1) Q3 Performance Overview
- Sales reached $976 million, with adjusted operating income of $242 million and adjusted EPS of $1.18, exceeding guidance of $1.05 to $1.08.
- Core sales were down 5% YoY, primarily due to an 18% decline in pool sales, while Flow and Water Solutions grew 1% and 4% respectively.
- Cash generation remained strong, with $153 million in free cash flow for Q3 and $620 million year-to-date.

2) Acquisition of Taco Group Holdings
- The acquisition, completed on October 1st, adds a high-growth platform with expected 2026 sales of $560 million (up 23% YoY) and 2027 sales of over $620 million.
- Taco is anticipated to be accretive to adjusted EPS in 2027, enhancing Pentair's capabilities in commercial and institutional markets.
- The acquisition aligns with Pentair's strategy of expanding its water management platform and improving margin opportunities through cross-selling.

3) Pool Business Strategy and Outlook
- The channel inventory destock is complete, positioning the pool business for growth in 2027 without relying on market recovery.
- Estimated full-year sell-through for 2026 is $1.45 billion, with expectations of flat growth in 2027.
- The pool segment aims for a 30% return on sales in 2027, supported by a four-pillar strategy focusing on sales, support, quality, and product excellence.

4) Segment Performance and Financial Guidance
- Flow Solutions sales increased 4% YoY, while Water Solutions grew 1%, driven by strong performance in commercial sectors.
- Adjusted operating income is expected to decrease by 6% for the full year, with pool sales projected to decline 18-19%.
- For Q4, sales are expected to rise 7-9%, including Taco, while core sales may decline 2-3%.

5) Challenges and Future Guidance
- The company faces headwinds from delayed spending in the food and beverage sector, impacting Flow Solutions.
- The impact of tariff refunds is expected to diminish, with $43 million recognized in 2026 not anticipated to repeat.
- Further clarity on 2027 guidance will be provided in the Q4 earnings call, with a focus on maintaining strong profitability and cash flow.

Bottom line: Pentair's solid Q3 results and strategic acquisition of Taco position the company for growth in 2027, despite challenges in the pool segment and external market conditions. The focus on operational excellence and disciplined capital allocation should enhance shareholder value moving forward.