How do you interpret aquatic systems — goodwill purchase accounting adjustments?

Frequent or large adjustments may indicate complexity in valuation or initial misestimation of acquisition targets.

How does aquatic systems — goodwill purchase accounting adjustments compare across companies?

Standard adjustment line item in the goodwill roll-forward for companies engaged in frequent M&A.

Pentair PNR Aquatic Systems — Goodwill Purchase Accounting Adjustments

Discontinued — last reported Q3 '19

Similar metrics at other companies

AWK

AWKOperating Segments — Goodwill Purchase Accounting Adjustments

$1.25M—

AMWater Handling — Goodwill Purchase Accounting Adjustments

$85M—

ZWSWater Management — Goodwill Purchase Accounting Adjustments

$0—

WTRGWater — Reclassification Of Goodwill Acquisition Adjustment

-$8K+81.8%

ZWSOperating Segments — Goodwill Purchase Accounting Adjustments

$300K—

DOVFluids — Goodwill Purchase Accounting Adjustments

$0—

Other financials

Income statement

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Revenue$1.0B+2.6%

Gross profit$433.4M+7.5%

Operating income$210.0M+3.4%

Net income$172.4M+11.3%

EPS (diluted)$1.05+12.9%

Balance sheet

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Cash & equivalents$67.7M-51.8%

Total debt$2.7B+36.0%

Total equity$3.8B+4.9%

Total assets$7.1B+4.8%

Cash flow

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Operating cash flow-$67.4M-73.3%

CapEx$18.5M+10.1%

Free cash flow-$85.9M-54.2%

Valuation

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Market cap$12.01B-2.5%

Enterprise value$14.6B+2.6%

P/E17.9×-1.1×

P/S2.9×-0.2×

Profitability

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Gross margin40.9%+1.4pp

Operating margin20.6%+0.3pp

Net margin16%+0.1pp

FCF margin17%-1.7pp

Returns & leverage

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Return on equity18%-0.6pp

Debt / equity0.7×+0.2×

Current ratio1.9×0.0×

Where this comes from

Reported directly by Pentair in its filing.

Tagged under the XBRL concept us-gaap:GoodwillPurchaseAccountingAdjustments.

The official record: Pentair’s 10-Q, filed October 23, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does aquatic systems — goodwill purchase accounting adjustments mean?: Corrections or updates to the value of goodwill recorded for the Aquatic Systems segment after an acquisition is finalized.
How do you interpret aquatic systems — goodwill purchase accounting adjustments?: Frequent or large adjustments may indicate complexity in valuation or initial misestimation of acquisition targets.
How does aquatic systems — goodwill purchase accounting adjustments compare across companies?: Standard adjustment line item in the goodwill roll-forward for companies engaged in frequent M&A.