Q2 2012 EARNINGS RELEASE

July 24, 2012

PENTAIR

Filed by Pentair, Inc.

pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

of the Securities Exchange Act of 1934

Subject Company: Pentair, Inc.

Registration Number: 333-181250

2

Caution

Concerning

Forward-Looking

Statements

This

communication

may

contain

certain

statements

about

Pentair,

Inc.

(“Pentair”),

Tyco

Flow

Control

International

Ltd.

(“Tyco

Flow”)

and

Tyco

International

Ltd.

(“Tyco”)

that

are

“forward-looking

statements”

within

the

meaning

of

the

U.S.

Private

Securities

Litigation

Reform

Act

of

1995.

The

forward-looking

statements

contained

in

this

press

release

may

include

statements

about

the

expected

effects

on

Pentair,

Tyco

Flow

and

Tyco

of

the

proposed

merger

of

Pentair

and

Tyco

Flow

(the

“Merger”),

the

anticipated

timing

and

benefits

of

the

Merger,

Pentair’s

and

Tyco

Flow’s

anticipated

standalone

or

combined

financial

results

and

all

other

statements

in

this

document

other

than

historical

facts.

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”,

“expect”,

“positioned”,

“strategy”,

“future”

or

words,

phrases

or

terms

of

similar

substance

or

the

negative

thereof,

are

forward-looking

statements.

These

statements

are

based

on

the

current

expectations

of

the

management

of

Pentair,

Tyco

Flow

and

Tyco

(as

the

case

may

be)

and

are

subject

to

uncertainty

and

changes

in

circumstances

and

involve

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

those

expressed

or

implied

in

such

forward-looking

statements.

In

addition,

these

statements

are

based

on

a

number

of

assumptions

that

are

subject

to

change.

Such

risks,

uncertainties

and

assumptions

include:

the

satisfaction

of

the

conditions

to

the

Merger

and

other

risks

related

to

the

completion

of

the

Merger

and

actions

related

thereto;

Pentair’s

and

Tyco’s

ability

to

complete

the

Merger

on

anticipated

terms

and

schedule,

including

the

ability

to

obtain

shareholder

or

regulatory

approvals

of

the

Merger

and

related

transactions;

risks

relating

to

any

unforeseen

liabilities

of

Pentair

or

Tyco

Flow;

future

capital

expenditures,

expenses,

revenues,

earnings,

synergies,

economic

performance,

indebtedness,

financial

condition,

losses

and

future

prospects;

business

and

management

strategies

and

the

expansion

and

growth

of

Pentair’s

or

Tyco

Flow’s

operations;

Pentair’s

and

Tyco

Flow’s

ability

to

integrate

successfully

after

the

Merger

and

achieve

anticipated

synergies;

the

effects

of

government

regulation

on

Pentair’s

or

Tyco

Flow’s

businesses;

the

risk

that

disruptions

from

the

transaction

will

harm

Pentair’s

or

Tyco

Flow’s

business;

Pentair’s,

Tyco

Flow’s

and

Tyco’s

plans,

objectives,  expectations

and

intentions

generally;

and

other

factors

detailed

in

Pentair’s

and

Tyco’s

reports

filed

with

the

U.S.

Securities

and

Exchange

Commission

(the

“SEC”),

including

their

Annual

Reports

on

Form

10-K

under

the

caption

“Risk

Factors”.

Forward-looking

statements

included

herein

are

made

as

of

the

date

hereof,

and

none

of

Pentair,

Tyco

Flow

or

Tyco

undertakes

any

obligation

to

update

publicly

such

statements

to

reflect

subsequent

events

or

circumstances.

Additional

Information

The

Merger

will

be

submitted

to

a

vote

of

Pentair

shareholders

and

the

proposed

distribution

of

Tyco

Flow

to

Tyco

shareholders

(the

“Distribution”)

will

be

submitted

to

a

vote

of

Tyco

shareholders.

On

May

8,

2012,

Tyco

Flow

filed

with

the

SEC

a

registration

statement

on

Form

S-4,

as

subsequently

amended,

containing

a

preliminary

proxy

statement/prospectus

regarding

the

Merger.

On

May

8,

2012,

Tyco

Flow

filed

with

the

SEC

a

registration

statement

on

Form

S-1,

as

subsequently

amended,

containing

a

preliminary

prospectus

and

Tyco

filed

with

the

SEC

a

preliminary

proxy

statement,

as

subsequently

amended,

regarding

the

Distribution.

The

preliminary

proxy

statement/prospectus

regarding

the

Merger,

the

preliminary

prospectus

regarding

the

Distribution

and

the

Tyco

preliminary

proxy

statement

are

available

free

of

charge

on

the

SEC’s

website

at

www.sec.gov.

Pentair

plans

to

file

with

the

SEC

and

mail

to

its

shareholders

a

definitive

proxy

statement

regarding

the

Merger

and

Tyco

plans

to

file

with

the

SEC

and

mail

to

its

shareholders

a

definitive

proxy

statement

regarding

the

Distribution.

Shareholders

are

urged

to

read

the

Form

S-4

containing

the

preliminary

proxy

statement/prospectus,

the

Form

S-1

containing

the

preliminary

prospectus

and

the

Tyco

preliminary

proxy

statement,

which

are

available

now,

and

the

Form

S-4

containing

the

definitive

proxy

statement/prospectus

regarding

the

Merger,

the

Form

S-1

containing

the

definitive

prospectus

regarding

the

Distribution

and

the

Tyco

definitive

proxy

statement

and

any

other

relevant

documents

when

they

become

available,

because

they

will

contain

important

information

about

Pentair,

Tyco

and

Tyco

Flow

and

the

proposed

transactions.

The

definitive

proxy

statement/prospectus

relating

to

the

Merger,

the

definitive

prospectus

relating

to

the

Distribution,

the

Tyco

definitive

proxy

statement

and

other

documents

relating

to

the

proposed

transaction

(when

they

are

available)

can

be

obtained

free

of

charge

from

the

SEC’s

website

at

www.sec.gov.

These

documents

(when

they

are

available)

can

also

be

obtained

free

of

charge

from

Pentair

upon

written

request

to

Investor

Relations

Department,

Pentair,

Inc.,

5500

Wayzata

Blvd.,

Suite

800,

Minneapolis,

MN,

55416,

or

by

calling

(763)

545-1730

or

from

Tyco

or

Tyco

Flow

upon

written

request

to

Investor

Relations

Department,

Tyco

International

Ltd.,

9

Roszel

Road,

Princeton,

NJ,

08540,

or

by

calling

(609)

720-4200.

Participants

in

the

Solicitation

Pentair

and

Tyco

and

certain

of

their

respective

directors

and

executive

officers

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

from

shareholders

in

connection

with

the

proposed

transaction

under

the

rules

of

the

SEC.

Information

about

the

directors

and

executive

officers

of

Pentair

may

be

found

in

its

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2011

filed

with

the

SEC

on

February

21,

2012,

the

definitive

proxy

statement

relating

to

its

2012

annual

meeting

of

shareholders

filed

with

the

SEC

on

March

9,

2012

and

Tyco

Flow’s

registration

statement

on

Form

S-4

containing

the

preliminary

proxy

statement/prospectus relating 

to

the

Merger,

which

was

filed

with

the

SEC

on

May

8,

2012,

as

subsequently

amended.

Information

about

the

directors

and

executive

officers

of

Tyco

may

be

found

in

its

Annual

Report

on

Form

10-K

for

the

year

ended

September

30,

2011

filed

with

the

SEC

on

November

16,

2011,

the

definitive

proxy

statement

relating

to

its

2012

annual

general

meeting

of

shareholders

filed

with

the

SEC

on

January

13,

2012

and

Tyco’s

preliminary

proxy

statement,

which

was

filed

with

the

SEC

on

May

8,

2012,

as

subsequently

amended.

These

documents

can

be

obtained

free

of

charge

from

the

sources

indicated

above.

Additional

information

regarding

the

interests

of

these

participants

will

also

be

included

in

the

definitive

proxy

statements

when

it

becomes

available.

FORWARD-LOOKING STATEMENTS

PENTAIR

3

Adj. Op Income Up 11%

Adj. Op Margins 14.3% …

Up 100 bps

•

Volume/Acq.

(0.6 pts.)

•

Price/Productivity

+3.5 pts.

•

Inflation

(1.6 pts.)

Adj. EPS Up 11%

•

Adj. Effective Tax Rate ~28%

•

Net Interest Up ~$1M

Q2 Free Cash Flow of $222M

•

Seasonal Acceleration; YTD FCF of $140M

•

On Track to Deliver FY FCF >100% of NI

* All year-over-year comparisons against 2011 adjusted results.

** CPT refers to the acquisition of  Norit’s  Clean  Process  Technologies  Business;  Closed  May  12,  2011

Sales Up 3%

•

Acq.

+4.4 pts.

•

Volume/Price

+2.0 pts.

•

FX

(2.9 pts.)

•

Water & Fluid Up 7%

•

Technical Products Down (4%)

•

Top-Line Hindered by FX Translation and End of

Life Contract (Technical Products)

•

Continued Gains in Industrial, Agriculture, Food,

and Energy

•

Strong Margin Improvement Led by Price,

Productivity, and Repositioning Savings

•

YTD Repositioning Charges of $10M to Accelerate

Productivity Savings

Price and Productivity Drove Margin Gains

Q2’12 PENTAIR RESULTS

*

Q2’12

Q2’11

Sales

$942M

$910M

Op Income

(Rpt.)

$118M

$109M

Op Income

(Adj.)

$134M

$121M

ROS

(Adj.)

14.3%

13.3%

EPS

(Rpt.)

$0.71

$0.67

EPS

(Adj.)

$0.83

$0.75

PENTAIR

SUMMARY

FINANCIAL HIGHLIGHTS

4

Operating Margins / Productivity Highlights

Sales Up 7% …

Up 1% ex-CPT, Organic up 3% ex-FX

•

Treatment/Process  +14%

-

Strong Industrial and Energy Offsetting W. Europe Headwinds

•

Aquatic  +8%

-

Strong Eco-Select Product Sales and Dealer Expansion

•

Flow (1%)

-

Lower Flood-Related Pump, W. Europe & Muni Sales

Fast Growth Regions Up 19%, including CPT and FX

Sales Highlights

(by Platform)

Adjusted Operating Margins 14.7%,

incl.

negative

CPT

headwind

of

70

bps

Solid Pricing and Productivity Execution, Along with

Repositioning Actions Benefited Margins

•

Continued Investments in New Product

Development to Fuel Future Growth

Solid Growth (ex-FX) and Strong Price and Productivity

Q2’12 WATER & FLUID SOLUTIONS PERFORMANCE

*

YoY

Q2’11

Adj

Prod./

Price

Infl.

Growth

Q2’12

Adj

$1M

$99M

$20M

$90M

$632M

$676M

($18M)

Q2’11

Volume

Price

FX

Q2’12

$15M

$7M

($12M)

$40M

CPT Acq.

1pt

6pts

2pts

(3pts)

7pts

ROS

(1.9%)

(0.4%)

2.8%

14.7%

14.2%

ROS

* All year-over-year comparisons against 2011 adjusted results.

$92M

($7M)

Adj

Q2’12

Rptd

13.6%

ROS

(1.1%)

PENTAIR

SALES

OPERATING INCOME

+7%

YoY

+10%

YoY

5

Sales Down 4% …

Down 1% ex-FX

Fast Growth Regions Up 2% (Up 8% ex-FX)

•

Industrial

+7%

•

Energy

+4%

•

Commercial

+3%

•

Infrastructure

(1%)

•

Sec/Def, Medical

(5%)

•

General Electronics

(8%)

•

Communications

(29%)

Q2’12 TECHNICAL PRODUCTS PERFORMANCE

*

Industrial Strength and Robust Margin Expansion

SALES

OPERATING INCOME

Operating Margins / Productivity Highlights

Sales Highlights

(by Sector Served)

Adjusted Operating Margins 20.2%, Up 290bps

•

End of Life Telecom Project & W. Europe Headwinds

Impacted Top-Line; Minimal Op Margin Impact

•

Strong Gross Margin Performance, with Continued

Investments in Global Selling & Marketing

•

Pricing realized; Repositioning Benefits Ramping

through Year

YoY

$278M

$266M

($8M)

Q2’11

Volume

Price

FX

Q2’12

$7M

($11M)

(4%)

YoY

(4pts)

3pts

(3pts)

(4pts)

* All year-over-year comparisons against 2011 adjusted results.

Q2’11

Prod./

Price

Infl.

Growth

Q2’12

Adj

($5M)

$54M

$14M

$48M

($3M)

+11%

YoY

(0.9%)

(0.9%)

4.7%

20.2%

ROS

$51M

($3M)

Adj

Q2’12

Rptd

17.3%

ROS

19.0%

ROS

(1.2%)

PENTAIR

6

1st

HALF GROWTH PROFILE

FX Translation a Headline, Europe a Headwind, Fast Growth still Growing

•

US/CANADA ~66% of Sales

–

YTD Revenue up

4% …

Up 5%

Excluding the Impact of Telecom End of

Life Program

•

WESTERN EUROPE  ~13% of Sales

–

Overall Volume/Price/FX Down 17% YOY

–

Impact of FX Translation ~(8%)

–

FX Translation Continues into

2nd

Half, 2012

•

FAST GROWTH ~18% of Sales

–

China YTD up 21% …

Flat excluding

Acquisitions and FX

–

Middle East up 29%

–

Latin America up 14% in Local Currency

–

India up 42% in Local Currency

•

Residential

~34%

of

Sales

–

Flat YTD

•

Industrial

~40%

of

Sales

–

Up 11% YTD

•

Agriculture/Aquaculture

~5%

of

Sales

–

Up 17% YTD

•

Comm’l

~13%

of

Sales

–

Up 5% YTD

•

Infrastructure

~8%

of

Sales

–

Up 3% YTD

•

Energy: Gaining momentum relating to

separation systems and shale penetrations

•

Water Reuse: Industrial application orders

accelerating …

2H shipments

•

Industrialization: Fast growth markets still

expanding as a whole …

China slower

•

Agriculture: Ag/Aquaculture orders

accelerating globally …

sales up >15% YOY

PENTAIR

st

nd

KEY GEOGRAPHIES

KEY VERTICALS (All Global)

PROGRESS

ON

STRATEGIC

GROWTH

PLATFORMS

7

Q2 YTD

1H ASSESSMENT AND FULL YEAR OUTLOOK

FY 2012

Outlook

Adj. Op Margin

Bps Chg from PY

Revenue

% Chg from PY

2H Assumptions

Europe remains challenged,

consistent with first half

FX translation headwind, but

inflation moderate

Strong price and growth priorities

offsetting weaker volume

Q4 benefit from improving Muni

and Beverage Backlog

Strength in Fast Growth Regions

$1.8B

+6%

12.9%

+60 bps

$1.47

+16%

~$3.6B

~4%

~12.4%

~+70 bps

$2.70 to $2.76

+12 to 15%

Adj. EPS

% Chg from PY

Driving Both Growth and

Productivity Initiatives

Price Plus Productivity More than

Offsetting Inflation

Accelerated Repositioning and

Integration/Standardization

Actions

Expect Some Top-Line Moderation in 2H12, but Margin Expansion to Continue

PENTAIR

8

Day 1 Readiness

•

40+ Dedicated IST Team Members

•

10 Functions -

Each Pentair / Tyco

Business Unit Represented

•

140+ Project Plans –

On Schedule

•

Business Continuity & Day 1 Value To

Shareholders Critical

Progressing as Scheduled

UPDATE ON PENDING PENTAIR & TYCO FLOW MERGER,

SYNERGIES

STANDARDIZATION

Day 1

Announce

Day 1,000

Synergies

•

$250M of Synergies Targeted By Business

& Function By 2015

•

Bottoms-up Planning Underway …

Significant Opportunity Identified

•

Day 1 Targets On Schedule

•

Day 1 –

100 “Fast Start”

Synergies Being

Identified

Standardization

•

Pentair Integrated Management

System (PIMS) Ready to Deploy

•

Function-by-Function Approach

Evaluating Best of Both Companies

•

Choose-and-Go Approach to

Standardization (Best Practices)

$250M

Commitment

Cost and

Growth

Corp Cost

Avoidance

Tax

Synergies

Cost

Synergies

$40M

$50M

$160M

PENTAIR

DAY 1 READINESS

Phase I

Planning

Phase II

Execution

Phase III

Readiness

PNR

PNR

PNR

TYCO

TYCO

TYCO

New PNR

PREVIOUSLY ANNOUNCED

(of key business processes)

9

•

Macroeconomic Uncertainty and Currency Translation Persist

-

Excluding FX, volume and price remain positive; Fast Growth markets growing double-digits

-

Western Europe worse than expected, but signs of bottom in Residential and Muni

•

Strong Growth Continued in Many Sectors We Serve

–

Growth continues in US Industrial +14%, Agriculture +14%, Pool +8% and Energy +6%

•

Adj. Op Income Grew 11% in Q2, Great PIMS Execution

-

100bps of margin expansion driven by the 3 P’s:  PIMS, pricing and productivity

-

Targeted investments in Global Marketing Capabilities and New Product Development

•

On-Track to Deliver Full Year Adj. Operating Income Targets

-

A little less contribution from growth

-

Strong net productivity

•

Pending Merger with Tyco Flow Progressing Well

-

Have received HSR and EU clearance

-

Integration & Standardization Team in place; anticipated synergies in line with expectations

Q2’12 SUMMARY

Strong Pricing and Productivity Driving Operating Improvement

PENTAIR

10

11.7%

A Little Less Contribution From

Growth (FX Related) and Strong

Productivity Driven

by Price/Cost

13.3%

~12.4%

14.3%

+100 bps

incl. CPT

acq. impact

•

A Little Less Growth

–

FX Headwind Forecasted at ($86M) for Full Year

–

Europe Expected to be down ($10M) for Full Year

–

Easier 2nd

Half Comparisons in Most Businesses

•

Better Price/Cost

–

Q2 YOY Pricing of 120 basis points …

Expect Full Year

Pricing ~2%

–

Raw Material and Strategic Sourcing Better than Original

Plan …

and accelerating entering 2nd

half

–

PIMS accelerating throughout Water/Tech Products

–

Repositioning actions ($10M YTD) driving upside

•

Sustaining, Strategic Investments

–

Continued Investments in New Product Development

and Global Selling & Marketing …

More Prioritization

(at midpoint)

1st

HALF/FULL YEAR OPERATING MARGINS

Good Start …

Pricing, Productivity + ‘Paced’

Investments

~70 bps

PENTAIR

Q2'11

Q2'12

FY'11

FY'12e

st

nd

nd

ADJ. OP MARGIN

OPERATING MARGIN EXPECTATIONS

11

ROIC (After-tax)

9.3%

9.0%

Debt / Total Cap.

38.2%

40.4%

Q2‘12

Maturity

Rate

Variable  

’12 –

’21                 2.1%

Fixed

’13 –

’21

5.5%

$1.2B

Q2’12

Avg. Rate ~4.8%

~81% Fixed …

YE’11

$1.0B

$0.2B

Key Ratios Exclude Non-controlling Interest from Equity

BALANCE SHEET AND CASH FLOW

Good ROIC Progress …

FY Free Cash Flow on Track

KEY RATIOS

CASH FLOW

DEBT SUMMARY

Q2

Q2

($M)

2012

2011

YOY Chg

Net Income attributable

to Pentair, Inc.

72

$      

67

$      

5

$         

Non-Cash Items

32

$        

33

$        

(1)

$          

Subtotal

104

$    

100

$    

4

$         

Working Capital

102

$      

94

$        

8

$            

Capital Expenditures

(16)

$       

(22)

$       

6

$            

Asset Sales

3

$          

-

$       

3

$            

Other Accruals/Other

29

$        

7

$          

22

$          

Free Cash Flow

222

$    

179

$    

43

$       

Q2

Q2

Use of Cash:

2012

2011

YOY Chg

Beginning Debt

1,415

$ 

808

$    

(607)

$    

Generated Cash

(222)

$     

(179)

$     

43

$          

Divestitures

-

$       

-

$       

-

$        

Share Repurchase

-

$       

-

$       

-

$        

Dividends

22

$        

20

$        

(2)

$          

Borrowings

-

$       

755

$      

755

$        

Other

20

$        

3

$          

(17)

$        

Ending Debt

1,235

$ 

1,407

$ 

172

$     

PENTAIR

12

Op Income Up 3% -

7%

Op Margins 11.7% -

11.9%, up 40 to 60 bps

•

Water & Fluid Margins

~11.5%

•

Technical Products Margins

~19.0%

EPS Up 5% -

9%

•

Adj. Tax Rate 28% -

29%

•

Net Interest ~$16.5M

Sales Up 1% -

3%

•

Water & Fluid Up 1% -

3%

•

Technical Products Down (4%) to (2%)

Q3’12

Q3’11

Sales

$900M -

$915M

$891M

Op Income

(Rpt.)

$104M -

$108M

$93M

Op Income

(Adj.)

$104M -

$108M

$101M

ROS

(Adj.)

11.7% -

11.9%

11.3%

EPS

(Rpt.)

$0.61 -

$0.63

$0.51

EPS

(Adj.)

$0.61 -

$0.63

$0.58

•

Expanded Coverage & Penetration, New Products

and Fast Growth Region Sales to Fuel Top-line

•

Expect Good Growth in Industrial, Agriculture,

Energy & Pool Continue …

Slower Decline in Muni

•

Repositioning Benefits and Pricing Realization

Ramping from Q2, Plus Productivity to Drive

Margin Expansion

Expanded Penetration, New Products & Margin Expansion Driving Growth

Q3’12 PENTAIR OUTLOOK

*

Q3 Free Cash Flow of ~$70M

•

Expect FCF >100% of Net Income for FY

* 2012 Q3 outlook excludes all impacts of the Tyco Flow Deal;  All year-over-year comparisons against 2011 adjusted results.

PENTAIR

Q3’12 FINANCIAL OUTLOOK

KEY HIGHLIGHTS

13

•

New Products, Expanded Distribution and Fast

Growth Regions Expected to Fuel Growth

•

Expect Better Price/Cost, More Productivity

and Prioritized Investments to Expand Margins

•

Expect to Generate FCF > Net Income, with

Disciplined Allocation

•

Integration Planning & Leadership is Critical

…

Tyco Flow Deal Not Reflected in this Outlook

Growth and Productivity Strategies In Place …

Well Positioned in 2012

FULL YEAR 2012 PENTAIR OUTLOOK

*

FY’12

FY’11

Sales

~$3.6B

$3.5B

Op Income

(Rpt.)

$411M -

$421M

$169M

Op Income

(Adj.)

$440M -

$450M

$404M

ROS

(Adj.)

up 50 bps -

80 bps

EPS

(Rpt.)

$2.55 -

$2.61

$0.34

EPS

(Adj.)

$2.70 -

$2.76

$2.41

Adj. Op Income Up 9% -

11%

Adj. Op Margins Up 50 bps -

80 bps

•

Water & Fluid Margins, ~12.5%

•

Technical Products Margins, ~19.0%

Adj. FY EPS Up 12% -

15%

•

Adj. Tax Rate ~27%

•

Net Interest ~$65M

Sales Up 4% -

5%

•

Water & Fluid Up 5% -

7%

•

Technical Products Down (2%) to Flat

FY’12 Free Cash Flow >$270M

•

Expect >100% Net Income Conversion

11.7%

PENTAIR

KEY HIGHLIGHTS

FY’12 FINANCIAL OUTLOOK

*

2012

full

year

outlook

does

not

include

any

future

impact

from

Tyco

Flow

Deal;

All

year-over-year

comparisons

against

2011

adjusted

results.

14

APPENDIX

GAAP to Non-GAAP Measurements & Reconciliations

PENTAIR

PENTAIR

15

GAAP TO NON-GAAP RECONCILIATIONS

GAAP to Non-GAAP Measurements and Reconciliations

$ in millions

Q111

Q211

Q311

Q411

Q112

Q212

Reported Operating Income

86.2

$          

109.4

$        

92.9

$          

(120.0)

$       

85.0

$          

117.8

$        

Adjustments

1.9

$            

11.4

$          

7.9

$            

214.0

$        

11.8

$          

16.7

$          

Adjusted Operating Income

88.1

$          

120.8

$        

100.8

$        

94.0

$          

96.8

$          

134.5

$        

Reported Provision for Income Taxes

25.1

$          

27.3

$          

24.1

$          

(3.4)

$           

9.1

$            

28.9

$          

Effect of Adjustments on Provision for Income Taxes

0.6

$            

2.6

$            

1.3

$            

24.2

$          

7.4

$            

4.7

$            

Adjusted Provision for Income Taxes

25.7

$          

29.9

$          

25.4

$          

20.8

$          

16.5

$          

33.6

$          

Reported Effective Tax Rate

32.5%

28.6%

31.6%

2.5%

12.7%

28.2%

Adjusted Effective Tax Rate

32.5%

28.0%

30.2%

27.0%

19.9%

28.3%

NOPAT

59.5

$          

87.0

$          

70.3

$          

68.6

$          

77.5

$          

96.4

$          

Trailing four quarter NOPAT

243.1

$        

263.7

$        

272.4

$        

285.3

$        

303.3

$        

312.7

$        

Ending Invested Capital (excluding noncontrolling interest)

2,918.5

$     

3,587.3

$     

3,478.4

$     

3,192.3

$     

3,387.4

$     

3,176.4

$     

Trailing five quarter average invested capital

2,777.6

$     

2,931.5

$     

3,091.4

$     

3,186.2

$     

3,312.8

$     

3,364.4

$     

After Tax Return on Invested Capital

8.8%

9.0%

8.8%

9.0%

9.2%

9.3%

NOPAT

(Net

Operating

Profit

After

Tax)

is

Defined

as

[(Adjusted

OI)

X

(1

-

Adjusted

Effective

Tax

Rate)]

Ending Invested

Capital

is

Defined

as

[Total

Shareholders'

Equity

-

Noncontrolling

interest

+

Long-term

Debt

+

Current

Maturities

of

Long-term

Debt

+

Short-term

Borrowings

-

Cash and Cash Equivalents]

Free Cash Flow

Net cash provided by (used for) operating activities

(48.2)

$         

200.8

$        

88.0

$          

79.6

$          

(67.5)

$        

234.3

$        

Capital expenditures

(13.3)

$         

(21.9)

$         

(17.9)

$         

(20.2)

$         

(15.6)

$        

(15.7)

$        

Proceeds from sale of property and equipment

0.1

$            

-

$            

-

$            

1.2

$            

1.5

$            

3.3

$            

Free cash flow

(61.4)

$         

178.9

$        

70.1

$          

60.6

$          

(81.6)

$        

221.9

$        

Free

Cash

Flow

is

Defined

as

[Net

cash

provided

by

(used

for)

continuing

operations

-

Capital

Expenditures

+

Proceeds

from

sale

of

property

and

equipment]

PENTAIR

16

REPORTED TO ADJUSTED 2012 RECONCILIATION

Pentair, Inc. and Subsidiaries

Reconciliation of the GAAP "As Reported" year ending December 31, 2012 to the "Adjusted" non-GAAP

excluding the effect of 2012 adjustments (Unaudited)

Total Pentair

First Quarter

Second Quarter

Year

In millions, except per-share data

2012

2012

2012

Net sales

858.2

$                      

941.5

$                         

approx $3,600

Operating

income -

as

reported

85.0

117.8

approx

411-

421

% of net sales

9.9%

12.5%

approx. 11.5%

Adjustments:

Deal related costs

11.8

6.3

18.1

Restructuring

—

10.4

10.4

Operating

income  -

as

adjusted

96.8

134.5

approx

440

-

450

% of net sales

11.3%

14.3%

approx. 12%+

Net

income

attributable

to

Pentair,

Inc. -

as

reported

60.8

71.8

approx

258

-

264

Interest expense

(1.2)

—

(1.2)

Other adjustments net of tax

4.4

11.9

16.3

Net income from continuing operations attributable

to Pentair, Inc. -

as adjusted

64.0

83.7

approx

273

-

279

Continuing

earnings

per

common

share

attributable

to

Pentair,

Inc.

-

diluted

Diluted

earnings

per

common

share -

as

reported

0.61

$                        

0.71

$                           

$2.55

-

$2.61

Adjustments

0.03

0.12

0.15

Diluted

earnings

per

common

share -

as

adjusted

0.64

$                        

0.83

$                           

$2.70

-

$2.76

PENTAIR

17

Note:  Inventory step-up and customer backlog reflect amortization of fair market value step-up associated with inventory and in process customer contracts.

REPORTED TO ADJUSTED 2011 RECONCILIATION

Pentair, Inc. and Subsidiaries

Reconciliation of the GAAP "As Reported" year ending December 31, 2011 to the "Adjusted" non-GAAP

excluding the effect of 2011 adjustments (Unaudited)

Total Pentair

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Year

In millions, except per-share data

2011

2011

2011

2011

2011

Net sales

790.3

$                      

910.2

$                         

890.5

$                   

865.7

$                   

3,456.7

$                

Operating income -

as reported

86.2

109.4

92.9

(120.0)

168.5

% of net sales

10.9%

12.0%

10.4%

(13.9%)

4.9%

Adjustments:

CPT deal related costs

1.7

6.1

—

0.5

8.3

Restructuring

—

—

2.1

10.8

12.9

Inventory step-up and customer backlog

0.2

5.3

5.8

2.2

13.5

Goodwill impairment

—

—

—

200.5

200.5

Operating income -

as adjusted

88.1

120.8

100.8

94.0

403.7

% of net sales

11.1%

13.3%

11.3%

10.9%

11.7%

Net income attributable to Pentair, Inc. -

as reported

50.5

66.7

51.1

(134.1)

34.2

Adjustments net of tax

1.3

8.8

6.6

189.8

206.5

Net income from continuing operations attributable

to Pentair, Inc. -

as adjusted

51.8

75.5

57.7

55.7

240.7

Continuing earnings per common share attributable to Pentair, Inc. -

diluted

Diluted earnings per common share -

as reported

0.51

$                        

0.67

$                           

0.51

$                     

(1.36)

$                    

0.34

$                     

Adjustments

0.01

0.08

0.07

1.92

2.07

Diluted earnings per common share -

as adjusted

0.52

$                        

0.75

$                           

0.58

$                     

0.56

$                     

2.41

$                     

PENTAIR

18

Note:  Inventory step-up and customer backlog reflect amortization of fair market value step-up associated with inventory and in process customer contracts.

REPORTED TO ADJUSTED 2012 RECONCILIATION

Pentair, Inc. and Subsidiaries

Reconciliation of the GAAP "As Reported" year ending December 31, 2012 to the "Adjusted" non-GAAP

excluding the effect of 2012 adjustments (Unaudited)

Water

First Quarter

Second Quarter

Year

In millions

2012

2012

2012

Net sales

587.0

$                   

675.5

$                   

approx $2,500

Operating

income

-

as

reported

63.7

92.0

$                     

approx

305

-

310

% of net sales

10.9%

13.6%

approx. 12.0%

—

6.9

7

Operating

income

-

as

adjusted

63.7

98.9

approx

312

-

317

% of net sales

10.9%

14.7%

approx. 12.5%

Technical Products

Net sales

271.2

$                   

266.0

$                   

approx $1,100

Operating

income

-

as

reported

50.5

50.6

approx

196

-

201

% of net sales

18.6%

19.0%

approx. 18.0%

—

3.1

3

Operating

income

-

as

adjusted

50.5

53.7

approx

199

-

204

% of net sales

18.6%

20.2%

approx. 18.5%

Adjustments -

restructuring

Adjustments -

restructuring

PENTAIR

19

Note:  Inventory step-up and customer backlog reflect amortization of fair market value step-up associated with inventory and in process customer contracts.

REPORTED TO ADJUSTED 2011 RECONCILIATION

Pentair, Inc. and Subsidiaries

Reconciliation of the GAAP "As Reported" year ending December 31, 2011 to the "Adjusted" non-GAAP

excluding the effect of 2011 adjustments (Unaudited)

Water

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Year

In millions

2011

2011

2011

2011

2011

Net sales

515.4

$                   

632.0

$                   

614.6

$                   

607.9

$                   

2,369.8

$                

Operating income -

as reported

56.5

$                     

84.5

$                     

59.6

$                     

(142.3)

$                  

58.3

$                     

% of net sales

11.0%

13.4%

9.7%

(23.4%)

2.5%

Adjustments:

Restructuring

—

—

2.0

7.8

9.8

Inventory step-up and customer backlog

0.2

5.3

5.8

2.2

13.5

Goodwill impairment

—

—

—

200.5

200.5

Operating income -

as adjusted

56.7

89.8

67.4

68.2

282.1

% of net sales

11.0%

14.2%

11.0%

11.2%

11.9%

Technical Products

Net sales

274.9

$                   

278.2

$                   

276.0

$                   

257.8

$                   

1,086.9

$                

Operating income -

as reported

48.1

$                     

48.3

$                     

48.6

$                     

40.3

$                     

185.3

$                   

% of net sales

17.5%

17.3%

17.6%

15.6%

17.0%

Adjustments -

Restructuring

—

—

0.1

2.0

2.1

Operating income -

as adjusted

48.1

48.3

48.7

42.3

187.4

% of net sales

17.5%

17.3%

17.7%

16.4%

17.2%