PENTAIR Q1 2015 Earnings Release
Q1 2015 EARNINGS RELEASE April 21, 2015 PENTAIR Q1 2015 Earnings - - PowerPoint PPT Presentation
Q1 2015 EARNINGS RELEASE April 21, 2015 PENTAIR Q1 2015 Earnings - - PowerPoint PPT Presentation
Q1 2015 EARNINGS RELEASE April 21, 2015 PENTAIR Q1 2015 Earnings Release FORWARD-LOOKING STATEMENTS C AUTION C ONCERNING F ORWARD -L OOKING S TATEMENTS This communication contains statements that we believe to be forward - looking
PENTAIR Q1 2015 Earnings Release
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FORWARD-LOOKING STATEMENTS
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS This communication contains statements that we believe to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward- looking statements. Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “positioned,” “strategy,” “future” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to achieve the benefits of planned cost take-out actions, the ability to successfully complete the disposition of
- ur Water Transport business on anticipated terms and timetable; overall global economic and business conditions;
competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, complete and integrate acquisitions; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including in our 2014 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this communication. We assume no obligation, and disclaim any obligation, to update the information contained in this communication.
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KEY DEFINITIONS
- Except as Otherwise Noted All References to 2015 and 2014 Represent Our
Results from Continuing Operations for the Period Indicated Presented on an Adjusted Basis
- “Core Sales” Refers to GAAP Revenue from Existing Operations Excluding (1) the
Impact of Currency Translation and (2) the Impact of Revenue from Acquired Businesses Recorded Prior to the First Anniversary of the Acquisition Less the Amount of Sales Attributable to Divested Product Lines Not Considered Discontinued Operations
- Segment Income (Loss) Represents Operating Income (Loss) from Continuing
Operations Exclusive of Certain Acquisition Related Expenses, Costs of Restructuring Activities, “Mark-to-Market" Gain (Loss) for Pension and Other Post-Retirement Plans, Impairments and Other Unusual Non-Operating Items
- See Appendix for GAAP to Non-GAAP Reconciliations
PENTAIR Q1 2015 Earnings Release
EXECUTIVE SUMMARY
Economic Challenges Persist … 2015 a “Pause” Year
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- Markets Throughout Q1 Were Significantly Below Forecast … We
Expected Energy to be Weak, but Industrial Contraction was a Surprise
- Planning on Continued FX Translation Impact and Very Little
Recovery in our End Markets in 2015
- Adjusting Cost Structure Accordingly to Reflect FX and Core
Revenue Decline
- Balance Sheet and Cash Flow Remain Strong … Will Continue
to Invest in M&A Where Appropriate While Executing the Cost Playbook
- 2015 Adjusted EPS Guidance now at ~$3.80
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2015 KEY FORECAST ASSUMPTIONS
External Headwinds Continue to Worsen … Focusing on Cost Actions
12/17/14 December Outlook Call 2/3/15 Q4 Earnings Update FX Headwind (EPS) Core Sales Growth
- Op. Margin Expansion
Share Buyback 2015 / 2016 Repositioning Benefit (cumulative) Balance Sheet Capacity >($0.20) ~2 - 3% ~90bps $200M Completed More Aggressive >$1B ~($0.10) ~2 - 4% ~110bps $200M Forecasted Modest >$1B 4/21/15 Q1 Earnings Update >($0.25) ~(2 - 3%) ~50bps $200M Completed $40M / $100M+ ~$0.8B
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- Adj. Op Income Down 15%
- Adj. EPS Down 8%
- Effective Tax Rate of 23%
- Net Interest of $18M; Share Count 183M
FINANCIAL HIGHLIGHTS (YoY) SUMMARY Core Sales Down 4% (Sales Down 10% including FX)
- Valves & Controls Down 11%
- Flow & Filtration Solutions Down 7%
- Water Quality Systems Up 4%
- Technical Solutions Up 1%
Disappointing Start to the Year … Corrective Actions Underway
- Continued Growth in Food & Beverage
- FX Headwind Significant … Volume Weakness in
Energy and Industrial
- Productivity and Price Not Enough to Offset
Volume Shortfall
- Completed $200 Million Share Buyback
$1.48B $171M $171M 11.6% $0.65 $0.65
Q1‘15 Q1'14
Sales Op Income (Rpt.) Op Income (Adj.)
ROS (Adj.)
EPS (Rpt.) EPS (Adj.)
$1.64B $182M $201M 12.2% $0.63 $0.71 Q1 Free Cash Flow Usage of $159M Consistent with Seasonality
- Adj. Op Margins 11.6% … Down 60 bps
Q1'15 PENTAIR RESULTS
PENTAIR Q1 2015 Earnings Release
Adjusted Operating Margins 11.6%
- Volume Shortfall and FX Deleverage Negatively
Impacted Margins
- Inflation Headwinds Remained
Consistently Modest
- Lean, Sourcing Actions, and G&A Reductions
Drove Productivity Gains
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Sales Highlights (by Vertical)
Productivity Unable to Offset Volume Shortfall
SALES OPERATING INCOME
Q1'15 PENTAIR PERFORMANCE
$1.64B $1.48B ($103M)
(6 pts) (10 pts) (5 pt)
($75M)
Q1'14 Adjusted Prod./ Price Infl. Vol/FX Q1'15 Adjusted
($46M) $171M $39M $201M ($23M)
ROS (1.4%) 2.5% 12.2% ROS 11.6% ROS
(15%)
YoY
Core Sales Down 4%
- Industrial Down 5%
- Residential & Commercial Down 1%
- Energy Down 9%
- Food & Beverage Up 3%
- Infrastructure Down 5%
1 pt
$9M
(1.7%) Q1'14 Price Q1'15 Volume FX
(10%)
YoY
Operating Margins / Productivity Highlights
Core (4%)
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Sales Highlights (by Vertical)
Weakness Across All Verticals … North America Only Area of Growth
SALES SEGMENT INCOME
Q1'15 VALVES & CONTROLS PERFORMANCE
$531M $429M ($43M)
(19%)
YoY
(8 pts) (19 pts) (11 pts)
($59M)
Prod./ Price Infl. Vol/FX Q1'15
($27M) $42M $14M $61M ($6M)
ROS (1.1%) 3.1% 11.5% ROS 9.8% ROS
(31%)
YoY
Backlog Including FX Down 4% Sequentially to $1.2B … Orders of $437M; Core Down 15% YoY
Core Sales Down 11% YoY
- Industrial – Process Down 10%
- Energy – Oil & Gas Down 11%
- Energy – Power Down 6%
- Energy – Mining Down 26%
Segment Margins 9.8%
- Volume Drop Significantly Impacted Margins
- OMT Investment Continued to Read Out
- Lean, Sourcing Actions, and G&A Reductions
Drove Productivity
0 pt
$0M
(3.7%) Q1'14 Price FX Q1'15 Volume
Segment Margins / Productivity Highlights
Core (11%)
Q1'14
PENTAIR Q1 2015 Earnings Release
388 391 390 376 396 413 370 349 344
100 200 300 400 500 600 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15
549 530 545 543 550 564 557 508 482
100 200 300 400 500 600 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15
374 371 353 364 368 373 345 328 310
100 200 300 400 500 600 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15
90 87 77 70 71 63 49 50 52
100 200 300 400 500 600 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15
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VALVES & CONTROLS BACKLOG (Includes Impact of FX)
FX Hurts Backlog and Order Weakness Reflective of Global Capital Strike
INDUSTRIAL - Process ENERGY - Oil & Gas ENERGY - Power ENERGY - Mining
- 2014: Revenue ~40%
- First Quarter Core Orders Down 13% Y-o-Y
- 2014: Revenue ~15%
- First Quarter Core Orders Down 11% Y-o-Y
- 2014: Revenue ~35%
- First Quarter Core Orders Down 17% Y-o-Y
- 2014: Revenue ~10%
- First Quarter Core Orders Down 19% Y-o-Y
Backlog ($ Millions) Backlog ($ Millions) Backlog ($ Millions) Backlog ($ Millions)
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Segment Margins / Productivity Highlights Sales Highlights (by Vertical)
Weak Demand and Destocking Impacted Top Line
SALES SEGMENT INCOME
Q1'15 FLOW & FILTRATION SOLUTIONS PERFORMANCE
$401M $350M $6M ($32M) ($17M) $29M $17M $35M ($6M)
ROS
Core Sales Down 7%
- Residential & Commercial Down 11%
- Food & Beverage Down 2%
- Infrastructure Down 14%
- Industrial Down 1%
Segment Margins 8.3%
- Volume and Mix Dragged on Margins
- Price Initiatives Offset Inflation
- Productivity Read Through as Lean and Sourcing
Accelerated and Gained Traction ($25M)
Q1'14 Price FX Q1'15 1 pt (6 pts) (13 pts) Volume (8 pts) Prod./ Price Infl. Vol/FX Q1'15 ROS (1.3%) (3.6%) 4.5% 8.7% 8.3% ROS
(13%)
YoY
(16%)
YoY
Core (7%)
Q1'14
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Segment Margins / Productivity Highlights Sales Highlights (by Vertical)
Solid Growth While Margins Impacted by Mix and Growth Investments
SALES SEGMENT INCOME
Q1'15 WATER QUALITY SYSTEMS PERFORMANCE
$304M $307M $2M $11M $1M $49M $6M $48M ($6M)
ROS
Core Sales Up 4%
- Residential & Commercial Up 3%
- Food & Beverage Up 11%
Segment Margins 16.1%
- Lean, Sourcing Actions, and G&A Reductions
Continued to Read Out
- Price and Productivity Offset Inflation
- NPD Investments Continued
($10M)
Q1'14 Price FX Q1'15 1 pt (3 pts) 1 pts Volume 3 pts Prod./ Price Infl. Vol/FX Q1'15 ROS (1.9%) 0.5% 1.8% 15.7% 16.1% ROS
1%
YoY
3%
YoY
Core 4%
Q1'14
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Q1'15 TECHNICAL SOLUTIONS PERFORMANCE
Core Sales Growth Weak … Mix and Productivity Hurt Margins
SALES SEGMENT INCOME Segment Margins / Productivity Highlights Sales Highlights (by Vertical)
Prod./ Price Infl. Vol/FX Q1'15
($5M) $73M $4M $79M ($5M)
(8%)
YoY
ROS (1.4%) (0.1%) 0.8% 19.1% 18.4% ROS
$415M $396M ($26M) $2M $5M
1 pt (6 pts) (5 pts)
Core Sales Up 1%
- Industrial Flat
- Energy Up 2%
- Residential & Commercial Up 7%
- Infrastructure Up 2%
Q1'14 Price Q1'15 Volume FX 0 pts
(5%)
YoY
Core +1%
Q1'14
Segment Margins 18.4%
- Experienced FX Headwind and Softer Volume
- Mix Impact and Transactional FX Negatively
Impacted Productivity
- Price Gains Were Modest
PENTAIR Q1 2015 Earnings Release
2015F CORE SALES GROWTH PROFILE
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Industrial Pause Impacts FY … Resi /Comm and F&B Still Healthy
FOOD & BEVERAGE RESIDENTIAL & COMMERCIAL ENERGY INDUSTRIAL INFRASTRUCTURE
% of PNR
(2014 Sales)
Q1’15 Growth FY’15 Growth Forecast FY’15 Assumptions ~29% ~27% ~27% ~10% ~7% ~(4-6)% ~+2-3% ~(6-8%) ~+5-7% ~(1-3%) (5%) (1%) (9%) +3% (5%)
- Cap Ex Pause Continues
- NA Chemical Buildout
- NA Resi Replacement
- Non-Resi Improvement
- Power and Mining
Remain Weak
- Upstream Pressure and
Downstream Pause
- NA LNG Good for Now
- Beer and Dairy Strength
- Food Service Strong
- Ag Remains Weak
- Muni Weakness Persists
Key Vertical
O&G – Power – Mining – 19% 5% 3%
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GUIDANCE UPDATE – FULL YEAR 2015 ADJUSTED EPS
Volume Shortfalls Hurt 1H … Corrective Actions to Drive 2H Improvement
PREVIOUS GUIDANCE CURRENT GUIDANCE ~$3.80
- Top Line Reduction Due to Stronger
Dollar, Market Softness, Reduced Capital Spending, and Customer De-Stocking
- Accelerating Cost Actions
- YoY EPS Growth Expected to be Flat
- Cash Flow Remains Strong
- Balance Sheet Flexibility
$4.10 - $4.25
- 2-3% Core Sales Growth
- FX Headwinds Mitigated by Internal
Execution
- Cost Actions on Track
- +10% YoY EPS Growth
- Strong Cash Flow
- Balance Sheet Flexibility
PENTAIR Q1 2015 Earnings Release
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2015 Actions Expected to Yield $100M+ in 2016 Savings
2015/2016 COST ACTIONS
- Expect Continued Strengthening of USD
Against Most Major Currencies Increasing Top Line and Bottom Line Headwinds
- Expect YOY OI Impact of ~$65M @ 1.08 Euro
Exchange Rate … Increases to $75M at Parity
- Implementing Cost Take-Out Actions in 2015
to Mitigate FX Translation Impact for 2016
Translation FX Impact
(FY 2015 Op Income $M) February 2015 Current View Euro @ 1.00
Cost Actions
(Cumulative $M)
- Significant Cost Actions Across all Four
Reporting Segments but Majority of Actions in Valves & Controls and Flow & Filtration Solutions Due to Revenue Challenges
- Actions Executed in 2015 Result in Full Run
Rate Benefit in 2016
- Focus is Still on G&A and Variable Labor but
also Expanding to Manufacturing Rooftops
2015F Cost 2015 Benefit 2016 Benefit
~($50) ~($65) ~($75) ~($60) ~$40 $100+
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Sales Highlights
Expect Core Sales Decline in 1H and Cost Actions to Read Out in 2H
SALES OPERATING INCOME
2015 CURRENT OUTLOOK (FY)
$7.0B $6.5B $0M ($120M)
($50M) $970M $0M $1.02B ($95M)
ROS
Core Sales Down ~2%
- Energy Weakness Continues
- Industrial Recovery Not Expected
- NA Resi Strength but Global Resi Slower
- Food & Beverage Strength Remains
($450M)
FY'14 Price FX FY'15 0 pt (6 pts) (8 pts) Volume (2 pts) Price Infl. Vol FY'15 ROS (0.0%) (0.5%) 0.0% 14.5% 15.0% ROS
(8%)
YoY
(5%)
YoY
Core (2%)
FY'14
2/3/15
$50M ($330M) $6.9B $175M
2/3/15
($45M) $100M $1.1B $60M
FX Prod.
($65M)
(1.3%) 2.3%
$160M
($85M) $50M
Operating Income Detail Adjusted Operating Margins 15.0%
- Productivity
- Cost-Out
$40M
- Base Productivity $120M
PENTAIR Q1 2015 Earnings Release
Other FY Key Financial Metrics:
- Capital Expenditures ~$150M
- Total D&A of ~$250M + ~$30M of Non-Cash
Stock Compensation
- Share Buyback of $200M
- ROIC at Quarter End 10.9%
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BALANCE SHEET AND CASH FLOW
Expect Another Strong Year of Free Cash Flow
DEBT ROLLFORWARD CASH FLOW DEBT SUMMARY
*Does Not Include $131M of Cash on Hand
Maturity
Variable
$3.4B*
Q1'15
- Avg. Rate ~2.35%
~59% Fixed … $2.0B $1.4B ’19 Fixed ’15 – ‘22 Q1 Q1 ($M) 2015 2014 YOY Chg Net Income from Continuing Operations $ 118 $ 125 $ (7) Non-Cash Items $ 70 $ 71 $ (1) Subtotal $ 188 $ 196 $ (8) Working Capital $ (234) $ (147) $ (87) Capital Expenditures $ (35) $ (27) $ (8) Asset Sales $ 2 $ - $ 2 Other Accruals/Other $ (87) $ (46) $ (41) Free Cash Flow $ (166) $ (24) $ (142) Discontinued Operations FCF $ (7) $ 15 $ (22) Continuing Operations FCF $ (159) $ (39) $ (120) Q1 Q1 Use of Cash: ($M) 2015 2014 YOY Chg Beginning Debt $ 3,004 $ 2,550 $ (454) Generated Cash $ 166 $ 24 $ (142) Share Repurchase $ 200 $ 252 $ 52 Dividends $ 58 $ 49 $ (9) Other $ (19) $ 56 $ 75 Ending Debt $ 3,409 $ 2,931 $ (478)
PENTAIR Q1 2015 Earnings Release
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Organic Growth
- Highest ROIC from Funding Organic
Opportunities (Distribution Channel, R&D, Sales / Marketing, Capital, etc.)
Debt Management
- Maintain Investment Grade Rating
ALLOCATION PRIORITIES FREE CASH FLOW USAGE Dividends
- 39 Straight Years of Increases
- Competitive Dividend Yield
Efficient Capital Allocation Deployment & Opportunities
2015F CASH FLOW USAGE & CAPITAL ALLOCATION
Acquisitions or Share Repurchases
- $2.4B of Share Repurchases
Since September 2012
- Building Acquisition Pipeline Across Portfolio
- If Deals do not Materialize, Will Consider
Incremental Buyback
Q2-Q4 2015F FCF Net Debt at Q1 2015 Q2-Q4 Buyback & Dividends
~$1.1B (~$180M) $3.3B* ~$2.4B*
Forecasted Net Debt at YE 2015
2.6 X EBITDA 1.9 X EBITDA ~$800M Capacity at 2.5X EBITDA
* Does not Include Pension Liability and Operating Leases
PENTAIR Q1 2015 Earnings Release
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- Adj. EPS Down ~6%
- Tax Rate of ~23%
- Net Interest / Other ~$18M; Shares ~182M
Q2 Free Cash Flow Expected to be Seasonally Strong Q2'15 FINANCIAL OUTLOOK (YoY) SUMMARY
Economic Headwinds Persist … Cost Actions Being Implemented
Q2'15 PENTAIR OUTLOOK
- FX Translation Persists
- Residential Seasonal Strength
- Core Sales Growth Expected in WQS and TS
- Continued Standardization Benefits …
Repositioning Actions Accelerated
- Adj. Op Income ~$247M
- Adj. Op Margins ~15.1% … Down ~10 bps
- Valves & Controls Margins, ~12.5%
- Flow & Filtration Solutions Margins, ~12.0%
- Water Quality Systems Margins, ~21.0%
- Technical Solutions Margins, ~19.5%
~$1.64B ~$207M ~$247M ~15.1% $0.78-$0.79 $0.95-$0.96
Q2'15 Q2’14
Sales Op Income (Rpt.) Op Income (Adj.)
ROS (Adj.)
EPS (Rpt.) EPS (Adj.)
$1.83B $226M $279M 15.2% $0.81 $1.02 Core Sales Down ~3-4% (FX ~7% Headwind)
- Valves & Controls Down ~13-15%
- Flow & Filtration Solutions Down ~3-4%
- Water Quality Systems Up ~6-7%
- Technical Solutions Up ~3-5%
PENTAIR Q1 2015 Earnings Release
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- Adj. EPS Up ~1%
- Tax Rate of ~23%
- Net Interest / Other ~$73M; Shares ~182M
Free Cash Flow of ~$900M; >120% Net Income FY’15 FINANCIAL OUTLOOK (YoY) SUMMARY
A “Pause” Year as First Half Market Impacts not Fully Offset
FULL YEAR 2015 PENTAIR OUTLOOK
- Core Sales Decline as Industrial Recovery
not Anticipated
- FX Transactional Impact to Moderate in 2H
- Productivity and Standardization Remain Strong
- Strong Cash Flow & Efficient Capital Deployment
- Adj. Op Income Down ~5%
- Adj. Op Margins ~15.0% … Up ~50 bps
- Valves & Controls Margins, ~14.0%
- Flow & Filtration Solutions Margins, ~11.0%
- Water Quality Systems Margins, ~19.0%
- Technical Solutions Margins, ~22.0%
~$6.47B ~$913M ~$973M ~15.0% ~$3.55 ~$3.80
FY’15 FY’14
Sales Op Income (Rpt.) Op Income (Adj.)
ROS (Adj.)
EPS (Rpt.) EPS (Adj.)
$7.0B $852M $1.02B 14.5% $3.14 $3.78 Core Sales Down ~2-3% (FX ~6% Headwind)
- Valves & Controls Down ~8-10%
- Flow & Filtration Solutions Down ~4-6%
- Water Quality Systems Up ~6-7%
- Technical Solutions Up ~2-4%
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APPENDIX
GAAP to Non-GAAP Measurements & Reconciliations
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REPORTED TO ADJUSTED 2015 RECONCILIATION
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Q1 2015 CORE SALES GROWTH RECONCILIATION
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OTHER RECONCILIATIONS
First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter In millions 2014 2014 2014 2014 2015 Reported Operating Income 182.1 $ 226.4 $ 267.4 $ 176.0 $ 171.2 $ Adjustments 18.5 52.9
- 98.4
- Adjusted Operating Income
200.6 $ 279.3 $ 267.4 $ 274.4 $ 171.2 $ Reported Provision for Income Taxes 40.8 $ 49.4 $ 58.1 $ 29.0 $ 35.3 $ Effect of Adjustments on Provision for Income Taxes 2.2 11.6
- 31.4
- Adjusted Provision for Income Taxes
43.0 $ 61.0 $ 58.1 $ 60.4 $ 35.3 $ Reported Effective Tax Rate 24.5% 23.7% 23.2% 18.3% 23.0% Adjusted Effective Tax Rate 23.2% 23.3% 23.2% 23.5% 23.0% NOPAT 154.0 $ 214.2 $ 205.4 $ 210.0 $ 131.8 $ Depreciation & Amortization ("D&A") 63.3 63.4 63.0 63.0 60.0 Capital expenditures ("Cap Ex") (27.2) (32.4) (32.9) (37.1) (34.8) Total NOPAT, D&A and Cap Ex 190.1 $ 245.2 $ 235.5 $ 235.9 $ 157.0 $ Trailing four quarter NOPAT, D&A and Cap Ex 812.4 $ 846.3 $ 874.8 $ 906.6 $ 873.6 $ Ending Invested Capital (excluding noncontrolling interest) 8,663.8 $ 8,293.8 $ 7,774.1 $ 7,557.5 $ 7,701.2 $ Trailing five quarter average invested capital 8,491.2 $ 8,422.5 $ 8,310.6 $ 8,135.8 $ 7,998.1 $ After Tax Return on Invested Capital 9.6% 10.0% 10.5% 11.1% 10.9%
NOPAT (Net Operating Profit After Tax) is Defined as [(Adjusted OI) X (1 - Adjusted Effective Tax Rate)] Ending Invested Capital is Defined as [Total Shareholders' Equity - Noncontrolling interest + Long-term Debt + Current Maturities of Long-term Debt + Short-term Borrowings
- Cash and Cash Equivalents]
Free Cash Flow Net cash provided by (used for) operating activities (32.9) $ 427.7 $ 293.4 $ 316.8 $ (126.2) $ Capital expenditures (27.2) (32.4) (32.9) (37.1) (34.8) Proceeds from sale of property and equipment 0.4 2.3 1.4 9.0 2.3 Free cash flow (59.7) $ 397.6 $ 261.9 $ 288.7 $ (158.7) $ EBITDA Adjusted Operating Income 200.6 $ 279.3 $ 267.4 $ 274.4 $ 171.2 $ Depreciation & Amortization ("D&A") 63.3 63.4 63.0 63.0 60.0 EBITDA 263.9 $ 342.7 $ 330.4 $ 337.4 $ 231.2 $ Trailing four quarters EBITDA 1,185.2 $ 1,218.7 $ 1,245.5 $ 1,274.4 $ 1,241.7 $
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