Pentair (PNR) 10-K risk factor changes: FY2017 vs FY2016

We have experienced, and expect to continue to experience, fluctuations in revenues and [removed: operating] results [added: of operations] due to economic and business cycles.

The businesses of many of our industrial [removed: customers, particularly oil and gas companies, chemical and petrochemical companies, mining and general industrial companies,] [added: customers] are to varying degrees cyclical and have experienced periodic downturns.

While we attempt to minimize our exposure to economic or market fluctuations by serving a balanced mix of end markets and geographic regions, any of the above factors, individually or in the aggregate, or a significant or sustained downturn in a specific end market or geographic region could reduce demand for our products and [removed: services.][added: services, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.]

If we are unable to continue to differentiate our products, services and solutions, or if we are forced to cut prices or to incur additional costs to remain competitive, [added: it could have a material adverse effect on] our business, financial condition, results of operations and cash [removed: flows could be materially and adversely affected.][added: flows.]

Volatility in currency exchange rates [removed: may adversely affect] [added: 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, [removed: 2016] [added: 2017] accounted for [removed: 41 percent] [added: 40%] of our net sales.

Therefore, if the U.S. dollar strengthens in relation to the [removed: principle] [added: 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.

Fluctuations in foreign currency exchange rates, most notably the strengthening of the U.S. dollar against the [removed: Euro,] [added: euro,] could [removed: continue to adversely affect] [added: have a material adverse effect on] our reported revenue in future periods.

In addition, currency variations [removed: can adversely affect] [added: could have a material adverse effect on] margins on sales of our products in countries outside of the U.S. and margins on sales of products that include components obtained from suppliers located outside of the U.S.

The failure to effectively adapt our products or services could [removed: materially and adversely affect] [added: have a material adverse effect on] our business, financial condition, results of operations and cash flows.

We may not be able to identify, finance and complete suitable acquisitions and investments, and any completed acquisitions and investments could be unsuccessful or consume significant [removed: resources, which could adversely affect our operating results.][added: resources.]

We [removed: cannot provide any assurance that we will] [added: may not] be able to identify suitable acquisition candidates, obtain financing or have sufficient cash necessary for acquisitions or successfully complete acquisitions in the future or that completed acquisitions will be successful.

Acquisitions and investments may involve significant cash expenditures, debt incurrences, equity issuances, operating losses and [removed: expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows.][added: expenses.]

| • | assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including risks [removed: related] [added: relating] to the U.S. Foreign Corrupt Practices Act (the "FCPA"); and |

Any acquisitions or investments may [added: not be successful and may] ultimately [removed: harm] [added: result in impairment charges and have a material adverse effect on] our business, financial condition, results of operations and cash [removed: flows, as such acquisitions may not be successful and may ultimately result in impairment charges.][added: flows.]

[removed: These and other factors could impair our ability to complete the sale in the time frame and on the terms we anticipate, and this] [added: The occurrence of any of these events] could have a material adverse effect on our [added: reputation, business,] financial [removed: position,] [added: condition,] results of operations [removed: or] [added: and] cash flows.

During [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] we initiated and continued execution of certain business initiatives aimed at reducing our fixed cost structure and realigning our business.

We may not be able to achieve the operating efficiencies to reduce costs or realize benefits that were [removed: initially] anticipated in connection with these initiatives.

If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could [removed: adversely affect] [added: have a material adverse effect on] our [removed: business and] [added: business, financial condition,] results of [removed: operations.][added: operations and cash flows.]

Sales outside of the U.S. for the year ended December 31, [removed: 2016] [added: 2017] accounted for [removed: 41 percent] [added: 40%] of our net sales.

| • | relatively more severe economic conditions in some international markets than in the [removed: United States;] [added: U.S.;] |

| • | the difficulty of enforcing agreements and collecting receivables through [removed: foreign] [added: non-U.S.] legal systems; |

| • | the difficulty of communicating and monitoring standards and directives across our global [removed: network of after-market service centers and manufacturing] facilities; |

| • | changes in tax treaties, laws or rulings that could have [removed: an] [added: a material] adverse impact on our effective tax rate; |

[removed: We cannot provide assurance, however, that] [added: However,] these actions [removed: will] [added: may not] be successful in managing our costs or increasing our productivity.

Over the past few years, we have noticed an increasing tendency for participants in our markets to use [removed: conflicts over and] challenges to intellectual property as a means to compete.

If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could [removed: harm] [added: have a material adverse effect on] our business, financial condition, results of operations and cash flows.

We have significant goodwill and intangible assets and future impairment of our goodwill and intangible assets could have a material [removed: negative impact] [added: adverse effect] on our [removed: financial results.][added: results of operations.]

We test goodwill and [added: other] indefinite-lived intangible assets for impairment on at least an annual basis, and more frequently if circumstances warrant, by comparing the estimated fair value of each of our reporting units to their respective carrying values on their balance sheets.

As of December 31, [removed: 2016] [added: 2017] our goodwill and intangible assets were [removed: $5,849.2] [added: $5,909.5] million and represented [removed: 51%] [added: 68%] of our total assets.

Long-term declines in projected future cash flows could result in future goodwill and intangible asset [removed: impairments.][added: impairment charges.]

Seasonality of sales and weather conditions [removed: may adversely affect] [added: could have a material adverse effect on] our financial results.

In [removed: Flow & Filtration Solutions,] [added: Water,] demand for residential water supply products, [removed: infrastructure and] [added: infrastructure,] agricultural products [removed: follows] [added: and end-user demand for pool equipment in our primary markets follow] warm weather trends and [removed: is] [added: are] at seasonal highs from April to August.

The magnitude of the sales increase in [removed: both Flow & Filtration Solutions and] Water [removed: Quality Systems] is partially mitigated by employing some advance sale or "early buy" programs (generally including extended payment terms and/or additional discounts).

[removed: Technical Solutions] [added: Electrical] generally experiences increased demand for thermal protection products and services during the fall and winter months in the Northern Hemisphere and increased demand for electrical fastening products during the spring and summer months in the Northern Hemisphere.

[removed: We cannot provide assurance that seasonality] [added: Seasonality] and weather conditions [removed: will not] [added: could] have a material adverse effect on our results of operations.

| • | actual or anticipated fluctuations in our [removed: operating] results [added: of operations] due to factors related to our business; |

We have experienced an increase in the number of asbestos-related lawsuits over the past several years, including lawsuits by plaintiffs [removed: with mesothelioma-related claims.]

[added: 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 entity restructuring and judicial relief.

[removed: We could be adversely affected by violations] [added: Violations] of the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws outside the [removed: United States.][added: U.S. could have a material adverse effect on us.]

Risks Relating to Our Proposed Separation of Our Water Business and Electrical Business by Spin-off

The proposed separation of our Water business and Electrical business is contingent upon the satisfaction of a number of conditions, may require significant time and attention of our management and may have an adverse effect on us whether or not it is completed.

On May 9, 2017, we announced that our Board of Directors approved a plan to separate our Water business and Electrical business into two independent, publicly-traded companies through a spin-off.

Completion of the spin-off will be contingent upon customary conditions, including obtaining final approval from our Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the SEC.

In addition, the proposed spin-off is complex in nature and may be affected by unanticipated developments or changes in market conditions.

For these and other reasons, the spin-off may not be completed on April 30, 2018, as we are targeting, if at all.

Whether or not we complete the spin-off, our ongoing businesses may be adversely affected and we may be subject to certain risks and consequences as a result of pursuing the spin-off, including the following:

| • | execution of the proposed spin-off will require significant time and attention from management, which may distract management from the operation of our businesses and the execution of other initiatives that may have been beneficial to us; |

| • | our employees may also be distracted due to uncertainty about their future roles with each of the separate companies pending the completion of the spin-off; |

| • | some of our suppliers or customers may delay or defer decisions or may end their relationships with us; |

| • | we will be required to pay certain costs and expenses relating to the spin-off, such as legal, accounting and other professional fees, whether or not it is completed; and |

| • | we may experience negative reactions from the financial markets if we fail to complete the spin-off or fail to complete it on a timely basis. |

Any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows and trading prices.

We may be unable to achieve some or all of the benefits that we expect to achieve from the spin-off.

Although we believe that separating our Electrical business from our Water business by means of the spin-off will provide financial, operational, managerial and other benefits to us and our shareholders, the spin-off may not provide the results on the scope or on the scale we anticipate, and we may not realize any or all of the intended benefits.

In addition, we will incur one-time costs and ongoing costs in connection with, or as a result of, the spin-off, including costs of operating as independent, publicly-traded companies that the two businesses will no longer be able to share.

Those costs may exceed our estimates or could negate some of the benefits we expect to realize.

If we do not realize the intended benefits or if our costs exceed our estimates, we could suffer a material adverse effect on the business, financial condition, results of operations, cash flows and trading prices.

If the proposed spin-off of our Electrical business is completed, the trading price of our ordinary shares will likely decline and may experience greater volatility.

We expect the trading price of our ordinary shares immediately following the spin-off to be significantly lower than immediately prior to the spin-off because the trading price for our shares will no longer reflect the value of our Electrical business.

In addition, until the market has fully analyzed our value without our Electrical business, the price of our shares may experience greater volatility.

If the proposed spin-off is completed, our shares may not match some holders' investment strategies or meet minimum criteria for inclusion in stock market indices or portfolios, which could cause investors to sell their shares.

Excessive selling pressure could cause the market price of our shares to decrease further following the completion of the proposed spin-off.

Following the spin-off, the value of our ordinary shares and the ordinary shares of the Electrical business that is spun off may collectively trade at an aggregate price less than that at which the Company's ordinary shares might trade had the spin-off not occurred.

For a number of reasons, our ordinary shares and the ordinary shares of the Electrical business that is spun off that you may hold following the spin-off may collectively trade at a value less than the price at which our ordinary shares might have traded had the spin-off not occurred and we continued to own the Electrical business.

These reasons include the future performance of either us or the Electrical business as separate, independent companies and the future shareholder base and market for our ordinary shares and the ordinary shares of the Electrical business and the prices at which these shares individually trade.

The proposed spin-off transaction could result in substantial tax liability to us and our shareholders.

The spin-off is conditioned on our receipt of opinions of tax counsel and tax rulings from taxing authorities.

However, these tax opinions will not be binding on taxing authorities.

Accordingly, taxing authorities or the courts may reach conclusions with respect to the spin-off that are different from the conclusions reached in the opinions of counsel.

Moreover, the opinions of counsel will be based on certain statements and representations made by us, which, if incomplete or inaccurate in any material respect, could invalidate the opinion of counsel.

Additionally, certain internal restructuring transactions necessary to accomplish the spin-off may result in adverse tax consequences to us.

If the spin-off and certain related transactions were determined to be taxable, we could be subject to a substantial tax liability that could have a material adverse effect on our financial condition, results of operations and cash flows.

In addition, if the spin-off were taxable, each holder of our ordinary shares who receives shares of the Electrical business in the spin-off would generally be treated as receiving a taxable distribution of property in an amount equal to the fair market value of the shares received.

We may experience cost and other inflation.

Continued cost inflation or failure of our initiatives to generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows.

A material disruption at any of our manufacturing facilities could cause us to be unable to meet customer demands or increase our costs.

If operations at any of our manufacturing facilities were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes or other reasons, we may be unable to fill customer orders and otherwise meet customer demand for our products, which could have a material adverse effect our business, financial condition, results of operations and cash flows.

Interruptions in production, in particular at our manufacturing facilities, could increase our costs and reduce our sales.

Any interruption in production capability could require us to make substantial capital expenditures to fill customer orders.

During 2016, foreign currency translations had a 0.8 percent negative impact on our net sales.

We have chosen to focus our growth initiatives in specific end markets and geographies, but we cannot provide assurance that these growth initiatives will be sufficient to offset revenue declines in other markets.

We may not complete the sale of our Valves & controls business in the time frame or on the terms we anticipate.

On August 18, 2016, we entered into an agreement to sell our Valves & Controls business to Emerson Electric Co. for a purchase price of $3.15 billion in cash, subject to certain customary adjustments.

We believe the sale will be completed by the end of the first quarter of 2017, subject to customary regulatory approvals and closing conditions.

The completion of the sale is subject to a number of risks and uncertainties, including the satisfaction of the conditions to the completion of the sale, the parties to the transactions obtaining the necessary regulatory approvals, the occurrence of any event, change or other circumstance that could give rise to the termination of the sale agreement and our ability to obtain the expected proceeds from the sale.

Material cost and other inflation have adversely affected and could continue to affect our results of operations.

Continued cost inflation or failure of our initiatives to generate cost savings or improve productivity would likely negatively impact our results of operations.

We may be adversely affected by work stoppages, union negotiations, labor disputes and other matters associated with our labor force.

As of December 31, 2016, approximately 9,000 of our employees were covered by collective bargaining agreements or works councils.

Although we believe that our relations with the labor unions and work councils that represent our employees are generally good and we have experienced no material strikes and only minor work stoppages recently, no assurances can be made that we will not experience in the future these and other types of conflicts with labor unions, works councils, other groups representing employees or our employees generally, or that any future negotiations with our labor unions will not result in significant increases in our cost of labor.

We experience seasonal demand in a number of markets within Flow & Filtration Solutions, Water Quality Systems and Technical Solutions.

In Water Quality Systems, end-user demand for pool equipment in our primary markets follows warm weather trends and is at seasonal highs from April to August.

These broad market fluctuations could adversely affect the trading price of our shares.

As of December 31, 2016, there were approximately 3,800 claims pending against our subsidiaries, of which approximately 3,300 relate to the Valves & Controls business classified as held for sale.

We cannot predict with certainty the extent to which we will be successful in litigating or

Prior to the Merger, the Flow Control business was subject to investigations by the DOJ and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the FCPA.

Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco's own internal investigations.

As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ.

As a result, the Flow Control business may be subject to investigations in other jurisdictions or suffer other criminal or civil penalties or adverse impacts, including being subject to lawsuits brought by private litigants, each of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our failure to satisfy international trade compliance regulations may adversely affect us.

We are exposed to potential regulatory, financial and reputational risks related to certain "conflict minerals."

In 2012, the SEC adopted disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo or adjoining countries, as required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The final rules impose inquiry, diligence and disclosure obligations with respect to "conflict minerals," defined as tin, tantalum, tungsten and gold, that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company.

Certain of these minerals are used extensively in components manufactured by our suppliers (or in components incorporated by our suppliers into components supplied to us) for use in our products.

Under the final rules, an SEC reporting company must conduct a country of origin inquiry that is reasonably designed to determine whether any of the "conflict minerals" that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by the company originated in the Democratic Republic of the Congo or an adjoining country.

If any such "conflict minerals" originated in the Democratic Republic of Congo or an adjoining country, the final rules require the issuer to exercise due diligence on the source of such "conflict minerals" and their chain of custody with the ultimate objective of determining whether the "conflict minerals" directly or indirectly financed or benefited armed groups in the Democratic Republic of the Congo or an adjoining country.

The issuer must then prepare and file with the SEC annually a report regarding its diligence efforts, which we have done since the SEC's reporting requirements became effective.

We have incurred, and expect to continue to incur, significant costs to conduct country of origin inquiries and to exercise such due diligence.

We have a very large number of suppliers and our supply chain is very complex and multifaceted.

While we have no intention to use minerals sourced from the Democratic Republic of Congo or adjoining countries that are not "conflict free" (meaning that they do not contain "conflict minerals" that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country), a significant number of our suppliers are small businesses, and those small businesses have limited or no resources to track their sources of minerals.

As a result, we have experienced, and expect to continue to experience, ongoing significant difficulty in determining the country of origin or the source and chain of custody for all "conflict minerals" used in our products and disclosing that our products are "conflict free." We may face reputational challenges if we are unable to verify the country of origin or the source and chain of custody for all "conflict minerals" used in our products or if we continue to be unable to disclose that our products are "conflict free." The ongoing implementation of these rules may also affect the sourcing and availability of some minerals necessary to the manufacture of our products and may affect the availability and price of "conflict minerals" capable of certification as "conflict free." Accordingly, we have incurred, and expect to continue to incur, significant costs as a consequence of these rules, which may adversely affect our business, financial condition or results of operations.

The U.S. Congress and federal and state regulatory agencies have been considering legislation and regulatory proposals that would regulate and limit greenhouse gas emissions.

In addition, new laws and regulations that might favor the increased use of non-fossil fuels, including nuclear, wind, solar and bio-fuels or that are designed to increase energy efficiency, could dampen demand for oil and gas production or power generation

resulting in lower spending by customers for our products and services.

We are exposed to potential regulatory, financial and reputational risks relating to the protection of our data.

We have identified attempts to gain unauthorized access to our information technology systems and networks.

To our knowledge, no such attack was ultimately successful in exporting sensitive data or controlling sensitive systems or networks.

The occurrence of any of these events could adversely affect our reputation, competitive position, business and results of operations.

Our results of operations may be negatively impacted by litigation.

These factors include the ability to [added: satisfy the necessary conditions to consummate the Proposed Separation (as defined below) on a timely basis or at all; the ability to] successfully [removed: complete] [added: separate] the [removed: sale of] [added: Water and Electrical businesses and realize] the [removed: Valves & Controls] [added: anticipated benefits from the Proposed Separation; adverse effects on the Water and Electrical] business [added: operations or financial results and the market price of our shares as a result of the announcement or consummation of the Proposed Separation; unanticipated transaction expenses, such as litigation or legal settlement expenses; failure to obtain tax rulings or changes in tax laws; changes in capital market conditions; the impact of the Proposed Separation] on [removed: anticipated terms] [added: our employees, customers] and [removed: timetable:] [added: suppliers;] overall global economic and business [removed: conditions, including worldwide demand for oil] [added: conditions impacting the Water] and [removed: gas;] [added: Electrical businesses; future opportunities that our board may determine present greater potential to increase shareholder value;] the ability [added: of the Water and Electrical businesses] to [added: operate independently following the Proposed Separation; the ability to] achieve the benefits of our restructuring plans; the ability to successfully identify, finance, complete and integrate acquisitions; competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals.

Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange [removed: Commission,] [added: Commission (the "SEC"),] including [removed: in Item 1A of] this Annual Report on Form 10-K.

Pentair plc is a focused diversified industrial manufacturing company comprising [removed: three] [added: two] reporting segments: Water [removed: Quality Systems, Flow & Filtration Solutions] and [removed: Technical Solutions.][added: Electrical.]

For the year ended December 31, [removed: 2016,] [added: 2017,] Water [removed: Quality Systems, Flow & Filtration Solutions] and [removed: Technical Solutions] [added: Electrical] accounted for [removed: 29 percent, 28 percent] [added: 58%] and [removed: 43 percent] [added: 42%] of total revenues, respectively.

The results of the [removed: Water Transport] [added: Valves & Controls] business have been presented as discontinued operations and the [added: related] assets and liabilities [removed: of the Water Transport business] have been reclassified as held for sale for all periods presented.

On September 18, 2015, we acquired, as part of [removed: Technical Solutions,] [added: Electrical,] all of the outstanding shares of capital stock of ERICO Global Company ("ERICO") for approximately [removed: 1.8] [added: $1.8] billion [added: in cash] (the "ERICO Acquisition").

The following trends and uncertainties affected our financial performance in [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and will likely impact our results in the future:

In [removed: 2017,] [added: 2018,] our operating objectives include the following:

| • | Driving operating excellence through [removed: lean enterprise initiatives,] [added: PIMS,] with specific focus on sourcing and supply management, cash flow management and lean operations; |

| In millions | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | | | [removed: 2016] [added: 2017] vs [removed: 2015] [added: 2016] | | [removed: 2015] [added: 2016] vs [removed: 2014] [added: 2015] | |

| Net sales | $ | [removed: 4,890.0] [added: 4,936.5] | | $ | [removed: 4,616.4] [added: 4,890.0] | | $ | [removed: 4,666.8] [added: 4,616.4] | | | [removed: 5.9] [added: 1.0] | % | [removed: (1.1] [added: 5.9] | [removed: )%] [added: %] |

| Cost of goods sold | [removed: 3,095.9] [added: 3,107.4] | | | [removed: 3,017.6] [added: 3,095.9] | | | [removed: 3,046.3] [added: 3,017.6] | | | | [removed: 2.6] [added: 0.4] | % | [removed: (0.9] [added: 2.6] | [removed: )%] [added: %] |

| Gross profit | [removed: 1,794.1] [added: 1,829.1] | | | [removed: 1,598.8] [added: 1,794.1] | | | [removed: 1,620.5] [added: 1,598.8] | | | | [removed: 12.2] [added: 2.0] | % | [removed: (1.3] [added: 12.2] | [removed: )%] [added: %] |

| % of net sales | [removed: 36.7] [added: 37.1] | | % | [removed: 34.6] [added: 36.7] | | % | [removed: 34.7] [added: 34.6] | | % | | [removed: 2.1] [added: 0.4 |] pts | [added: 2.1] | [removed: (0.1)] pts | [removed: |]

| Selling, general and administrative | [removed: 979.3] [added: 1,032.5] | | | [removed: 884.0] [added: 979.3] | | | [removed: 985.6] [added: 884.0] | | | | [removed: 10.8] [added: 5.4] | % | [removed: (10.3] [added: 10.8] | [removed: )%] [added: %] |

| % of net sales | [removed: 20.0] [added: 20.9] | | % | [removed: 19.1] [added: 20.0] | | % | [removed: 21.1] [added: 19.1] | | % | | 0.9 [added: |] pts | [added: 0.9] | [removed: (2.0)] pts | [removed: |]

| Research and development | [removed: 114.1] [added: 115.8] | | | [removed: 98.7] [added: 114.1] | | | [removed: 96.4] [added: 98.7] | | | | [removed: 15.6] [added: 1.5] | % | [removed: 2.4] [added: 15.6] | % |

| % of net sales | 2.3 | | % | [removed: 2.1] [added: 2.3] | | % | 2.1 | | % | | [removed: 0.2 pts] [added: —] | | [removed: —] [added: 0.2] | [added: pts] |

| Operating income | [removed: 700.7] [added: 680.8] | | | [removed: 616.1] [added: 700.7] | | | [removed: 538.5] [added: 616.1] | | | | [removed: 13.7] [added: (2.8] | [removed: %] [added: )%] | [removed: 14.4] [added: 13.7] | % |

| % of net sales | [removed: 14.3] [added: 13.8] | | % | [removed: 13.3] [added: 14.3] | | % | [removed: 11.5] [added: 13.3] | | % | | [removed: 1.0] [added: (0.5 | )] pts | [added: 1.0] | [removed: 1.8] pts | [removed: |]

| Loss on sale of [removed: businesses, net] [added: businesses] | [removed: 3.9] [added: 4.2] | | | [removed: 3.2] [added: 3.9] | | | [removed: 0.2] [added: 3.2] | | | | [removed: 21.9] [added: 7.7] | % | [removed: N.M.] [added: 21.9] | [added: %] |

| Net interest expense | [removed: 140.1] [added: 87.3] | | | [removed: 101.9] [added: 140.1] | | | [removed: 68.6] [added: 101.9] | | | | [removed: 37.5] [added: (37.7] | [removed: %] [added: )%] | [removed: 48.5] [added: 37.5] | % |

| Income from continuing operations before income taxes | [removed: 561.0] [added: 489.2] | | | [removed: 512.5] [added: 561.0] | | | [removed: 470.9] [added: 512.5] | | | | [removed: 9.5] [added: (12.8] | [removed: %] [added: )%] | [removed: 8.8] [added: 9.5] | % |

| Provision for income taxes | [removed: 109.4] [added: 9.2] | | | [removed: 115.4] [added: 109.4] | | | [removed: 114.3] [added: 115.4] | | | | [removed: (5.2] [added: (91.6] | )% | [removed: 1.0] [added: (5.2] | [added: )] % |

| Effective tax rate | [removed: 19.5] [added: 1.9] | | % | [removed: 22.5] [added: 19.5] | | % | [removed: 24.3] [added: 22.5] | | % | | [removed: (3.0)] [added: (17.6 | )] pts | [added: (3.0] | [removed: (1.8)] [added: )] pts | [removed: |]

| | [removed: 2016] [added: 2017] vs [removed: 2015] [added: 2016] | | | [removed: 2015] [added: 2016] vs [removed: 2014] [added: 2015] | |

| Volume | [removed: (1.7] [added: (1.0] | )% | | [removed: 0.5] [added: (1.7] | [removed: %] [added: )%] |

| Price | [removed: 0.3] [added: 0.5] | | | [removed: 0.6] [added: 0.3] | |

| Core growth | [removed: (1.4] [added: (0.5] | ) | | [removed: 1.1] [added: (1.4] | [added: )] |

| Acquisition | [removed: 8.1] [added: 0.9] | | | [removed: 3.1] [added: 8.1] | |

| Currency | [removed: (0.8] [added: 0.6] | [removed: )] | | [removed: (5.3] [added: (0.8] | ) |

| Total | [removed: 5.9] [added: 1.0] | % | | [removed: (1.1] [added: 5.9] | [removed: )%] [added: %] |

| • | continued slowdown in capital spending, [removed: particularly in our industrial and energy businesses,] driving core sales declines in [removed: Flow & Filtration Solutions] [added: our industrial] and [removed: Technical Solutions;] [added: energy businesses;] |

The 1.1 percent decrease in [removed: consolidated net] [added: Water] sales in [removed: 2015] [added: 2016] from [removed: 2014] [added: 2015] was primarily the result of:

These [removed: decreases] [added: increases] were partially offset by:

| • | a decrease in cost of goods sold of $35.7 million in 2016 compared to 2015 as a result of inventory fair value step-up recorded as part of the [removed: Technical Solutions] [added: Electrical] acquisitions in 2015. |

| • | inflationary increases related to raw materials and labor [removed: costs.] [added: costs; and] |

The [removed: 0.1] [added: 0.4] percentage point [removed: decrease] [added: increase] in gross profit as a percentage of sales in [removed: 2015] [added: 2017] from [removed: 2014] [added: 2016] was primarily the result of:

| • | higher contribution margin as a result of savings generated from our [removed: PIMS] [added: Pentair Integrated Management System ("PIMS")] initiatives including lean and supply management practices. |

The 0.9 percentage point increase in SG&A expense as a percentage of sales in 2016 from 2015 and was driven [removed: by:][added: by the following:]

On April 28, 2017 we completed the sale of the Valves & Controls business to Emerson Electric Co. for $3.15 billion in cash.

The sale resulted in a gain of $181.1 million, net of tax.

On May 9, 2017, we announced that our Board of Directors approved a plan to separate our Water business and Electrical business into two independent, publicly-traded companies (the "Proposed Separation").

The Proposed Separation is expected to occur through a tax-free spin-off of the Electrical business to Pentair shareholders.

Completion of the Proposed Separation is subject to certain customary conditions, including, among other things, final approval of the transaction by Pentair's Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the SEC.

Upon completion of the Proposed Separation, it is anticipated that Electrical's jurisdiction of organization will be Ireland, but that it will manage its affairs so that it will be centrally managed and controlled in the U.K. and therefore will have its tax residency in the U.K.

We are targeting April 30, 2018 for the completion of the Proposed Separation; however, there can be no assurance regarding the ultimate timing of the Proposed Separation or that the Proposed Separation will be completed.

| • | During 2017 and 2016, we continued execution of certain business restructuring initiatives aimed at reducing our fixed cost structure and, during 2017, began realigning our business in contemplation of the Proposed Separation. We expect that these actions will contribute to margin growth in 2018. |

| • | Complete the execution of the Proposed Separation to create two industry-leading pure-play companies in Water and Electrical. |

| Other (income) expense | | | | | | | | | | | | | | |

| Loss on early extinguishment of debt | 101.4 | | | — | | | — | | | | N.M. | | N.M. | |

| • | increased sales volume in our industrial business primarily in the U.S.; |

| • | increased sales related to business acquisitions that occurred in the fourth quarter of 2016 and the first quarter of 2017; and |

| • | favorable foreign currency effects during the year ended December 31, 2017. |

| • | continued lower project sales volume particularly in the energy and industrial businesses; |

| • | large job adjustments to net sales of $9.7 million in 2017. |

| • | increased volume driving core sales growth in our North America pool business. |

| • | favorable mix as a result of the decline in lower margin project sales and growth in higher margin product sales; and |

| • | large job adjustments negatively impacting gross profit by $16.4 million in 2017. |

| • | restructuring costs of $30.7 million in 2017, compared to $20.6 million in 2016; |

| • | costs incurred in anticipation of the Proposed Separation of $53.1 million in 2017; |

| • | non-cash charges of $32.0 million related to trade name and other impairments; and |

| • | savings generated from back-office consolidation, reduction in personnel and other lean initiatives; |

| • | a benefit from the reversal of a $13.3 million indemnification liability in 2017 related to our 2012 transaction with Tyco (now known as Johnson Controls International plc); and |

| • | increased investment in sales and marketing to drive growth. |

| • | the impact of lower debt levels during 2017 compared to 2016. In May 2017, a portion of the proceeds from the sale of the Valves & Controls business was utilized to repay all commercial paper and revolving long term debt and for the early extinguishment of $1,659.3 million aggregate principal amount of certain series of fixed rate outstanding notes. |

| • | increased overall interest rates in effect on our outstanding debt during 2017 compared to 2016. |

Loss on early extinguishment of debt

In May 2017, we repurchased aggregate principal of certain series of outstanding fixed rate debt totaling $1,659.3 million.

Total costs of $101.4 million associated with the repurchases were recorded as Loss on early extinguishment of debt.

| • | a net provisional tax benefit of $84.8 million recognized in 2017 as a result of the enactment of U.S. tax reform legislation. We expect our effective tax rate to approximate 18% in future periods, which is an improvement from our historical rate of 20%; and |

| • | the unfavorable tax impact of restructuring costs in 2016 in jurisdictions with low tax benefits. |

Segment income represents equity income of unconsolidated subsidiaries and operating income exclusive

Water

| Net sales | $ | 2,844.4 | | $ | 2,777.7 | | $ | 2,808.3 | | | 2.4 | % | (1.1 | )% |

| Segment income | 546.0 | | | 494.0 | | | 469.0 | | | | 10.5 | % | 5.3 | % |

| % of net sales | 19.2 | | % | 17.8 | | % | 16.7 | | % | | 1.4 | pts | 1.1 | pts |

| Volume | — | % | | (1.0 | )% |

| Core growth | 0.8 | | | (0.1 | ) |

| Acquisition (divestiture) | 1.1 | | | (0.5 | ) |

In December 2013, the Company's Board of Directors approved changing the Company's jurisdiction of organization from Switzerland to Ireland.

At an extraordinary meeting of shareholders on May 20, 2014, Pentair Ltd. shareholders voted in favor of a reorganization proposal pursuant to which Pentair Ltd. would merge into Pentair plc and all Pentair Ltd. common shares would be cancelled and all holders of such shares would receive ordinary shares of Pentair plc on a one-to-one basis.

The reorganization transaction was completed on June 3, 2014, at which time Pentair plc replaced Pentair Ltd. as the ultimate parent company (the "Redomicile").

Shares of Pentair plc began trading on the New York Stock Exchange ("NYSE") on June 3, 2014 under the symbol "PNR", the same symbol under which Pentair Ltd. shares were previously traded.

Our former parent company, Pentair Ltd., took its form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of Pentair Ltd. "Flow Control" refers to Pentair Ltd. prior the Merger.

Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco.

On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding ordinary shares of Flow Control to Tyco's shareholders (the "Distribution"), resulting in the distribution of approximately 110.9 million of our ordinary shares to Tyco's shareholders.

The Merger was accounted for as a reverse acquisition under the purchase method of accounting with Pentair, Inc. treated as the acquirer.

On January 30, 2014, we acquired, as part of Water Quality Systems, the remaining 19.9 percent ownership interest in two entities, a U.S. entity and an international entity (collectively, Pentair Residential Filtration or "PRF"), from GE Water & Process Technologies (a unit of General Electric Company) ("GE") for $134.3 million in cash.

Prior to the acquisition, we held a 80.1 percent ownership equity interest in PRF, representing our and GE's respective global water softener and residential water filtration businesses.

On July 28, 2014, our Board of Directors approved a decision to exit our Water Transport business in Australia.

During 2014, we recognized an impairment charge related to allocated amounts of goodwill, intangible assets, property, plant & equipment and other non-current assets totaling $380.1 million, net of tax, representing our estimated loss on disposal of the Water Transport business.

The sale of the Water Transport business was completed in 2015.

On August 18, 2016, we entered into a share purchase agreement to sell our Valves & Controls business to Emerson Electric Co. for a purchase price of $3.15 billion in cash, subject to customary adjustments.

We believe the sale will be completed by the end of the first quarter of 2017, subject to customary regulatory approvals and closing conditions.

The results of the Valves and Controls business have been presented as discontinued operations and the related assets and liabilities have been reclassified as held for sale for all periods presented.

| | |

| --- | --- |

| • | Despite the favorable long-term outlook for our end-markets, we experience differing levels of volatility depending on the end-market and may continue to do so over the medium and longer term. During 2015 and 2016, our core sales have been challenged by broad-based industrial capital expenditure and maintenance deferrals. We expect this trend to continue into 2017. |

| | |

| --- | --- |

| • | We experienced declines within our industrial and energy businesses. We expect headwinds in the industrial and energy businesses to continue and oil prices to remain depressed into 2017. |

| | |

| --- | --- |

| • | We initiated restructuring actions to offset the negative earnings impact of core revenue decline and foreign exchange. We expect to continue these actions into 2017 and these actions will contribute to margin growth in 2017. |

| | |

| --- | --- |

| • | In late 2015 and continuing through 2016, our results were negatively impacted due to the strengthening of the U.S. dollar against most key global currencies. We expect this trend to continue into 2017. |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

| • | Reducing long-term debt and overall leverage through improved cash flow performance and the pending sale of the Valves & Controls business; |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

Our debt portfolio as of December 31, [removed: 2016,] [added: 2017,] was comprised of debt predominantly denominated in U.S. dollars.

This debt portfolio is comprised of [removed: 77%] [added: 96%] fixed-rate debt and [removed: 23%] [added: 4%] variable-rate debt.

A change in interest rates on the fixed portion of the debt portfolio impacts the fair [removed: value] [added: value,] but has no impact on interest incurred or cash flows.

Based on the fixed-rate debt included in our debt portfolio, as of December 31, [removed: 2016,] [added: 2017,] a 100 basis point increase or decrease in interest rates would result in a [removed: $118.5] [added: $28.6] million decrease or a [removed: $124.3] [added: $29.3] million increase in fair value, respectively.

Based on the variable-rate debt included in our debt portfolio as of December 31, [removed: 2016,] [added: 2017,] a 100 basis point increase or decrease in interest rates would result in a [removed: $9.8] [added: $0.6] million increase or decrease in interest incurred.

At December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of [removed: $475.6] [added: $481.4] million and [removed: $331.5] [added: $475.6] million, respectively.

The rates used to perform this analysis were based on the market exchange rates in effect on December 31, [removed: 2016.][added: 2017.]

A 10% appreciation of the U.S. dollar relative to the Euro would result in a [removed: $47.3] [added: $54.0] million net increase in Other comprehensive income.

Conversely, a 10% depreciation of the U.S. dollar relative to the Euro would result in a [removed: $57.9] [added: $66.0] million net decrease in Other comprehensive income.

Pentair plc is a focused diversified industrial manufacturing company comprising [removed: three] [added: two] reporting segments: Water [removed: Quality Systems, Flow & Filtration Solutions] and [removed: Technical Solutions.][added: Electrical.]

Water [removed: Quality Systems] designs, manufactures, markets and services innovative [removed: water system] products and solutions to meet [removed: filtration] [added: filtration, separation, flow] and [removed: fluid] [added: water] management challenges in [added: agriculture, aquaculture, foodservice,] food and [removed: beverage, water,] [added: beverage processing,] swimming [removed: pools] [added: pools, water supply] and [removed: aquaculture] [added: disposal and a variety of industrial] applications.

[removed: Flow & Filtration Solutions] [added: The Water segment] designs, manufactures, markets and services [added: innovative water] solutions for the [removed: toughest] filtration, separation, flow and [removed: fluid] [added: water] management challenges in agriculture, [added: foodservice,] food and beverage processing, [added: swimming pools,] water supply and disposal and a variety of industrial applications.

On September 18, 2015, we acquired, as part of [removed: Technical Solutions,] [added: Electrical,] all of the outstanding shares of capital stock of ERICO Global Company ("ERICO") for approximately $1.8 billion [added: in cash] (the "ERICO Acquisition").

The results of the Valves [removed: and] [added: &] Controls business have been presented as discontinued operations and the related assets and liabilities have been reclassified as held for sale for all periods presented.

[removed: Water Quality Systems offers a comprehensive product suite that] [added: This] includes a full range of [removed: recreational] water treatment equipment including energy-efficient pumps, [removed: point-of-entry / point-of-use filtration for residential and commercial applications including foodservice,] [added: point-of-entry/point-of-use filtration,] valves, UV sanitization and automation [removed: controls.][added: controls for residential and commercial applications, as well as engineered solutions in advanced filtration, desalination, water supply and disposal, process and control for industrial and infrastructure applications.]

We offer design and consulting services and our advanced water technologies are used across a wide number of industries including [removed: industrial,] residential, commercial, [removed: municipal,] foodservice, [added: industrial,] aquaculture, [removed: aquaponics, aquatic life support systems,] irrigation and flood control, wastewater and more.

Our equipment and solutions are found in swimming pools and spas, [removed: aquaculture farms, laboratories,] water purification and sanitation systems, foodservice operations, [added: food] and [added: beverage processing plants, wastewater treatment plants, flood control and storm water management facilities and] in other applications across the globe.

Brand names for Water [removed: Quality Systems] include [added: Aurora, Berkeley, Codeline, Everpure, Fairbanks-Nijhuis, Kreepy Krauly, Haffmans, Hydromatic, Hypro,] Pentair, Pentair Aquatic Eco-Systems, [removed: Everpure, Kreepy Krauly, Sta-Rite] [added: Sta-Rite, Shurflo, Südmo] and [removed: Shurflo.][added: X-Flow.]

Water [removed: Quality Systems] customers include businesses engaged in wholesale and retail distribution in the residential & commercial, food & [removed: beverage] [added: beverage, infrastructure,] and [removed: infrastructure] [added: industrial] verticals.

Customers [added: also include end-user and consumers] in the residential & commercial vertical [removed: also include end-users] [added: as well as engineering procurement contractors,] and [removed: consumers.][added: original equipment manufacturers.]

[removed: End-user] [added: We experience increased] demand for [added: residential water supply and] pool equipment [removed: follows] [added: products, infrastructure and agricultural products following] warm weather [removed: trends and is] [added: trends, which are] at [removed: seasonal] [added: season] highs from April to August.

The magnitude of the sales increase is [removed: partially] mitigated by employing some advance sale [removed: "early buy"] [added: “early buy”] programs (generally including extended payment terms and/or [removed: additional discounts).]

Water [removed: Quality Systems] faces numerous domestic and international competitors, some of which have substantially greater resources directed to the verticals in which we compete.

Competition focuses on brand names, product performance (including energy-efficient [removed: offerings), quality] [added: offerings] and [added: required specifications), quality, service and] price.

[removed: Technical Solutions] [added: Electrical] products include mild steel, stainless steel, aluminum and non-metallic enclosures, cabinets, cases, subracks, backplanes, engineered fastening solutions across a wide range of industries and verticals and thermal management systems including heat tracing, floor heating, fire-rated and specialty wiring, sensing, and snow melting and de-icing solutions for industrial, commercial and residential use.

Brand names for [removed: Technical Solutions] [added: Electrical] offerings include CADDY, ERICO, Hoffman, LENTON, Raychem, Schroff and Tracer.

[removed: Technical Solutions] [added: Electrical] customers include electrical distributors, data center contractors, original equipment manufacturers, [removed: contractors mainly of] greenfield [removed: developments] [added: development contractors] and maintenance contractors.

[removed: Technical Solutions] [added: Electrical] has a [removed: global] [added: globally] installed base of customers.

[removed: Technical Solutions] [added: Electrical] generally experiences increased demand for thermal protection products and services during the fall and winter months in the Northern Hemisphere and increased demand for electrical fastening products during the spring and summer months in the Northern Hemisphere.

Within [removed: Technical Solutions,] [added: Electrical,] the equipment protection business faces significant competition in the verticals it serves, particularly within the communications industry, where product design, prototyping, global supply, price competition and customer service are significant factors.

The industries and verticals served by the engineered fastening solutions [added: business is relatively fragmented, with a small number of large competitors and a large number of smaller suppliers.]

During the first quarter of 2017, we reorganized our business segments to reflect a new operating structure, resulting in a change to our reporting [removed: segments in 2017.][added: segments.]

In addition, the legacy Technical Solutions business segment [removed: will be] [added: was] renamed the Electrical reporting segment.

| In millions | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | $ change | | | % change | |

A substantial portion of our revenues result from orders received and [removed: product] [added: products] delivered in the same month.

We expect the majority of our backlog at December 31, [removed: 2016] [added: 2017] will be shipped in [removed: 2017.][added: 2018.]

Research and development expenditures during [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] were [removed: $114.1] [added: $115.8] million, [removed: $98.7] [added: $114.1] million and [removed: $96.4] [added: $98.7] million, respectively.

We make available free of charge (other than an investor's own Internet access charges) through our Internet website (http://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 [removed: U.S. Securities and Exchange Commission ("SEC").][added: SEC.]

Electrical designs, manufactures, markets, installs and services high performance products and solutions that connect and protect some of the world's most sensitive equipment, buildings and critical processes.

On April 28, 2017 we completed the sale of the Valves & Controls business to Emerson Electric Co. for $3.15 billion in cash.

The sale resulted in a gain of $181.1 million, net of tax.

On May 9, 2017, we announced that our Board of Directors approved a plan to separate our Water business and Electrical business into two independent, publicly-traded companies (the "Proposed Separation").

The Proposed Separation is expected to occur through a tax-free spin-off of the Electrical business to Pentair shareholders.

Completion of the Proposed Separation is subject to certain customary conditions, including, among other things, final approval of the transaction by Pentair's Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission (the “SEC").

Upon completion of the Proposed Separation, it is anticipated that Electrical's jurisdiction of organization will be Ireland, but that it will manage its affairs so that it will be centrally managed and controlled in the United Kingdom (the "U.K.") and therefore will have its tax residency in the U.K.

We are targeting April 30, 2018 for the completion of the Proposed Separation; however, there can be no assurance regarding the ultimate timing of the Proposed Separation or that the Proposed Separation will be completed.

All prior period amounts related to the segment change have been retrospectively reclassified throughout this Annual Report on Form 10-K to conform to the new presentation.

Water

Water provides a comprehensive portfolio of products and services to address customers’ needs for reliable and efficient movement and control of water and other fluids.

additional discounts).

Electrical

The Electrical segment designs, manufactures, markets, installs and services high performance products and solutions that connect and protect some of the world's most sensitive equipment, buildings and critical processes.

| Water | $ | 406.9 | | $ | 375.8 | | $ | 31.1 | | 8.3 | % |

| Electrical | 280.4 | | | 266.3 | | | 14.1 | | | 5.3 | |

| Total | $ | 687.3 | | $ | 642.1 | | $ | 45.2 | | 7.0 | % |

As of December 31, 2017, we employed 18,400 people worldwide.

Technical Solutions designs, manufactures, markets and services products that guard and protect some of the world's most sensitive electrical and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications and engineered electrical and fastening products for electrical, mechanical and civil applications.

On August 18, 2016, we entered into a share purchase agreement to sell our Valves & Controls business to Emerson Electric Co. for a purchase price of $3.15 billion in cash, subject to customary adjustments.

We believe the sale will be completed by the end of the first quarter of 2017, subject to customary regulatory approvals and closing conditions.

WATER QUALITY SYSTEMS

The Water Quality Systems segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration and fluid management challenges in food and beverage, water, swimming pools and aquaculture applications.

Customers

Seasonality

We experience seasonal demand with several end customers and end-users within Water Quality Systems.

Competition

We compete by offering a wide variety of innovative and high-quality products, which are competitively priced.

FLOW & FILTRATION SOLUTIONS

The Flow & Filtration Solutions segment designs, manufactures, markets and services solutions for the toughest filtration, separation, flow and fluid management challenges in agriculture, food and beverage processing, water supply and disposal and a variety of industrial applications.

Flow & Filtration Solutions is involved in the entire water, water treatment and wastewater system from advanced filtration, desalination, water supply to water disposal, process and control.

Our solutions also help in critical municipal challenges around flood control, storm water management, de-watering, dredging and fish friendly solutions.

From engineered solutions to installation and maintenance, we support a broad range of solutions and services specifically tailored to address our customers' needs for water reuse, water availability and water stewardship.

Solutions include light duty diaphragm pumps and pressure boosters, high-flow turbine pumps and solid handling pumps, as well as advanced filtration, oil & gas separation, membrane technology, energy recovery and quality control and instrumentation.

Applications for Flow and Filtration Solutions' products include precision agriculture, biogas upgrading, water supply and disposal, fire applications and food and beverage processing.

Brand names for Flow & Filtration Solutions products include Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hypro, Sta-Rite, Südmo and X-Flow.

Flow & Filtration Solutions customers include businesses engaged in wholesale distribution and retail across the residential, commercial, food and beverage, infrastructure, industrial, and energy verticals.

Customers also include end-users as well as engineering procurement contractors, and original equipment manufacturers.

We experience demand for residential water supply products, infrastructure and agricultural products following warm weather trends, which are at seasonal highs from April to August.

The magnitude of the sales increase is partially mitigated by employing some advance sale "early buy" programs (generally including extended payment terms and/or additional discounts).

Flow & Filtration Solutions faces numerous domestic and international competitors, some of which have substantially greater resources directed to the verticals in which we compete.

Competition in Flow & Filtration Solutions focuses on brand names, product performance (including energy-efficient offerings and required specifications), quality, service and price.

TECHNICAL SOLUTIONS

The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world's most sensitive electrical and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications and engineered electrical and fastening products for electrical, mechanical and civil applications.

business is relatively fragmented, with about a dozen major competitors and a large number of smaller suppliers.

NEW SEGMENTATION

All segment information presented throughout this Annual Report on Form 10-K, with exception of the table below, was prepared based on the reporting segments in place during 2016.

The below table presents sales and segment income under the revised reporting segments (Water and Electrical) for the years ended December 31, 2016, 2015, and 2014.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| | December 31 | | | | | | | | |

| In millions | 2016 | | | 2015 | | | 2014 | | |

| Net Sales | | | | | | | | | |

| Water | $ | 2,777.7 | | $ | 2,808.3 | | $ | 2,941.3 | |

| Electrical | 2,116.0 | | | 1,809.3 | | | 1,728.1 | | |

| Other | (3.7 | | ) | (1.2 | | ) | (2.6 | | ) |

| Consolidated | $ | 4,890.0 | | $ | 4,616.4 | | $ | 4,666.8 | |

Our subsidiaries and numerous other [added: unaffiliated] companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials.

We do not anticipate [removed: these] [added: our remaining] environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows.

As of December 31, 2017, there were approximately 600 claims outstanding against our subsidiaries.

We have been named as defendant, target or a potentially responsible party ("PRP") in a number of environmental clean-ups relating to our current or former business units.

We have disposed of a number of businesses in recent years and in certain cases, we have retained responsibility and potential liability for certain environmental obligations.

We have received claims for indemnification from certain purchasers.

We may be named as a PRP at other sites in the future for existing business units, as well as both divested and acquired businesses.

In addition to cleanup actions brought by governmental authorities, private parties could bring personal injury or other claims due to the presence of, or exposure to, hazardous substances.

Certain environmental laws impose liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at their properties or at properties at which they have disposed of hazardous substances.

We have projects underway at several current and former manufacturing facilities to investigate and remediate environmental contamination resulting from our past operations or by other businesses that previously owned or used the properties.

As of December 31, 2017, our recorded reserves for environmental matters were not material.

As of December 31, 2016, there were approximately 3,800 claims outstanding against our subsidiaries, of which approximately 3,300 relate to the Valves & Controls business classified as held for sale.

Our estimated liability for asbestos-related claims was $228.3 million and $237.9 million as of December 31, 2016 and 2015, respectively, and was recorded in Non-current liabilities held for sale in the Consolidated Balance Sheets for pending and future claims and related defense costs.

Our estimated receivable for insurance recoveries was $108.5 million and $111.0 million, respectively, at December 31, 2016 and 2015, and was recorded in Non-current assets held for sale in the Consolidated Balance Sheets.

We are involved in or have retained responsibility and potential liability for environmental obligations and legal proceedings related to our current business and, including pursuant to certain indemnification obligations, related to certain formerly owned businesses.

We are responsible, or alleged to be responsible, for ongoing environmental investigation and/or remediation of sites in several countries.

These sites are in various stages of investigation and/or remediation and at some of these sites our liability is considered de minimis.

We received notification from the U.S. Environmental Protection Agency and from similar state and non-U.S. environmental agencies that several sites formerly or currently owned and/or operated by us, and other properties or water supplies that may be or may have been impacted from those operations, contain disposed or recycled materials or waste and require environmental investigation and/or remediation.

Those sites include instances where we have been identified as a potentially responsible party under U.S. federal, state and/or non-U.S. environmental laws and regulations.

For several formerly owned businesses, we have also received claims for indemnification from purchasers of these businesses.

Based upon our experience, current information regarding known contingencies and applicable laws, we have recorded reserves for these environmental matters of $18.3 million and $22.8 million as of December 31, 2016 and 2015, respectively, which relate primarily to the Valves & Controls business classified as held for sale.

Compliance matters

Prior to the Merger, the Flow Control business was subject to investigations by the DOJ and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the Foreign Corrupt Practices Act.

Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco's own internal investigations.

As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ.

For the Fiscal Year Ended December 31, [removed: 2016][added: 2017]

Registrant's telephone number, including area code: [removed: 44-207-347-8925][added: 44-20-7347-8925]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or] [added: filer,] a smaller reporting [added: company or an emerging growth] company.

See the definitions of "large accelerated filer," "accelerated [removed: filer" and] [added: filer",] "smaller reporting company" [added: and "emerging growth company"] in Rule 12b-2 of the Exchange [removed: Act.][added: Act.:]

| Large accelerated filer þ | | Accelerated filer o | | Non-accelerated filer o | | Smaller reporting company o | [added: | Emerging growth company o |]

| | | | | (Do not check if a smaller reporting company) | | | [added: | |]

Aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of [removed: $58.29] [added: $66.54] per share as reported on the New York Stock Exchange on June 30, [removed: 2016] [added: 2017] (the last business day of Registrant's most recently completed second quarter): [removed: $9,520,686,063.][added: $10,849,958,298.]

The number of shares outstanding of Registrant's only class of common stock on December 31, [removed: 2016] [added: 2017] was [removed: 181,765,451.][added: 180,306,617.]

Parts of the Registrant's definitive proxy statement for its annual [added: general] meeting to be held on May [removed: 9, 2017,] [added: 8, 2018,] are incorporated by reference in this Form 10-K in response to Part III, ITEM 10, 11, 12, 13 and 14.

For the Year Ended December 31, [removed: 2016][added: 2017]

| ITEM 1. | | [removed: [Business](#s9B77E1D2B4615A19BA26EFA783570505)] [added: [Business](#s536270D2B945520F86466927C7E53029)] | | [removed: [1](#s9B77E1D2B4615A19BA26EFA783570505)] [added: [1](#s536270D2B945520F86466927C7E53029)] |

| ITEM 1A. | | [Risk [removed: Factors](#s1A7C7A035EE155F990B9E0E297A5F048)] [added: Factors](#sB6BD422C4D645B268D650DBD00A76E75)] | | [removed: [5](#s1A7C7A035EE155F990B9E0E297A5F048)] [added: [5](#sB6BD422C4D645B268D650DBD00A76E75)] |

| ITEM 1B. | | [Unresolved Staff [removed: Comments](#sB73DA6EFC1125C74A3EA252A1BBE8005)] [added: Comments](#s8C8BA1652BE35FF7BD682B3DD92C0915)] | | [removed: [15](#sB73DA6EFC1125C74A3EA252A1BBE8005)] [added: [14](#s8C8BA1652BE35FF7BD682B3DD92C0915)] |

| ITEM 2. | | [removed: [Properties](#s49B28ADD4B305292B828B367503F0BCB)] [added: [Properties](#sDE2579EA40415EDDBDCE78A5E9E71521)] | | [removed: [15](#s49B28ADD4B305292B828B367503F0BCB)] [added: [15](#sDE2579EA40415EDDBDCE78A5E9E71521)] |

| ITEM 3. | | [Legal [removed: Proceedings](#s2BF131EB6B265EB4ADDBD4DCFDCD7DF5)] [added: Proceedings](#s6B59601AD3AF5D359A27925F76B75F84)] | | [removed: [15](#s2BF131EB6B265EB4ADDBD4DCFDCD7DF5)] [added: [15](#s6B59601AD3AF5D359A27925F76B75F84)] |

| ITEM 4. | | [Mine Safety [removed: Disclosures](#sFBCCF40A3839505D85B7BD3CB7961678)] [added: Disclosures](#s9049D0292C895676B919FFEA24535D72)] | | [removed: [16](#sB8FBD9CF2D5D5481A5A38ED6AEC24242)] [added: [16](#s681D4084E3235BBDB910EA14C31DD1B3)] |

| ITEM 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s7C835BA54C48546CBC70CB3D9F722648)] [added: Securities](#sEAEFE7C9846E54138241F463E6879401)] | | [removed: [18](#s7C835BA54C48546CBC70CB3D9F722648)] [added: [18](#sEAEFE7C9846E54138241F463E6879401)] |

| ITEM 6. | | [Selected Financial [removed: Data](#s8DB47E6207035DCABBA4CAB2E72BE86E)] [added: Data](#s6AF99F871DDC5481B5CD892054C7C5E1)] | | [removed: [21](#s8DB47E6207035DCABBA4CAB2E72BE86E)] [added: [21](#s6AF99F871DDC5481B5CD892054C7C5E1)] |

| ITEM 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD8945E0635765D6DB9CC9D360B42E983)] [added: Operations](#sE39224051B675A08A164E5D3FA47ABFB)] | | [removed: [22](#sD8945E0635765D6DB9CC9D360B42E983)] [added: [22](#sE39224051B675A08A164E5D3FA47ABFB)] |

| ITEM 7A. | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#sB6B3A762D8E55FE7B9660A5F1381AA64)] [added: Risk](#s376C02FCEF4B54C79A20DCC368182FD1)] | | [removed: [40](#sB6B3A762D8E55FE7B9660A5F1381AA64)] [added: [38](#s376C02FCEF4B54C79A20DCC368182FD1)] |

| ITEM 8. | | [Financial Statements and Supplementary [removed: Data](#s7941F1A8C54352E894E9043271F3E60B)] [added: Data](#sD7B9DEAD4EAF581A9A3815D01E45FF1B)] | | [removed: [41](#s7941F1A8C54352E894E9043271F3E60B)] [added: [39](#sD7B9DEAD4EAF581A9A3815D01E45FF1B)] |

| ITEM 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s605BC9DC5777581EBC3F3C022BEBD03F)] [added: Disclosure](#sB6F7401070945664BF198115F772AC2A)] | | [removed: [91](#s605BC9DC5777581EBC3F3C022BEBD03F)] [added: [87](#sB6F7401070945664BF198115F772AC2A)] |

| ITEM 9A. | | [Controls and [removed: Procedures](#s66E9A4D0A0005A53AE1328BDDE0D2BD9)] [added: Procedures](#sDEE5974CE31351739783D27E3DBB7EDE)] | | [removed: [91](#s66E9A4D0A0005A53AE1328BDDE0D2BD9)] [added: [87](#sDEE5974CE31351739783D27E3DBB7EDE)] |

| ITEM 9B. | | [Other [removed: Information](#sDF685AC78E05539AA4B1EFC15A9CA3FC)] [added: Information](#s9D2169591884563A8D0ECCD475606072)] | | [removed: [91](#sDF685AC78E05539AA4B1EFC15A9CA3FC)] [added: [87](#s9D2169591884563A8D0ECCD475606072)] |

| ITEM 10. | | [Directors, Executive Officers and Corporate [removed: Governance](#s646FC72F39C75103BF56494DAA0B1B04)] [added: Governance](#s9C5531B3E517527C9B54BB024297C007)] | | [removed: [92](#s646FC72F39C75103BF56494DAA0B1B04)] [added: [88](#s9C5531B3E517527C9B54BB024297C007)] |

| ITEM 11. | | [Executive [removed: Compensation](#s94D5F70753215F96ADC0752E8F6B2433)] [added: Compensation](#s887C075CF6E2518F998201FCDE490F36)] | | [removed: [92](#s94D5F70753215F96ADC0752E8F6B2433)] [added: [88](#s887C075CF6E2518F998201FCDE490F36)] |

| ITEM 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s75B9DD1510F251CC891CE667D352B61C)] [added: Matters](#s4EA9270F345A52E3B9C8E259D40B32A3)] | | [removed: [93](#s75B9DD1510F251CC891CE667D352B61C)] [added: [89](#s4EA9270F345A52E3B9C8E259D40B32A3)] |

| ITEM 13. | | [Certain Relationships and Related Transactions and Director [removed: Independence](#s69BD6B87EA2D5B02A9DAD153A9F869EF)] [added: Independence](#s7C6D8E300B3A5DB6B0A72CED128C60FA)] | | [removed: [93](#s69BD6B87EA2D5B02A9DAD153A9F869EF)] [added: [89](#s7C6D8E300B3A5DB6B0A72CED128C60FA)] |

| ITEM 14. | | [Principal Accounting Fees and [removed: Services](#sD1F8D44071555840ADDA67F2DDD4E4DD)] [added: Services](#s8374F1D29419584299C5E126DAA8970A)] | | [removed: [93](#sD1F8D44071555840ADDA67F2DDD4E4DD)] [added: [89](#s8374F1D29419584299C5E126DAA8970A)] |

| ITEM 15. | | [removed: [Exhibits,] [added: [Exhibits and] Financial Statement [removed: Schedules](#s4315612088B85C318279249CFCCB8200)] [added: Schedules](#sB8899D9D9212549992653DC0876A153D)] | | [removed: [94](#s4315612088B85C318279249CFCCB8200)] [added: [90](#sB8899D9D9212549992653DC0876A153D)] |

| ITEM 16. | | [Form 10-K [removed: Summary](#s4315612088B85C318279249CFCCB8200)] [added: Summary](#sB8899D9D9212549992653DC0876A153D)] | | [removed: [94](#s4315612088B85C318279249CFCCB8200)] [added: [90](#sB8899D9D9212549992653DC0876A153D)] |

10-K 1 a2017pnr-10k.htm 10-K

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| | | [Signatures](#s17EEDFD092365279B4D2293E803DBAE6) | | [95](#s17EEDFD092365279B4D2293E803DBAE6) |

10-K 1 a2016pnr-10k.htm FORM 10-K

(Check one):

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| | | [Signatures](#sE4CC8E4FDC265A75A5BE616161AB8A35) | | [95](#sE4CC8E4FDC265A75A5BE616161AB8A35) |

We carry out our Water [removed: Quality Systems] manufacturing operations at [removed: 12] [added: 21] plants located throughout the United States and at [removed: 7] [added: 27] plants located in [removed: 6] [added: 14] other countries.

In addition, Water [removed: Quality Systems] has [removed: 15] [added: 33] distribution facilities, [removed: 14] [added: 48] sales offices and [removed: 1] [added: 11] service [removed: center] [added: centers] located in numerous countries throughout the world.

We carry out our [removed: Flow & Filtration Solutions] [added: Electrical] manufacturing operations at 8 plants located throughout the United States and at [removed: 12] [added: 13] plants located in [removed: 8] [added: 11] other countries.

In addition, [removed: Flow & Filtration Solutions] [added: Electrical] has [removed: 14] [added: 24] distribution facilities, [removed: 14] [added: 53] sales offices and [removed: 10] [added: 2] service centers located in numerous countries throughout the world.

We carry out our Technical Solutions manufacturing operations at 9 plants located throughout the United States and at 11 plants located in 9 other countries.

In addition, Technical Solutions has 16 distribution facilities, 52 sales offices and 3 service centers located in numerous countries throughout the world.

| Randall J. Hogan | | [removed: 61] [added: 62] | | | Chief Executive Officer since 2001 and Chairman of the Board since 2002; President and Chief Operating Officer, 1999 — 2000; Executive Vice President and President of Pentair's Electrical and Electronic Enclosures Group, 1998 — 1999; United Technologies Carrier Transicold President, 1995 — 1997; Pratt & Whitney Industrial Turbines Vice President and General Manager, 1994 — 1995; General Electric various executive positions, 1988 — 1994; McKinsey & Company consultant, 1981 — 1987. [added: It is expected that Mr. Hogan will retire from his positions as Chairman and Chief Executive Officer of the Company and become the Chairman of nVent Electric plc, effective upon the completion of the Proposed Separation.] |

| John L. Stauch | | [removed: 52] [added: 53] | | | Executive Vice President and Chief Financial Officer since 2007; 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; Various executive, investor relations and managerial finance positions with Honeywell International Inc. and its predecessor AlliedSignal Inc., 1994 — 2000. [added: It is expected that Mr. Stauch will become the Company’s Chief Executive Officer, effective upon the completion of the Proposed Separation.] |

| Angela D. Jilek | | [removed: 48] [added: 49] | | | Senior Vice President, General Counsel and Secretary since 2010; Assistant General Counsel, 2002 — 2010; Shareholder and Officer of the law firm of Henson & Efron, P.A., 2000 — 2002; Associate Attorney in the law firm of Henson & Efron, P.A. 1996 — 2000 and in the law firm of Felhaber Larson Fenlon & Vogt, P.A., 1992 — 1996. [added: It is expected that Ms. Jilek will retire from the Company effective May 1, 2018.] |

| John H. Jacko | | [removed: 59] [added: 60] | | | Senior Vice President and Chief Marketing Officer since 2017; Vice President and Chief Marketing Officer of Kennametal Corporation, 2007 — 2016; Senior Vice President and Chief Marketing Officer of Flowserve Corporation, 2002 — 2007; Vice President of Marketing and Customer Management of Flowserve Corporation, 2001 — 2002; Various business leadership positions of Honeywell Aerospace, 1995 — 2001. [added: It is expected that Mr. Jacko will become the Company’s Chief Growth Officer, effective upon the completion of the Proposed Separation.] |

| Mark C. Borin | | [removed: 49] [added: 50] | | | Senior Vice President and Chief Accounting Officer since 2008 and Treasurer since 2015; Partner in the audit practice of the public accounting firm KPMG LLP, 2000 — 2008; Various positions in the audit practice of KPMG LLP, 1989 — 2000. [added: It is expected that Mr. Borin will become the Company’s Chief Financial Officer, effective upon the completion of the Proposed Separation.] |

| Karl R. Frykman | | [removed: 56] [added: 57] | | | President, Water segment since 2017; President, Water Quality Systems Global Business Unit, 2007 — 2016; President of Aquatic Systems' National Pool Tile group, 1998— 2007; Vice President of Operations for American Products, 1995 — 1998; Vice President of Anthony Pools, 1990 — 1995; Vice President of Poolsaver, 1988 — 1990. [added: It is expected that Mr. Frykman will become the Company’s Chief Operating Officer, effective upon the completion of the Proposed Separation.] |

| Beth A. Wozniak | | [removed: 52] [added: 53] | | | President, Electrical segment since 2017; President, Flow & Filtration Solutions Global Business Unit, 2015 — 2016; President of Environmental and Combustion Controls unit of Honeywell International Inc., 2011 — 2015; President of Sensing and Controls unit of Honeywell International Inc., 2006 — 2011; Various leadership positions at Honeywell International Inc. and its predecessor AlliedSignal Inc., 1990 — 2006. [added: It is expected that Ms. Wozniak will resign from her position with the Company and become the Chief Executive Officer of nVent Electric plc, effective upon the completion of the Proposed Separation.] |

| Karen L. Keegans | | 51 | | | Senior Vice President and Chief Human Resources Officer since 2016; Vice President and Chief Human Resources Officer of Praxair Inc., 2014 — 2016; Vice President North America Human Resources of Praxair Inc., 2012 — 2014; Vice President of Human Resources and Global Manufacturing of Monsanto, 2011 — 2012; Various executive human resources positions of Monsanto, 2007 — 2011. |

| Dennis J. Cassidy, Jr. | | 48 | | | President, Valves & Controls global business unit since 2016; Managing Director - Oil, Gas and Chemicals Strategy and Operations Expert, AlixPartners, 2012 — 2016; Vice President, Booz & Company, 2009 — 2012; Principal, Booz Allen Hamilton, 2004 — 2009. |

Our ordinary shares are listed for trading on the New York Stock Exchange and trade under the symbol "PNR." As of December 31, [removed: 2016,] [added: 2017,] there were [removed: 18,840] [added: 16,011] shareholders of record.

The high, low and closing sales price for our ordinary shares and the dividends paid for each of the quarterly periods for [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] were as follows:

| Dividends paid | [removed: 0.33] [added: 0.345] | | | [removed: 0.33] [added: 0.345] | | | [removed: 0.34] [added: 0.345] | | | [removed: 0.34] [added: 0.345] | | | | [removed: 0.32] [added: 0.33] | | | [removed: 0.32] [added: 0.33] | | | [removed: 0.32] [added: 0.34] | | | [removed: 0.32] [added: 0.34] | | |

Pentair has paid [removed: 164] [added: 168] consecutive quarterly dividends.

The Board of Directors has approved a plan to increase the dividend for [removed: 2017,] [added: 2018,] which will mark the [removed: 41st] [added: 42nd] consecutive year we have increased dividends.

On July 29, 2014, following the approval of the Irish High Court, we made the required filing of Pentair plc's initial accounts with the Irish Companies Registration Office, which completed the process to allow us to pay future cash dividends and redeem and repurchase shares out of Pentair plc's "distributable reserves." Our distributable reserve balance was [removed: $9.4] [added: $9.0] billion and [removed: $9.6] [added: $9.4] billion as of December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively.

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, [removed: 2011] [added: 2012] and the reinvestment of all dividends since that date to December 31, [removed: 2016.][added: 2017.]

[removed: ][added: ]

| | Base Period December [removed: 2011] | | INDEXED RETURNS Years ended December 31 | | | | | | | | | |

| Company / Index | 2012 | [removed: |] 2013 | | 2014 | | 2015 | | 2016 | | [added: 2017] | | [added: |]

The following table provides information with respect to purchases we made of our ordinary shares during the fourth quarter of [removed: 2016:][added: 2017:]

| (a) | The purchases in this column include [removed: 1,633] [added: 1,146] shares for the period October 1 – October [removed: 29, 2016, 1,181] [added: 28, 2017, 17,792] shares for the period October [removed: 30] [added: 29] – November [removed: 26, 2016,] [added: 25, 2017,] and [removed: 1,596] [added: no] shares for the period November [removed: 27] [added: 26] – December 31, [removed: 2016] [added: 2017] deemed surrendered to us by participants in our 2012 Stock and Incentive Plan (the "2012 Plan") and earlier stock incentive plans that are now outstanding under the 2012 Plan (collectively the "Plans") to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options and vesting of restricted shares. |

| (d) | In December 2014, our Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $1.0 billion. This authorization expires on December 31, 2019. We have [removed: $800.0] [added: $600.0] million remaining availability for repurchases under the 2014 authorization. |

| | 2017 | | | | | | | | | | | | | 2016 | | | | | | | | | | | |

| High | $ | 63.45 | | $ | 69.03 | | $ | 68.50 | | $ | 71.76 | | | $ | 54.54 | | $ | 63.39 | | $ | 66.99 | | $ | 64.39 | |

| Low | 56.53 | | | 61.61 | | | 59.13 | | | 67.27 | | | | 41.57 | | | 50.37 | | | 57.20 | | | 53.80 | | |

| Close | 62.78 | | | 66.54 | | | 67.96 | | | 70.62 | | | | 54.26 | | | 58.29 | | | 64.24 | | | 56.07 | | |

| Pentair plc | 100 | | 160.70 | | 139.55 | | 106.31 | | 123.32 | | 158.68 | |

| S&P 500 Index | 100 | | 132.39 | | 150.51 | | 152.59 | | 170.84 | | 208.14 | |

| S&P 500 Industrials Index | 100 | | 131.64 | | 147.91 | | 152.19 | | 167.59 | | 205.41 | |

| October 1 – October 28, 2017 | 1,146 | | $ | 67.96 | | — | | $ | 700,000,054 | |

| October 29 – November 25, 2017 | 17,792 | | 69.28 | | | — | | 700,000,054 | | |

| November 26 – December 31, 2017 | 1,432,297 | | 69.80 | | | 1,432,297 | | 600,000,119 | | |

| Total | 1,451,235 | | | | | 1,432,297 | | | | |

| | 2016 | | | | | | | | | | | | | 2015 | | | | | | | | | | | |

| High | $ | 54.54 | | $ | 63.39 | | $ | 66.99 | | $ | 64.39 | | | $ | 68.24 | | $ | 66.52 | | $ | 69.65 | | $ | 59.69 | |

| Low | 41.57 | | | 50.37 | | | 57.20 | | | 53.80 | | | | 60.73 | | | 59.92 | | | 49.44 | | | 48.14 | | |

| Close | 54.26 | | | 58.29 | | | 64.24 | | | 56.07 | | | | 62.39 | | | 63.75 | | | 51.98 | | | 49.53 | | |

| Pentair plc | 100 | | 150.88 | | 242.46 | | 210.55 | | 160.41 | | 186.07 | |

| S&P 500 Index | 100 | | 116.00 | | 153.57 | | 174.60 | | 177.01 | | 198.18 | |

| S&P 500 Industrials Index | 100 | | 115.35 | | 162.67 | | 178.21 | | 173.70 | | 206.46 | |

| October 1 – October 29, 2016 | 1,633 | | $ | 59.95 | | — | | $ | 800,000,049 | |

| October 30 – November 26, 2016 | 1,181 | | 56.44 | | | — | | 800,000,049 | | |

| November 27 – December 31, 2016 | 1,596 | | 58.34 | | | — | | 800,000,049 | | |

| Total | 4,410 | | | | | — | | | | |

The following table sets forth our selected historical financial data for the five years ended December 31, [removed: 2016.][added: 2017.]

| | [removed: | | |] Years ended December 31 | | | | | | | | | | | | [added: | | |]

| In millions, except per-share data | [added: 2017 | | |] 2016 | | | 2015 | | | 2014 | | | 2013 | | | [removed: 2012 | | |]

| Consolidated statements of operations and comprehensive income [removed: (loss)] data | | | | | | | | | | | | | | | |

| Net sales | $ | [removed: 4,890.0] [added: 4,936.5] | | $ | [removed: 4,616.4] [added: 4,890.0] | | $ | [removed: 4,666.8] [added: 4,616.4] | | $ | [removed: 4,553.7] [added: 4,666.8] | | $ | [removed: 3,767.4] [added: 4,553.7] | |

| Operating income | [added: 680.8 | | |] 700.7 | | | 616.1 | | | 538.5 | | | 529.2 | | | [removed: 76.4 | | |]

| Net income [removed: (loss)] from continuing operations attributable to Pentair plc | [added: 480.0 | | |] 451.6 | | | 397.1 | | | 356.6 | | | 354.8 | | | [removed: (21.3 | | ) |]

| Earnings [removed: (loss)] per ordinary share from continuing operations attributable to Pentair plc | $ | [removed: 2.49] [added: 2.64] | | $ | [removed: 2.20] [added: 2.49] | | $ | [removed: 1.87] [added: 2.20] | | $ | [removed: 1.76] [added: 1.87] | | $ | [removed: (0.17] [added: 1.76] | [removed: )] |

| Weighted average shares | [added: 181.7 | | |] 181.3 | | | 180.3 | | | 190.6 | | | 201.1 | | | [removed: 127.4 | | |]

| Earnings [removed: (loss)] per ordinary share from continuing operations attributable to Pentair plc | $ | [removed: 2.47] [added: 2.61] | | $ | [removed: 2.17] [added: 2.47] | | $ | [removed: 1.84] [added: 2.17] | | $ | [removed: 1.73] [added: 1.84] | | $ | [removed: (0.17] [added: 1.73] | [removed: )] |

| Weighted average shares | [added: 183.7 | | |] 183.1 | | | 182.6 | | | 193.7 | | | 204.6 | | | [removed: 127.4 | | |]

| Cash dividends declared and paid per ordinary share | $ | [removed: 1.34] [added: 1.38] | | $ | [removed: 1.28] [added: 1.34] | | $ | [removed: 1.10] [added: 1.28] | | $ | [removed: 0.96] [added: 1.10] | | $ | [removed: 0.88] [added: 0.96] | |

| Cash dividends declared and unpaid per ordinary share | [added: 0.35 | | |] 0.345 | | | 0.33 | | | 0.64 | | | 0.50 | | | [removed: 0.46 | | |]

| Total assets | $ | [removed: 11,534.8] [added: 8,633.7] | | $ | [removed: 11,833.5] [added: 11,534.8] | | $ | [removed: 10,643.8] [added: 11,833.4] | | $ | [removed: 11,732.5] [added: 10,643.8] | | $ | [removed: 11,870.6] [added: 11,732.5] | |

| Total debt | [added: 1,440.7 | | |] 4,279.2 | | | 4,685.8 | | | 2,988.4 | | | 2,532.6 | | | [removed: 2,430.9 | | |]

| Total equity | [added: 5,037.8 | | |] 4,254.4 | | | 4,008.8 | | | 4,663.8 | | | 6,217.7 | | | [removed: 6,487.5 | | |]

All periods presented have been revised, as applicable, to present the results of the Valves & Controls business as discontinued operations and to reclassify the assets and liabilities of the Valves & Controls business as held for sale.

See ITEM 8, Note 3 of the Notes to Consolidated Financial Statements for additional information.

Factors affecting comparability of our Selected Financial Data

The consummation of the Merger with Tyco's Flow Control business occurred on September 28, 2012.

Prior to the Merger, the Consolidated Statements of Operations and Comprehensive Income (Loss) include the historical results of Pentair, Inc.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

Based on this assessment, management believes that, as of December 31, [removed: 2016,] [added: 2017,] the Company's internal control over financial reporting was effective based on those criteria.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on the Company's internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

We have audited the internal control over financial reporting of Pentair plc and subsidiaries (the "Company") as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission (COSO).]

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

A [removed: company's] [added: company’s] internal control over financial reporting is a process designed [removed: by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Also, projections of any evaluation of [removed: the] effectiveness [removed: of the internal control over financial reporting] to future periods are subject to the risk that [removed: the] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on the criteria established in Internal Control [removed: —] [added: -] Integrated Framework (2013) issued by [removed: the Committee of Sponsoring Organizations of the Treadway Commission.][added: COSO.]

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule listed in the Index at Item 15 as of and for the year ended December 31, [removed: 2016] [added: 2017,] of the Company and our report dated February [removed: 21, 2017] [added: 27, 2018] expressed an unqualified opinion on those financial statements and financial statement schedule.

We have audited the accompanying consolidated balance sheets of Pentair plc and subsidiaries (the "Company") as of December 31, [removed: 2016 and 2015,] [added: 2017] and [added: 2016,] the related consolidated statements of operations and comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, [removed: 2016.][added: 2017, the related notes, and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").]

These financial statements [removed: and financial statement schedule] are the responsibility of the Company's management.

Our responsibility is to express an opinion on the financial statements [removed: and financial statement schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, [removed: such consolidated] [added: the] financial statements present fairly, in all material respects, the financial position of [removed: Pentair plc and subsidiaries] [added: the Company] as of December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for each of the three years in the period ended December 31, [removed: 2016,] [added: 2017,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [removed: Company's] [added: Company’s] internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on [removed: the] criteria established in Internal [removed: Control—Integrated] [added: Control-Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 21, 2017] [added: 20, 2018] expressed an unqualified opinion on the [removed: Company's] [added: Company’s] internal control over financial reporting.

| In millions, except per-share data | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | |

| Net sales | $ | [removed: 4,890.0] [added: 4,936.5] | | $ | [removed: 4,616.4] [added: 4,890.0] | | $ | [removed: 4,666.8] [added: 4,616.4] | |

| Cost of goods sold | [removed: 3,095.9] [added: 3,107.4] | | | [removed: 3,017.6] [added: 3,095.9] | | | [removed: 3,046.3] [added: 3,017.6] | | |

| Gross profit | [removed: 1,794.1] [added: 1,829.1] | | | [removed: 1,598.8] [added: 1,794.1] | | | [removed: 1,620.5] [added: 1,598.8] | | |

| Selling, general and administrative | [removed: 979.3] [added: 1,032.5] | | | [removed: 884.0] [added: 979.3] | | | [removed: 985.6] [added: 884.0] | | |

| Research and development | [removed: 114.1] [added: 115.8] | | | [removed: 98.7] [added: 114.1] | | | [removed: 96.4] [added: 98.7] | | |

| Operating income | [removed: 700.7] [added: 680.8] | | | [removed: 616.1] [added: 700.7] | | | [removed: 538.5] [added: 616.1] | | |

| Loss on sale of [removed: businesses, net] [added: businesses] | [removed: 3.9] [added: 4.2] | | | [removed: 3.2] [added: 3.9] | | | [removed: 0.2] [added: 3.2] | | |

| Equity income of unconsolidated subsidiaries | [removed: (4.3] [added: (1.3] | | ) | [removed: (1.5] [added: (4.3] | | ) | [removed: (1.2] [added: (1.5] | | ) |

| Interest income | [removed: (8.3] [added: (9.9] | | ) | [removed: (4.7] [added: (8.3] | | ) | [removed: (2.3] [added: (4.7] | | ) |

| Interest expense | [removed: 148.4] [added: 97.2] | | | [removed: 106.6] [added: 148.4] | | | [removed: 70.9] [added: 106.6] | | |

| Income from continuing operations before income taxes | [removed: 561.0] [added: 489.2] | | | [removed: 512.5] [added: 561.0] | | | [removed: 470.9] [added: 512.5] | | |

| Provision for income taxes | [removed: 109.4] [added: 9.2] | | | [removed: 115.4] [added: 109.4] | | | [removed: 114.3] [added: 115.4] | | |

| Net income from continuing operations | [removed: 451.6] [added: 480.0] | | | [removed: 397.1] [added: 451.6] | | | [removed: 356.6] [added: 397.1] | | |

| Income (loss) from discontinued operations, net of tax | [removed: 70.0] [added: 5.4] | | | [removed: (466.8] [added: 70.0] | | [removed: )] | [removed: 244.0] [added: (466.8] | | [added: )] |

| Gain (loss) from sale / impairment of discontinued operations, net of tax | [removed: 0.6] [added: 181.1] | | | [removed: (6.7] [added: 0.6] | | [removed: )] | [removed: (385.7] [added: (6.7] | | ) |

| Net income (loss) | $ | [removed: 522.2] [added: 666.5] | | $ | [removed: (76.4] [added: 522.2] | [removed: )] | $ | [removed: 214.9] [added: (76.4] | [added: )] |

| Net income (loss) | $ | [removed: 522.2] [added: 666.5] | | $ | [removed: (76.4] [added: 522.2] | [removed: )] | $ | [removed: 214.9] [added: (76.4] | [added: )] |

| Changes in cumulative translation adjustment | [removed: (83.0] [added: 497.5] | | [removed: )] | [removed: (264.9] [added: 497.5] | | [removed: )] | [removed: (336.3] [added: 497.5] | | [added: | 497.5 | | | (1,492.5 | |] ) | [added: 497.5 | | |]

| Changes in market value of derivative financial instruments, net of [removed: $1.9, $0.5 and $1.1 tax, respectively] [added: tax] | [removed: (8.3] [added: (4.6] | | ) | [removed: 0.2] [added: (8.3] | | [added: )] | [removed: (0.4] [added: 0.2] | | [removed: )] |

| Comprehensive income (loss) | $ | [removed: 430.9] [added: 1,159.4] | | $ | [removed: (341.1] [added: 430.9] | [removed: )] | $ | [removed: (121.8] [added: (341.1] | ) |

| Continuing operations | $ | [removed: 2.49] [added: 2.64] | | $ | [removed: 2.20] [added: 2.49] | | $ | [removed: 1.87] [added: 2.20] | |

Opinion on Internal Control over Financial Reporting

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

February 27, 2018

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

February 27, 2018

We have served as the Company's auditor since 1977.

| Loss on early extinguishment of debt | 101.4 | | | — | | | — | | |

| Changes in cumulative translation adjustment (inclusive of divestiture of business reclassified to gain from sale of $374.2 for the year ended December 31, 2017) | 497.5 | | | (83.0 | | ) | (264.9 | | ) |

| Loss on early extinguishment of debt | 101.4 | | | — | | | — | | |

| Proceeds from sale of businesses and other | 2,759.4 | | | (5.2 | | ) | (3.0 | | ) |

| Premium paid on early extinguishment of debt | (94.9 | | ) | — | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Share repurchases | (3.0 | ) | — | | | | — | | — | | | (200.0 | | ) | — | | | — | | | (200.0 | | ) |

| Balance - December 31, 2017 | 180.3 | | $ | 1.8 | | | — | | $ | — | | $ | 2,797.7 | | $ | 2,481.7 | | $ | (243.4 | ) | $ | 5,037.8 | |

Proposed separation

On May 9, 2017, we announced that our Board of Directors approved a plan to separate our Water business and Electrical business into two independent, publicly-traded companies (the "Proposed Separation").

The Proposed Separation is expected to occur through a tax-free spin-off of the Electrical business to Pentair shareholders.

Completion of the Proposed Separation is subject to certain customary conditions, including, among other things, final approval of the transaction by Pentair's Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the SEC.

We are targeting April 30, 2018 for the completion of the Proposed Separation; however, there can be no assurance regarding the ultimate timing of the Proposed Separation or that the Proposed Separation will be completed.

An impairment charge of $25.2 million was recorded in 2017 related to certain trade names in Water and Electrical as a result of lower forecasted sales volume or rebranding strategies implemented in the fourth quarter of 2017.

In March 2017, the Financial Accounting Standards Board ("FASB") issued a new accounting standard which requires the presentation of all components of net periodic benefit cost other than service costs outside of operating income.

Only the service cost component will be included in operating income and eligible for capitalization in assets.

The new guidance related to the presentation of the components of net periodic benefit cost within the Consolidated Statement of Operations will be applied retrospectively.

The new guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively.

We adopted this standard on January 1, 2018.

As a result of adoption, $10.7 million and $13.3 million of pension and post-retirement expense and $12.7 million of pension and post-retirement benefit will be reclassified out of operating income for the years ended December 31, 2017, 2016 and 2015, respectively.

In March 2016, the FASB issued a new accounting standard for share-based payments.

The impact of the adoption resulted in the following:

| • | All excess tax benefits and deficiencies arising from employee share-based payment awards, and dividends on those awards, will be recognized within income taxes in the period in which they occur rather than within additional paid-in-capital. Our adoption of this requirement under the new standard had no material impact for the year ended December 31, 2017. |

| • | The Company no longer presents excess tax benefits within cash flows from financing activities in the Consolidated Statements of Cash Flows; instead these are now reflected within cash flows from operating activities. The Company elected to apply this change prospectively. |

| • | The Company elected not to change its policy on accounting for forfeitures and continues to estimate the total number of awards for which the requisite service period will not be rendered. |

| • | The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of our diluted earnings per share for the year ended December 31, 2017. This increased diluted weighted average common shares outstanding by less than 300,000 shares for the year ended December 31, 2017. |

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.

February 21, 2017

Our audits also included the consolidated financial statement schedule listed in the Index at Item 15.

Also, in our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

February 21, 2017

Pentair plc and Subsidiaries

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

Pentair plc and Subsidiaries

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| Other | (5.2 | | ) | (3.0 | | ) | 0.2 | | |

| Purchase of noncontrolling interest | — | | | — | | | (134.7 | | ) |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance - December 31, 2013 | 213.0 | | $ | 113.5 | | | (15.6 | ) | $ | (875.1 | ) | $ | 5,071.4 | | $ | 1,829.1 | | $ | (43.6 | ) | $ | 6,095.3 | | $ | 122.4 | | $ | 6,217.7 | |

| Conversion of Pentair Ltd. common shares to Pentair plc ordinary shares | — | | (111.4 | | ) | | — | | — | | | 111.4 | | | — | | | — | | | — | | | — | | | — | | |

| Purchase of noncontrolling interest | — | | — | | | | — | | — | | | (12.3 | | ) | — | | | — | | | (12.3 | | ) | (122.4 | | ) | (134.7 | | ) |

| Share repurchase | (10.6 | ) | (0.1 | | ) | | (5.8 | ) | (450.7 | | ) | (699.2 | | ) | — | | | — | | | (1,150.0 | | ) | — | | | (1,150.0 | | ) |

Notes to consolidated financial statements

In December 2013, the Company's Board of Directors approved changing the Company's jurisdiction of organization from Switzerland to Ireland.

At an extraordinary meeting of shareholders on May 20, 2014, Pentair Ltd. shareholders voted in favor of a reorganization proposal pursuant to which Pentair Ltd. would merge into Pentair plc, an Irish company, and all Pentair Ltd. CHF 0.50 par value common shares would be canceled and all holders of such shares would receive $0.01 par value ordinary shares of Pentair plc on a one-for-one basis.

The reorganization transaction was completed on June 3, 2014, at which time Pentair plc replaced Pentair Ltd. as our ultimate parent company (the "Redomicile").

Shares of Pentair plc began trading on the New York Stock Exchange on June 3, 2014 under the symbol "PNR," the same symbol under which Pentair Ltd. shares were previously traded.

Our former parent company, Pentair Ltd., took its form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of ours.

Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco.

On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding ordinary shares of Flow Control to Tyco's shareholders (the "Distribution"), resulting in the distribution of approximately 110.9 million of our ordinary shares to Tyco's shareholders.

Notes to consolidated financial statements

Returns of custom or modified goods are normally not allowed.

Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate.

Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry.

Actual results may differ from those used in our valuations.

There were no impairment charges recorded in 2014 for identifiable intangible assets.

enacted.

Environmental

We recognize environmental clean-up liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated.

Such liabilities generally are not subject to insurance coverage.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year ended December 31, [removed: 2016,] [added: 2017,] pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 ("the Exchange Act").

Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the year ended December 31, [removed: 2016] [added: 2017] to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2016] [added: 2017] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Information required under this item with respect to directors is contained in our Proxy Statement for our [removed: 2017] [added: 2018] annual general meeting of shareholders under the captions "Corporate Governance Matters," "Proposal 1 Re-elect Director Nominees" and "Section 16(a) Beneficial Ownership Reporting Compliance" and is incorporated herein by reference.

Information required under this item is contained in our Proxy Statement for our [removed: 2017] [added: 2018] annual general meeting of shareholders under the captions "Compensation Discussion and Analysis," "Compensation Committee Report," "Executive Compensation Tables" and "Corporate Governance Matters - Director Compensation" and is incorporated herein by reference.

Information required under this item with respect to security ownership is contained in our Proxy Statement for our [removed: 2017] [added: 2018] annual general meeting of shareholders under the caption "Security Ownership" and is incorporated herein by reference.

The following table summarizes, as of December 31, [removed: 2016,] [added: 2017,] information about compensation plans under which our equity securities are authorized for issuance:

| 2008 Omnibus Stock Incentive Plan | [removed: 2,199,075] [added: 1,688,173] | | (4) | [removed: 32.73] [added: 32.21] | | | (2) | — | | (5) |

| 2004 Omnibus Stock Incentive Plan | [removed: 382,897] [added: 6,598] | | | [removed: 33.93] [added: 33.19] | | | | — | | (5) |

| Outside Directors Non-qualified Stock Option Plan | [removed: 80,000] [added: —] | | | [removed: 34.05] [added: —] | | | | — | | (5) |

| (1) | Consists of [removed: 3,107,651] [added: 3,551,120] shares subject to stock options, [removed: 706,214] [added: 537,259] shares subject to restricted stock units, and [removed: 296,368] [added: 454,353] shares subject to performance share awards. |

| (4) | Consists of [removed: 2,199,075] [added: 1,688,173] shares subject to stock options. |

| (5) | The 2008 Omnibus Stock Incentive Plan was terminated in [removed: connection with the Merger.] [added: 2012.] The 2004 Omnibus Plan and the Directors Plan were terminated in 2008. Options previously granted under these plans and restricted stock units granted under the 2008 Omnibus Stock Incentive Plan remain outstanding, but no further options or shares may be granted or issued under either plan. |

| 2012 Stock and Incentive Plan | 4,542,732 | | (1) | $ | 57.73 | | (2) | 4,166,037 | | (3) |

| Total | 6,237,503 | | | $ | 49.49 | | (2) | 4,166,037 | | |

| 2012 Stock and Incentive Plan | 4,110,233 | | (1) | $ | 56.54 | | (2) | 5,228,708 | | (3) |

| Total | 6,772,205 | | | $ | 45.65 | | (2) | 5,228,708 | | |

Information required under this item is contained in our Proxy Statement for our [removed: 2017] [added: 2018] annual general meeting of shareholders under the captions "Proposal 1 Re-elect Director Nominees - Director Independence" and "Corporate Governance Matters - The Board's Role and Responsibilities - Policies and Procedures Regarding Related Person Transactions" and is incorporated herein by reference.

Information required under this item is contained in our Proxy Statement for our [removed: 2017] [added: 2018] annual general meeting of shareholders under the caption "Proposal [removed: 4] [added: 3] Ratify, by Non-Binding Advisory Vote, the Appointment of Deloitte & Touche LLP as the Independent Auditors of Pentair plc and to Authorize, by Binding Vote, the Audit and Finance Committee of the Board of Directors to Set the Auditors' Remuneration" and is incorporated herein by reference.

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

Consolidated Balance Sheets as of December 31, [removed: 2016] [added: 2017] and [removed: 2015][added: 2016]

Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

Consolidated Statements of Changes in Equity for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

The exhibits of this Annual Report on Form 10-K included herein are set forth [removed: on the attached Exhibit Index.][added: below.]

| | | |

| --- | --- | --- |

| | | |

| Exhibit Number | | Exhibit |

| [2.1](http://www.sec.gov/Archives/edgar/data/77360/000119312515294098/d92608dex21.htm) | | Agreement and Plan of Merger, dated August 14, 2015, among Pentair plc, Pentair Lionel Acquisition Co., Pentair Lionel Merger Sub, Inc. and ERICO Global Company (Incorporated by reference to Exhibit 2.1 in the Current Report on Form 8-K of Pentair plc filed with the Commission on August 18, 2015 (File No. 001-11625)). |

| | | |

| [2.2](http://www.sec.gov/Archives/edgar/data/77360/000007736016000088/ex21sharepurchaseagreement.htm) | | Share Purchase Agreement, dated August 18, 2016, by and between Emerson Electric Co. and Pentair plc (Incorporated by reference to Exhibit 2.1 in the Quarterly Report on Form 10-Q of Pentair plc filed with the Commission on October 25, 2016 (File No. 001-11625)). |

| | | |

| [3.1](http://www.sec.gov/Archives/edgar/data/77360/000119312517164403/d365501dex31.htm) | | Amended and Restated Memorandum and Articles of Association of Pentair plc (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Pentair plc filed with the Commission on May 9, 2017 (File No. 001-11625)). |

| | | |

| [4.1](http://www.sec.gov/Archives/edgar/data/77360/000119312512408001/d409131dex41.htm) | | Indenture, dated as of September 24, 2012, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.) (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)). |

| | | |

| [4.2](http://www.sec.gov/Archives/edgar/data/77360/000119312512408001/d409131dex43.htm) | | Second Supplemental Indenture, dated as of September 24, 2012, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.) (as Issuer), Pentair Ltd. (as Guarantor), Pentair, Inc. and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.3 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)). |

| | | |

| [4.3](http://www.sec.gov/Archives/edgar/data/77360/000119312512483347/d445454dex42.htm) | | Fourth Supplemental Indenture, dated as of November 26, 2012, among Pentair Finance S.A. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on November 28, 2012 (File No. 001-11625)). |

| | | |

| [4.4](http://www.sec.gov/Archives/edgar/data/77360/000119312512506767/d456536dex41.htm) | | Fifth Supplemental Indenture, dated as of December 18, 2012, among Pentair Finance S.A. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 18, 2012 (File No. 001-11625)). |

| | | |

| | | |

| --- | --- | --- |

| | | |

| [4.5](http://www.sec.gov/Archives/edgar/data/77360/000119312514206241/d728966dex43.htm) | | Sixth Supplemental Indenture, dated as of May 20, 2014, among Pentair Finance S.A., Pentair Ltd., Pentair Investments Switzerland GmbH, Pentair plc and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.3 in the Current Report on Form 8-K of Pentair plc filed with the Commission on May 20, 2014 (File No. 001-11625)). |

| | | |

| [4.6](http://www.sec.gov/Archives/edgar/data/77360/000007736017000025/exhibit41seventhsupplement.htm) | | Seventh Supplemental Indenture, dated as of May 26, 2017, among Pentair Finance S.A., Pentair plc, Pentair Investments Switzerland GmbH and Wells Fargo Bank, National Association as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Pentair plc filed with the Commission on May 31, 2017 (File No. 001-11625)). |

| | | |

| [4.7](http://www.sec.gov/Archives/edgar/data/77360/000104746911004332/a2203678zex-4_5.htm) | | Senior Indenture, dated May 2, 2011 by and among Pentair, Inc. and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 4.5 to Pentair, Inc.'s Registration Statement on Form S-3 (Registration 333-173829)). |

| | | |

| [4.8](http://www.sec.gov/Archives/edgar/data/77360/000110465911027276/a11-10890_9ex4d2.htm) | | First Supplemental Indenture, dated as of May 9, 2011, among Pentair, Inc., the guarantors named therein and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on May 9, 2011 (File No. 000-04689)). |

| | | |

| [4.9](http://www.sec.gov/Archives/edgar/data/77360/000119312512411468/d417892dex41.htm) | | Third Supplemental Indenture, dated October 1, 2012, among Pentair Ltd., Pentair, Inc. and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)). |

| | | |

| [4.10](http://www.sec.gov/Archives/edgar/data/77360/000119312512506767/d456536dex42.htm) | | Fourth Supplemental Indenture, dated as of December 17, 2012, among Pentair, Inc. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 18, 2012 (File No. 001-11625)). |

| | | |

| [4.11](http://www.sec.gov/Archives/edgar/data/77360/000119312514206241/d728966dex42.htm) | | Fifth Supplemental Indenture, dated as of May 20, 2014, among Pentair, Inc., Pentair Ltd., Pentair Investments Switzerland GmbH, Pentair plc and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair plc filed with the Commission on May 20, 2014 (File No. 001-11625)). |

| | | |

| [4.12](http://www.sec.gov/Archives/edgar/data/77360/000007736017000025/exhibit42sixthsupplemental.htm) | | Sixth Supplemental Indenture, dated as of May 26, 2017, among Pentair, Inc., Pentair plc, Pentair Investments Switzerland GmbH and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Pentair plc filed with the Commission on May 31, 2017 (File No. 001-11625)). |

| | | |

| [4.13](http://www.sec.gov/Archives/edgar/data/77360/000007736014000034/ex4120141009.htm) | | Amended and Restated Credit Agreement, dated as of October 3, 2014 among Pentair, plc, Pentair Investments Switzerland GmbH, Pentair Finance, S.A., Pentair, Inc. and the lenders and agents party thereto (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair, plc, filed with the Commission on October 3, 2014 (File No. 001-11625)). |

| | | |

| [4.14](http://www.sec.gov/Archives/edgar/data/77360/000119312515311259/d92174dex41.htm) | | First Amendment, dated as of August 28, 2015, among Pentair, Pentair Investments Switzerland GmbH, Pentair Finance S.A. and the lenders and agents party thereto (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Pentair plc filed with the SEC on September 3, 2015 (File No. 001-11625)). |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February [removed: 21, 2017.][added: 27, 2018.]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on February [removed: 21, 2017.][added: 27, 2018.]

| Year ended December 31, 2017 | $ | 16.4 | | $ | 0.8 | | $ | 4.5 | | $ | 1.1 | | $ | 13.8 | |

| | | |

| --- | --- | --- |

| | | |

| | | |

| | | |

| --- | --- | --- |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |