelligence, and business models, and we may not be able to take advantage of such technologies, which could include not being able to attract and retain talent that would enable us to leverage such technologies.
Patent and trademark challenges increase our costs to develop, engineer and market our products. We may need to spend significant resources monitoring, enforcing and defending, including through litigation, our intellectual property rights, and we may or may not be able to detect infringement by third parties.
We may need to spend significant resources monitoring, enforcing and defending, including through litigation, our intellectual property rights, and we may or may not be able to detect infringement by third parties.
During 2023, 2022 and 2021, we experienced supply chain challenges, including increased lead times for raw materials due to availability constraints and high demand for these materials.
In recent years, we experienced supply chain challenges, including increased lead times for raw materials due to availability constraints and high demand for these materials.
It is uncertain whether, when and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. Similarly, certain countries have adopted the Kyoto Protocol and, in 2021, the U.S. rejoined the Paris Accord. These and other existing or potential international initiatives and regulations could affect our international operations.
It is uncertain whether, when and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted. These and other existing or potential international initiatives and regulations could affect our operations.
It remains unclear what the U.S. administration or foreign governments, including China, will or will not do with respect to tariffs or international trade agreements and policies.
The current U.S. administration has recently implemented tariffs and has announced the possibility of implementing additional, or increasing current, tariffs, and it remains unclear what the U.S. administration or foreign governments, including China, will or will not do with respect to tariffs or international trade agreements and policies.
Violations of these laws may require self-disclosure to government agencies and result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows. 12 Our failure to satisfy international trade compliance regulations, and changes in U.S. government and other applicable sanctions, could have a material adverse effect on us.
Violations of these laws may require self-disclosure to government agencies and result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.
Furthermore, our business strategy also includes expanding our smart products and Internet of Things offerings and there are many other companies that hold patents in this space. Over the past few years, we have noticed an increasing tendency for participants in our markets, including competitors, to use challenges to intellectual property to compete.
Furthermore, our business strategy also includes expanding our smart product offerings and there are many other companies that hold patents in this space. We have noticed an increasing tendency for participants in our markets, including competitors, to use challenges to intellectual property to compete. Patent and trademark challenges increase our costs to develop, engineer and market our products.
While we have elevated our engagement with our suppliers and used secondary suppliers and new methods of procurement where available to mitigate the supply chain pressures, supply chain challenges may continue in the future. In addition, as we execute on our ongoing Transformation Program, we may experience costs as a result of changing to new suppliers.
While we have elevated our engagement with our suppliers and used secondary suppliers and new methods of procurement where available to mitigate supply chain pressures, supply chain challenges may continue in the future.
Volatility in currency exchange rates could have a material adverse effect on our financial condition, results of operations and cash flows. Sales outside of the U.S. for the year ended December 31, 2023 accounted for approximately 31% of our net sales. Our financial statements reflect translation of items denominated in non-U.S. currencies to U.S. dollars.
Volatility in currency exchange rates and failure to effectively hedge our exposure to fluctuations could have a material adverse effect on our financial condition, results of operations and cash flows. Sales outside of the U.S. for the year ended December 31, 2024 accounted for approximately 31% of our net sales.
Furthermore, we could be criticized for the accuracy or completeness of the disclosure of our 14 ESG initiatives.
Furthermore, we could be criticized for the accuracy or completeness of the disclosure of our corporate responsibility and sustainability initiatives.
Although we believe that our relations with the labor unions and works councils that represent our employees are generally good and we have experienced no material work stoppages recently, no assurances can be made that we will not experience these and other types of conflicts with labor unions, works councils, other groups representing employees or our employees generally in the future, or that any future negotiations with these groups will not result in significant increases in our cost of labor.
Although we believe that our relations with the labor unions and works councils that represent our employees are generally good and we have experienced no material work stoppages recently, we may experience these and other types of conflicts with labor unions, works councils, or other groups representing our employees.
In addition, legislative action could be taken by the U.S., the U.K., Ireland or the European Union that could override tax treaties or modify tax statutes or regulations upon which we expect to rely and adversely affect our effective tax rate. We cannot predict the outcome of any specific legislative proposals.
We continue to evaluate the enacted legislative changes and new guidance as it becomes available. In addition, legislative action could be taken by the U.S., the U.K., Ireland or the European Union that could override tax treaties or modify tax statutes or regulations upon which we expect to rely and adversely affect our effective tax rate.
Our success is dependent on retaining these customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the channels in which we sell our products.
Our concentration of sales to a relatively small number of larger customers makes our relationship with each of these customers important to our business. Our success is dependent on retaining these customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the channels in which we sell our products.
In prior years, we experienced inflationary cost increases of raw materials, such as metals, resins, drives and motors, as well as increases in logistics, energy, insurance and labor costs (including wages, pensions and health care benefits), and due to the current volatile nature of the market, we expect inflationary cost increases to continue in 2024.
In recent years, we experienced inflationary cost increases of raw materials, such as metals and resins, drives and motors, as well as increases in logistics, transportation, energy, insurance and labor costs (including wages, pensions and health care benefits). The ongoing volatile market for commodities has the potential to continue to drive price increases in our supply chain.
In addition, such cybersecurity incidents could result in litigation, regulatory action and potential liability and the costs and operational consequences of implementing further data protection measures. For information on our cybersecurity risk management, strategy and governance, see ITEM 1C.- Cybersecurity. Changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.
In addition, such cybersecurity incidents could result in litigation, reputational impacts, regulatory action and potential liability, and additional costs and operational consequences of implementing further data protection measures. For information on our cybersecurity risk management, strategy and governance, see ITEM 1C.- Cybersecurity.
For example, the Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”) for a global 15.0% minimum tax, are in the process of being adopted by a number of jurisdictions in which we operate.
For example, the Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”) for a global 15.0% minimum tax, have been adopted by a number of jurisdictions in which we operate. Pillar Two has negatively impacted our effective tax rate in 2024 and is likely to continue to impact our effective tax rate in the future.
Accordingly, our business is subject to the political, regulatory, economic, trade, and other risks that are inherent in operating in, and purchasing from, numerous countries.
Further, most of our businesses obtain some products, components and raw materials from non-U.S. suppliers. Accordingly, our business is subject to the political, regulatory, economic, trade, and other risks that are inherent in operating in, and purchasing from, numerous countries.
In addition, an important aspect of attracting and retaining qualified personnel is continuing to offer competitive wages, employee healthcare, retirement and other benefits.
Any future negotiations with these groups may result in significant increases in our cost of labor. In addition, an important aspect of attracting and retaining qualified personnel is continuing to offer competitive wages, employee healthcare, retirement plans and other benefits.
We collect and store data that is sensitive to us and our employees, customers, dealers and suppliers. A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data.
A variety of U.S. and non-U.S. state and national, and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal and other data.
In addition, the markets for our products, services and solutions may not develop or grow as we anticipate.
Our competitors may be more successful in their technology strategy and develop superior products and services with the aid of emerging technologies. In addition, the markets for our products, services and solutions may not develop or grow as we anticipate.
While we do not have any other customers that accounted for more than 10% of our consolidated net sales in 2023, we have other customers that are key to the success of our business. Our concentration of sales to a relatively small number of larger customers makes our 9 relationship with each of these customers important to our business.
Our net sales to our largest customer represented approximately 15% of our consolidated net sales in 2024. While we do not have any other customers that accounted for more than 10% of our consolidated net sales in 2024, we have other customers that are key to the success of our business.
We cannot predict with certainty the extent to which we will be successful in litigating or otherwise resolving lawsuits in the future, and we continue to evaluate different strategies related to asbestos claims filed against us including the possibility of entity restructuring.
We cannot predict with certainty the extent to which we will be successful in litigating or otherwise resolving lawsuits in the future, and we continue to evaluate different strategies related to asbestos claims filed against us. Unfavorable rulings, judgments or settlement terms could have a material adverse impact on our business and financial condition, results of operations and cash flows.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeProfessional-level employees receive mandatory cybersecurity education and training. Employee phishing tests are conducted on a regular basis. Employees who do not follow protocol are redirected for additional training. We also provide periodic updates to employees on emerging cybersecurity trends and ways to protect themselves and our company.
Biggest changeSecurity awareness and training We provide ongoing security awareness and training to educate internal users on how to identify and report potential issues. Professional-level employees receive mandatory cybersecurity education and training. Employee phishing tests are conducted on a regular basis. Employees who do not follow protocol are redirected for additional training.
Our Chief Executive Officer, Chief Financial Officer and General Counsel each hold degrees in their respective fields, and each have over 25 years of experience managing risks at the Company and at similar companies, including risks arising from cybersecurity threats.
Members of our cybersecurity team have broad experience in security functions in various industries. Our Chief Executive Officer, Chief Financial Officer and General Counsel each hold degrees in their respective fields, and each have over 25 years of experience managing risks at the Company and at similar companies, including risks arising from cybersecurity threats.
We believe our cybersecurity program is enhanced with the results of the audits, assessments and reviews performed. Governance The Board is responsible for general oversight of our risk management, including cybersecurity risk.
We look to enhance our cybersecurity program with the results of the audits, assessments and reviews we perform. Governance The Board is responsible for general oversight of our risk management, including cybersecurity risk.
Additional oversight for assessing and managing cybersecurity risk include the Security Steering Committee and as part of our ERM program. The CISO has over 20 years of cybersecurity and technology experience and has previously held Chief Information Security Officer positions at a large public retail company, as well as at a public technology company and services organization.
The Security Steering Committee provides additional oversight for assessing and managing cybersecurity risk. The CIO/CISO has over 20 years of cybersecurity and technology experience and has previously held Chief Information Security Officer positions at a large public retail company, as well as at a public technology company and services organization. The CIO/CISO has an undergraduate degree in Management Information Systems.
Our cybersecurity team shares information regarding such risks with our Security Steering Committee, which consists of our Chief Financial Officer, General Counsel, Chief Human Resources Officer, Chief Technology Officer and Chief Supply Chain Officer, and our ERM function, both of which support the Board’s oversight of cybersecurity risk.
Our cybersecurity team shares information regarding such risks with our Security Steering Committee, which consists of our General Counsel, Chief Financial Officer, CIO/CISO, and members of our IT, Legal and ERM functions. Both our Security Steering Committee and our ERM function support the Board’s oversight of cybersecurity risk.
Security audits and assessments We perform periodic security audits and assessments to test our cybersecurity program. These efforts span across our cybersecurity program, including but not limited to audits, assessments, tabletop exercises, vulnerability scanning and penetration tests.
We also provide periodic updates to employees on emerging cybersecurity trends and ways to protect themselves and our company. Security audits and assessments We perform periodic security audits and assessments to test our cybersecurity program. These efforts span across our cybersecurity program, including but not limited to audits, assessments, tabletop exercises, vulnerability scanning and penetration tests.
Cybersecurity Risk Management and Strategy Our cybersecurity program is focused on the following areas: Security governance We have established processes to assess, identify and manage material risks from cybersecurity threats. Annual risk assessments are performed and incorporated as part of our ERM organizational process.
This is supported by our security operating framework, roadmap and governance. Cybersecurity Risk Management and Strategy Our cybersecurity program is focused on the following areas: Security governance We have established processes aimed to assess, identify and manage material risks from cybersecurity threats. Our ERM organizational process includes annual risk assessments.
ITEM 1C. CYBERSECURITY Our management and Board of Directors (the “Board”) recognize the importance of maintaining the security and resiliency of our cybersecurity environment to deliver on the expectations of our customers, dealers, business partners, employees and investors.
ITEM 1C. CYBERSECURITY Our management and Board of Directors (the “Board”) recognize the importance of maintaining the security and resiliency of our cybersecurity environment to deliver on the expectations of our customers, dealers, business partners, employees and investors. The Board oversees our risk management practices, including our overall enterprise risk management (“ERM”) program, in which cybersecurity risk is included.
Third-party risk management We maintain a risk-based third-party risk management process to identify, assess and manage risks presented by service providers, vendors and other third parties that access our systems or that process or store our data. 18 Security awareness and training We provide ongoing security awareness and training to educate internal users on how to identify and report potential issues.
Third-party risk management We maintain a risk-based third-party risk management process designed to identify, assess and manage risks presented by service providers, vendors and other third parties that access our systems or that process or store our data.
Technical safeguards We deploy technical safeguards that are designed to protect our systems from cybersecurity threats, including firewalls, anti-malware software, and authentication and authorization controls. Ongoing enhancements are integrated into our security roadmap, as informed by our security audits and assessments.
Technical safeguards We deploy technical safeguards designed to protect our systems from cybersecurity threats, including firewalls, anti-malware software, and authentication and authorization controls.
Security and privacy incident response We have in place an incident response plan to identify, protect, detect, respond to and recover from cybersecurity threats and incidents. The CISO, the Security Steering Committee, our Chief Executive Officer and the Board are notified of any material cybersecurity incidents through an established escalation process.
The CIO/CISO, the Security Steering Committee, our Chief Executive Officer and the Board are notified of any material cybersecurity incidents through an established escalation process.
Strategic and operational cybersecurity risks are assessed, identified and managed by our cybersecurity team, which is led by our Chief Information Security Officer (the “CISO”).
Our cybersecurity team, which is led by our Chief Information Officer and Chief Information Security Officer (the “CIO/CISO”), is responsible for identifying, assessing and managing strategic and operational cybersecurity risks.
Overall, the purpose of our information security program is to protect the confidentiality, integrity and availability of our systems and data, along with the safe operation of our connected products. This is supported by our security operating framework, roadmap and governance.
Our cybersecurity program is aligned with the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and leverages the International Organization for Standardization and other applicable industry standards. Overall, the purpose of our information security program is to protect the confidentiality, integrity and availability of our systems and data, along with the safe operation of our connected products.
Cybersecurity reviews are conducted at least quarterly and reported to the Board or the Audit and Finance Committee by the CISO and/or Chief Financial Officer at least quarterly. Our cybersecurity team, which assesses and manages our risks from cybersecurity threats, is led by the CISO, who reports to our Chief Financial Officer.
We conduct cybersecurity audits and assessments on a regular basis and either our CIO/CISO or Chief Financial Officer report to the Audit and Finance Committee on a quarterly basis. Our cybersecurity team, which is responsible for assessing and managing our risks from cybersecurity threats, is led by the CIO/CISO, who reports to our Chief Financial Officer.
Our incident response team maintains a standard playbook to respond to any potential cybersecurity incidents. We test and evaluate our plans on a regular basis.
Ongoing enhancements are integrated into our security roadmap, as informed by our security audits and assessments. 18 Security and privacy incident response We maintain an incident response plan to identify, protect, detect, respond to and recover from cybersecurity threats and incidents. We test and evaluate our plans on a regular basis.
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The Board is actively involved in our risk management practices, including oversight of our overall enterprise risk management (“ERM”) program, in which cybersecurity risk is included. Our cybersecurity program is aligned with the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and leverages International Organization for Standardization and other applicable industry standards.
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The CISO has an undergraduate degree in Management Information Systems.
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Members of our cybersecurity team have, combined, over 100 years of cybersecurity experience, have degrees including Bachelors in Information Systems, Management Information Systems and/or Masters in Security Technologies, and hold professional certifications including Certified Information Systems Security Professional, Global Information Assurance Certification Security Essentials, Certified Cloud Security Professional, Certified Information Systems Auditor, Microsoft Cybersecurity Architect Expert and/or Certified Digital Forensics Examiner.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following is a summary of our principal properties as of December 31, 2023, including manufacturing, distribution, sales offices and service centers: No. of Sites Location Manufacturing Distribution Sales and Corporate Offices Service Centers Flow U.S. and 15 foreign countries 21 10 5 9 Water Solutions U.S. and 6 foreign countries 13 6 7 30 Pool U.S. and 2 foreign countries 7 11 2 1 Corporate U.S. and 3 foreign countries — — 6 — Total 41 27 20 40 We believe that our production sites, as well as the related machinery and equipment, are well maintained and suitable for their purpose and are adequate to support our businesses.
Biggest changeThe following is a summary of our principal properties as of December 31, 2024, including manufacturing, distribution, sales offices and service centers: No. of Sites Location Manufacturing Distribution Sales and Corporate Offices Service Centers Flow U.S. and 15 foreign countries 21 10 4 8 Water Solutions U.S. and 5 foreign countries 14 5 4 30 Pool U.S. and 2 foreign countries 6 15 4 2 Corporate U.S. and 3 foreign countries — — 6 — Total 41 30 18 40 We believe that our production sites, as well as the related machinery and equipment, are well maintained and suitable for their purpose and are adequate to support our businesses.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRefer to “Legal proceedings” and “Environmental matters” within Note 15 “Commitments and Contingencies” , of the consolidated financial statements included in ITEM 8 of Part II of this Form 10-K for information regarding legal and regulatory proceedings we are involved in.
Biggest changeRefer to “Legal proceedings” and “Environmental matters” within Note 15 “Commitments and Contingencies , ” of the consolidated financial statements included in ITEM 8 of Part II of this Form 10-K for information regarding legal and regulatory proceedings we are involved in.
In addition, see Item 1A “Risk Factors - Our subsidiaries are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows” related to asbestos matters.
In addition, see Item 1A “Risk Factors - Our subsidiaries are party to asbestos-related litigation that could adversely affect our financial condition, results of operations and cash flows” related to asbestos matters.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRobertson 53 Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer since 2020; Executive Vice President, General Counsel and Secretary 2018 – 2020; General Counsel, Water segment 2017 – 2018; Executive Vice President, General Counsel and Corporate Secretary of SUPERVALU Inc.
Biggest changeRobertson 54 Executive Vice President, Chief Sustainability Officer, General Counsel and Secretary since 2020; Executive Vice President, General Counsel and Secretary 2018 – 2020; General Counsel, Water segment 2017 – 2018; Executive Vice President, General Counsel and Corporate Secretary of SUPERVALU Inc.
Stauch 59 President and Chief Executive Officer since 2018; Executive Vice President and Chief Financial Officer 2007 – 2018; Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc. 2005 – 2007; Vice President, Finance and Chief Financial Officer of the Sensing and Controls unit of Honeywell International Inc. 2004 – 2005; Vice President, Finance and Chief Financial Officer of the Automation & Control Products unit of Honeywell International Inc. 2002 – 2004; Chief Financial Officer and IT Director of PerkinElmer Optoelectronics, a unit of PerkinElmer, Inc., 2000 – 2002.
Stauch 60 President and Chief Executive Officer since 2018; Executive Vice President and Chief Financial Officer 2007 – 2018; Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc. 2005 – 2007; Vice President, Finance and Chief Financial Officer of the Sensing and Controls unit of Honeywell International Inc. 2004 – 2005; Vice President, Finance and Chief Financial Officer of the Automation & Control Products unit of Honeywell International Inc. 2002 – 2004; Chief Financial Officer and IT Director of PerkinElmer Optoelectronics, a unit of PerkinElmer, Inc., 2000 – 2002.
Robert P. Fishman 60 Executive Vice President, Chief Financial Officer and Chief Accounting Officer since 2020; Executive Vice President and Chief Financial Officer of NCR Corporation (a global provider of omni-channel technology solutions) 2016 – 2018; Senior Vice President and Chief Financial Officer of NCR Corporation 2010 – 2016; Vice President and Corporate Controller of NCR Corporation 2007 – 2009.
Robert P. Fishman 61 Executive Vice President, Chief Financial Officer and Chief Accounting Officer since 2020; Executive Vice President and Chief Financial Officer of NCR Corporation (a global provider of omni-channel technology solutions) 2016 – 2018; Senior Vice President and Chief Financial Officer of NCR Corporation 2010 – 2016; Vice President and Corporate Controller of NCR Corporation 2007 – 2009.
Rolchigo 62 Executive Vice President and Chief Technology Officer since 2018; Chief Technology Officer 2017 – 2018; Vice President of Technology 2015 – 2017; Vice President of Engineering 2007 – 2015; Business Development Director of Water Technologies business of GE Global Research Center 2006 – 2007; Director of Technology of GE Water & Process Technologies 2003 – 2006; Chief Technology Officer of Osmonics 2000 – 2003; Vice President of Research & Development of Osmonics 1998 – 2000.
Rolchigo 63 Executive Vice President and Chief Technology Officer since 2018; Chief Technology Officer 2017 – 2018; Vice President of Technology 2015 – 2017; Vice President of Engineering 2007 – 2015; Business Development Director of Water Technologies business of GE Global Research Center 2006 – 2007; Director of Technology of GE Water & Process Technologies 2003 – 2006; Chief Technology Officer of Osmonics 2000 – 2003; Vice President of Research & Development of Osmonics 1998 – 2000.
Chiu 45 Executive Vice President and President of the Water Solutions reporting segment since January 1, 2023; Executive Vice President, Chief Human Resources Officer and Chief Transformation Officer 2021 – 2022; Vice President of Total Rewards and Human Resources Information Systems 2018 – 2021; Vice President and Project Management Office Leader for the separation of nVent plc (Pentair’s former electrical business) 2017 – 2018; Vice President of Human Resources Technology, Operations, and Equity Compensation 2016 – 2018; Senior Director of Human Resources Technology and Services 2011 – 2016; Various consulting positions of increasing responsibility at IBM Global Business Services 2000 – 2011.
Chiu 46 Executive Vice President and President of the Water Solutions reportable segment since 2023; Executive Vice President, Chief Human Resources Officer and Chief Transformation Officer 2021 – 2022; Vice President of Total Rewards and Human Resources Information Systems 2018 – 2021; Vice President and Project Management Office Leader for the separation of nVent plc (Pentair’s former electrical business) 2017 – 2018; Vice President of Human Resources Technology, Operations, and Equity Compensation 2016 – 2018; Senior Director of Human Resources Technology and Services 2011 – 2016; Various consulting positions of increasing responsibility at IBM Global Business Services 2000 – 2011.
Hooper 51 Executive Vice President and Chief Human Resources Officer since January 1, 2023; Vice President of Global Talent and Corporate Human Resources of Honeywell International Inc. 2021 – 2022; Vice President and Chief Human Resources Officer of Collins Aerospace 2019 – 2021; Vice President of Talent of Collins Aerospace 2018 – 2019; Vice President of Human Resources of Collins Aerospace 2016 – 2018; Various positions of increasing responsibility at Shell 2000 – 2016.
Hooper 52 Executive Vice President and Chief Human Resources Officer since 2023; Vice President of Global Talent and Corporate Human Resources of Honeywell International Inc. 2021 – 2022; Vice President and Chief Human Resources Officer of Collins Aerospace 2019 – 2021; Vice President of Talent of Collins Aerospace 2018 – 2019; Vice President of Human Resources of Collins Aerospace 2016 – 2018; Various positions of increasing responsibility at Shell 2000 – 2016.
Pedretti 53 Executive Vice President and Chief Executive Officer of the Pool reporting segment since January 1, 2023; Executive Vice President and President of the Flow reporting segment 2020 – 2022; Senior Vice President of Pentair’s former Aquatic Systems reporting segment 2016 – 2019; Vice President of Pentair’s former Valves & Controls business 2014 – 2016; Vice President Growth Strategy 2010 – 2014; Various business leadership positions of Pentair 2005 – 2014; Consultant at Bain & Co 2002 – 2005.
Pedretti 54 Executive Vice President and Chief Executive Officer of the Pool reportable segment since 2023; Executive Vice President and President of the Flow reportable segment 2020 – 2022; Senior Vice President of Pentair’s former Aquatic Systems reportable segment 2016 – 2019; Vice President of Pentair’s former Valves & Controls business 2014 – 2016; Vice President Growth Strategy 2010 – 2014; Various business leadership positions of Pentair 2005 – 2014; Consultant at Bain & Co 2002 – 2005.
Wiggins 49 Executive Vice President and President of the Flow reporting segment since January 1, 2023; Group President of Pentair’s Pool business 2021 – 2022; Vice President of Pentair’s Pool business 2017 – 2021; Vice President and Strategic Business Unit leader for Pentair’s Fluid Motion platform 2016 – 2017; Various other business leadership positions of Pentair 2010 – 2016. 21 PART II
Wiggins 50 Executive Vice President and President of the Flow reportable segment since 2023; Group President of Pentair’s Pool business 2021 – 2022; Vice President of Pentair’s Pool business 2017 – 2021; Vice President and Strategic Business Unit leader for Pentair’s Fluid Motion platform 2016 – 2017; Various other business leadership positions of Pentair 2010 – 2016. 21 PART II
Stephen J. Pilla 60 Executive Vice President, Chief Supply Chain Officer and Chief Transformation Officer since January 1, 2023; Executive Vice President and Chief Supply Chain Officer 2020 – 2022; Vice President and Chief Supply Chain Officer of Red Wing Shoe Co.
Stephen J. Pilla 61 Executive Vice President, Chief Supply Chain Officer and Chief Transformation Officer since 2023; Executive Vice President and Chief Supply Chain Officer 2020 – 2022; Vice President and Chief Supply Chain Officer of Red Wing Shoe Co.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn the basis of our size and diversity of businesses, we believe the S&P 500 Industrials Index and the S&P Mid Cap 400 Index are appropriate published industry indexes for comparison purposes. 22 Base Period December INDEXED RETURNS Years ended December 31 Company / Index 2018 2019 2020 2021 2022 2023 Pentair plc $ 100 $ 123.68 $ 145.80 $ 203.02 $ 127.14 $ 208.71 S&P 500 Index 100 131.49 155.68 200.37 164.08 207.21 S&P 500 Industrials Index 100 131.97 162.55 207.89 167.55 218.55 S&P Mid Cap 400 Index 100 124.05 138.70 170.89 146.14 167.26 Purchases of Equity Securities The following table provides information with respect to purchases we made of our ordinary shares during the fourth quarter of 2023: (a) (b) (c) (d) Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Dollar value of shares that may yet be purchased under the plans or programs October 1 – October 28 4,679 $ 63.56 — $ 600,002,203 October 29 – November 25 594 60.99 — 600,002,203 November 26 – December 31 1,283 65.23 — 600,002,203 Total 6,556 — (a) The purchases in this column include 4,679 shares for the period October 1 – October 28, 594 shares for the period October 29 – November 25, and 1,283 shares for the period November 26 – December 31 deemed surrendered to us by participants in our equity incentive plans to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options and vesting of restricted and performance shares.
Biggest changeOn the basis of our size and diversity of businesses, we believe the S&P 500 Industrials Index is an appropriate published industry index for comparison purposes. 22 Base Period December INDEXED RETURNS Years ended December 31 Company / Index 2019 2020 2021 2022 2023 2024 Pentair plc $ 100 $ 117.89 $ 164.15 $ 102.80 $ 168.75 $ 236.25 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 S&P 500 Industrials Index 100 123.17 157.53 126.96 165.61 207.55 Purchases of Equity Securities The following table provides information with respect to purchases we made of our ordinary shares during the fourth quarter of 2024: (a) (b) (c) (d) Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Dollar value of shares that may yet be purchased under the plans or programs October 1 – October 26 229 $ 95.00 — $ 500,002,264 October 27 – November 23 1,086 99.06 — 500,002,264 November 24 – December 31 473,457 106.05 471,493 450,002,346 Total 474,772 471,493 (a) The purchases in this column include 229 shares for the period October 1 – October 26, 1,086 shares for the period October 27 – November 23, and 1,964 shares for the period November 24 – December 31 deemed surrendered to us by participants in our equity incentive plans to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options and vesting of restricted and performance shares.
The graph also contains for comparison purposes the S&P 500 Index, the S&P 500 Industrials Index and the S&P Mid Cap 400 Index assuming the same investment level and reinvestment of dividends. By virtue of our market capitalization, we are a component of the S&P 500 Index.
The graph also contains for comparison purposes the S&P 500 Index and the S&P 500 Industrials Index, assuming the same investment level and reinvestment of dividends. By virtue of our market capitalization, we are a component of the S&P 500 Index.
(d) 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. As of December 31, 2023, we had $600.0 million remaining availability for repurchases under this authorization.
(d) 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. As of December 31, 2024, we had $450.0 million remaining availability for repurchases under this authorization.
The following graph sets forth the cumulative total shareholder return on our ordinary shares for the last five years, assuming the investment of $100 on December 31, 2018 and the reinvestment of all dividends since that date to December 31, 2023.
The following graph sets forth the cumulative total shareholder return on our ordinary shares for the last five years, assuming the investment of $100 on December 31, 2019 and the reinvestment of all dividends since that date to December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares are listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “PNR.” As of December 31, 2023, there were 12,363 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares are listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “PNR.” As of December 31, 2024, there were 11,731 shareholders of record.
This dividend reflects a 5 percent increase in the Company’s regular cash dividend rate and marks the 48 th consecutive year that Pentair has increased its dividend.
This dividend reflects a 9 percent increase in the Company’s regular cash dividend rate and marks the 49 th consecutive year that Pentair has increased its dividend.
Pentair has paid 192 consecutive quarterly cash dividends, including most recently a dividend of $0.22 per share in the fourth quarter of 2023.
Pentair has paid 196 consecutive quarterly cash dividends, including most recently a dividend of $0.23 per share in the fourth quarter of 2024.
On December 11, 2023, Pentair’s Board of Directors approved a regular quarterly cash dividend of $0.23 per share that was paid on February 2, 2024 to shareholders of record at the close of business on January 19, 2024.
On December 16, 2024, Pentair’s Board of Directors approved a regular quarterly cash dividend of $0.25 per share that was paid on February 7, 2025 to shareholders of record at the close of business on January 24, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+19 added−26 removed57 unchanged
Biggest changeThis increase was partially offset by: • inflationary cost increases due to high demand and limited supply of raw materials such as metals, resins and electronics along with increased logistics and labor costs; • decreased productivity in our residential business due to decreased sales volume; and • unfavorable foreign currency effects. 30 Pool The net sales and segment income for Pool were as follows: Years ended December 31 % / point change In millions 2023 2022 2021 2023 vs 2022 2022 vs 2021 Net sales $ 1,343.6 $ 1,632.7 $ 1,572.0 (17.7) % 3.9 % Segment income 417.0 462.1 452.7 (9.8) % 2.1 % % of net sales 31.0 % 28.3 % 28.8 % 2.7 pts (0.5) pts Net sales The components of the change in Pool net sales were as follows: 2023 vs 2022 2022 vs 2021 Volume (25.2) % (13.2) % Price 7.6 15.0 Core growth (17.6) 1.8 Acquisition/Divestiture — 2.4 Currency (0.1) (0.3) Total (17.7) % 3.9 % The 17.7 percent decrease in net sales for Pool in 2023 from 2022 was primarily the result of: • sales volume decreases primarily due to higher channel inventory and lower demand compared to the prior year.
Biggest changePool The net sales and segment income for Pool were as follows: Years ended December 31 % / point change In millions 2024 2023 2022 2024 vs 2023 2023 vs 2022 Net sales $ 1,436.1 $ 1,343.6 $ 1,632.7 6.9 % (17.7) % Segment income 476.5 417.0 462.1 14.3 % (9.8) % % of net sales 33.2 % 31.0 % 28.3 % 2.2 pts 2.7 pts Net sales The components of the change in Pool net sales were as follows: 2024 vs 2023 2023 vs 2022 Volume 4.1 % (25.2) % Price 2.9 7.6 Core growth 7.0 (17.6) Acquisition/Divestiture (0.2) — Currency 0.1 (0.1) Total 6.9 % (17.7) % The 6.9 percent increase in net sales for Pool in 2024 from 2023 was primarily the result of: • increased sales volume due to higher demand compared to the prior year; • increased selling prices to mitigate inflationary cost increases; and • increased sales due to the acquisition of G & F Manufacturing completed in the fourth quarter of 2024.
Investing activities Net cash used for investing activities in 2023 primarily reflects capital expenditures of $76.0 million and cash paid upon the settlement of net investment hedges of $18.5 million, partially offset by proceeds from the sale of property and equipment of $5.6 million.
Net cash used for investing activities in 2023 primarily reflects capital expenditures of $76.0 million and cash paid upon the settlement of net investment hedges of $18.5 million, partially offset by proceeds from the sale of property and equipment of $5.6 million.
Financing activities In 2023, net cash used for financing activities primarily relates to net repayments of revolving long-term debt of $320.0 million and dividend payments of $145.2 million.
In 2023, net cash used for financing activities primarily relates to net repayments of revolving long-term debt of $320.0 million and dividend payments of $145.2 million.
We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims. Stand-by letters of credit, bank guarantees and bonds In certain situations, Tyco International Ltd., Pentair Ltd.’s former parent company (“Tyco”), guaranteed performance by the flow control business of Pentair Ltd.
We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims. 35 Stand-by letters of credit, bank guarantees and bonds In certain situations, Tyco International Ltd., Pentair Ltd.’s former parent company (“Tyco”), guaranteed performance by the flow control business of Pentair Ltd.
We also consider the extent to which each of the adverse events and circumstances identified affect the comparison of the respective reporting unit’s fair value with its carrying amount. We place more weight on the events and circumstances that most affect the respective reporting unit’s fair value or the carrying amount of its net assets.
We also consider the extent to which each of the adverse events and circumstances identified affect the comparison of the respective reporting unit’s fair value with its carrying amount. We place more weight on the events and circumstances that most affect the respective reporting unit’s 36 fair value or the carrying amount of its net assets.
These factors include the overall global economic and business conditions impacting our business, including the strength of housing and related markets and conditions relating to international hostilities; supply, demand, logistics, competition and pricing pressures related to and in the markets we serve; the ability to achieve the benefits of our restructuring plans, cost reduction initiatives and Transformation Program; the impact of raw material, logistics and labor costs and other inflation; volatility in currency exchange rates and interest rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; risks associated with operating foreign businesses; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating and ESG goals.
These factors include the overall global economic and business conditions impacting our business, including the strength of housing and related markets and conditions relating to international hostilities; supply, demand, logistics, competition and pricing pressures related to and in the markets we serve; the ability to achieve the benefits of our restructuring plans, cost reduction initiatives and Transformation Program; the impact of raw material, logistics and labor costs and other inflation; volatility in currency exchange rates and interest rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; risks associated with operating foreign businesses; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating and sustainability goals and targets.
For purposes of the Leverage Ratio, the Senior Credit Facility and the Term 34 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.
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.
This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy. No impairment charges were recognized in 2023 or 2022 as a result of our annual impairment assessment.
This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy. No impairment charges were recognized in 2024 or 2023 as a result of our annual impairment assessment.
Factors considered in the analysis included the 2020 discounted cash flow fair value assessment of the reporting units and the calculated excess fair value over carrying amount, financial performance, forecasts and trends, market capitalization, regulatory and environmental issues, macro-economic conditions, industry and market considerations, raw material costs and management stability.
Factors considered in the analysis included the 2023 discounted cash flow fair value assessment of the reporting units and the calculated excess fair value over carrying amount, financial performance, forecasts and trends, market capitalization, regulatory and environmental issues, macro-economic conditions, industry and market considerations, raw material costs and management stability.
We expect to continue investing in our businesses to drive 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. In 2024, our operating objectives focus on delivering our core and building our future.
We expect to continue investing in our businesses to drive 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. In 2025, our operating objectives focus on delivering our core and building our future.
If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. 40
If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. 38
Consistent with historical trends, we experienced seasonal cash usage in the first quarter of 2023 and drew on our revolving credit facility to fund our operations. This cash usage reversed in the second quarter of 2023 as the seasonality of our businesses peaked and generated significant cash to fund our operations.
Consistent with historical trends, we experienced seasonal cash usage in the first quarter of 2024 and drew on our revolving credit facility to fund our operations. This cash usage reversed in the second quarter of 2024 as the seasonality of our businesses peaked and generated significant cash to fund our operations.
In the second half of 2023, we funded our operations using our strong cash flow and revolving credit facility. End-user demand for pool equipment in the Pool segment, water solution products in the Water Solutions segment, and residential water supply and agricultural products within the Flow segment follows warm weather trends, with seasonal highs from April to September.
In the second half of 2024, we funded our operations using our strong cash flow and revolving credit facility. End-user demand for pool equipment in the Pool segment, water solution products in the Water Solutions segment, and residential water supply and agricultural products within the Flow segment follows warm weather trends, with seasonal highs ranging from April to September.
We classified this debt as long-term as of December 31, 2023 as we have the intent and ability to refinance such obligations on a long-term basis under the revolving credit facility under the Senior Credit Facility.
We classified this debt as long-term as of December 31, 2024 as we have the intent and ability to refinance such obligations on a long-term basis under the revolving credit facility under the Senior Credit Facility.
NEW ACCOUNTING STANDARDS See ITEM 8, Note 1 of the Notes to Consolidated Financial Statements, included in this Form 10-K, for information pertaining to accounting standards to be adopted in the future. 37 CRITICAL ACCOUNTING POLICIES We have adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP.
NEW ACCOUNTING STANDARDS See ITEM 8, Note 1 of the Notes to Consolidated Financial Statements, included in this Form 10-K, for information pertaining to accounting standards recently adopted or to be adopted in the future. CRITICAL ACCOUNTING POLICIES We have adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP.
During 2023, 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.
During 2024, 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.
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 increases to $12.5 million beginning with the last day of the third quarter of 2024.
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.
Distributable reserves may be created through the earnings of the Irish parent company and through a reduction in share capital approved by the Irish High Court. Distributable reserves are not linked to a U.S. GAAP reported amount (e.g., retained earnings). Our distributable reserve balance was $6.9 billion and $7.1 billion as of December 31, 2023 and 2022, respectively.
Distributable reserves may be created through the earnings of the Irish parent company and through a reduction in share capital approved by the Irish High Court. Distributable reserves are not linked to a U.S. GAAP reported amount (e.g., retained earnings). Our distributable reserve balance was $6.8 billion and $6.9 billion as of December 31, 2024 and 2023, respectively.
Refer to ITEM 8, Note 9 of the Notes to Consolidated Financial Statements for additional information regarding our interest rate swaps and collars. The total gross liability for uncertain tax positions at December 31, 2023 was estimated to be $38.6 million.
Refer to ITEM 8, Note 9 of the Notes to Consolidated Financial Statements for additional information regarding our interest rate swaps and collars. The total gross liability for uncertain tax positions at December 31, 2024 was estimated to be $6.0 million.
As of December 31, 2023, we had $87.5 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences. Authorized shares Our authorized share capital consists of 426.0 million ordinary shares with a par value of $0.01 per share.
As of December 31, 2024, we had $89.5 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences. 33 Authorized shares Our authorized share capital consists of 426.0 million ordinary shares with a par value of $0.01 per share.
Overview Pentair plc and its consolidated subsidiaries (“we,” “us,” “our,” “Pentair” or the “Company”) is a pure play water industrial manufacturing company comprised of three reporting segments: Flow (formerly named the Industrial & Flow Technologies segment), Water Solutions and Pool. We classify our operations into business segments based primarily on types of products offered and markets served.
Overview Pentair plc and its consolidated subsidiaries (“we,” “us,” “our,” “Pentair” or the “Company”) is a pure play water industrial manufacturing company comprised of three reportable segments: Flow, Water Solutions and Pool. We classify our operations into business segments based primarily on types of products offered and markets served.
This accounting method also results in the potential for volatile and difficult to forecast mark-to-market adjustments. Mark-to-market adjustments resulted in a pre-tax loss of $6.1 million in 2023 and pre-tax gains of $17.5 million and $2.4 million in 2022 and 2021, respectively.
This accounting method also results in the potential for volatile and difficult to forecast mark-to-market adjustments. Mark-to-market adjustments resulted in pre-tax gains of $5.3 million and $17.5 million in 2024 and 2022, respectively, and a pre-tax loss of $6.1 million in 2023.
In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs. As of December 31, 2023 and 2022, the outstanding value of bonds, letters of credit and bank guarantees totaled $124.3 million and $99.7 million, respectively.
In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs. As of December 31, 2024 and 2023, the outstanding value of bonds, letters of credit and bank guarantees totaled $102.1 million and $124.3 million, respectively.
That impact could change in the future as we continue to evaluate the enacted legislative changes and as new guidance becomes available. • We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S.
We continue to evaluate the enacted legislative changes and new guidance as it becomes available. • We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S.
The balance of dividends payable included in Other current liabilities on our Consolidated Balance Sheets was $38.0 million at December 31, 2023. Dividends paid per ordinary share were $0.88, $0.84 and $0.80 for the years ended December 31, 2023, 2022 and 2021, respectively.
The balance of dividends payable included in Other current liabilities on our Consolidated Balance Sheets was $41.2 million at December 31, 2024. Dividends paid per ordinary share were $0.92, $0.88 and $0.84 for the years ended December 31, 2024, 2023 and 2022, respectively.
The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating. As of December 31, 2023, total availability under the Senior Credit Facility was $900.0 million.
The applicable margin is based on, at PFSA’s election, Pentair’s leverage level or PFSA’s public credit rating. As of December 31, 2024, total availability under the Senior Credit Facility was $890.5 million.
The remaining components of pension expense, including service and interest costs and the expected return on plan assets, are recorded on a quarterly basis as ongoing pension expense. Discount rates The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date.
The remaining components of pension expense, including service and interest costs and the expected return on plan assets, are recorded on a quarterly basis as ongoing pension expense. Discount rates The discount rate reflects the current rate at which the pension liabilities could be effectively settled.
Key trends and uncertainties regarding our existing business The following trends and uncertainties affected our financial performance in 2023, and are reasonably likely to impact our results in the future: • In 2021, we created a transformation office and launched and committed resources to the Transformation Program designed to accelerate growth and drive margin expansion by driving operational excellence, reducing complexity and streamlining our processes.
Key trends and uncertainties regarding our existing business The following trends and uncertainties affected our financial performance in 2024, and are reasonably likely to impact our results in the future: • We have a Transformation Program designed to accelerate growth and drive margin expansion by driving operational excellence, reducing complexity and streamlining our processes.
This increase was partially offset by: • inflationary cost increases related to labor costs and certain raw materials; and • unfavorable foreign currency effects.
This increase was partially offset by: • inflationary cost increases related to labor costs and certain raw materials.
Share repurchases 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 year ended December 31, 2022, we repurchased 1.0 million of our ordinary shares for $50.0 million.
Share repurchases 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 year ended December 31, 2023, no ordinary shares were repurchased.
We expect to execute these objectives by: • Delivering profitable revenue growth and productivity for customers and shareholders; • Continuing to focus on capital allocation through: ◦ Committing to maintain our investment grade rating; ◦ Focusing on reducing our long-term debt; ◦ Returning cash to shareholders through dividends and share repurchases; and ◦ Accelerating our performance with strategically-aligned mergers and acquisitions; • Focusing growth initiatives that accelerate our investments in digital, innovation, technology and ESG; • Continuing to implement our Transformation Program initiatives that will drive operational excellence, reduce complexity and improve our organizational structure; and • Building a high performance growth culture and delivering on our commitments while living our Win Right values. 25 CONSOLIDATED RESULTS OF OPERATIONS The consolidated results of operations were as follows: Years ended December 31 % / point change In millions 2023 2022 2021 2023 vs 2022 2022 vs 2021 Net sales $ 4,104.5 $ 4,121.8 $ 3,764.8 (0.4) % 9.5 % Cost of goods sold 2,585.3 2,757.2 2,445.6 (6.2) % 12.7 % Gross profit 1,519.2 1,364.6 1,319.2 11.3 % 3.4 % % of net sales 37.0 % 33.1 % 35.0 % 3.9 pts (1.9) pts Selling, general and administrative 680.2 677.1 596.4 0.5 % 13.5 % % of net sales 16.6 % 16.4 % 15.8 % 0.2 pts 0.6 pts Research and development 99.8 92.2 85.9 8.2 % 7.3 % % of net sales 2.4 % 2.2 % 2.3 % 0.2 pts (0.1) pts Operating income 739.2 595.3 636.9 24.2 % (6.5) % % of net sales 18.0 % 14.4 % 16.9 % 3.6 pts (2.5) pts Gain on sale of businesses — (0.2) (1.4) N.M.
We expect to execute these objectives by: • Delivering profitable revenue growth and productivity for customers and shareholders; • Continuing to focus on capital allocation through: ◦ Committing to maintain our investment grade rating; ◦ Focusing on reducing our long-term debt; ◦ Returning cash to shareholders through dividends and share repurchases; and ◦ Accelerating our performance with strategically-aligned mergers and acquisitions; • Focusing growth initiatives that accelerate our investments in digital, innovation, technology and sustainability; • Continuing to implement our Transformation Program initiatives that will drive operational excellence, reduce complexity and improve our organizational structure, which includes the focus on 80/20 actions to drive profitable growth; and • Building a high performance growth culture and delivering on our commitments while living our Win Right values. 25 CONSOLIDATED RESULTS OF OPERATIONS The consolidated results of operations were as follows: Years ended December 31 % / point change In millions 2024 2023 2022 2024 vs 2023 2023 vs 2022 Net sales $ 4,082.8 $ 4,104.5 $ 4,121.8 (0.5) % (0.4) % Cost of goods sold 2,484.0 2,585.3 2,757.2 (3.9) % (6.2) % Gross profit 1,598.8 1,519.2 1,364.6 5.2 % 11.3 % % of net sales 39.2 % 37.0 % 33.1 % 2.2 pts 3.9 pts Selling, general and administrative 701.4 680.2 677.1 3.1 % 0.5 % % of net sales 17.2 % 16.6 % 16.4 % 0.6 pts 0.2 pts Research and development 93.6 99.8 92.2 (6.2) % 8.2 % % of net sales 2.3 % 2.4 % 2.2 % (0.1) pts 0.2 pts Operating income 803.8 739.2 595.3 8.7 % 24.2 % % of net sales 19.7 % 18.0 % 14.4 % 1.7 pts 3.6 pts Net interest expense 88.6 118.3 61.8 (25.1) % 91.4 % Other (income) expense (3.7) 2.0 (17.1) N.M.
Segment income represents equity income of unconsolidated subsidiaries and operating income exclusive of intangible amortization, certain acquisition related expenses, costs of restructuring and transformation activities, impairments and other unusual non-operating items.
Segment income represents operating income of each reportable segment inclusive of equity income of unconsolidated subsidiaries and exclusive of intangible amortization, certain acquisition related expenses, costs of restructuring and transformation activities, impairments, legal accrual adjustments and settlements and other unusual non-operating items.
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 December 31, 2023. Borrowings under these credit facilities bear interest at variable rates.
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 December 31, 2024. Borrowings under these credit facilities bear interest at variable rates. We have $19.3 million of senior notes maturing in the next twelve months.
The increase was partially offset by: • decreased sales volume in our residential business in 2023 compared to the prior year. 28 Segment income The components of the change in Flow segment income as a percentage of net sales from the prior period were as follows: 2023 2022 Growth/Price/Acquisition 5.6 pts 9.6 pts Currency (0.1) (0.1) Inflation (5.6) (7.4) Productivity 1.8 (1.0) Total 1.7 pts 1.1 pts The 1.7 percentage point increase in segment income for Flow as a percentage of net sales in 2023 from 2022 was primarily the result of: • increased selling prices to mitigate impacts of inflation; and • increased productivity mainly driven by manufacturing leverage and transformation initiatives.
The decrease was partially offset by: • increased selling prices to mitigate inflationary cost increases; and • increased sales volume in our commercial flow business compared to the prior year. 28 Segment income The components of the change in Flow segment income as a percentage of net sales from the prior period were as follows: 2024 2023 Volume/Price 2.5 pts 5.6 pts Currency — (0.1) Inflation (2.3) (5.6) Productivity 3.0 1.8 Total 3.2 pts 1.7 pts The 3.2 percentage point increase in segment income for Flow as a percentage of net sales in 2024 from 2023 was primarily the result of: • increased productivity mainly driven by transformation initiatives; and • increased selling prices to mitigate impacts of inflation.
The following table is a reconciliation of free cash flow: Years ended December 31 In millions 2023 2022 2021 Net cash provided by operating activities of continuing operations $ 620.8 $ 364.3 $ 613.6 Capital expenditures of continuing operations (76.0) (85.2) (60.2) Proceeds from sale of property and equipment of continuing operations 5.6 4.1 3.9 Free cash flow from continuing operations $ 550.4 $ 283.2 $ 557.3 Net cash used for operating activities of discontinued operations (1.6) (1.0) (0.4) Free cash flow $ 548.8 $ 282.2 $ 556.9 Debt and Capital 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 and a $200.0 million senior unsecured term loan facility.
Our measure of free cash flow may not be comparable to similarly titled measures reported by other companies. 32 The following table is a reconciliation of free cash flow: Years ended December 31 In millions 2024 2023 2022 Net cash provided by operating activities of continuing operations $ 766.9 $ 620.8 $ 364.3 Capital expenditures of continuing operations (74.4) (76.0) (85.2) Proceeds from sale of property and equipment of continuing operations 0.6 5.6 4.1 Free cash flow from continuing operations $ 693.1 $ 550.4 $ 283.2 Net cash used for operating activities of discontinued operations (0.2) (1.6) (1.0) Free cash flow $ 692.9 $ 548.8 $ 282.2 Debt and Capital 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.
As of December 31, 2023, we had recorded $0.3 million for the possible payment of penalties and $6.4 million related to the possible payment of interest. 36 COMMITMENTS AND CONTINGENCIES We have been, and in the future may be, made parties to a number of actions filed or have been, and in the future may be, given notice of potential claims relating to the conduct of our business, including those relating to commercial, regulatory or contractual disputes with suppliers, authorities, customers or parties to acquisitions and divestitures, intellectual property matters, environmental, asbestos, safety and health matters, product liability, the use or installation of our products, consumer matters, and employment and labor matters.
COMMITMENTS AND CONTINGENCIES We have been, and in the future may be, made parties to a number of actions filed or have been, and in the future may be, given notice of potential claims relating to the conduct of our business, including those relating to commercial, regulatory or contractual disputes with suppliers, authorities, customers or parties to acquisitions and divestitures, intellectual property matters, environmental, asbestos, safety and health matters, product liability, the use or installation of our products, consumer matters, and employment and labor matters.
BACKLOG OF ORDERS BY SEGMENT December 31 In millions 2023 2022 $ change % change Flow $ 390.1 $ 512.1 $ (122.0) (23.8) % Water Solutions 108.5 193.5 (85.0) (43.9) % Pool 239.7 289.6 (49.9) (17.2) % Total $ 738.3 $ 995.2 $ (256.9) (25.8) % The majority of our backlog is short cycle in nature with shipments within one year from when a customer places an order, and a substantial portion of our revenues has historically resulted from orders received and products delivered in the same month.
BACKLOG OF ORDERS BY SEGMENT December 31 In millions 2024 2023 $ change % change Flow $ 352.3 $ 390.1 $ (37.8) (9.7) % Water Solutions 68.9 108.5 (39.6) (36.5) % Pool 190.0 239.7 (49.7) (20.7) % Total $ 611.2 $ 738.3 $ (127.1) (17.2) % The majority of our backlog is short cycle in nature with shipments within one year from when a customer places an order, and a substantial portion of our revenues has historically resulted from orders received and products delivered in the same month.
Dividends On December 11, 2023, the Board of Directors approved a regular quarterly cash dividend of $0.23 per share that was paid on February 2, 2024 to shareholders of record at the close of business on January 19, 2024. This dividend reflects a 5 percent increase in the Company’s regular cash dividend rate.
Dividends On December 16, 2024, the Board of Directors approved a regular quarterly cash dividend of $0.25 per share that was paid on February 7, 2025 to shareholders of record at the close of business on January 24, 2025. This dividend reflects a 9 percent increase in the Company’s regular cash dividend rate.
No impairment charges associated with identifiable intangibles with finite lives were recognized in 2023. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We complete our annual impairment test the first day of the fourth quarter each year for those identifiable assets not subject to amortization.
Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We complete our annual impairment test the first day of the fourth quarter each year for those identifiable assets not subject to amortization.
This increase was partially offset by: • inflationary cost increases related to labor costs and certain raw materials; and • inventory impairments and write-offs of $7.0 million in 2023.
This increase was partially offset by: • inflationary cost increases related to labor costs and certain raw materials; and • asset impairment and write-offs of $11.3 million recorded in 2024, compared to $7.0 million recorded in 2023.
Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment charges associated with identifiable intangibles with finite lives were recognized in 2024 or 2023.
The following summarizes our material cash requirements from significant contractual obligations and purchase commitments that impact our liquidity as of December 31, 2023: In millions Next Twelve Months Greater Than Twelve Months Total Debt obligations (Note 8) $ 237.5 $ 1,769.3 $ 2,006.8 Interest obligations on fixed-rate debt 42.5 279.7 322.2 Operating lease obligations, net of sublease rentals (Note 15) 31.4 97.8 129.2 Pension and other post-retirement plan contributions (Note 11) 9.5 79.9 89.4 Other purchase obligations 42.4 24.2 66.6 Total contractual obligations, net $ 363.3 $ 2,250.9 $ 2,614.2 Other purchase obligations primarily include service and marketing contracts as well as commitments for raw materials to be utilized in the normal course of business.
The following summarizes our material cash requirements from significant contractual obligations and purchase commitments that impact our liquidity as of December 31, 2024: In millions Next Twelve Months Greater Than Twelve Months Total Debt obligations (Note 8) $ 28.6 $ 1,634.5 $ 1,663.1 Interest obligations on fixed-rate debt 42.5 237.2 279.7 Operating lease obligations, net of sublease rentals (Note 15) 31.2 110.6 141.8 Pension and other post-retirement plan benefit payments (Note 11) 9.0 72.7 81.7 Other purchase obligations 45.4 11.3 56.7 Total contractual obligations, net $ 156.7 $ 2,066.3 $ 2,223.0 Other purchase obligations primarily include service and marketing contracts as well as commitments for raw materials to be utilized in the normal course of business.
In 2022, Pentair and PFSA entered into a senior unsecured term loan facility (the “Term Loan Facility”), with PFSA, as borrower, Pentair, as guarantor, and the lenders and agents party thereto, providing for an aggregate principal amount of $1.0 billion.
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.
As of December 31, 2023, variable interest rate debt was $1,187.5 million at a weighted average interest rate of 6.84%. Inclusive of our interest rate swaps and collars, our weighted average interest rate on our variable rate debt was 6.29% as of December 31, 2023.
As of December 31, 2024, variable interest rate debt was $843.8 million at a weighted average interest rate of 5.84%. Inclusive of our interest rate swaps and collars, our weighted average interest rate on our variable rate debt was 5.59% as of December 31, 2024.
Each of these segments is comprised of various product offerings that serve multiple end users. We evaluate performance based on net sales and segment income and use a variety of ratios to measure performance of our reporting segments.
Each of these segments comprises various product offerings that serve multiple end users. We evaluate performance based on net sales and reportable segment income (“segment income”) and use certain ratios, particularly return on sales, to measure performance of our reportable segments.
During the year ended December 31, 2023, no ordinary shares were repurchased. As of December 31, 2023, we had $600.0 million available for share repurchases under this authorization.
During the year ended December 31, 2024, we repurchased 1.6 million of our ordinary shares for $150.0 million. As of December 31, 2024, we had $450.0 million available for share repurchases under this authorization.
Flow The net sales and segment income for Flow were as follows: Years ended December 31 % / point change In millions 2023 2022 2021 2023 vs 2022 2022 vs 2021 Net sales $ 1,582.1 $ 1,500.8 $ 1,421.4 5.4 % 5.6 % Segment income 282.3 242.3 213.3 16.5 % 13.6 % % of net sales 17.8 % 16.1 % 15.0 % 1.7 pts 1.1 pts Net sales The components of the change in Flow net sales were as follows: 2023 vs 2022 2022 vs 2021 Volume (2.0) % (0.7) % Price 7.1 10.4 Core growth 5.1 9.7 Currency 0.3 (4.1) Total 5.4 % 5.6 % The 5.4 percent increase in net sales for Flow in 2023 from 2022 was primarily the result of: • increased selling prices to mitigate inflationary cost increases; • increased sales volume in our commercial and industrial solutions businesses in 2023 compared to the prior year; and • favorable foreign currency effects in 2023 compared to the prior year.
Flow The net sales and segment income for Flow were as follows: Years ended December 31 % / point change In millions 2024 2023 2022 2024 vs 2023 2023 vs 2022 Net sales $ 1,514.0 $ 1,582.1 $ 1,500.8 (4.3) % 5.4 % Segment income 318.1 282.3 242.3 12.7 % 16.5 % % of net sales 21.0 % 17.8 % 16.1 % 3.2 pts 1.7 pts Net sales The components of the change in Flow net sales were as follows: 2024 vs 2023 2023 vs 2022 Volume (6.0) % (2.0) % Price 1.7 7.1 Core growth (4.3) 5.1 Currency — 0.3 Total (4.3) % 5.4 % The 4.3 percent decrease in net sales for Flow in 2024 from 2023 was primarily the result of: • decreased sales volume in our residential flow and industrial solutions businesses compared to the prior year.
The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy. For the 2023 annual impairment test, the estimated fair value significantly exceeded the carrying value in each of our reporting units, therefore, no impairment charge was required. During 2022, a qualitative assessment was performed.
For the 2023 annual impairment test, the estimated fair value significantly exceeded the carrying value in each of our reporting units, therefore, no impairment charge was required. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described in ITEM 8, Note 9 of the Notes to Consolidated Financial Statements.
Segment income The components of the change in Water Solutions segment income as a percentage of net sales from the prior period were as follows: 2023 2022 Growth/Price/Acquisition 7.8 pts 14.6 pts Currency (0.5) (0.3) Inflation (4.7) (10.6) Productivity 3.3 (1.8) Total 5.9 pts 1.9 pts The 5.9 percentage point increase in segment income for Water Solutions as a percentage of net sales in 2023 from 2022 was primarily the result of: • increased sales as a result of the Manitowoc Ice acquisition; • increased selling prices to mitigate impacts of inflation; and • increased productivity in the residential business as a result of certain transformation and restructuring initiatives.
This decrease was partially offset by: • increased selling prices to mitigate inflationary cost increases. 29 Segment income The components of the change in Water Solutions segment income as a percentage of net sales from the prior period were as follows: 2024 2023 Volume/Price/Acquisition/Divestiture 1.3 pts 7.8 pts Currency 0.1 (0.5) Inflation (2.5) (4.7) Productivity 2.7 3.3 Total 1.6 pts 5.9 pts The 1.6 percentage point increase in segment income for Water Solutions as a percentage of net sales in 2024 from 2023 was primarily the result of: • increased productivity mainly driven by transformation initiatives; and • increased selling prices to mitigate impacts of inflation.
We believe free cash flow is an important measure of liquidity because it provides us and our investors a measurement of cash generated from operations that is available to pay dividends, repurchase shares and repay debt. In addition, free cash flow is used as a criterion to measure and pay compensation-based incentives.
Free cash flow is a non-U.S. GAAP financial measure that we use to assess our cash flow performance. We believe free cash flow is an important measure of liquidity because it provides us and our investors a measurement of cash generated from operations that is available to pay dividends, repurchase shares and repay debt.
N.M. Net interest expense 118.3 61.8 12.5 N.M. N.M. Other expense (income) 2.0 (16.9) (1.0) N.M. N.M. Income from continuing operations before income taxes 618.9 550.6 626.8 12.4 % (12.2) % (Benefit) provision for income taxes (4.0) 67.4 70.8 N.M. (4.8) % Effective tax rate (0.6) % 12.2 % 11.3 % (12.8) pts 0.9 pts N.M.
N.M. Income from continuing operations before income taxes 718.9 618.9 550.6 16.2 % 12.4 % Provision (benefit) for income taxes 93.3 (4.0) 67.4 N.M. N.M. Effective tax rate 13.0 % (0.6) % 12.2 % 13.6 pts (12.8) pts N.M.
In millions December 31, 2023 Current assets (1) $ 71.7 Noncurrent assets (2) 2,686.9 Current liabilities (3) 1,659.0 Noncurrent liabilities (4) 2,331.4 (1) No assets due from non-guarantor subsidiaries were included. (2) Includes assets due from non-guarantor subsidiaries of $2,673.3 million. (3) Includes liabilities due to non-guarantor subsidiaries of $1,583.6 million.
In millions December 31, 2024 Current assets (1) $ 1.3 Noncurrent assets (2) 2,551.7 Current liabilities (3) 1,893.1 Noncurrent liabilities (4) 1,828.6 (1) No assets due from non-guarantor subsidiaries were included. (2) Includes assets due from non-guarantor subsidiaries of $2,547.3 million. (3) Includes liabilities due to non-guarantor subsidiaries of $1,843.0 million.
The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds rated AA or higher available in the marketplace.
The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds rated AA or higher available in the marketplace. There are no known or anticipated changes in our discount rate assumptions that will impact our pension expense in 2025.
Material Cash Requirements From Contractual Obligations and Commitments We expect to continue to have sufficient cash and borrowing capacity to support working capital needs and capital expenditures, to pay interest and service debt and to pay dividends to shareholders quarterly.
The Parent Company Guarantor and Subsidiary Issuer do not have material results of operations on a combined basis. 34 Material Cash Requirements From Contractual Obligations and Commitments We expect to continue to have sufficient cash and borrowing capacity to support working capital needs and capital expenditures, to pay interest and service debt and to pay dividends to shareholders quarterly.
Not Meaningful Net sales The components of the consolidated net sales change were as follows: 2023 vs 2022 2022 vs 2021 Volume (11.3) % (7.1) % Price 6.4 13.3 Core growth (4.9) 6.2 Acquisition/Divestiture 4.4 5.5 Currency 0.1 (2.2) Total (0.4) % 9.5 % The 0.4 percent decrease in consolidated net sales in 2023 from 2022 was primarily the result of: • decreased sales volume in our residential business within our Flow segment compared to the prior year; • decreased sales volume in our residential business within our Water Solutions segment driven by lower demand compared to the prior year and certain business exits announced in the second half of 2022; and • decreased sales volume in our Pool segment primarily due to higher channel inventory and lower demand compared to the prior year.
Not Meaningful Net sales The components of the consolidated net sales change were as follows: 2024 vs 2023 2023 vs 2022 Volume (2.3) % (11.3) % Price 1.9 6.4 Core growth (0.4) (4.9) Acquisition/Divestiture (0.1) 4.4 Currency — 0.1 Total (0.5) % (0.4) % The 0.5 percent decrease in consolidated net sales in 2024 from 2023 was primarily the result of: • decreased sales volume in our residential flow and industrial solutions businesses within our Flow segment compared to the prior year; • decreased sales volume in our Water Solutions segment compared to the prior year, in addition to a business exit in our residential business in 2024 and the completion of a large project in 2023 within our commercial business that did not recur in 2024; and • a product line exit in our Pool segment that occurred in 2024.
Demand for residential and agricultural water systems is also impacted by weather patterns, particularly by temperature, heavy flooding and droughts. 32 Summary of Cash Flows Years ended December 31 In millions 2023 2022 2021 Cash provided by (used for): Operating activities of continuing operations $ 620.8 $ 364.3 $ 613.6 Investing activities (85.4) (1,582.8) (390.7) Financing activities (468.1) 1,232.7 (222.2) Operating activities In 2023, net cash provided by operating activities of continuing operations primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization, asset impairment and deferred income taxes, of $653.1 million.
Summary of Cash Flows Years ended December 31 In millions 2024 2023 2022 Cash provided by (used for): Operating activities of continuing operations $ 766.9 $ 620.8 $ 364.3 Investing activities (187.6) (85.4) (1,582.8) Financing activities (636.7) (468.1) 1,232.7 Operating activities In 2024, net cash provided by operating activities of continuing operations primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization and asset impairment, of $757.8 million.
Selling, general and administrative (“SG&A”) The 0.2 percentage point increase in SG&A expense as a percentage of net sales in 2023 from 2022 was driven by: • higher employee compensation costs compared to the prior year; and • transformation costs of $44.3 million in 2023, compared to $27.2 million in 2022.
Selling, general and administrative (“SG&A”) The 0.6 percentage point increase in SG&A expense as a percentage of net sales in 2024 from 2023 was driven by: • transformation costs of $52.0 million in 2024, compared to $44.3 million in 2023; • restructuring costs of $34.4 million in 2024, compared to $9.1 million in 2023; and • asset impairment charges of $6.3 million in 2024, compared to $0.9 million in 2023.
While we have taken pricing actions and implemented transformation initiatives that we expect to improve productivity and offset cost increases, we anticipate supply chain pressures and inflationary cost increases to continue into 2024. 24 • The Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”), for a global 15.0% minimum tax, are in the process of being adopted by a number of jurisdictions in which we operate.
We anticipate supply chain pressures and inflationary cost increases due to potential tariffs and pressure on global manufacturing to continue into 2025. • The Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”), for a global 15.0% minimum tax, have been adopted by a number of jurisdictions in which we operate.
We expect these actions to continue into 2024 and to drive margin growth. • The current volatile market for commodities has the potential to drive price increases in our supply chain.
We expect these actions to continue into 2025 and to drive margin growth. 24 • During 2024, 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.
For the year ended December 31, 2023, the Flow, Water Solutions and Pool segments represented approximately 38%, 29% and 33% of total revenues, respectively. Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have our tax residency in the U.K.
Although our jurisdiction of organization is Ireland, we manage our affairs so that we are centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have our tax residency in the U.K.
Segment income The components of the change in Pool segment income as a percentage of net sales from the prior period were as follows: 2023 2022 Growth/Price/Acquisition 5.3 pts 10.1 pts Currency — 0.1 Inflation (2.9) (8.6) Productivity 0.3 (2.1) Total 2.7 pts (0.5) pts The 2.7 percentage point increase in segment income for Pool as a percentage of net sales in 2023 from 2022 was primarily the result of: • increased selling prices to mitigate impacts of inflation as well as lower rebates and incentives; • increased productivity associated with benefits realized from our transformation initiatives; and • cost management initiatives associated with decreased sales volume. 31 This increase was partially offset by: • inflationary cost increases related to labor costs and certain raw materials.
This increase was partially offset by: • a product line exit that occurred in 2024. 30 Segment income The components of the change in Pool segment income as a percentage of net sales from the prior period were as follows: 2024 2023 Volume/Price/Acquisition/Divestiture 2.2 pts 5.3 pts Inflation (1.7) (2.9) Productivity 1.7 0.3 Total 2.2 pts 2.7 pts The 2.2 percentage point increase in segment income for Pool as a percentage of net sales in 2024 from 2023 was primarily the result of: • increased selling prices to mitigate impacts of inflation; and • increased productivity driven by transformation initiatives.
We consider positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value exceeds the carrying amount.
We consider positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value exceeds the carrying amount. During 2023, a quantitative assessment was performed. The fair value of each reporting unit was determined using a discounted cash flow analysis and market approach.
We record penalties and interest related to unrecognized tax benefits in (Benefit) p rovision for income taxes and Net interest expense , respectively, which is consistent with our past practices.
We record penalties and interest related to unrecognized tax benefits in Provision (benefit) for income taxes and Net interest expense , respectively, which is consistent with our past practices. As of December 31, 2024, we had recorded $3.9 million related to the possible payment of interest and recorded no liabilities for the possible payment of penalties.
If such subsidiaries are unable to transfer funds to the Parent Company Guarantor or the Subsidiary Issuer and sufficient cash or liquidity is not otherwise available, the Parent Company Guarantor or the Subsidiary Issuer may not be able to make principal and interest payments on their outstanding debt, including the senior notes or the guarantees. 35 The following table presents summarized financial information as of December 31, 2023 for the Parent Company Guarantor and Subsidiary Issuer on a combined basis after elimination of (i) intercompany transactions and balances among the guarantors and issuer and (ii) equity in earnings from and investments in any subsidiary that is a non-Guarantor or issuer.
The following table presents summarized financial information as of December 31, 2024 for the Parent Company Guarantor and Subsidiary Issuer on a combined basis after elimination of (i) intercompany transactions and balances among the guarantors and issuer and (ii) equity in earnings from and investments in any subsidiary that is a non-Guarantor or issuer.
There are no known or anticipated changes in our discount rate assumptions that will impact our pension expense in 2024. 39 Expected rate of return The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns.
Expected rate of return The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns.
The revolving credit facility has a maturity date of December 16, 2026 and the term loan facility has a maturity date of December 16, 2024.
During 2024, PFSA repaid $200.0 million of term loans under the Senior Credit Facility. The revolving credit facility has a maturity date of December 16, 2026.
Sensitivity to changes in key assumptions A 100 basis point increase or decrease in the discount rates used to measure our U.S. defined-benefit pension and other post-retirement plans would result in an approximately $7 million increase or $6 million decrease in our total projected benefit obligation.
In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader long-term market indices. 37 Sensitivity to changes in key assumptions A 100 basis point increase or decrease in the discount rates used to measure our U.S. defined-benefit pension and other post-retirement plans would result in an approximate decrease of $5 million or increase of $6 million in our total projected benefit obligation.
Decreases in inventory and accounts payable were primarily related to supply chain efficiencies and improved lead times. In 2022, net cash provided by operating activities of continuing operations primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization and asset impairment, of $615.4 million.
In 2023, net cash provided by operating activities of continuing operations primarily reflects net income from continuing operations, net of non-cash depreciation, definite-lived intangible amortization, asset impairment and deferred income taxes, of $653.1 million.
Water Solutions The net sales and segment income for Water Solutions were as follows: Years ended December 31 % / point change In millions 2023 2022 2021 2023 vs 2022 2022 vs 2021 Net sales $ 1,177.2 $ 986.8 $ 769.9 19.3 % 28.2 % Segment income 247.6 149.0 101.7 66.2 % 46.5 % % of net sales 21.0 % 15.1 % 13.2 % 5.9 pts 1.9 pts Net sales The components of the change in Water Solutions net sales were as follows: 2023 vs 2022 2022 vs 2021 Volume (2.0) % (6.2) % Price 3.1 15.1 Core growth 1.1 8.9 Acquisition/Divestiture 18.5 21.9 Currency (0.3) (2.6) Total 19.3 % 28.2 % The 19.3 percent increase in net sales for Water Solutions in 2023 from 2022 was primarily the result of: • increased sales as a result of the acquisition of Manitowoc Ice, which was completed in the third quarter of 2022; • higher sales volume in our commercial business driven by higher demand and easing of supply chain pressures, which allowed increased production and delivery to market; and • increased selling prices to mitigate inflationary cost increases.
Water Solutions The net sales and segment income for Water Solutions were as follows: Years ended December 31 % / point change In millions 2024 2023 2022 2024 vs 2023 2023 vs 2022 Net sales $ 1,131.0 $ 1,177.2 $ 986.8 (3.9) % 19.3 % Segment income 255.1 247.6 149.0 3.0 % 66.2 % % of net sales 22.6 % 21.0 % 15.1 % 1.6 pts 5.9 pts Net sales The components of the change in Water Solutions net sales were as follows: 2024 vs 2023 2023 vs 2022 Volume (4.8) % (2.0) % Price 1.2 3.1 Core growth (3.6) 1.1 Acquisition/Divestiture (0.1) 18.5 Currency (0.2) (0.3) Total (3.9) % 19.3 % The 3.9 percent decrease in net sales for Water Solutions in 2024 from 2023 was primarily the result of: • decreased sales volume compared to the prior year, in addition to the completion of a large project in 2023 within our commercial business that did not recur in 2024; • unfavorable foreign currency effects compared to the prior year; and • a business exit in our residential business that occurred in 2024.
As a result, it was determined that it was more likely than not that the fair value of the reporting units exceeded their respective carrying values.
However, we may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist. During 2024, a qualitative assessment was performed. As a result, it was determined that it was more likely than not that the fair value of the reporting units exceeded their respective carrying values.
This increase was partially offset by: • the amortization of debt issuance costs of $9.0 million in 2022 related to financing commitments for a bridge loan facility established in connection with the acquisition of Manitowoc Ice that did not recur in 2023. 27 (Benefit) provision for income taxes The 12.8 percentage point decrease in the effective tax rate in 2023 from 2022 was primarily due to: • the favorable impact of worthless stock deductions related to exiting certain businesses in our Water Solutions segment; • the favorable impact of discrete items primarily related to increases in tax basis in assets located in foreign jurisdictions; and • the favorable mix of global earnings. 2022 Comparison with 2021 A discussion of changes in our consolidated results of operations, segment results of operations for the Flow (formerly named Industrial & Flow Technologies) segment and liquidity and capital resources from the year ended December 31, 2022 to December 31, 2021 can be found in Part II, ITEM 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 21, 2023.
This increase was partially offset by: • the favorable impact of discrete items that occurred during 2024 primarily related to changes in uncertain tax positions. 27 2023 Comparison with 2022 A discussion of changes in our consolidated results of operations, segment results of operations and liquidity and capital resources from the year ended December 31, 2023 to December 31, 2022 can be found in Part II, ITEM 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 20, 2024.
Net cash used for investing activities in 2022 primarily reflects the net cash paid of $1,579.5 million for the Manitowoc Ice acquisition and capital expenditures of $85.2 million, partially offset by cash received upon the settlement of net investment hedges of $78.9 million.
Investing activities Net cash used for investing activities in 2024 primarily reflects net cash paid of $108.0 million for the acquisition of G & F Manufacturing, capital expenditures of $74.4 million and cash paid upon the settlement of net investment hedges of $5.8 million.
Our backlog of orders is dependent upon when customers place orders and is not necessarily an indicator of our expected results for our 2024 net sales. The decrease in our overall backlog from the prior year was primarily driven by our backlog trending down to more historical levels as a result of increased manufacturing capacity and improved lead times.
The decrease in our overall backlog from the prior year was primarily driven by our backlog trending down to more historical levels as a result of increased manufacturing capacity and improved lead times within each of our reportable segments as well as timing of delivery of orders associated with certain advance sale (“early buy”) programs within our Pool segment.
We used the net proceeds from the Term Loan Facility and the issuance of the 2032 Senior Notes to finance a portion of the Manitowoc Ice acquisition purchase price and to pay related fees and expenses. Our debt agreements contain various financial covenants, but the most restrictive covenants are contained in the Senior Credit Facility and the Term Loan Facility.
Our debt agreements contain various financial covenants, but the most restrictive covenants are contained in the Senior Credit Facility and the Term Loan Facility.
We have a long-term goal to consistently generate free cash flow that is equal to 100 percent conversion of net income. Free cash flow is a non-U.S. GAAP financial measure that we use to assess our cash flow performance.
Free Cash Flow In addition to measuring our cash flow generation or usage based upon operating, investing and financing classifications included in the Consolidated Statements of Cash Flows, we also measure our free cash flow. We have a long-term goal to consistently generate free cash flow that is equal to 100 percent conversion of net income.
This decrease was partially offset by: • increased selling prices to mitigate a rise in inflationary costs as well as lower rebates and incentives in our Pool segment; 26 • increased sales within our Water Solutions segment from the acquisition of Manitowoc Ice, which was completed in the third quarter of 2022; • increased sales volume in our commercial business within our Water Solutions segment driven by demand and easing of supply chain pressures, which allowed increased productivity and delivery to market; and • increased sales volume in our commercial and industrial solutions businesses within our Flow segment compared to the prior year.
This decrease was partially offset by: • increased selling prices across all of our segments to mitigate inflationary cost increases; • increased sales volume in our commercial flow business within our Flow segment compared to the prior year; 26 • increased sales volume within our Pool segment due to higher demand compared to the prior year; and • increased sales due to the acquisition of G & F Manufacturing completed in the fourth quarter of 2024.
The 1.9 percentage point increase in segment income for Water Solutions as a percentage of net sales in 2022 from 2021 was primarily the result of: • increased sales as a result of the Manitowoc Ice acquisition in the third quarter of 2022; and • increased selling prices to mitigate impacts of inflation.
Gross profit The 2.2 percentage point increase in gross profit as a percentage of net sales in 2024 from 2023 was primarily the result of: • increases in selling prices to mitigate impacts of inflationary costs; and • increased productivity mainly driven by transformation initiatives.
We expect to continue to execute on our key Transformation Program initiatives to drive margin expansion and to continue to incur transformation costs in 2024 and beyond. • In 2023, we executed certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.
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. • In 2024, we executed certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business.
Net interest expense The increase in net interest expense in 2023 from 2022 was the result of: • increased variable interest rates in 2023 compared to the prior year; and • increased debt due to the acquisition of Manitowoc Ice in the third quarter of 2022.
This increase was partially offset by: • a reduction in our legal accrual of $7.5 million in 2024, compared to an increase in our legal accrual of $2.2 million in 2023. Net interest expense The 25.1 percent decrease in net interest expense in 2024 from 2023 was the result of: • lower variable-rate debt compared to the prior year.
Removed
In July 2022, as part of our Water Solutions reporting segment, we acquired the issued and outstanding equity securities of certain subsidiaries of Welbilt, Inc. (“Welbilt”) and certain other assets, rights, and properties, and assumed certain liabilities, comprising Welbilt’s Manitowoc Ice business (“Manitowoc Ice”), for approximately $1.6 billion in cash.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed10 unchanged
Biggest changeAs the majority of our foreign currency contracts have an original maturity date of less than one year, there is no material foreign currency risk. At December 31, 2023, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $23.9 million.
Biggest changeAs the majority of our foreign currency contracts have an original maturity date of less than one year, there is no material foreign currency risk. At December 31, 2024, there were no outstanding foreign currency derivative contracts.
The functional currencies of our foreign operating locations are generally the local currency in the country of domicile. We manage these operating activities at the local level and revenues, costs, assets and liabilities are generally denominated in local currencies, thereby mitigating the risk associated with changes in foreign exchange.
The functional currencies of our foreign operating locations are generally the local currency in the country of domicile. We manage these operating activities at the local level and revenues, costs, assets and liabilities are generally denominated in local currencies, thereby mitigating the risk associated with changes in foreign currency exchange.
As of December 31, 2023, we had an aggregate notional amount of $300.0 million and $200.0 million in interest rate swaps and collars, respectively, that are designated as cash flow hedges. Refer to ITEM 8, Note 9 of the Notes to Consolidated Financial Statements for additional information regarding our interest rate swaps and collars.
As of December 31, 2024, we had an aggregate notional amount of $300.0 million and $200.0 million in interest rate swaps and collars, respectively, that are designated as cash flow hedges. Refer to ITEM 8, Note 9 of the Notes to Consolidated Financial Statements for additional information regarding our interest rate swaps and collars.
A 10% appreciation or a 10% depreciation of the U.S. dollar relative to the Euro would result in a change in accumulated other comprehensive income of approximately $73 million. However, the change in other comprehensive income would be offset by decreases or increases in the hedged items on our balance sheet. 41
A 10% appreciation or a 10% depreciation of the U.S. dollar relative to the Euro would result in a change in accumulated other comprehensive income of approximately $68 million. However, the change in other comprehensive income would be offset by decreases or increases in the hedged items on our balance sheet. 39
At December 31, 2023, we had outstanding cross currency swap agreements with a combined notional amount of $940.2 million. The cross currency swap agreements are accounted for as either cash flow hedges to hedge foreign currency fluctuations on certain intercompany debt, or as net investment hedges to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate.
At December 31, 2024, we had outstanding cross currency swap agreements with a combined notional amount of $728.5 million. The cross currency swap agreements are accounted for as either cash flow hedges to hedge foreign currency fluctuations on certain intercompany debt, or as net investment hedges to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate.
The major accounting policies and utilization of these instruments is described more fully in ITEM 8, Note 1 of the Notes to Consolidated Financial Statements. Interest rate risk Our debt portfolio as of December 31, 2023, was comprised of debt denominated in U.S. dollars. This debt portfolio is comprised of 41% fixed-rate debt and 59% variable-rate debt.
The major accounting policies and utilization of these instruments is described more fully in ITEM 8, Note 1 of the Notes to Consolidated Financial Statements. Interest rate risk Our debt portfolio as of December 31, 2024, was comprised of debt denominated in U.S. dollars. This debt portfolio is comprised of 49% fixed-rate debt and 51% variable-rate debt.
A 100 basis point fluctuation in interest rates associated with our variable-rate debt as of December 31, 2023, inclusive of our interest rate swaps and collars, would result in an increase of approximately $7 million or decrease of approximately $8 million in interest incurred.
A 100 basis point fluctuation in interest rates associated with our variable-rate debt as of December 31, 2024, inclusive of our interest rate swaps and collars, would result in an approximately $5 million increase or decrease in interest incurred.
Based on the fixed-rate debt included in our debt portfolio, as of December 31, 2023, a 100 basis point increase or decrease in interest rates would result in approximately a $48 million decrease or a $52 million increase in fair value of total fixed rate debt outstanding, respectively.
Based on the fixed-rate debt included in our debt portfolio, as of December 31, 2024, a 100 basis point increase or decrease in interest rates would result in approximately a $42 million decrease or a $45 million increase in fair value of total fixed rate debt outstanding, respectively.

Other PNR 10-K year-over-year comparisons