On April 28, 2017, the Company completed the acquisition of Pentair's valves & controls business for $2.960 billion, net of cash acquired of $207 million, subject to certain post-closing adjustments. This business, with sales of approximately $1.6 billion for the trailing twelve months ended March 2017, is a manufacturer of control, isolation and pressure relief valves and actuators, and complements the Valves, Actuators & Regulators product offering within Automation Solutions. The Company recognized goodwill of $1,373 million (none of which is expected to be tax deductible), and other identifiable intangible assets of $988 million, primarily customer relationships and intellectual property with a weighted-average life of approximately 15 years. The Company also acquired two smaller businesses in the Automation Solutions segment. Total cash paid for all businesses was $3.0 billion, net of cash acquired.

The purchase price of the valves & controls business was preliminarily allocated to assets and liabilities as follows. Valuations of acquired assets and liabilities are in-process and subject to refinement.



Accounts receivable	$	363
Inventory	562
Other current assets	27
Property, plant & equipment	405
Goodwill	1,373
Intangibles	988
Other assets	287
Assets held-for-sale, including deferred taxes	38
Total assets	4,043

Accounts payable	119
Other current liabilities	308
Deferred taxes and other liabilities	656
Cash paid, net of cash acquired	$	2,960

Results of operations for the third quarter of 2017 include sales of $241 million and a net loss of $(35) million, $(0.05) per share, including intangibles amortization and restructuring expense. These results also include first year pretax acquisition accounting charges related to inventory and backlog of $(37) million, $(26) million after-tax, $(0.04) per share.

Pro Forma Financial Information

The following unaudited proforma consolidated condensed financial results of operations are presented as if the acquisition of the valves & controls business occurred on October 1, 2015. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition occurred as of that time ($ in millions, except per share amounts).



	Three Months Ended June 30,			Nine Months Ended June 30,
	2016		2017	2016	2017

Net sales	$	4,101	4,132	11,864	11,677
Net earnings from continuing operations common stockholders	$	436	426	972	1,155
Diluted earnings per share from continuing operations	$	0.67	0.66	1.50	1.78

The pro forma results for 2016 were adjusted to include first year acquisition accounting charges related to inventory and backlog of $11 million in the third quarter and $120 million year-to-date. The pro forma year-to-date 2016 results also include acquisition costs of $50 million which were assumed to be incurred in the first quarter. 2017 pro forma results were adjusted to exclude these charges.