Pentair (PNR) risk factors, FY2025 10-K

Risks Relating to Our Business

1. 01General global economic and business conditions affect demand for our products
2. 02We compete in attractive markets with a high level of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products
3. 03Our future growth is dependent upon our ability to transform and adapt our products, services, solutions and organization to meet the demands of local markets in both developed and emerging economies and by developing or acquiring new technologies that achieve market acceptance with acceptable margins
4. 04We may not be able to identify, finance and complete suitable acquisitions and investments, and any completed acquisitions and investments may be unsuccessful or consume significant resources
5. 05We may not achieve some or all of the expected benefits of our business initiatives35% rewritten
6. 06We may experience cost increases and other inflation32% rewritten
7. 07Interruption of our supply chain could affect our ability to produce or deliver our products and could negatively impact our business and profitability
8. 08We are exposed to political, regulatory, economic, trade, and other risks that arise from operating a multinational business
9. 09Changes in U.S. or foreign government administrative policy, including the imposition of, or increases in, tariffs and changes to existing trade agreements, could have a material adverse effect on us48% rewritten
10. 10Failure to achieve and maintain a high level of product and service quality and on-time delivery could damage our reputation with customers and negatively impact our resultsNew
11. 11Intellectual property challenges may hinder our ability to develop, engineer and market our products
12. 12We have significant goodwill and intangible assets and future impairment of our goodwill and intangible assets could have a material adverse effect on our results of operations42% rewritten
13. 13A loss of, or material cancellation, reduction, or delay in purchases by, or delivery of products to, one or more of our largest customers could harm our business
14. 14Catastrophic and other events beyond our control may disrupt operations at our manufacturing facilities and those of our suppliers, which could cause us to be unable to meet customer demands or increase our costs, or reduce customer spending
15. 15Seasonality of sales and weather conditions could have a material adverse effect on our financial results27% rewritten
16. 16Volatility in currency exchange rates and failure to effectively hedge our exposure to fluctuations could have a material adverse effect on our financial condition, results of operations and cash flows
17. 17Our business may be adversely affected by matters associated with our labor force
18. 18Complications with the design or implementation of our updated enterprise resource planning system could adversely impact our business and operations

Risks Relating to Our Debt and Financial Markets

1. 19Increased leverage may harm our business, financial condition and results of operations
2. 20Covenants in our debt instruments may adversely affect us
3. 21We may increase our debt or raise additional capital, our credit ratings may be downgraded in the future, or our interest rates may increase, each of which could affect our financial condition, and may decrease our profitability
4. 22Disruptions in the financial markets could adversely affect us, our customers and our suppliers by increasing funding costs or reducing availability of credit

Risks Relating to Legal, Regulatory and Compliance Matters

1. 23Our failure to satisfy international trade compliance regulations, and changes in U.S. government and other applicable sanctions, could have a material adverse effect on us
2. 24We are exposed to environmental, health and safety laws, liabilities and litigation
3. 25Our subsidiaries are party to asbestos-related litigation that could adversely affect our financial condition, results of operations and cash flows21% rewritten
4. 26Failure to comply with the broad range of standards, laws and regulations in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs and liabilities
5. 27We are exposed to certain regulatory, financial and other risks related to climate change and other sustainability matters
6. 28Increased cybersecurity threats and computer crime pose a risk to our systems, networks, products and services, and we are exposed to potential regulatory, financial and reputational risks relating to the protection of our data
7. 29Changes in data privacy laws and our ability to comply with them could have a material adverse effect on us
8. 30We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operationsNew
9. 31The use by our employees of artificial intelligence tools or technology can adversely impact our business by posing risks to our confidential or proprietary information and could give rise to legal actions or reputational damage, or otherwise adversely affect our businessNew
10. 32We may be negatively impacted by litigation and other claims

Risks Relating to Our Jurisdiction of Incorporation in Ireland and Tax Residency in the U.K

1. 33We are subject to changes in law and other factors that may not allow us to maintain a worldwide effective corporate tax rate that is competitive in our industry
2. 34A change in our tax residency could have a negative effect on our future profitability, and may trigger taxes on dividends or exit charges
3. 35In January 2021, we obtained a determination from the tax authorities in Ireland, the Irish Revenue Commissioners, and in the U.K., HM Revenue & Customs, which states that we are resident for tax purposes only in the U.K
4. 36Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities
5. 37Irish law differs from the laws in effect in the United States, which may negatively impact our ability to issue ordinary shares
6. 38Transfers of our ordinary shares may be subject to Irish stamp duty
7. 39Our ordinary shares received by means of a gift or inheritance could be subject to Irish capital acquisitions tax
8. 40Our share price may fluctuate significantly