Acquisitions and Divestitures (Tables)

6 Months Ended

Jun. 29, 2013

Purchase Price Detail

Based on the price of Pentair, Inc. common stock and our common shares issued on the date of the Merger, the purchase price was composed of the following:

In millions
Value of common shares issued to Tyco shareholders (1)	$	4,811.4
Value of replacement equity-based awards to holders of Tyco equity-based awards (2)	111.2
Cash paid to Tyco in settlement of the working capital and net indebtedness adjustment	84.4
Cash paid to Tyco shareholders in lieu of fractional common shares (3)	0.5
	$	5,007.5

(1) Equals 110.9 million Pentair Ltd. shares distributed to Tyco shareholders multiplied by the Merger date share price of $43.39.

(2) In accordance with applicable accounting guidance, the fair value of replacement equity-based awards attributable to pre-combination service is recorded as part of the consideration transferred in the Merger, while the fair value of replacement equity-based awards attributable to post-combination service is recorded separately from the business combination and recognized as compensation cost in the post-acquisition period over the remaining service period. The fair value of our equivalent stock options was estimated using the Black-Scholes valuation model utilizing various assumptions.

(3) Equals cash paid to Tyco shareholders in lieu of less than 0.1 million Pentair Ltd. fractional shares multiplied by the Merger date share price of $43.39.

Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes our preliminary fair values of the assets acquired and liabilities assumed in the Merger as reported at December 31, 2012 and as adjusted at June 29, 2013:

	Preliminary purchase price allocation as of acquisition date
In millions	December 31, 2012			June 29, 2013
Cash and cash equivalents	$	691.7		$	691.7
Accounts and notes receivable	771.6			772.8
Inventories	1,046.2			1,044.8
Other current assets	98.2			98.2
Property, plant and equipment	822.0			807.3
Goodwill	2,520.1			2,614.1
Intangibles	1,425.1			1,441.9
Other non-current assets	275.1			275.1
Current liabilities	(856.3		)	(867.3		)
Long-term debt	(914.5		)	(914.5		)
Income taxes, including current and deferred	(364.6		)	(360.3		)
Other liabilities and redeemable noncontrolling interest	(591.5		)	(596.3		)
Total purchase price	$	4,923.1		$	5,007.5

Pro Forma Condensed Consolidated Financial Results of Operations

The following unaudited pro forma condensed consolidated financial results of operations are presented as if the Merger had been completed on January 1, 2011:

	Three months ended		Six months ended
In millions, except per-share data	June 30, 2012		June 30, 2012
Pro forma net sales	$	1,924.8	$	3,781.3
Pro forma net income attributable to Pentair Ltd.	108.7		215.9
Diluted earnings per common share attributable to Pentair Ltd.	0.51		1.02