Pentair (PNR) 10-K risk factor changes: FY2020 vs FY2019

Important factors for our businesses and the businesses of our customers include the overall strength of the global economy and various regional economies and our customers’ confidence in these economies, industrial and governmental capital spending, the strength of [removed: the] residential and commercial real estate markets, [removed: the] residential housing [removed: market,] [added: markets,] the commercial business climate, unemployment rates, availability of consumer and commercial financing, interest rates, and energy and commodity prices.

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 [removed: for our products and services, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.]

Competition may also result from new entrants into the markets we serve, offering products and/or services that compete with [removed: us.][added: ours.]

Some of our [removed: competitors, in particular smaller companies,] [added: competitors] attempt to compete based primarily on price, localized expertise and local relationships, especially with respect to products and applications that do not require a great deal of engineering or technical expertise.

In addition, during economic [removed: downturns] [added: downturns,] average selling prices tend to decrease as market participants compete more aggressively on price.

Moreover, demand for our products, which impacts profit margins, is affected by changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases, [added: adoption of new technology] and [added: connected products, and] changes in customers’ preferences for our products, including the success of products offered by our competitors.

Sales outside of the U.S. for the year ended December 31, [removed: 2019] [added: 2020] accounted for [removed: 37%] [added: 33%] of our net sales.

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

[removed: | • |] [added: -] diversion of management time and attention from daily operations; [removed: |]

[removed: | • |] [added: -] difficulties integrating acquired businesses, technologies and personnel into our business; [removed: |]

[removed: | • |] [added: -] difficulties in obtaining and verifying the financial statements and other business information of acquired businesses; [removed: |]

[removed: | • |] [added: -] inability to obtain required regulatory approvals; [removed: |]

[removed: | • |] [added: -] potential loss of key employees, key contractual relationships or key customers of acquired companies or of ours; [removed: |]

[removed: | • |] [added: -] dilution of interests of holders of our shares through the issuance of equity securities or equity-linked securities. [removed: |]

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

During [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] we initiated and continued execution of certain business initiatives aimed at reducing our fixed cost structure and realigning our business.

Accordingly, our business is subject to the political, regulatory, economic, trade, and other risks that are inherent in operating in [added: and purchasing from,] numerous countries.

[removed: | • |] [added: -] changes in general economic and political conditions in countries where we operate, particularly in emerging markets; [removed: |]

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

[removed: | • |] [added: -] the imposition of tariffs, duties, exchange controls or other trade restrictions; [removed: |]

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

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

[removed: | • |] [added: -] the difficulty of communicating and monitoring evolving standards and directives across our product lines, services, and global facilities; [removed: |]

[removed: | • |] [added: -] trade protection measures and import or export licensing requirements and restrictions; [removed: |]

[removed: | • |] [added: -] the possibility of terrorist action affecting us or our operations; [removed: |]

[removed: | • |] [added: -] the threat of nationalization and expropriation; [removed: |]

[removed: | • |] [added: - the] difficulty in staffing and managing widespread operations in non-U.S. labor markets; [removed: |]

[removed: | • |] [added: -] limitations on repatriation of earnings or other regionally-imposed capital requirements; [removed: |]

[removed: | • |] [added: -] the difficulty of protecting intellectual property in non-U.S. countries; and [removed: |]

[removed: | • |] [added: -] changes in and required compliance with a variety of non-U.S. laws and regulations. [removed: |]

In 2016, the United Kingdom [removed: voted in] [added: held] a referendum [removed: to] [added: in which voters approved an] exit [added: from] the European Union [removed: (“Brexit”), which resulted in significant currency exchange rate fluctuations and volatility.][added: (“Brexit”).]

The United [removed: Kingdom’s exit] [added: Kingdom subsequently withdrew] from the European Union [removed: became] effective on January 31, [added: 2020, subject to a transition period that ended on December 31,] 2020.

As a result of changes to U.S. or foreign government administrative policy, there may be changes to existing trade agreements, like the [removed: North American Free Trade Agreement (“NAFTA”) and its anticipated successor agreement, the] U.S.-Mexico-Canada Agreement [removed: (“USMCA”), which is still subject to approval by Canada,] [added: (“USMCA”);] greater restrictions on free trade [removed: generally, and] [added: generally;] significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured in Mexico, China, or other [removed: U.S. trading] countries where we [added: purchase from,] have operations or manufacture or sell [removed: products,] [added: products; prohibitions or restrictions on doing business with certain companies, including those with certain relationships with China; and adverse responses by foreign governments to U.S. trade policy,] among other possible changes.

It remains unclear what the U.S. administration or foreign governments, including China, will or will not do with respect to tariffs, [removed: NAFTA,] USMCA or other international trade agreements and policies.

A trade [removed: war,] [added: war;] other governmental action related to tariffs or international trade agreements, including [removed: NAFTA and USMCA,] [added: USMCA;] changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently [added: purchase,] manufacture and sell [removed: products,] [added: products;] and any resulting negative sentiments towards the U.S. as a result of such changes, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

As of December 31, [removed: 2019] [added: 2020] our goodwill and intangible assets were [removed: $2,598] [added: $2,718] million and represented [removed: 63%] [added: 65%] of our total assets.

Our net sales to our largest customer represented approximately 15% of our consolidated net sales in [removed: 2019.][added: 2020.]

While we do not have any other customers that accounted for 10% or more of our consolidated net sales in [removed: 2019,] [added: 2020,] we have other customers that are key to the success of our business.

If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes, public health epidemics [added: (including the COVID-19 pandemic)] or other catastrophic events or [removed: events] [added: disruptions] outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products.

[removed: The significance of the impact of the coronavirus outbreak to us remains unclear at this time; however, it] [added: These issues] could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Relating to the COVID-19 Pandemic

The COVID-19 pandemic is expected to have a material negative impact on our business, financial condition, results of operations and cash flows.

Our business and financial results have been and are expected to continue to be negatively impacted by the COVID-19 pandemic.

The severity, magnitude and duration of the current COVID-19 pandemic is uncertain, rapidly changing and hard to predict.

In 2020, the COVID-19 pandemic significantly impacted economic activity and markets around the world and our business, and it is expected to negatively impact our business in numerous ways, including but not limited to those outlined below:

- The COVID-19 pandemic has caused a global economic slowdown that may last for a potentially extended duration, and it is possible that it could cause a global recession.

Deteriorating economic and political conditions caused by the COVID-19 pandemic, such as increased unemployment, decreases in capital spending, declines in consumer confidence, or economic slowdowns or recessions, could cause a decrease in demand for our products.

- Due to the impacts of the COVID-19 pandemic, we have experienced and expect to continue to experience reductions in customer demand for certain of our products and in several of our end-markets, including commercial filtration, commercial flow, industrial filtration and food and beverage.

- The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, certain elements of our business (including certain elements of our operations, supply chains and distribution systems), including as a result of impacts associated with required, preventive and precautionary measures that we, other businesses, our communities and governments are taking.

These impacts include requiring employees to work from home or not go into their offices or facilities, limiting the number of employees attending meetings, reducing the number of people in our sites at any one time, reducing employee travel and adopting other employee safety measures.

These measures also may impact our ability to meet production demands or requests and may delay our new product introductions depending on employee attendance or ability to continue to work.

In addition, we have experienced disruptions at some of our facilities with higher absenteeism due to the COVID-19 pandemic.

- If the COVID-19 pandemic continues and economic conditions worsen, we expect to experience additional adverse impacts on our operational and commercial activities, customer orders and our collections of accounts receivable, which may be material, and it remains uncertain the impact on future operational and commercial activities, customer orders, and collections even if economic conditions begin to improve.

- Government or regulatory responses to the COVID-19 pandemic have and are likely to continue to negatively impact our business.

During the first and second quarters of 2020, mandatory lockdowns or other restrictions on operations in

some countries temporarily disrupted our ability to manufacture or distribute our products in some of these markets.

A reoccurrence of these disruptions could materially adversely impact our operations and results.

In addition, the current resurgence of the COVID-19 pandemic and government restrictions related thereto in the fourth quarter of 2020 and first quarter of 2021 may negatively impact demand in certain of our commercial and industrial businesses.

In addition to existing travel restrictions, jurisdictions may continue to close borders, impose prolonged quarantines and further restrict travel and business activity, and other related supply chain delays may develop, which could significantly impact our ability to support our operations and customers, meet demand, develop new products, ship our backlog and also impact the ability of our employees to get to their workplaces to produce products and services, or significantly hamper our products from moving through the supply chain.

- The impacts of the COVID-19 pandemic may limit our ability to reduce our overall operating costs.

We have experienced increased costs relating to our efforts to mitigate the impact of the COVID-19 pandemic through, among other things, enhanced sanitization procedures and social-distancing measures we have enacted and will likely continue to enact at our locations around the world in an effort to protect our employees’ health and well-being.

- The COVID-19 pandemic has disrupted and is expected to continue to disrupt our operations, global supply chain and routes to market or those of our suppliers or their suppliers.

These disruptions or our failure to effectively respond to them have increased and may continue to increase product, distribution or labor costs or cause delays in delivering our backlog or may cause an inability to deliver products to our customers or meet customer demand.

- While we have experienced high demand in our pool business as consumers sheltered-in-place and have spent more time at home as a result of the COVID-19 pandemic that contributed to growth in our sales during 2020, such growth may not be sustainable and may not be repeated in future periods.

Furthermore, even if growth in demand continues, we may not be able to meet that demand due to production and capacity challenges.

- Disruptions or uncertainties related to the COVID-19 pandemic for a sustained period of time could result in delays or modifications to some of our strategic plans and initiatives and hinder our ability to achieve our growth targets.

- The COVID-19 pandemic has increased volatility and pricing in and disrupted the capital markets and commercial paper markets, and volatility is likely to continue.

We might not be able to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase.

- Actions we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemic, may result in legal investigations or claims, regulatory actions, or litigation against us.

We might not be able to predict or respond to all impacts of the COVID-19 pandemic on a timely basis to prevent near- or long-term adverse impacts to our results.

Due to the speed with which the COVID-19 situation continues to develop, the global breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration and ultimate impact and uncertainty regarding the availability and distribution of vaccines to address the COVID-19 virus; therefore, any negative impact on our business, financial condition (including without limitation our liquidity), results of operations and cash flows cannot be reasonably estimated at this time, but the COVID-19 pandemic could lead to extended disruption of economic activity and the impact on our business, financial condition, results of operations and cash flows could be material.

The ultimate impact of these disruptions also depends on events beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken by parties other than us to respond to them.

The foregoing and other impacts of the COVID-19 pandemic could have the effect of heightening many of the other risks described below and any of these impacts could materially adversely affect our business, financial condition, results of operations and cash flows.

In addition, we need to be flexible to adapt our products to ever changing customer preferences, including those relating to regulatory, climate change and social responsibility matters.

- assumption of the liabilities and exposure to unforeseen liabilities of acquired companies; and

Sales outside of the U.S. for the year ended December 31, 2020 accounted for 33% of our net sales.

- the difficulty of ensuring that products and services meet ever-changing regional regulations and requirements;

Since January 1, 2021, the European Union - United Kingdom Trade and Cooperative Agreement has provisionally been in effect.

However, these actions may not be successful in managing our costs or increasing our productivity and we anticipate inflation to continue with respect to materials (especially resins, copper, steel and stainless steel) as well as labor.

Furthermore, our business strategy also includes expanding our smart products and Internet of Things offerings and there are many other companies that hold patents in this space.

material adverse effect on our reported revenue in future periods.

Any acquisitions that we complete may not be successful.

| | |

| --- | --- |

| • | assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including risks relating to the U.S. Foreign Corrupt Practices Act (the “FCPA”) and privacy laws, including the General Data Protection Regulation (“GDPR”); and |

It may be difficult for us to integrate acquired operations, including those from our recent acquisitions of Aquion, Inc. and Pelican Water Systems, efficiently into our business operations.

The Brexit bill was passed by the United Kingdom on January 23, 2020, and it was passed by the European Parliament on January 29, 2020.

If the USMCA is ratified by Canada, its provisions will go into effect shortly thereafter.

While the USMCA is somewhat similar to NAFTA, it contains several new compliance obligations addressing such issues as rules of origin, labor standard, certificate of origin documentation and de minimis thresholds, as well as new policies on labor and environmental standards, intellectual property protections and some digital trade provisions.

We are currently analyzing the expected impact of the USMCA.

While certain aspects of the USMCA are expected to be positive, others, including potentially higher regulatory compliance costs, may have an adverse impact on our business.

However, these actions may not be successful in managing our costs or increasing our productivity.

For example, we are evaluating the potential impact of the coronavirus (COVID-19) outbreak that originated in China, including evaluating the impact on our employees, customers, and global supply chain, and of governmental actions being taken to curtail the spread of the virus.

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.

employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts), we cannot provide any assurance that such programs will be successful.

access credit markets if the need arises.

Each case typically names between several dozen to more than a hundred corporate defendants.

greenhouse gas emissions.

Risks Relating to the Separation of nVent Electric plc by Spin-off

The spin-off transaction could result in substantial tax liability to us and our shareholders if the spin-off does not qualify as a tax-free transaction.

On April 30, 2018, we completed the separation of our Electrical business through the spin-off of nVent Electric plc to our shareholders.

The spin-off was conditioned on our receipt of opinions of tax advisors 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 such opinions.

Moreover, such opinions were based on certain statements and representations made by us, which, if incomplete or inaccurate in any material respect, could invalidate the opinions.

In addition, if the spin-off were taxable, each holder of our ordinary shares who received shares of nVent Electric plc 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 be exposed to claims and liabilities as a result of the spin-off.

In connection with the spin-off, we and nVent Electric plc entered into a separation and distribution agreement and various other agreements, including a transition services agreement, a tax matters agreement and an employee matters agreement.

These agreements provide for the performance of services by each company for the benefit of the other for a period of time after the spin-off and provide for specific indemnity and liability obligations.

The indemnity rights we have against nVent under the agreements may not be sufficient to protect us.

In addition, our indemnity obligations to nVent may be significant, and these risks could negatively affect our financial condition, results of operations and cash flows.

These changes include the Tax Cuts and Jobs Act enacted in the U.S. in December 2017, which made significant changes to certain U.S. tax laws relevant to us, including limitations on the deductibility of certain interest expense and employee compensation, limitations on various other deductions and credits, the imposition of taxes in respect of certain cross-border payments or transfers, the imposition of taxes on certain earnings of non-U.S. entities on a current basis, and changes in the timing of the recognition of income or its character.

These items and regulations and guidance implementing the Tax Cuts and Jobs Act could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

Where a company is treated as tax resident under the domestic laws of both the U.K. and Ireland, article 4(3) of the Double Tax Convention between Ireland and the U.K. (the “residence tie-breaker”) historically provided that the company should be treated as resident only in one of those two jurisdictions if its place of effective management is situated in that jurisdiction.

Under Ireland’s domestic tax residency rules, Pentair should not be Irish resident until January 1, 2021 (provided that there is no change in ownership and no major change in the nature or conduct of the business of the company before that date, in which case the residence tie-breaker should apply from the date of the change of ownership).

Accordingly, we do not expect the change to the residence tie-breaker to have effect until January 1, 2021 at the earliest.

Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” [added: “could,”] “positioned,” “strategy,” “future” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements.

These factors include [added: the] overall [added: impact of the COVID-19 pandemic on our business; the duration and severity of the COVID-19 pandemic; actions that may be taken by us, other businesses and governments to address or otherwise mitigate the impact of the COVID-19 pandemic, including those that may impact our ability to operate our facilities, meet production demands, and deliver products to our customers; the negative impacts of the COVID-19 pandemic on the] global [added: economy, our customers and suppliers, and customer demand; overall global] economic and business conditions impacting our business, including the strength of housing and related markets; demand, competition and pricing pressures in the markets we serve; volatility in currency exchange rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; the ability to [removed: successfully integrate the Aquion, Inc. (“Aquion”) and Pelican Water Systems (“Pelican”) acquisitions; the ability to] achieve the benefits of our restructuring plans and cost reduction initiatives; risks associated with operating foreign businesses; the impact of material cost and other inflation; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs; the outcome of litigation and governmental proceedings; [removed: the potential negative impact of the coronavirus (COVID-19) outbreak on our business;] and the ability to achieve our long-term strategic operating goals.

Pentair plc and its consolidated subsidiaries (“we,” “us,” “our,” “Pentair” or the “Company”) is a pure play water industrial manufacturing company [removed: and in 2019 we were] comprised of [removed: three] [added: two] reporting segments: [removed: Aquatic Systems, Filtration] [added: Consumer] Solutions and [added: Industrial &] Flow Technologies.

For the year ended December 31, [removed: 2019,] [added: 2020,] the [removed: Aquatic Systems, Filtration] [added: Consumer] Solutions and [added: Industrial &] Flow Technologies segments represented approximately [removed: 33%, 36%] [added: 58%] and [removed: 31%] [added: 42%] of total revenues, respectively.

In February 2019, as part of [removed: Filtration] [added: Consumer] Solutions, we completed the acquisitions of [removed: Aquion] [added: Aquion, Inc. (“Aquion”)] and Pelican [added: Water Systems (“Pelican”)] for $163.4 million and $121.1 million, respectively, in cash, net of cash [removed: acquired.][added: acquired and final working capital true-ups.]

The following trends and uncertainties affected our financial performance in [removed: 2019,] [added: 2020,] and will likely impact our results in the future:

[removed: | • |] [added: -] During [removed: 2019,] [added: 2020,] we executed certain business restructuring initiatives [added: unrelated to the COVID-19 pandemic] aimed at reducing our fixed cost structure and realigning our business. [removed: We expect these actions will contribute to margin growth in 2020. |]

[removed: | • |] [added: -] We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S. We are reinforcing [added: that] our businesses [removed: to] more effectively address these opportunities through research and development and additional sales and marketing resources. [removed: Unless we successfully penetrate these markets, our core sales growth will likely be limited or may decline. |]

[removed: | • |] We [removed: have experienced material and other cost inflation. We strive for productivity improvements, and we implement increases in selling prices to help mitigate this inflation. We] expect the current economic environment will result in continuing price volatility for many of our raw materials, and we are uncertain as to the timing and impact of these market changes. [removed: |]

[removed: | • |] [added: -] Building a high performance growth culture and delivering on our commitments while living our Win Right values. [removed: |]

| | [added: | |] Years ended December 31 | | | | | | | | | | [added: | |] % / point change | | | | [added: | |]

| *In millions* | [added: | | 2020 | | |] 2019 | | | 2018 | | | [removed: 2017] | | | [added: 2020 vs 2019] | [added: | |] 2019 vs 2018 | | [removed: 2018 vs 2017] | [removed: |]

| Net sales | [added: | |] $ | [added: 3,017.8 | | $ |] 2,957.2 | | $ | 2,965.1 | | [removed: $] | [removed: 2,845.7] | | [added: 2.0] | [removed: (0.3] | [removed: )%] [added: %] | [removed: 4.2] [added: (0.3)] | [added: |] % |

| Cost of goods sold | [added: | | 1,960.2 | | |] 1,905.7 | | | 1,917.4 | | | [removed: 1,858.2] | | | [added: 2.9] | [removed: (0.6] | [removed: )%] [added: %] | [removed: 3.2] [added: (0.6)] | [added: |] % |

| Gross profit | [added: | | 1,057.6 | | |] 1,051.5 | | | 1,047.7 | | | [removed: 987.5] | | | [added: 0.6] | [removed: 0.4] | % | [removed: 6.1] [added: 0.4] | [added: |] % |

| *% of net sales* | [added: | | *35.0* | | *%* |] *35.6* | | *%* | *35.3* | | *%* | [removed: *34.7*] | | [removed: *%*] | [added: *(0.6)*] | [removed: *0.3*] | *pts* | [removed: *0.6*] [added: *0.3*] | [added: |] *pts* |

| Selling, general and administrative | [added: | | 520.5 | | |] 540.1 | | | 534.3 | | | [removed: 536.0] | | | [added: (3.6)] | [removed: 1.1] | % | [removed: (0.3] [added: 1.1] | [removed: )%] | [added: % |]

| *% of net sales* | [added: | | *17.2* | | *%* |] *18.3* | | *%* | *18.0* | | *%* | [removed: *18.8*] | | [removed: *%*] | [added: *(1.1)*] | [removed: *0.3*] | *pts* | [removed: *(0.8*] [added: *0.3*] | [removed: *) pts*] | [added: *pts* |]

| Research and development | [added: | | 75.7 | | |] 78.9 | | | 76.7 | | | [removed: 73.2] | | | [added: (4.1)] | [removed: 2.9] | % | [removed: 4.8] [added: 2.9] | [added: |] % |

| *% of net sales* | [removed: *2.7*] | | [added: *2.5* | |] *%* | [removed: *2.6*] [added: *2.7*] | | *%* | *2.6* | | *%* | | [removed: *0.1*] | [added: | *(0.2)* | |] *pts* | [removed: *—*] [added: *0.1*] | | [added: *pts* |]

| Operating income | [added: | | 461.4 | | |] 432.5 | | | 436.7 | | | [removed: 378.3] | | | [added: 6.7] | [removed: (1.0] | [removed: )%] [added: %] | [removed: 15.4] [added: (1.0)] | [added: |] % |

| *% of net sales* | [added: | | *15.3* | | *%* |] *14.6* | | *%* | *14.7* | | *%* | [removed: *13.3*] | | [removed: *%*] | [added: *0.7*] | [removed: *(0.1*] | [removed: *) pts*] [added: *pts*] | [removed: *1.4*] [added: *(0.1)*] | [added: |] *pts* |

| [removed: (Gain) loss] [added: Loss (gain)] on sale of businesses | [removed: (2.2] | | [removed: )] [added: 0.1] | [removed: 7.3] | | [added: (2.2)] | [removed: 4.2] | | [added: 7.3] | | [added: | | | |] N.M. | | [added: |] N.M. | | [added: |]

| Loss on early extinguishment of debt | [added: | |] — | | | [removed: 17.1] [added: —] | | | [removed: 101.4] [added: 17.1] | | | | [added: | |] N.M. | | [added: |] N.M. | | [added: |]

| Net interest expense | [added: | | 23.9 | | |] 30.1 | | | 32.6 | | | [removed: 87.3] | | | [added: (20.6)] | [removed: (7.7] | [removed: )%] [added: %] | [removed: (62.7] [added: (7.7)] | [removed: )%] | [added: % |]

| Other [removed: (income)] expense [added: (income)] | [removed: (2.9] | | [removed: )] [added: 5.3] | [removed: (0.1] | | [removed: )] [added: (2.9)] | [removed: 12.6] | | [added: (0.1)] | | [added: | | | |] N.M. | | [added: |] N.M. | | [added: |]

| Income from continuing operations before income taxes | [added: | | 432.1 | | |] 407.5 | | | 379.8 | | | [removed: 172.8] | | | [added: 6.0] | [removed: N.M.] | [added: %] | [removed: N.M.] [added: 7.3] | | [added: % |]

| Provision for income taxes | [added: | | 75.0 | | |] 45.8 | | | 58.1 | | | [removed: 58.7] | | | [added: 63.8] | [removed: (21.2] | [removed: )%] [added: %] | [removed: (1.0] [added: (21.2)] | [removed: )] [added: |] % |

| *Effective tax rate* | [added: | | *17.4* | | *%* |] *11.2* | | *%* | *15.3* | | *%* | [removed: *34.0*] | | [removed: *%*] | [added: *6.2*] | [removed: *(4.1*] | [removed: *) pts*] [added: *pts*] | [removed: *(18.7*] [added: *(4.1)*] | [removed: *) pts*] | [added: *pts* |]

| | [removed: 2019] [added: | | 2020] vs [removed: 2018] [added: 2019] | | | [removed: 2018] [added: 2019] vs [removed: 2017] [added: 2018] | | [added: |]

| Volume | [removed: (3.9] | [removed: )%] | [added: 0.4] | [removed: 3.6] | % | [added: (3.9) | | % |]

| Price | [removed: 2.6] | | [added: 0.9] | [removed: 1.2] | | [added: 2.6 | | |]

| Core growth | [removed: (1.3] | [removed: )] | [added: 1.3] | [removed: 4.8] | | [added: (1.3) | | |]

| Acquisition [removed: (divestiture)] | [removed: 2.5] | | [added: 0.5] | [removed: (1.2] | [removed: )] | [added: 2.5 | | |]

| Currency | [removed: (1.5] | [removed: )] | [added: 0.2] | [removed: 0.6] | | [added: (1.5) | | |]

| Total | [removed: (0.3] | [removed: )%] | [added: 2.0] | [removed: 4.2] | % | [added: (0.3) | | % |]

[removed: *The* *0.3* *percent* *decrease* *in] [added: *The 2.0 percent increase in] consolidated net sales [removed: in* *2019* *from* *2018* *was] [added: in 2020 from 2019 was] primarily the result of:*

[removed: *This* *decrease* *was] [added: *This decrease was] partially offset by:*

[removed: | • |] [added: -] selective increases in selling prices to mitigate inflationary cost increases; and [removed: |]

[removed: | • | the acquisitions] [added: - impact] of [removed: the] Aquion and Pelican [removed: businesses in 2019. |][added: acquisitions; and]

OPERATIONS

COVID-19 Pandemic

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

The COVID-19 pandemic continues to spread throughout the United States (“U.S.”) and the world, with the continued potential for significant impact.

The COVID-19 pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter-in-place” and “stay-at-home” orders, travel restrictions, business curtailments, limits on gatherings, and other measures.

In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the economic impacts of the COVID-19 pandemic.

The effects of the COVID-19 pandemic have had and may continue to have an unfavorable impact on certain parts of our business.

*Health and safety*

From the earliest signs of the outbreak, we have taken proactive action to protect the health and safety of our employees, customers, and suppliers.

We have enacted rigorous safety measures in our sites, including implementing social distancing protocols, implementing working from home arrangements for those employees who do not need to be physically present on the manufacturing floor and do not provide manufacturing-support activities, suspending travel, extensively and frequently disinfecting our workspaces, conducting temperature monitoring at our facilities, and providing or accommodating the wearing of facial coverings to those employees who must be physically present in their workplace and where facial coverings are required by local government orders.

We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, and suppliers.

For the year ended December 31, 2020, we incurred $10.4 million of costs related to providing for the health and safety of our employees specific to the COVID-19 pandemic.

*Operations*

We have important manufacturing operations in the U.S. and around the world that have been affected by the COVID-19 pandemic, and we have taken certain actions to help curb its spread.

Government-mandated measures providing for business curtailments or shutdowns generally exclude certain essential businesses and services, including businesses that manufacture and sell products that are considered essential to daily lives or otherwise operate in essential or critical sectors.

While substantially all of our manufacturing facilities are considered essential and have remained operational, we have experienced intermittent partial or full factory closures at certain facilities as a result of these measures or the need to sanitize the facilities and address employee well-being.

We also experienced brief interruptions in operations due to government-mandated shutdowns at our sites in India, Italy, and New Zealand during the year ended December 31, 2020.

While sanitation-related closures or governmental shutdowns may occur again in the future, all of our manufacturing facilities currently remain operational.

In addition, we have experienced disruptions at some of our facilities with higher absenteeism due to the COVID-19 pandemic.

*Supply*

The COVID-19 pandemic has impacted our factory productivity and supply chain.

Certain of our suppliers, particularly in our pool and flow businesses, faced difficulties maintaining operations in light of manufacturing shutdowns and interruptions due to the COVID-19 pandemic, which negatively impacted our production and contributed to an increase in backlog.

During the third quarter of 2020, we identified second source suppliers and increased supply for key items in our pool business to reduce the production and capacity challenges we encountered in the second quarter of 2020 as a result of supply chain issues and increased demand.

These supply chain and capacity challenges have led to higher transportation and labor costs in order to timely deliver finished goods to our customers.

Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures, have in certain cases resulted, and may continue to result, in higher costs and delays, both for obtaining raw materials and components and shipping finished goods to customers, which could harm our profitability, make our products less competitive, or cause our customers to seek alternative suppliers.

Although we regularly monitor the financial health and operations of companies in our supply chain, and use alternative suppliers when necessary and available, financial hardship or government restrictions on our suppliers or sub-suppliers caused by the COVID-19 pandemic could cause a disruption in our ability to obtain raw materials or components required to manufacture our products and adversely affect our operations.

*Demand*

The COVID-19 pandemic has significantly increased economic and demand uncertainty.

We have experienced and expect to continue to experience reductions in customer demand in several of our end-markets.

Within our Consumer Solutions segment, the COVID-19 pandemic has impacted demand in each of our businesses.

Our pool business has experienced high demand as consumers sheltered-in-place and have spent more time at home.

While shelter-in-place orders impacted our ability to reach our customers in our residential water treatment business at the beginning of the second quarter of 2020, we started to see stabilization in demand in this business towards the end of the second quarter and then saw demand rebound in the second half of 2020 as consumers became more comfortable allowing dealers back into their homes to test their water and install new systems.

Our commercial filtration business was negatively impacted by restaurant and hospitality industry closures or operations at limited capacity across North America and Europe in the second quarter and to a lesser extent in the second half of 2020.

New or extended government-mandated shutdowns could impact demand for our Consumer Solutions products in the future.

Within our Industrial & Flow Technologies segment, demand for our residential flow products was initially negatively impacted due to store closures as a result of state-wide orders in the U.S. However, sell through improved throughout the year driven by pent up demand from the earlier closures.

Demand continued to remain soft in our commercial and infrastructure flow businesses, but stabilized in the third quarter of 2020.

In our industrial filtration business, demand is mostly driven by customer capital spending, which was reduced and/or delayed beginning in the second quarter of 2020 across most industries served.

In addition, lower asset utilization drove down demand in industrial filtration aftermarket sales.

Furthermore, many of our commercial customers have been negatively impacted due to worldwide lockdowns as a result of the COVID-19 pandemic.

While we are preparing for this business to remain under pressure in the near term, we expect long-term demand drivers for this business not to be significantly changed.

Commencing with the first quarter of 2020, we revised our segments, going from three segments to two with the two revised segments named Consumer Solutions and Industrial & Flow Technologies.

The discussions below reporting on prior periods reflect the previous segmentation, but the descriptions of our businesses below continue to apply in their re-segmented form.

Additional information regarding this re-segmentation is found under the section titled “New Segmentation” in ITEM 1 of this Form 10-K.

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

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

The results of the Valves & Controls business have been presented as discontinued operations for all periods presented.

The Valves & Controls business was previously disclosed as a stand-alone reporting segment.

| | |

| --- | --- |

| • | Proposed regulations as part of the Tax Cuts and Jobs Act, enacted in the U.S. in December 2017, may place limitations on the deductibility of certain interest expense for U.S. tax purposes. These proposed regulations could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods when enacted. |

| • | Our businesses utilize a global supply chain including materials, components and products sourced directly or indirectly from China and from other countries and geographic regions potentially impacted by the coronavirus outbreak, and 3-4% of our total revenues are generated from sales to customers in China. Our overall business could be negatively impacted by the coronavirus outbreak, but the significance of the impact of the coronavirus outbreak on our business and the duration for which it may have an impact cannot be determined at this time. |

In 2020, our operating objectives include the following:

| • | Accelerating Pentair Integrated Management System (“PIMS”), with specific focus on the area of commercial excellence and acquisition integrations; |

| • | Delivering our growth priorities through new products and global and market expansion, specifically in the areas of pool and residential and commercial filtration solutions; |

| • | Optimizing our technological capabilities to increasingly generate innovative new products and advance digital transformation; and |

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

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

Net sales

| | | | | | |

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

| *•* | volume declines across all three reportable segments; and |

| • | unfavorable foreign currency effects. |

| *•* | core sales increases across all three reportable segments, primarily driven by increased sales in the residential and commercial businesses; |

| • | favorable foreign currency effects during the year ended December 31, 2018. |

| • | sales declines due to the sale of certain businesses during the year ended December 31, 2018. |

| • | unfavorable mix as a result of a core sales growth decrease in the higher margin Aquatic Systems segment; and |

| • | favorable mix in the Filtration Solutions segment; and |

| • | duplicative corporate costs of $11.0 million in 2018 resulting from the Separation of nVent that did not recur in 2019; and |

| • | lower annual performance based cash incentive awards in 2019 compared to 2018. |

| • | savings generated from restructuring and other lean initiatives; and |

| • | higher sales resulting in increased leverage. |

| • | restructuring and other costs of $31.8 million in 2018, compared to $28.2 million in 2017; |

| • | the reversal of a $13.3 million indemnification liability in 2017 that did not recur in 2018; and |

| • | investments in sales and marketing to drive growth. |

| • | lower average outstanding debt levels during the first half of 2019 compared to 2018. In June 2018, the proceeds from the Separation were utilized to repay the remaining $255.3 million aggregate principal amount of our 2.9% fixed rate senior notes due 2018 and for the early extinguishment of €363.4 million aggregate principal amount of our 2.45% senior notes due 2019. |

Loss on early extinguishment of debt

In 2018, we redeemed the remaining $255.3 million aggregate principal amount of our 2.9% fixed rate senior notes due 2018 and completed a cash tender offer in the amount of €363.4 million aggregate principal amount of our 2.45% senior notes due 2019.

All costs associated with the repurchases of debt were recorded as a *Loss on the early extinguishment of debt*, including $16.0 million premium paid on early extinguishment and $1.1 million of unamortized deferred financing costs.

| • | the mix of global earnings; |

| • | the impact of lower nondeductible interest expense allocated to continuing operations in 2019 compared to 2018; |

Our debt portfolio as of December 31, [removed: 2019,] [added: 2020,] was comprised of debt predominantly denominated in U.S. dollars.

This debt portfolio is comprised of [removed: 66%] [added: 72%] fixed-rate debt and [removed: 34%] [added: 28%] variable-rate debt.

Based on the fixed-rate debt included in our debt portfolio, as of December 31, [removed: 2019,] [added: 2020,] a 100 basis point increase or decrease in interest rates would result in a [removed: $39.8] [added: $37.6] million decrease or [removed: $43.4] [added: $40.9] million increase in fair value, respectively.

Based on the variable-rate debt included in our debt portfolio as of December 31, [removed: 2019,] [added: 2020,] a 100 basis point increase or decrease in interest rates would result in a [removed: $3.5] [added: $2.4] million increase or decrease in interest incurred.

At December 31, [removed: 2019 and 2018,] [added: 2020,] we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of [removed: $17.0 million and $47.6 million, respectively.][added: $12.4 million.]

At December 31, [removed: 2019,] [added: 2020,] we had outstanding cross currency swap agreements with a combined notional amount of [removed: $777.0] [added: $855.1] million.

A 10% appreciation of the U.S. dollar relative to the Euro would result in a [removed: $57.9] [added: $63.7] million net increase in [removed: *Accumulated] [added: accumulated] other comprehensive [removed: loss*.][added: income.]

Conversely, a 10% depreciation of the U.S. dollar relative to the Euro would result in [removed: a $55.2] [added: an $57.0] million net decrease in [removed: *Accumulated] [added: accumulated] other comprehensive [removed: loss*.][added: income.]

[removed: In 2019,] Pentair [removed: plc was] [added: is] comprised of [removed: three] [added: two] reportable business segments: [removed: Aquatic Systems, Filtration] [added: Consumer] Solutions and [added: Industrial &] Flow Technologies.

[removed: | • |] [added: -] Focused on strategies to advance pool growth and accelerate residential and commercial water treatment; [removed: |]

[removed: | • |] [added: -] Accelerated by innovation and digital transformation; and [removed: |]

[removed: | • |] [added: -] Grounded in Win Right values and utilizing the Pentair Integrated Management System (“PIMS”) consisting of lean enterprise, growth and talent management to drive sustained and consistent performance. [removed: |]

Our management office in the United States (“U.S.”) is located at 5500 Wayzata Boulevard, Suite 900, [removed: Minneapolis,] [added: Golden Valley,] Minnesota.

The following is a brief description of each of the Company’s [removed: 2019] reportable segments and business activities.

[removed: The Aquatic Systems segment manufactures and sells a complete line of energy-efficient residential] [added: Residential] and commercial pool equipment and accessories [removed: including] [added: include] pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment and pool accessories.

Applications for our [removed: Aquatic Systems] [added: pool business’s] products include residential and commercial pool maintenance, [removed: pool] repair, renovation, service and [removed: construction solutions.][added: construction.]

[removed: Brand] [added: Consumer Solutions brand] names [removed: for Aquatic Systems] include [added: Everpure,] Kreepy Krauly, [added: Pelican,] Pentair [added: Water Solutions, RainSoft] and Sta-Rite.

[removed: Aquatic Systems] [added: Consumer Solutions] customers include businesses engaged in wholesale and retail distribution in the residential & commercial verticals.

Customers [removed: in the residential & commercial verticals] also include [removed: end-users] [added: end-users, consumers] and [removed: consumers.][added: original equipment manufacturers.]

One customer of the [removed: Aquatic Systems] [added: Consumer Solutions] segment, Pool Corporation, represented approximately 15% of our consolidated net sales in [removed: 2019, 2018] [added: 2020] and [removed: 2017.][added: 2019.]

We experience seasonal demand with several end customers and end-users within [removed: Aquatic Systems.][added: Consumer Solutions.]

End-user demand for pool equipment follows warm weather trends and is at [removed: season] [added: seasonal] highs from April to August.

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

[removed: Filtration Solutions] [added: Industrial & Flow Technologies] customers include businesses engaged [removed: in] [added: with end users, and] wholesale and retail distribution in the residential, commercial, food & beverage and industrial verticals.

[removed: Filtration Solutions] [added: Industrial & Flow Technologies] faces numerous domestic and international competitors, some of which have substantially greater resources directed to the verticals in which we compete.

[removed: Flow] [added: Industrial & Flow] Technologies

[removed: These pumps] [added: They] are used in a range of applications, [removed: including residential] [added: food] and [removed: municipal wells,] [added: beverage, fluid separation technologies (oil and gas and other industries),] water [removed: treatment,] [added: and] wastewater [removed: solids handling,] [added: treatment, water wells,] pressure boosting, [removed: fluid delivery, circulation and transfer,] fire suppression, flood control, agricultural [removed: irrigation and] [added: irrigation,] crop [removed: spray.][added: spray and fluid circulation and transfer.]

[removed: Brand names for] [added: Industrial &] Flow Technologies [added: brand names] include [added: Pentair,] Aurora, Berkeley, [added: Codeline,] Fairbanks-Nijhuis, [added: Haffmans,] Hydromatic, Hypro, Jung Pumpen, [removed: Pentair,] Myers, Sta-Rite, [added: Shurflo, Südmo] and [removed: Shurflo.][added: X-Flow.]

We experience increased demand for residential water [removed: supply, infrastructure] [added: supply] and [removed: agricultural products] [added: irrigation pumps] following [removed: warm] weather trends, which are at [removed: season] [added: seasonal] highs from April to August.

[removed: | Consumer Solutions | $ | 1,611.7 | | $ | 1,578.4 | | $ | 1,489.5 | |][added: Consumer Solutions]

We purchase the materials we use in various manufacturing processes on the open market, and the majority [removed: is] [added: are] available through multiple sources which are in adequate supply.

Matters pertaining to Penwald are discussed in ITEM [removed: 3 and ITEM] 8, Note 1 of the Notes to Consolidated Financial Statements – Insurance subsidiary, included in this Form 10-K.

Pentair makes the most of life’s essential resources.

From our residential and business solutions that help people move, improve and enjoy their water, to our sustainable innovations and applications, we deliver smart, sustainable solutions for life.

The Consumer Solutions segment designs, manufactures and sells energy-efficient residential and commercial pool equipment and accessories, and commercial and residential water treatment products and systems.

Water treatment products and systems include pressure tanks, control valves, activated carbon products, conventional filtration products, and point-of-entry and point-of-use systems.

Our water treatment products and systems are used in residential whole home water filtration, drinking water filtration and water softening solutions in addition to commercial total water management and filtration in food service operations.

The primary focus of this segment is business-to-consumer.

For the fiscal year ended December 31, 2020, our pool business comprised 60% of the Consumer Solutions sales.

The pool business is a leader in North American pool equipment, serving a market that is primarily replacement.

The other 40% of sales were from the water treatment businesses, which sell residential and commercial components, residential systems and commercial systems.

The Industrial & Flow Technologies segment manufactures and sells a variety of fluid treatment products (advanced membrane filtration, separation systems, membrane bioreactors), pumps (water supply pumps, water disposal pumps, solid handling pumps, fluid transfer pumps, turbine pumps), valves, and spray nozzles as well as systems combining these products (process filtration systems, gas recovery solutions).

These products and systems serve the global residential, commercial, industrial, agricultural and infrastructure verticals.

The primary focus of this segment is business-to-business.

For the fiscal year ended December 31, 2020, our residential and irrigation flow businesses comprised 40% of the Industrial & Flow Technologies sales.

The residential and irrigation flow businesses sell pumps focused on residential and agriculture.

Another 30% of sales were from the commercial & infrastructure flow businesses, which sell larger pumps focused on fire suppression, waste water and flood control.

The remaining 30% of sales were from the industrial filtration business, comprised of applications focused on industrial process filtration and sustainable gas.

Human capital resources

We believe our success depends on our ability to attract, develop and retain strong employees.

We believe a deep-rooted culture energizes our employees to make a difference within and beyond the workplace.

We strive to be the destination for top talent, and work hard to develop and retain high performers throughout their career.

We also believe our Win Right values, positive culture and commitment to inclusion and diversity foster innovation and curiosity, which, in turn, contribute to us being an industry leader.

As of December 31, 2020, we had approximately 9,750 employees worldwide, of which approximately 52% are located in the U.S. A small portion of our U.S. employees are unionized, while outside the U.S., we have employees in certain countries, particularly in Europe, that are represented by an employee representative organization, such as a union, works council or employee association.

Refer to "COVID-19 Pandemic" included in ITEM 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for information on human capital management actions we have taken in response to the COVID-19 pandemic.

*Employee engagement and development*

Engaging our employees and developing their careers is important to our long-term success and ties directly to our Win Right culture and values.

We engage with our employees and gather feedback about our employee programs, practices and policies through various approaches that include: town hall meetings where Pentair leaders share strategies and perspectives; quarterly leadership webcasts to help ensure our results and expectations are clearly communicated; an annual global leadership meeting to help drive growth and productivity initiatives and share best practices; and a feedback feature on our employee intranet.

*Training and development*

To support employees in their career journey, we have developed and shared through our employee intranet a number of new tools and resources.

These resources include: live training sessions; on-demand eLearning and virtual classrooms; and downloadable materials.

Our talent development efforts span across all levels of our organization, including our Leadership Development Program, a 36-month program in which future leaders participate in cross-functional rotations intended to develop their capabilities throughout organization-wide exposure.

*Inclusion and diversity*

Our commitment to inclusion and diversity is part of living our Win Right values.

Our success also depends on our ability to attract, engage and retain a diverse group of employees.

We believe an inclusive and diverse workforce contributes different perspectives and innovative ideas that enable us to improve every day.

We believe that every employee should be provided the same opportunity to be heard, respected, have a sense of belonging and contribute to our mission.

Race, gender, ethnicity, country of origin, age, personal style, sexual orientation, physical ability, religion, life experiences and many more factors contribute to this diversity.

Our statistics are a measure of our performance, and we are committed to advancing a diverse workplace.

The following sets forth information regarding the diversity of our workforce as of December 31, 2020:

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

At Pentair plc, we believe the health of our world depends on reliable access to clean, safe water.

We deliver a comprehensive range of smart, sustainable water solutions to homes, business and industry around the world.

Whether it’s improving, moving or enjoying water, we help manage the world’s most precious resource.

Smart, Sustainable Water Solutions.

For Life.

See below for further discussion of each of these segments.

| | |

| --- | --- |

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.

The results of the Valves & Controls business have been presented as discontinued operations.

The Valves & Controls business was previously disclosed as a stand-alone reporting segment.

Commencing with the first quarter of 2020 we revised our segments, going from three segments to two with the two revised segments named Consumer Solutions and Industrial & Flow Technologies.

The discussions below that speak to historical periods refer to the prior segments, while statements about present and future periods refer to the businesses underlying those segments and carry forward with those businesses (including our customers, seasonality and competition) in their re-segmented form.

Additional information regarding this re-segmentation is found below under the section titled “New Segmentation.”

Aquatic Systems

Customers

Pentair’s verticals include residential, commercial, and industrial businesses.

Seasonality

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

Competition

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

We believe our distribution channels and reputation for quality also provide us a competitive advantage.

Filtration Solutions

The Filtration Solutions segment designs, manufactures, markets and services innovative water solutions to meet filtration and separation challenges across residential, commercial, food & beverage and industrial applications.

Filtration Solutions offers a comprehensive product suite of components and systems that ranges from point-of-entry and point-of-use filtration, valves and automated controls for residential and commercial applications as well as advanced filtration, oil & gas separation, membrane technology, and energy recovery for food & beverage and industrial applications.

Our equipment and solutions are found in water purification and sanitation systems, food service operations, food & beverage processing plants and in other applications across the globe.

The portfolio of products serves a range of industries, including use in the commercial, residential and industrial verticals.

Brand names for Filtration Solutions offerings include Codeline, Everpure, Haffmans, Pelican, RainSoft, Südmo and X-Flow.

Customers in the residential and commercial vertical also include end-users, consumers and original equipment manufacturers.

We experience seasonal demand with several end customers and end-users within Filtration Solutions.

End-user demand for water filtration products generally follows warm weather trends and is at seasonal highs from April to July.

Competition focuses on brand names, product performance (including required specification), quality and price.

The Flow Technologies segment manufactures and sells products ranging from light duty diaphragm pumps to high-flow turbine pumps and solid handling pumps while serving the global residential, commercial and industrial markets.

Flow Technologies customers include businesses engaged in wholesale and retail distribution in the residential & commercial, food & beverage and industrial verticals.

Customers also include end-users and consumers in the residential & commercial vertical.

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

NEW SEGMENTATION

During the first quarter of 2020, we reorganized our business segments to better align our organization with our strategies and to better align with our customer base, resulting in a change to our reporting segments in 2020.

We believe the new alignment into a business-to-consumer focused segment, Consumer Solutions, and primarily business-to-business driven segment, Industrial & Flow Technologies, better positions our teams to build upon our core strengths, more aggressively pursue our growth opportunities, increase productivity, and enhance profitability.

We have been, and in the future may be, made parties to a number of actions filed or have been, and in the future may be, given notice of potential claims relating to the conduct of our business, including those relating to [removed: commercial or] [added: commercial,] contractual [added: or regulatory] disputes with suppliers, [removed: customers] [added: customers, authorities] or parties to acquisitions and [removed: divestitures,] [added: divestiture;] intellectual property [removed: matters,] [added: matters;] environmental, [added: asbestos,] safety and health [removed: matters,] [added: matters;] product [removed: liability,] [added: liability;] the use or installation of our [removed: products,] [added: products;] consumer [removed: matters,] [added: matters;] and employment and labor matters.

Refer to *“Legal proceedings”* and *“Environmental Matters”* within [Note 15 “Commitments and Contingencies”](#i6dc268ed6dd347a8b0f30d2d112a7272_154), of the consolidated financial statements included in ITEM 8 of Part II of this Form 10-K for information regarding legal and regulatory proceedings we are involved in.

In addition, see [Item 1A](#i6dc268ed6dd347a8b0f30d2d112a7272_16) [“](#i6dc268ed6dd347a8b0f30d2d112a7272_16)[Risk Factors](#i6dc268ed6dd347a8b0f30d2d112a7272_16) [-](#i6dc268ed6dd347a8b0f30d2d112a7272_16) [Our subsidiaries are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows](#i6dc268ed6dd347a8b0f30d2d112a7272_16)[”](#i6dc268ed6dd347a8b0f30d2d112a7272_16) related to asbestos matters.

While we believe that a material impact on our consolidated financial position, results of operations or cash flows from any such future claims or potential claims is unlikely, given the inherent uncertainty of litigation, a remote possibility exists that a future adverse ruling or unfavorable development could result in future charges that could have a material adverse impact.

We do and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and make appropriate adjustments to such estimates based on experience and developments in litigation.

As a result, the current estimates of the potential impact on our consolidated financial position, results of operations and cash flows for the proceedings and claims described in the notes to our consolidated financial statements could change in the future.

Asbestos matters

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

These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties.

Each case typically names between several dozen to more than a hundred corporate defendants.

Our historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial.

Although a large percentage of litigated suits have been dismissed, we cannot predict the extent to which we will be successful in resolving lawsuits in the future.

As of December 31, 2019, there were approximately 730 claims outstanding against our subsidiaries.

This amount is not adjusted for claims that are not actively being prosecuted, identified incorrect defendants, or duplicated other actions, which would ultimately reflect our current estimate of the number of viable claims made against us, our affiliates, or entities for which we assumed responsibility in connection with acquisitions or divestitures.

In addition, the amount does not include certain claims pending against third parties for which we have been provided an indemnification.

Environmental matters

We have been named as defendant, target or a 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.

Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies.

It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors.

In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known.

As of December 31, 2019, our recorded reserves for environmental matters were not material.

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

However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Product liability claims

We are subject to various product liability lawsuits and personal injury claims.

A substantial number of these lawsuits and claims are insured and accrued for by Penwald, our captive insurance subsidiary.

See discussion in ITEM 1 and ITEM 8, Note 1 of the Notes to Consolidated Financial Statements — Insurance subsidiary.

Penwald records a liability for these claims based on actuarial projections of ultimate losses.

For all other claims, accruals covering the claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information.

The accruals are adjusted periodically as additional information becomes available.

We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims.

[removed: FORM 10-K][added: FORM 10-K]

| ☑ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission file [removed: number 001-11625][added: number 001-11625]

[added: |] Pentair plc [added: | | |]

| Ireland | | [added: | | | |] 98-1141328 | [added: | |]

| (State or other jurisdiction [removed: of incorporation] [added: of incorporation] or organization) | | [added: | | | |] (I.R.S. [removed: Employer Identification] [added: Employer Identification] number) | [added: | |]

| | [added: | |] Regal House, 70 London Road, | | [added: | | | |] Twickenham, | [added: | |] London, | [added: | |] TW13QS | [added: | |] United Kingdom | | [added: | | | |]

| (Address of principal executive offices) | | | | | | | | [added: | | | | | | | | | | | | | | | |]

Registrant’s telephone number, including area [removed: code: 44\-74\-9421-6154][added: code: 44-74-9421-6154]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Ordinary Shares, nominal value $0.01 per share | [added: | |] PNR | [added: | |] New York Stock Exchange | [added: | |]

Yes ☐ [added: No ☑]

| Large accelerated filer | [added: | |] ☑ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |] Emerging growth company | [added: | |] ☐ | [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: $37.20] [added: $37.99] per share as reported on the New York Stock Exchange on June [removed: 28, 2019] [added: 30, 2020] (the last business day of Registrant’s most recently completed second quarter): [removed: $6,191,407,033.][added: $6,245,419,948.]

The number of shares outstanding of Registrant’s only class of common stock on December 31, [removed: 2019] [added: 2020] was [removed: 168,293,375.][added: 166,063,551.]

Parts of the Registrant’s definitive proxy statement for its annual general meeting to be held on May [removed: 5, 2020,] [added: 4, 2021,] are incorporated by reference in this Form 10-K in response to Part III, ITEM 10, 11, 12, 13 and 14.

For the Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| | | | | [added: | | | | | | | |] Page | [added: | |]

| PART I | | | | | [added: | | | | | | | | | |]

| ITEM 1. | | [removed: [Business](#s84102035C51651F5B010E89AD9C24F47)] | | [removed: [1](#s84102035C51651F5B010E89AD9C24F47)] | [added: | [Business](#i6dc268ed6dd347a8b0f30d2d112a7272_13) | | | | | | [1](#i6dc268ed6dd347a8b0f30d2d112a7272_13) | | |]

| ITEM 1A. | | [added: | | | |] [Risk [removed: Factors](#s8E20265540A75939A6CFAFE0D7D61BC7)] [added: Factors](#i6dc268ed6dd347a8b0f30d2d112a7272_16)] | | [removed: [5](#s8E20265540A75939A6CFAFE0D7D61BC7)] | [added: | | | [5](#i6dc268ed6dd347a8b0f30d2d112a7272_16) | | |]

| ITEM 1B. | | [added: | | | |] [Unresolved Staff [removed: Comments](#sC6E94D33AB415F04B3596271033B8055)] [added: Comments](#i6dc268ed6dd347a8b0f30d2d112a7272_19)] | | [removed: [15](#sC6E94D33AB415F04B3596271033B8055)] | [added: | | | [18](#i6dc268ed6dd347a8b0f30d2d112a7272_19) | | |]

| ITEM 2. | | [removed: [Properties](#sE23EA57B95265A2FBE1024AF5F0A40DD)] | | [removed: [15](#sE23EA57B95265A2FBE1024AF5F0A40DD)] | [added: | [Properties](#i6dc268ed6dd347a8b0f30d2d112a7272_22) | | | | | | [18](#i6dc268ed6dd347a8b0f30d2d112a7272_22) | | |]

| ITEM 3. | | [added: | | | |] [Legal [removed: Proceedings](#s76AA9BF6257256CEB8D97785AF56357F)] [added: Proceedings](#i6dc268ed6dd347a8b0f30d2d112a7272_25)] | | [removed: [16](#s76AA9BF6257256CEB8D97785AF56357F)] | [added: | | | [18](#i6dc268ed6dd347a8b0f30d2d112a7272_25) | | |]

| ITEM 4. | | [added: | | | |] [Mine Safety [removed: Disclosures](#s89600D6752F057D990CAA0321D511A9E)] [added: Disclosures](#i6dc268ed6dd347a8b0f30d2d112a7272_31)] | | [removed: [17](#sB22BF7937F82514EB43CEE320331CE2A)] | [added: | | | [18](#i6dc268ed6dd347a8b0f30d2d112a7272_28) | | |]

| PART II | | | | | [added: | | | | | | | | | |]

| ITEM 5. | | [added: | | | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s78DD442AB07E5B818FF7F2B3CFF08F72)] [added: Securities](#i6dc268ed6dd347a8b0f30d2d112a7272_37)] | | [removed: [20](#s78DD442AB07E5B818FF7F2B3CFF08F72)] | [added: | | | [20](#i6dc268ed6dd347a8b0f30d2d112a7272_37) | | |]

| ITEM 7. | | [added: | | | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sC9263C6E4DB959F889BF5E761000602D)] [added: Operations](#i6dc268ed6dd347a8b0f30d2d112a7272_43)] | | [removed: [23](#sC9263C6E4DB959F889BF5E761000602D)] | [added: | | | [22](#i6dc268ed6dd347a8b0f30d2d112a7272_43) | | |]

| ITEM 7A. | | [added: | | | |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#sECD5971AF3F558BCAE5EA2A11D7DF8E5)] [added: Risk](#i6dc268ed6dd347a8b0f30d2d112a7272_61)] | | [removed: [38](#sECD5971AF3F558BCAE5EA2A11D7DF8E5)] | [added: | | | [39](#i6dc268ed6dd347a8b0f30d2d112a7272_61) | | |]

| ITEM 8. | | [added: | | | |] [Financial Statements and Supplementary [removed: Data](#sE27D6287DBB25611AE2B8EA3F39F9252)] [added: Data](#i6dc268ed6dd347a8b0f30d2d112a7272_64)] | | [removed: [40](#sE27D6287DBB25611AE2B8EA3F39F9252)] | [added: | | | [41](#i6dc268ed6dd347a8b0f30d2d112a7272_64) | | |]

| ITEM 9. | | [added: | | | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s4EC4F8AD6E6F5E20874EDF1208718444)] [added: Disclosure](#i6dc268ed6dd347a8b0f30d2d112a7272_163)] | | [removed: [89](#s4EC4F8AD6E6F5E20874EDF1208718444)] | [added: | | | [80](#i6dc268ed6dd347a8b0f30d2d112a7272_163) | | |]

| ITEM 9A. | | [added: | | | |] [Controls and [removed: Procedures](#s368130A92E5A5EAAAE7746E8F6CD1098)] [added: Procedures](#i6dc268ed6dd347a8b0f30d2d112a7272_166)] | | [removed: [89](#s368130A92E5A5EAAAE7746E8F6CD1098)] | [added: | | | [80](#i6dc268ed6dd347a8b0f30d2d112a7272_166) | | |]

| ITEM 9B. | | [added: | | | |] [Other [removed: Information](#s791D95CB1BB6553D9AF045DFF09C4262)] [added: Information](#i6dc268ed6dd347a8b0f30d2d112a7272_169)] | | [removed: [89](#s791D95CB1BB6553D9AF045DFF09C4262)] | [added: | | | [80](#i6dc268ed6dd347a8b0f30d2d112a7272_169) | | |]

| PART III | | | | | [added: | | | | | | | | | |]

| ITEM 10. | | [added: | | | |] [Directors, Executive Officers and Corporate [removed: Governance](#s2407235E50AD560FA1A27406570B382D)] [added: Governance](#i6dc268ed6dd347a8b0f30d2d112a7272_175)] | | [removed: [90](#s2407235E50AD560FA1A27406570B382D)] | [added: | | | [81](#i6dc268ed6dd347a8b0f30d2d112a7272_175) | | |]

| ITEM 11. | | [added: | | | |] [Executive [removed: Compensation](#sCEAAE4500E01534994EEE7DF5119A085)] [added: Compensation](#i6dc268ed6dd347a8b0f30d2d112a7272_178)] | | [removed: [90](#sCEAAE4500E01534994EEE7DF5119A085)] | [added: | | | [81](#i6dc268ed6dd347a8b0f30d2d112a7272_178) | | |]

| ITEM 12. | | [added: | | | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s804A5EBEB5EC5092A99D4A11BFF765CD)] [added: Matters](#i6dc268ed6dd347a8b0f30d2d112a7272_181)] | | [removed: [91](#s804A5EBEB5EC5092A99D4A11BFF765CD)] | [added: | | | [82](#i6dc268ed6dd347a8b0f30d2d112a7272_181) | | |]

| ITEM 13. | | [added: | | | |] [Certain Relationships and Related Transactions and Director [removed: Independence](#s9753DC791F5258ABB8AF365F81241005)] [added: Independence](#i6dc268ed6dd347a8b0f30d2d112a7272_184)] | | [removed: [91](#s9753DC791F5258ABB8AF365F81241005)] | [added: | | | [82](#i6dc268ed6dd347a8b0f30d2d112a7272_184) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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No ☑

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| ITEM 6. | | [Selected Financial Data](#sDCAD3E031D4D5B838F3E372BEAE93E1C) | | [22](#sDCAD3E031D4D5B838F3E372BEAE93E1C) |

| | | [Signatures](#sFFC062F82B6252B29AE28E2B6BAA3968) | | [97](#sFFC062F82B6252B29AE28E2B6BAA3968) |

Our principal office is located in leased premises in London, U.K., and our management office in the U.S. is located in leased premises in [removed: Minneapolis,] [added: Golden Valley,] Minnesota.

The following is a summary of our principal properties as of December 31, [removed: 2019,] [added: 2020,] including manufacturing, distribution, sales offices and service centers:

| | | [added: | | | |] No. of Facilities | | | | | | | | [added: | | | |]

| | [added: | |] Location | [added: | |] Manufacturing | | [added: |] Distribution | | [added: |] Sales and Corporate Offices | | [added: |] Service Centers | | [added: |]

| [removed: Aquatic Systems] [added: Corporate] | [added: | |] U.S. and [removed: 4] [added: 3] foreign countries | [removed: 4] | | [removed: 7] [added: —] | | [removed: 9] | [added: —] | [added: | | 5 | | |] — | | [added: |]

| [removed: Filtration] [added: Consumer] Solutions | [added: | |] U.S. and [removed: 19] [added: 6] foreign countries | [removed: 23] | | [added: 16 | | | 8 | | |] 7 | | [removed: 27] | [added: 10] | [removed: —] | |

| [added: Industrial &] Flow Technologies | [added: | |] U.S. and [removed: 10] [added: 15] foreign countries | [removed: 10] | | [removed: 10] [added: 20] | | [removed: 4] | [added: 15] | [removed: 10] | | [added: 6 | | | 7 | | |]

| Total | | [removed: 37] | | [removed: 24] | | [removed: 45] [added: 36] | | [removed: 10] | [added: 23] | [added: | | 18 | | | 17 | | |]

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| Corporate | U.S. and 3 foreign countries | — | | — | | 5 | | — | |

| Name | | [added: |] Age | | | [added: | | |] Current Position and Business Experience | [added: | |]

| John L. Stauch | | [removed: 55] | [added: 56] | | [added: | | | |] President and Chief Executive Officer since 2018; Executive Vice President and Chief Financial Officer 2007 - 2018; Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc. 2005 - 2007; Vice President, Finance and Chief Financial Officer of the Sensing and Controls unit of Honeywell International Inc. 2004 - 2005; Vice President, Finance and Chief Financial Officer of the Automation & Control Products unit of Honeywell International Inc. 2002 - 2004; Chief Financial Officer and IT Director of PerkinElmer Optoelectronics, a unit of PerkinElmer, Inc., 2000 - [removed: 2002; Various executive, investor relations and managerial finance positions with Honeywell International Inc. and its predecessor AlliedSignal Inc. 1994 - 2000.] [added: 2002.] | [added: | |]

| Kelly A. Baker | | [removed: 50] | [added: 51] | | [added: | | | |] Executive Vice President and Chief Human Resources Officer since 2018; Chief Human Resources Officer, Water segment, 2017 - 2018; Chief Human Resources Officer of Patterson Companies, Inc. (a dental and animal health industry product and technology distributor) 2016 - 2017; Vice President of Human Resources, North America Retail and Marketing Function of General Mills (a multinational manufacturer and marketer of branded consumer foods) 2014 - 2016; Vice President of Human Resources, Corporate & Global Business Solutions of General Mills 2009 - 2014; Vice President of Diversity & Inclusion of General Mills 2005 - [removed: 2009; Various Human Resources leadership positions at General Mills 1995 - 2005.] [added: 2009.] | [added: | |]

| John H. Jacko | | [removed: 62] | [added: 63] | | [added: | | | |] Executive Vice President and Chief Growth Officer since 2018; Senior Vice President and Chief Marketing Officer 2017 - 2018; Vice President and Chief Marketing Officer of Kennametal Inc. (a global supplier of tooling, engineered components and advanced materials) 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 - [removed: 2002; Various business leadership positions of Honeywell Aerospace 1995 - 2001.] [added: 2002.] | [added: | |]

| Karla C. Robertson | | [removed: 49] | [added: 50] | | [added: | | | |] Executive Vice President, General [added: Counsel, Secretary and Chief Social Responsibility Officer since 2020; Executive Vice President, General] Counsel and Secretary [removed: since 2018;] [added: 2018-2020;] General Counsel, Water segment 2017 - 2018; Executive Vice President, General Counsel and Corporate Secretary of SUPERVALU Inc. (a wholesaler and retailer of grocery products) 2013 - 2017; Vice President, Employment, Compensation and Benefits Law of SUPERVALU Inc. 2012 - 2013; Director, Employment Law of SUPERVALU Inc. 2011 - 2012; Senior Counsel, Employment Law of SUPERVALU Inc. 2009 - 2011; Senior Employee Relations Counsel of Target Corporation 2006 - 2008; Associate, Faegre & Benson LLP 2000 - 2005; Judicial Clerk, United States District Court for the Southern District of Iowa 1998 - 2000. | [added: | |]

| Philip M. Rolchigo | | [removed: 58] | [added: 59] | | [added: | | | |] Executive Vice President and Chief Technology Officer since 2018; Chief Technology Officer 2017 - 2018; Vice President of Technology 2015 - 2017; Vice President of Engineering 2007 - 2015; Business Development Director of Water Technologies business of GE Global Research Center 2006 - 2007; Director of Technology of GE Water & Process Technologies 2003 - 2006; Chief Technology Officer of Osmonics 2000 - 2003; Vice President of Research & Development of Osmonics 1998 - [removed: 2000; Chief Technology Officer of Membrex 1991 - 1998.] [added: 2000.] | [added: | |]

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| Mario R. D’Ovidio | | | 51 | | | | | | Executive Vice President and President, Consumer Solutions since 2020; Senior Vice President of Sales and Ownership Solutions - North America of Electrolux AB (a manufacturer of large and small household appliances) 2017 – 2020; Global Vice President Sales and Service – Husqvarna AB (a manufacturer of innovative outdoor power products) 2016 – 2017; Vice President Global Product Management and Development of Husqvarna AB 2014 – 2016. | | |

| Robert P. Fishman | | | 57 | | | | | | Executive Vice President, Chief Financial Officer and Chief Accounting Officer since 2020; Executive Vice President and Chief Financial Officer of NCR Corporation (a global provider of omni-channel technology solutions) 2016 - 2018; Senior Vice President and Chief Financial Officer of NCR Corporation 2010 - 2016; Vice President and Corporate Controller of NCR Corporation 2007 - 2009. | | |

| Jerome O. Pedretti | | | 50 | | | | | | Executive Vice President and President, Industrial & Flow Technologies since 2020. Senior Vice President of Pentair’s former Aquatic Systems reporting segment 2016 - 2019; Vice President of Pentair’s former Valves & Controls business 2014 - 2016; Vice President Growth Strategy 2010 - 2014; Various business leadership positions of Pentair 2005 - 2014; Consultant at Bain & Co 2002 - 2005. | | |

| Stephen J. Pilla | | | 57 | | | | | | Executive Vice President and Chief Supply Chain Officer since 2020; Vice President and Chief Supply Chain Officer of Red Wing Shoe Co. (a manufacturer of personal protection equipment and footwear) 2017 - 2020; Vice President and General Manager of Pentair’s former Enclosure Division 2015 – 2017; Vice President of Pentair’s Global Operations and Supply Chain 2014 – 2016; Vice President, Global Supply of Pentair 2009 – 2012; Various other business leadership positions of Pentair 2002 – 2009. | | |

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| Mark C. Borin | | 52 | | | Executive Vice President and Chief Financial Officer since 2018 and Chief Accounting Officer since 2019. As previously announced, Mr. Borin intends to resign from Pentair in connection with accepting an operational leadership opportunity at a private, employee-owned company, and he plans to remain in his role with Pentair through the search process and to assist with an orderly transition. Senior Vice President and Chief Accounting Officer 2008 - 2018 and Treasurer 2015 - 2018; 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. |

| Karl R. Frykman | | 59 | | | Executive Vice President and Chief Operating Officer since 2018; Senior Vice President and President, Water segment 2017 - 2018; President, Water Quality Systems Global business unit 2007 - 2016; President, National Pool Tile group 1998- 2007; Vice President of Operations, American Products group 1995 - 1998; Vice President of Anthony Pools, 1990 - 1995; Vice President of Poolsaver, 1988 - 1990. |

| James P. Wamsley | | 43 | | | Executive Vice President and Chief Supply Chain Officer since 2019. Mr. Wamsley informed Pentair of his intention to resign from Pentair as of February 26, 2020. Executive Vice President Global Operations of the Power Tools group of Milwaukee Tool (a manufacturer and marketer of professional power tools, hand tools and accessories) 2008 - 2019; Sourcing Manager of Industrial Accessories division of Black & Decker Corporation 2007 - 2008; Operations Manager of the Linear Edge business of Black & Decker Corporation 2005 - 2007; Engineering Manager of the Linear Edge business of Black & Decker Corporation 2004 - 2006. |

Our ordinary shares are listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “PNR.” As of December 31, [removed: 2019,] [added: 2020,] there were [removed: 14,468] [added: 13,931] shareholders of record.

Pentair has paid [removed: 176] [added: 180] consecutive quarterly cash dividends, including most recently a dividend of [removed: $0.18] [added: $0.19] per share in the fourth quarter of [removed: 2019.][added: 2020.]

On December [removed: 9, 2019,] [added: 8, 2020,] Pentair’s Board of Directors approved a [removed: 6] [added: 5] percent increase in the [removed: company’s] [added: Company’s] regular quarterly cash dividend rate (from [removed: $0.18] [added: $0.19] per share to [removed: $0.19] [added: $0.20] per share) that was paid on February [removed: 7, 2020] [added: 5, 2021] to shareholders of record at the close of business on January [removed: 24, 2020.][added: 22, 2021.]

[removed: 2020 will mark] [added: 2021 marks] the [removed: 44th] [added: 45th] consecutive year that Pentair has increased its dividend.

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: 2014] [added: 2015] and the reinvestment of all dividends since that date to December 31, [removed: 2019.][added: 2020.]

[removed: ][added: ]

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

| Company / Index | [removed: 2014] | | [removed: |] 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | [added: 2020] | [added: | | | | |]

The following table provides information with respect to purchases we made of our ordinary shares during the fourth quarter of [removed: 2019:][added: 2020:]

| | [added: | |] Total number [removed: of shares purchased] [added: of shares purchased] | | [added: |] Average [removed: price paid] [added: price paid] per share | | | Total number [removed: of shares purchased as part] of [removed: publicly announced plans or programs] [added: shares purchased as part of publicly announced plans or programs] | | [added: |] Dollar [removed: value of shares] [added: value of shares] that [removed: may yet] [added: may yet] be [removed: purchased under] [added: purchased under] the plans [removed: or programs] [added: or programs] | | |

[removed: | (a) | The] [added: (a)The] purchases in this column include [removed: 2,106] [added: 714] shares for the period October 1 – October [removed: 26, 867] [added: 24, 17,083] shares for the period October [removed: 27] [added: 25] – November [removed: 23,] [added: 21,] and [removed: 142] [added: 68] shares for the period November [removed: 24] [added: 22] – December 31 deemed surrendered to us by participants in our [removed: 2012 Stock and Incentive Plan (the “2012 Plan”) and earlier stock] [added: equity] incentive plans [removed: 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 [added: and performance] shares. [removed: |]

[removed: | (b) | The] [added: (b)The] average price paid in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the Plans to satisfy the exercise price for the exercise price of stock options and withholding tax obligations due upon stock option exercises and vesting of restricted and performance shares. [removed: |]

[removed: | (c) | The] [added: (c)The] number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our ordinary shares up to a maximum dollar limit authorized by the Board of Directors, discussed below. [removed: |]

[removed: | (d) | In May 2018, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $750.0 million. The 2018 authorization expires on May 31, 2021. We have $250.0 million remaining availability for repurchases under this authorization.] From time to time, we may enter into a Rule 10b5-1 trading plan for the purpose of repurchasing shares under this authorization. [removed: |]

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| Pentair plc | | | $ | 100 | | | | | $ | 116.00 | | $ | 149.25 | | $ | 121.10 | | $ | 149.78 | | $ | 176.57 | |

| S&P 500 Index | | | 100 | | | | | | 111.96 | | | 136.40 | | | 130.42 | | | 171.49 | | | 203.04 | | |

| S&P 500 Industrials Index | | | 100 | | | | | | 110.12 | | | 134.97 | | | 130.86 | | | 172.69 | | | 212.71 | | |

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

| | | | (a) | | | (b) | | | (c) | | | (d) | | |

| October 1 – October 24 | | | 714 | | | $ | 47.02 | | — | | | $ | 134,718,028 | |

| October 25 – November 21 | | | 689,880 | | | 51.97 | | | 672,797 | | | 99,718,419 | | |

| November 22 – December 31 | | | 68 | | | 53.09 | | | — | | | 849,718,419 | | |

| Total | | | 690,662 | | | | | | 672,797 | | | | | |

(d)In May 2018, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $750.0 million (the “2018 Authorization”).

The 2018 Authorization expires on May 31, 2021.

On December 8, 2020, the Board of Directors authorized the repurchase of our ordinary shares up to a maximum dollar limit of $750.0 million (the “2020 Authorization”).

The 2020 Authorization expires on December 31, 2025.

The 2020 Authorization supplements the 2018 Authorization.

We have $99.7 million and $750.0 million remaining availability for repurchases under the 2018 Authorization and 2020 Authorization, respectively.

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| Pentair plc | $ | 100 | | | $ | 76.19 | | $ | 88.37 | | $ | 113.71 | | $ | 92.26 | | $ | 114.11 | |

| S&P 500 Index | 100 | | | | 101.38 | | | 113.51 | | | 138.29 | | | 132.23 | | | 173.86 | | |

| S&P 500 Industrials Index | 100 | | | | 102.90 | | | 113.31 | | | 138.88 | | | 134.65 | | | 177.70 | | |

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

| | (a) | | (b) | | | (c) | | (d) | | |

| October 1 – October 26 | 2,106 | | $ | 36.72 | | — | | $ | 250,000,187 | |

| October 27 – November 23 | 867 | | 38.83 | | | — | | 250,000,187 | | |

| November 24 – December 31 | 142 | | 44.76 | | | — | | 250,000,187 | | |

| Total | 3,115 | | | | | — | | | | |

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| --- | --- |

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on this assessment, management believes that, as of December 31, [removed: 2019,] [added: 2020,] 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: 2019.][added: 2020.]

| *President and Chief Executive Officer* | | [added: | | | |] *Executive Vice President, Chief Financial Officer and Chief Accounting Officer* | [added: | |]

We have audited the internal control over financial reporting of Pentair plc and subsidiaries (the “Company”) as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control—Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on [removed: the] criteria established in *Internal Control—Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2019,] [added: 2020,] of the Company and our report dated February [removed: 25, 2020] [added: 16, 2021] expressed an unqualified opinion on those financial statements.

We have audited the accompanying consolidated balance sheets of Pentair plc and subsidiaries (the “Company”) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of operations and comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] 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 States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control—Integrated Framework* *(2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 25, 2020] [added: 16, 2021,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

The determination of the estimated fair value using the relief-from-royalty method requires management to make significant estimates and assumptions including selecting appropriate royalty and [removed: discount] [added: weighted average cost of capital (“WACC”)] rates and [removed: forecast] [added: forecasting] future [removed: revenues.][added: revenues for the related brands.]

The indefinite-lived trade names balance was [removed: $173.4] [added: $180.6] million as of December 31, [removed: 2019,] [added: 2020,] of which certain trade names are higher risk for impairment.

Given the level of judgment involved, management uses a third-party fair value specialist to assist in establishing the [removed: discount][added: royalty and WACC rate assumptions.]

[removed: As the trade name revenues are sensitive to changes in demand, auditing] [added: Auditing] these assumptions involved a high degree of auditor judgment, and an increased extent of audit effort, including the need to involve our fair value specialists.

Our audit procedures related to the [removed: significant estimates] [added: forecasts of future trade name revenues] and [removed: assumptions for] [added: selection of] the [removed: trade names] [added: royalty and WACC rates] included the following, among others:

[removed: | • |] [added: -] We tested the effectiveness of controls over indefinite-lived trade [removed: names,] [added: names impairment evaluation,] including those over management’s review of the [added: trade name] revenue forecasts and the selection of the royalty and [removed: discount] [added: WACC] rates to be used in the valuation. [removed: |]

[removed: | • |] [added: -] We assessed management’s ability to prepare accurate [added: trade name] revenue forecasts by performing a retrospective review to compare actual results to management’s historical forecasts. [removed: |]

[removed: | • |] [added: -] We evaluated the reasonableness of management’s [added: trade name] revenue forecasts by inquiring of management regarding the forecasts and comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, [removed: and] (3) forecasted information included in Company press releases, [removed: analyst] [added: (4) underlying analysis detailing business strategies] and [removed: industry reports of the Company] [added: growth plans,] and [removed: companies in its peer group. |][added: (5) current industry, market and economic trends.]

[added: -] With the assistance of our fair value specialists, we evaluated the royalty and [removed: discount] [added: WACC] rates used by management in the valuation, including [added: (1)] testing the underlying source information and the mathematical calculations, [added: (2)] developing a range of independent estimates and comparing those to the [removed: royalty and discount rates] [added: WACC rate] selected by [removed: management.][added: management, and (3) comparing the selected royalty rate to market data for comparable licensing agreement rates.]

Income Taxes *—* Completeness of Uncertain Tax Positions *—* Refer to Notes 1 and [removed: 12 in] [added: 10 to] the financial statements

The Company assesses uncertain tax positions [removed: (“UTP”)] [added: (“UTPs”)] based upon an evaluation of available information and records a liability when a position taken or expected to be taken in a tax return does not meet certain measurement or recognition criteria.

As of December 31, [removed: 2019,] [added: 2020,] the Company’s recorded UTP balance was [removed: $47.4] [added: $46.3] million.

Our audit procedures to evaluate [removed: management’s estimates, in material jurisdictions, related to] the [removed: determination] [added: completeness] of UTPs [added: in material jurisdictions] included the following, among others:

[removed: | • |] [added: -] We tested the effectiveness of controls over management’s determination of the existence of UTPs. [removed: |]

[removed: | • |] [added: -] With the assistance of our income tax specialists, we assessed the Company’s determination of the existence of UTPs. [removed: In particular, our procedures included: |]

[removed: | ◦ | Evaluating] [added: ◦Evaluating] the Company’s significant judgments related to completeness of UTPs in material [removed: jurisdictions (U.S. and Switzerland): |][added: jurisdictions:]

[removed: | ▪ | We] [added: ▪We] performed inquiries of management to assess whether they are aware of any new items or significant changes to the business that would impact the UTP assessment or give rise to new UTPs. [removed: |]

[removed: | ▪ | We] [added: ▪We] evaluated the following: technical merits of existing UTPs, technical merits of potential UTPs, and significant transactions and their tax implications, including the completeness and accuracy of the underlying data supporting the transactions. [removed: |]

[removed: | ▪ | We] [added: ▪We] assessed the appropriateness and consistency of management’s methods and assumptions used in identifying [removed: uncertain tax positions |][added: UTPs.]

[removed: | ▪ | We] [added: ▪We] evaluated former and ongoing tax audits by tax authorities. [removed: |]

[removed: | ▪ | We] [added: ▪We considered changes in and] assessed the [added: Company’s] interpretation of applicable tax [removed: law. |][added: laws.]

[removed: | ▪ | We] [added: ▪We] inspected the Company’s filed tax returns [removed: in material jurisdictions] and the tax provision to obtain an understanding of significant differences. [removed: We assessed whether the appropriate UTP was recorded as well as whether any additional UTPs needed to be considered. |]

[removed: | ▪ | We] [added: ▪We] evaluated the appropriateness and consistency of the financial statement disclosures, including judgments associated with unrecognized tax benefits that could increase or decrease within 12 months of the reporting date. [removed: |]

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

| *In millions, except per-share data* | [removed: 2019] | | [added: 2020] | [removed: 2018] | | [added: 2019] | [removed: 2017] | | [added: 2018] | [added: | |]

| Net sales | [added: | |] $ | [removed: 2,957.2] [added: 3,017.8] | | $ | [removed: 2,965.1] [added: 2,957.2] | | $ | [removed: 2,845.7] [added: 2,965.1] | |

| Cost of goods sold | [removed: 1,905.7] | | [added: 1,960.2] | [removed: 1,917.4] | | [added: 1,905.7] | [removed: 1,858.2] | | [added: 1,917.4] | [added: | |]

| Gross profit | [removed: 1,051.5] | | [added: 1,057.6] | [removed: 1,047.7] | | [added: 1,051.5] | [removed: 987.5] | | [added: 1,047.7] | [added: | |]

| Selling, general and administrative | [removed: 540.1] | | [added: 520.5] | [removed: 534.3] | | [added: 540.1] | [removed: 536.0] | | [added: 534.3] | [added: | |]

| Research and development | [removed: 78.9] | | [added: 75.7] | [removed: 76.7] | | [added: 78.9] | [removed: 73.2] | | [added: 76.7] | [added: | |]

| John L. Stauch | | | | | | Robert P. Fishman | | |

February 16, 2021

The future trade name revenues are sensitive to changes in demand, and the short-term growth rates have increased uncertainty as a result of the COVID-19 pandemic.

- We also performed sensitivity analyses to evaluate the impact that changes in the significant assumptions would have on the fair value of the trade names.

In particular, our procedures included:

We assessed whether the appropriate UTPs were recorded as well as whether any additional UTPs needed to be considered.

February 16, 2021

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| Asset impairment | | | — | | | 21.2 | | | 12.0 | | |

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| John L. Stauch | | Mark C. Borin |

February 25, 2020

rate and royalty rate assumptions.

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| --- | --- |

| • | We considered the impact of changes in the regulatory environment and the industry on management’s forecasts. |

| ▪ | We considered changes in applicable tax law. |

Pentair plc and Subsidiaries

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

| Gain from sale of discontinued operations, net of tax | — | | | — | | | 181.1 | | |

| 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) | (15.3 | | ) | 10.0 | | | 497.5 | | |

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

| Gain from sale of discontinued operations, net of tax | — | | | — | | | (181.1 | | ) |

| Trade name and other impairment | 21.2 | | | 12.0 | | | 15.6 | | |

| Balance - December 31, 2016 | 181.8 | | $ | 1.8 | | $ | 2,920.8 | | $ | 2,068.1 | | $ | (736.3 | ) | $ | 4,254.4 | |

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

Notes to consolidated financial statements

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| Contract assets | $ | 41.0 | | $ | 36.5 | | | $ | 4.5 | | 12.3 | % |

| Contract liabilities | 32.6 | | | 32.8 | | | | (0.2 | | ) | (0.6 | )% |

A qualitative assessment is first performed, as of the first day of the fourth quarter, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If it is concluded that this is the case, an evaluation, based upon discounted cash flows, is performed and requires management to estimate future cash flows, growth rates and economic and market conditions.

amount.

An impairment charge of $8.8 million was recorded in 2017 related to certain trade names in Filtration Solutions and Flow Technologies as a result of lower forecasted sales volume or rebranding strategies implemented in the fourth quarter of 2017.

The trade name impairment charges were recorded in *Selling, general and administrative* in our Consolidated Statements of Operations and Comprehensive Income.

These modified grants are accounted for as a new award and measured

On January 1, 2019, we adopted ASU No. 2016-02, “Leases” (“the new lease standard” or “ASC 842”) using the transition method of adoption.

Under the transition method of adoption, comparative information has not been restated and continues to be reported under the standards in effect for those periods.

In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.

We also elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes.

The impact of adopting the new standard primarily relates to the recognition of a lease right-of-use (“ROU”) asset and current and non-current lease liability on the consolidated balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

There was no impact on our Consolidated Statements of Operations and Comprehensive Income or Consolidated Statements of Cash Flows.

On January 1, 2019, we adopted ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU changes the disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans.

On January 1, 2018, we adopted ASU No. 2017-01, “Clarifying the Definition of a Business.” This ASU clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

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: 2019,] [added: 2020,] 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: 2019] [added: 2020] 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: 2019] [added: 2020] 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: 2020] [added: 2021] annual general meeting of shareholders under the captions “Corporate Governance Matters” and “Proposal 1 Re-elect Director Nominees” and is incorporated herein by reference.

Information required under this item is contained in our Proxy Statement for our [removed: 2020] [added: 2021] 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: 2020] [added: 2021] 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: 2019,] [added: 2020,] information about compensation plans under which our equity securities are authorized for issuance:

| Plan category | [added: | |] Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | [added: | | |] Weighted-average exercise price of outstanding options, warrants and rights (b) | | | | [added: | |] Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | | [added: | | |]

| Equity compensation plans approved by security holders: | | | | | | | | | | | [added: | | | | | | | | | |]

| 2008 Omnibus Stock Incentive Plan | [removed: 664,329] | | [removed: (4)] [added: 15,616] | [removed: 23.69] | | [added: (6)] | [added: | | 24.27 | | |] (2) | [added: | |] — | | [removed: (5)] | [added: (7) | | |]

[removed: | (1) | Consists] [added: (4)Consists] of [removed: 3,626,370] [added: 3,059,184] shares subject to stock options, [removed: 563,051] [added: 588,399] shares subject to restricted stock units, and [removed: 366,311] [added: 359,208] shares subject to performance share awards. [removed: |]

[removed: | (2) | Represents] [added: (2)Represents] the weighted average exercise price of outstanding stock options and does not take into account outstanding restricted stock units or performance share units. [removed: |]

[removed: | (3) | Represents] [added: (3)Represents] securities remaining available for issuance under the [removed: 2012 Stock] [added: 2020 Share] and Incentive Plan. [removed: |]

[removed: | (4) | Consists] [added: (6)Consists] of [removed: 664,329] [added: 15,616] shares subject to stock options. [removed: |]

[removed: | (5) | The 2008 Omnibus] Stock [removed: Incentive Plan was terminated in 2012. Stock] options previously granted under the 2008 Omnibus Stock Incentive Plan remain outstanding, but no further options or shares may be granted under this plan. [removed: |]

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| 2020 Share and Incentive Plan | | | 86,233 | | | (1) | | | $ | — | | (2) | | | 5,497,519 | | | (3) | | |

| 2012 Stock and Incentive Plan | | | 4,006,791 | | | (4) | | | 40.47 | | | (2) | | | 400,997 | | | (5) | | |

| Total | | | 4,108,640 | | | | | | $ | 40.39 | | (2) | | | 5,898,516 | | | | | |

(1)Consists of 86,233 shares subject to restricted stock units.

(5)The 2012 Stock and Incentive Plan was terminated in 2020.

Stock options, restricted stock units and performance share awards previously granted under the 2012 Stock and Incentive Plan remain outstanding, but no further options or shares may be granted under this plan.

(7)The 2008 Omnibus Stock Incentive Plan was terminated in 2012.

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| 2012 Stock and Incentive Plan | 4,555,732 | | (1) | $ | 39.78 | | (2) | 3,081,917 | | (3) |

| Total | 5,220,061 | | | $ | 37.29 | | (2) | 3,081,917 | | |

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Information required under this item is contained in our Proxy Statement for our [removed: 2020] [added: 2021] 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: 2020] [added: 2021] annual general meeting of shareholders under the caption “Proposal 3 Ratify, by Nonbinding, Advisory Vote, the Appointment of Deloitte & Touche LLP as the Independent Auditor of Pentair plc and to Authorize, by Binding Vote, the Audit and Finance Committee of the Board of Directors to Set the Auditor’s Remuneration” and is incorporated herein by reference.

Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Balance Sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

Consolidated Statements of Changes in Equity for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017][added: 2018]

| [removed: Exhibit Number] [added: Exhibit Number] | | [added: | | | |] Exhibit | [added: | |]

| [removed: [2.1](http://www.sec.gov/Archives/edgar/data/77360/000007736016000088/ex21sharepurchaseagreement.htm)] [added: [10.1](http://www.sec.gov/Archives/edgar/data/77360/000007736018000018/exhibit22.htm)] | | [removed: Share Purchase] [added: | | | | Tax Matters] Agreement, dated [removed: August 18, 2016,] [added: as of April 27, 2018,] by and between [removed: Emerson Electric Co. and] Pentair plc [added: and nVent Electric plc] (Incorporated by reference to Exhibit [removed: 2.1 in] [added: 2.2 to] the [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] of Pentair plc filed with the Commission on [removed: October 25, 2016] [added: April 30, 2018] (File No. 001-11625)). | [added: | |]

| [removed: [2.2](http://www.sec.gov/Archives/edgar/data/77360/000007736018000018/exhibit21.htm)] [added: [4.12](http://www.sec.gov/Archives/edgar/data/77360/000007736018000018/exhibit41.htm)] | | [removed: Separation and Distribution] [added: | | | | Credit] Agreement, dated as of April [removed: 27,] [added: 25,] 2018, [removed: by and between] [added: among] Pentair [removed: plc] [added: plc, Pentair Investments Switzerland GmbH, Pentair Finance S.à r.l., Pentair, Inc.] and [removed: nVent Electric plc] [added: the lenders and agents party thereto] (Incorporated by reference to Exhibit [removed: 2.1] [added: 4.1] to the Current Report on Form 8-K of Pentair plc filed with the Commission on April 30, 2018) (File No. 001-11625)). | [added: | |]