10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-11625

Pentair Ltd.

(Exact name of Registrant as specified in its charter)

Switzerland	98-1050812
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification number)
Freier Platz 10, 8200 Schaffhausen, Switzerland
(Address of principal executive offices)

Registrant’s telephone number, including area code: 41-52-630-48-00

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, CHF 0.50 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes þ    No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ¨    No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes þ    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit to post such files).    Yes þ    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in PART III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company  o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes ¨    No þ

Aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of $57.69 per share as reported on the New York Stock Exchange on June 28, 2013 (the last business day of Registrant’s most recently completed second quarter): $11,254,968,822

The number of shares outstanding of Registrant’s only class of common stock on December 31, 2013 was 197,356,157.

DOCUMENTS INCORPORATED BY REFERENCE

Parts of the Registrant’s definitive proxy statement for its annual meeting to be held on May 20, 2014, are incorporated by reference in this Form 10-K in response to Part III, ITEM 10, 11, 12, 13 and 14.

Pentair Ltd.

Annual Report on Form 10-K

For the Year Ended December 31, 2013

		Page
PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	6
ITEM 1B.	Unresolved Staff Comments	22
ITEM 2.	Properties	22
ITEM 3.	Legal Proceedings	22
ITEM 4.	Mine Safety Disclosures	24
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
ITEM 6.	Selected Financial Data	29
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	52
ITEM 8.	Financial Statements and Supplementary Data	54
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	105
ITEM 9A.	Controls and Procedures	105
ITEM 9B.	Other Information	105
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	106
ITEM 11.	Executive Compensation	106
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	107
ITEM 13.	Certain Relationships and Related Transactions and Director Independence	107
ITEM 14.	Principal Accounting Fees and Services	107
PART IV
ITEM 15.	Exhibits, Financial Statement Schedules	108
	Signatures	109

PART I

ITEM 1.    BUSINESS

GENERAL

Pentair Ltd. is a focused diversified industrial manufacturing company comprising four reporting segments: Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions. Valves & Controls designs, manufactures, markets and services valves, fittings, automation and controls and actuators. Process Technologies designs, manufactures, markets and services innovative water system products and solutions to meet filtration, separation and fluid process management challenges in food and beverage, water, wastewater, swimming pools and aquaculture applications. Flow Technologies designs, manufactures and markets products and services designed for the transfer and flow of clean water, wastewater and a variety of industrial applications. Technical Solutions designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electronics and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications.

Pentair Strategy

Our strategy is to drive sustainable, profitable growth and return on invested capital improvements through:

• building operational excellence through the Pentair Integrated Management System ("PIMS") consisting of lean enterprise, growth and talent management;

• driving long-term growth in sales, operating income and cash flows, through growth and productivity initiatives along with acquisitions;

• developing new products and enhancing existing products;

• penetrating attractive growth markets, particularly outside of the United States;

• expanding multi-channel distribution; and

• proactively managing our business portfolio for optimal value creation, including consideration of new business platforms.

Unless the context otherwise indicates, references herein to “Pentair,” the “Company,” and such words as “we,” “us,” and “our” include Pentair Ltd. and its consolidated subsidiaries. We are a Swiss corporation limited by shares that was formed in 2000. We are the successor to Pentair, Inc., a Minnesota corporation formed in 1966 and our wholly-owned subsidiary, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

HISTORY AND DEVELOPMENT

Pentair Ltd. took its current form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of Pentair Ltd. "Flow Control" refers to Pentair Ltd. prior the Merger. Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco. On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding common shares of Flow Control to Tyco’s shareholders (the “Distribution”), resulting in the distribution of approximately 110.9 million of our common shares to Tyco’s shareholders. The Merger was accounted for as a reverse acquisition under the purchase method of accounting with Pentair, Inc. treated as the acquirer. After the Merger, our common shares are traded on the New York Stock Exchange under the symbol PNR.

On December 10, 2013, Pentair Ltd. entered into a Merger Agreement (the “Merger Agreement”) with Pentair plc, a newly-formed Irish public limited company and subsidiary of Pentair (“Pentair-Ireland”). Under the Merger Agreement, and subject to the conditions set forth in the Merger Agreement, Pentair will merge with and into Pentair-Ireland, with Pentair-Ireland being the surviving company (the “Redomicile”), thereby changing the jurisdiction of organization of the publicly-traded parent company from Switzerland to Ireland. Pentair shareholders will receive one ordinary share of Pentair-Ireland for each common share of Pentair held immediately prior to the Redomicile.

Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that it is centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have its tax residency in the U.K. Pentair-Ireland will continue to own and conduct the same businesses as Pentair owned and conducted prior to the Merger, except that Pentair-Ireland will replace Pentair as the publicly-traded parent company. Pentair-Ireland will remain subject to U.S. Securities and Exchange Commission (“SEC”) reporting requirements and the applicable corporate governance rules of the New York Stock Exchange.

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The Redomicile is subject to Pentair shareholder approval of the Merger Agreement and certain other conditions. Pentair’s shareholders will be asked to vote to approve the Merger Agreement at an extraordinary general meeting of shareholders, which Pentair expects to be held during the second quarter of 2014.

We anticipate that having our publicly-traded parent company incorporated in Ireland and tax resident in the U.K. will provide us the following benefits:

• Incorporation of our publicly-traded parent company in Ireland would enable us to benefit by being subject to a legal and regulatory structure in a jurisdiction with a well-developed legal system and corporate law with established standards of corporate governance.

• The U.K. has a developed, stable and internationally competitive tax system.

• The legal requirements we will be subject to as a company incorporated in Ireland, listed on the NYSE and subject to SEC disclosure and shareholder voting requirements strike the right balance between robust external governance oversight and regulation of our executive and director pay practices and the ability of our compensation committee consisting of independent directors to determine executive compensation to provide incentives to our executive management and to offer competitive salaries and benefits.

Our registered principal office is located at Freier Platz 10, 8200 Schaffhausen, Switzerland. Our management office in the United States is located at 5500 Wayzata Boulevard, Suite 800, Minneapolis, Minnesota.

BUSINESS AND PRODUCTS

Reporting segment and geographical financial information is contained in ITEM 8, Note 15 of the Notes to Consolidated Financial Statements, included in this Form 10-K. During the fourth quarter of 2013, we reorganized our business segments to reflect a new operating structure and management of our Global Business Units, resulting in a change from three reporting segments to four. All prior period amounts related to the segment change have been retrospectively reclassified throughout this Annual Report on Form 10-K to conform to the new presentation. The following is a brief description of each of the Company’s reportable segments and business activities.

VALVES & CONTROLS

The Valves & Controls segment designs, manufactures, markets and services valves, fittings, automation and controls and actuators for the energy and industrial verticals and operates as a stand-alone Global Business Unit ("GBU").

Valve products include a broad range of industrial valves, including on-off valves, safety relief valves and other specialty valves. Actuation products include pneumatic, hydraulic and electric actuators. Control products include limit switches, valve positioners, network systems and accessories.

Valves & Controls products are used in many applications including chemical, petrochemical, oil and gas, power generation, mining, food and beverage, pulp and paper and wastewater. Valves & Controls also provides engineering, design, inspection, maintenance and repair services for its valves and related products. The product line is sold under many trade names, including Biffi, Keystone, Vanessa, Anderson Greenwood and Crosby globally via its internal sales force and in some cases through a network of independent distributors.

Customers

Valves & Controls customers include businesses engaged in a wide range of applications within the energy and industrial verticals. Customers include end-users as well as engineering, procurement and construction companies, contractors, original equipment manufacturers and distributors.

Seasonality

Valves & Controls is not significantly affected by seasonal demand fluctuations.

Competition

The flow control industry is highly fragmented, consisting of many local and regional companies and a few global competitors. We compete against a number of international, national and local manufacturers of industrial valves, as well as against specialized manufacturers on the basis of product capability, product quality, breadth of product line, delivery, service capability and price. Our major competitors vary by region and by industry.

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PROCESS TECHNOLOGIES

The Process Technologies segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration, separation and fluid process management challenges in food and beverage, water, wastewater, swimming pools and aquaculture applications. The Filtration & Process and Aquatic Systems GBUs comprise this segment.

Process Technologies offers a comprehensive product suite that ranges from energy-efficient pumps and point-of-use filtration to automated controls and CO2 recovery systems. Both the Filtration & Process and Aquatic Systems GBUs primarily sell water systems, consisting of pumps, valves and filters. Filtration & Process products are used in the manufacturing of water softeners, filtration and deionization systems, marine and recreational vehicle applications and commercial and residential water filtration applications. Aquatic Systems produces a broad line of leading edge equipment, accessories and water technology solutions, including pumps, filtration equipment, thermal products, automated controls, lights, automatic cleaners, water purification and treatment technology and water features.

Applications for Process Technologies’ products include oil and gas, residential, power generation, chemical, food and beverage, pharmaceutical, foodservice, medical and municipal and industrial desalination, water and wastewater treatment. Brand names for Process Technologies include Pentair, Everpure, Sta-Rite, X-Flow, Haffmans and Südmo.

Customers

Process Technologies customers include businesses engaged in wholesale and retail distribution in the residential & commercial, food & beverage, industrial, infrastructure and energy verticals. Customers in the residential & commercial vertical also include end-users and consumers.

Seasonality

We experience seasonal demand with several end customers and end-users within Process Technologies. End-user demand for pool equipment follows warm weather trends and is at seasonal highs from April to August. The magnitude of the sales increase is partially mitigated by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts).

Competition

Process Technologies faces numerous domestic and international competitors, some of which have substantially greater resources directed to the verticals in which we compete. Competition in Filtration & Process focuses on product performance and design, quality, delivery and price. For Aquatic Systems, competition focuses on brand names, product performance (including energy-efficient offerings), quality and price. We compete by offering a wide variety of innovative and high-quality products, which are competitively priced. We believe our distribution channels and reputation for quality also provide us a competitive advantage.

FLOW TECHNOLOGIES

The Flow Technologies segment designs, manufactures and markets products and services designed for the transfer and flow of clean water, wastewater and a variety of industrial applications. The Flow Technologies segment operates as a stand-alone GBU.

Flow Technologies is involved in the entire fluid system from transmission and distribution, process and control, to pumps, pipes, fittings and couplings. From product selection to installation, maintenance and servicing, Flow Technologies supports a broad range of products and services specifically tailored to address customers' needs for reliable and efficient movement and control of fluids.

Applications for Flow Technologies’ products include agriculture, along with pumps for residential and municipal wells, flood control, water treatment, wastewater solids handling, pressure boosting, engine cooling, fluid delivery, circulation and transfer and energy. Brand names for Flow Technologies products include Aurora, Fairbanks-Nijhuis, Sta-Rite, Hydromatic Hypro, Berkeley and Sintakote.

Customers

Flow Technologies customers include businesses engaged in wholesale and retail distribution in the residential & commercial, infrastructure, food & beverage, industrial and energy verticals. Customers also include end-users and consumers in the residential & commercial vertical.

Seasonality

We experience demand for residential water supply products, infrastructure and agricultural products following warm weather trends, which are at seasonal highs from April to August. Also, we generally experience increased demand during Australia’s prime agricultural seasons. Seasonal effects may vary from year to year and are impacted by weather patterns, particularly by temperatures, heavy flooding and droughts.

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Competition

Flow Technologies faces numerous domestic and international competitors, some of which have substantially greater resources directed to the verticals in which we compete. Competition in Flow Technologies focuses on brand names, product performance (including energy-efficient offerings), quality and price. While home center and national retailers are important for residential lines of water and wastewater pumps, they are not important for commercial pumps. For municipal pumps and pipeline systems, competition focuses on performance to meet required specifications, service and price. We compete by offering a wide variety of innovative and high-quality products, which are competitively priced.

TECHNICAL SOLUTIONS

The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electronics and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications. The Technical Solutions segment operates as a stand-alone GBU.

Technical Solutions products include mild steel, stainless steel, aluminum and non-metallic enclosures, cabinets, cases, subracks, backplanes and thermal management systems including heat tracing, snow melting/de-icing and temperature management equipment. Technical Solutions products are produced globally.

The portfolio of products serves a range of industries, including use in industrial, energy, residential & commercial and infrastructure verticals. Brand names for Technical Solutions offerings include Hoffman, Schroff, Raychem and Tracer. Technical Solutions products are sold largely through a global network of independent distributors and are highly engineered and sold on a project basis via a network of sales and service professionals.

Customers

Technical Solutions customers include electrical distributors, data center contractors, original equipment manufacturers, contractors mainly of greenfield developments and maintenance contractors. Technical Solutions has developed a global installed base of customers.

Seasonality

Technical Solutions generally experiences increased demand for thermal protection products and services during the fall and winter months in the Northern Hemisphere.

Competition

Within Technical Solutions, equipment protection faces significant competition in the verticals it serves, particularly within the communications industry, where product design, prototyping, global supply, price competition and customer service are significant factors. However, consolidation, globalization and outsourcing are visible trends in the marketplace and typically play to the strengths of a large and globally positioned supplier. The industries and verticals served by the thermal management business are highly fragmented, comprising local markets and niches.

INFORMATION REGARDING ALL REPORTABLE SEGMENTS

Backlog of orders by segment

	December 31
In millions	2013		2012		$ change			% change
Valves & Controls	$	1,353.2	$	1,412.5	$	(59.3	)	(4.2	)%
Process Technologies	298.7		287.7		11.0			3.8
Flow Technologies	352.4		471.2		(118.8		)	(25.2	)
Technical Solutions	218.7		290.4		(71.7		)	(24.7	)
Total	$	2,223.0	$	2,461.8	$	(238.8	)	(9.7	)%

Backlog from Valves & Controls consists of business in the energy and industrial verticals. Generally, backlog from Valves & Controls has a longer manufacturing cycle and products typically ship within six to twelve months of the date on which a customer places an order. Backlog from Process Technologies, Flow Technologies and Technical Solutions typically has a shorter manufacturing cycle and products generally ship within 90 days of the date on which a customer places an order. A substantial portion of our revenues, however, result from orders received and product delivered in the same month. We record as part of our backlog all orders from external customers, which represent firm commitments, and are supported by a purchase order or other legitimate contract. We expect the majority of our backlog from all segments at December 31, 2013 will be filled in 2014.

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Research and development

We conduct research and development activities primarily in our own facilities. These efforts consist primarily of the development of new products, product applications and manufacturing processes. Research and development expenditures during 2013, 2012 and 2011 were $125.8 million, $93.6 million and $78.2 million, respectively.

Environmental

Environmental matters are discussed in ITEM 3, ITEM 7 and ITEM 8, Note 16 of the Notes to Consolidated Financial Statements, included in this Form 10-K.

Raw materials

The principal materials we use in manufacturing our products are electric motors, mild steel, stainless steel, electronic components, plastics (resins, fiberglass, epoxies), copper and paint (powder and liquid). In addition to the purchase of raw materials, we purchase some finished goods for distribution through our sales channels.

We purchase the materials we use in various manufacturing processes on the open market and the majority is available through multiple sources which are in adequate supply. We have not experienced any significant work stoppages to date due to shortages of materials. We have certain long-term commitments, principally price commitments, for the purchase of various component parts and raw materials and believe that it is unlikely that any of these agreements would be terminated prematurely. Alternate sources of supply at competitive prices are available for most materials for which long-term commitments exist and we believe that the termination of any of these commitments would not have a material adverse effect on our financial position, results of operations or cash flows.

Certain commodities, such as metals and resin, are subject to market and duty-driven price fluctuations. We manage these fluctuations through several mechanisms, including long-term agreements with price adjustment clauses for significant commodity market movements in certain circumstances. Prices for raw materials, such as metals and resins, may trend higher in the future.

Intellectual property

Patents, non-compete agreements, proprietary technologies, customer relationships, trademarks, trade names and brand names are important to our business. However, we do not regard our business as being materially dependent upon any single patent, non-compete agreement, proprietary technology, customer relationship, trademark, trade name or brand name.

Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise. We do not expect the termination of patents, patent applications or license agreements to have a material adverse effect on our financial position, results of operations or cash flows.

Employees

As of December 31, 2013, we employed 28,600 people worldwide, of which 9,300 were in the United States and 10,900 were covered by collective bargaining agreements or works councils. We believe that our relations with the labor unions have generally been good.

Captive insurance subsidiary

We insure certain general and product liability, property, workers’ compensation and automobile liability risks through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses. Accruals with respect to liabilities insured by third parties, such as liabilities arising from acquired businesses, pre-Penwald liabilities and those of certain Non-U.S. operations are established.

Matters pertaining to Penwald are discussed in ITEM 3 and ITEM 8, Note 1 of the Notes to Consolidated Financial Statements – Insurance Subsidiary, included in this Form 10-K.

Available information

We make available free of charge (other than an investor’s own Internet access charges) through our Internet website (http://www.pentair.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with or furnish it to, the Securities and Exchange Commission. Reports of beneficial ownership filed by our directors and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our website. We are not including the information contained on our website as part of or incorporating it by reference into, this Annual Report on Form 10-K.

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ITEM 1A.    RISK FACTORS

You should carefully consider all of the information in this document and the following risk factors before making an investment decision regarding our securities. Any of the following risks could materially and adversely affect our business, financial condition, results of operations, cash flows and the actual outcome of matters as to which forward-looking statements are made in this document. While we believe we have identified and discussed below the material risks affecting us, there may be additional risks and uncertainties that we do not presently know or that we do not currently believe to be material that may adversely affect our business, financial condition, results of operations and cash flows in the future.

Risks Relating to Our Business

General global economic and business conditions affect demand for our products.

We compete in various geographic regions and product markets around the world. Among these, the most significant are global industrial markets and residential markets. Many of our businesses have experienced periodic economic downturns. Important factors for our businesses and the businesses of our customers include the overall strength of the economy and our customers’ confidence in the economy, industrial and governmental capital spending, the strength of the residential and commercial real estate markets, unemployment rates, availability of consumer and commercial financing, interest rates, and energy and commodity prices. While we attempt to minimize our exposure to economic or market fluctuations by serving a balanced mix of end markets and geographic regions, any of these factors, individually or in the aggregate, or a significant or sustained downturn in a specific end market or geographic region could materially and adversely affect our business, financial condition, results of operations and cash flows.

We compete in attractive markets with a high level of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products.

The markets for our products and services are geographically diverse and highly competitive. We compete against large and well-established national and global companies, as well as regional and local companies and lower cost manufacturers. We compete based on technical expertise, reputation for quality and reliability, timeliness of delivery, previous installation history, contractual terms and price. Some of our competitors, in particular smaller companies, attempt to compete based primarily on price, localized expertise and local relationships, especially with respect to products and applications that do not require a great deal of engineering or technical expertise. In addition, during economic downturns average selling prices tend to decrease as market participants compete more aggressively on price. If we are unable to continue to differentiate our products, services and solutions, or if we are forced to cut prices or to incur additional costs to remain competitive, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Our future growth is dependent upon our ability to continue to adapt our products, services and organization to meet the demands of local markets in both developed and emerging economies and by developing or acquiring new technologies that achieve market acceptance with acceptable margins.

We operate in global markets that are characterized by customer demand that is often global in scope but localized in delivery. We compete with thousands of smaller regional and local companies that may be positioned to offer products produced at lower cost than ours, or to capitalize on highly localized relationships and knowledge that are difficult for us to replicate. Also, in several emerging markets potential customers prefer local suppliers, in some cases because of existing relationships and in other cases because of local legal restrictions or incentives that favor local businesses. Accordingly, our future success depends upon a number of factors, including our ability to adapt our products, services, organization, workforce and sales strategies to fit localities throughout the world, particularly in high growth emerging markets; identify emerging technological and other trends in our target end-markets; and develop or acquire competitive products and services and bring them to market quickly and cost-effectively. We have chosen to focus our growth initiatives in specific end markets and geographies, but we cannot provide assurance that these growth initiatives will be sufficient to offset revenue declines in other markets. The failure to effectively adapt our products or services could materially and adversely affect our business, financial condition, results of operations and cash flows.

Our business strategy includes acquiring companies and making investments that complement our existing businesses. These acquisitions and investments could be unsuccessful or consume significant resources, which could adversely affect our operating results.

We continue to analyze and evaluate the acquisition of strategic businesses or product lines with the potential to strengthen our industry position or enhance our existing set of product and services offerings. There can be no assurance that we will identify or successfully complete transactions with suitable acquisition candidates in the future or that completed acquisitions will be successful. Acquisitions and investments may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. Acquisitions involve numerous other risks, including:

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• diversion of management time and attention from daily operations;

• difficulties integrating acquired businesses, technologies and personnel into our business;

• difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;

• inability to obtain required regulatory approvals and/or required financing on favorable terms;

• potential loss of key employees, key contractual relationships or key customers of acquired companies or of ours;

• assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including risks related to the U.S. Foreign Corrupt Practices Act (the “FCPA”); and

• dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities.

It may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our business operations. Any acquisitions or investments may ultimately harm our business, financial condition, results of operations and cash flows, as such acquisitions may not be successful and may ultimately result in impairment charges.

We are exposed to political, regulatory, economic and other risks that arise from operating a multinational business.

Sales outside of the United States for the year ended December 31, 2013 accounted for 54 percent of our net sales. Further, most of our businesses obtain some products, components and raw materials from Non-U.S. suppliers. Accordingly, our business is subject to the political, regulatory, economic and other risks that are inherent in operating in numerous countries. These risks include:

• changes in general economic and political conditions in countries where we operate, particularly in emerging markets;

• relatively more severe economic conditions in some international markets than in the United States;

• the difficulty of enforcing agreements and collecting receivables through foreign legal systems;

• the difficulty of communicating and monitoring standards and directives across our global network of after-market service centers and manufacturing facilities;

• trade protection measures and import or export licensing requirements and restrictions;

• the possibility of terrorist action affecting us or our operations;

• the threat of nationalization and expropriation;

• the imposition of tariffs, exchange controls or other trade restrictions;

• difficulty in staffing and managing widespread operations in non-U.S. labor markets;

• changes in tax treaties, laws or rulings that could have an adverse impact on our effective tax rate;

• limitations on repatriation of earnings;

• the difficulty of protecting intellectual property in foreign countries; and

• changes in and required compliance with a variety of Non-U.S. laws and regulations.

Our success depends in part on our ability to anticipate and effectively manage these and other risks. We cannot assure you that these and other factors will not have a material adverse effect on our international operations or on our business as a whole.

Volatility in currency exchange rates may adversely affect our financial condition, results of operations and cash flows.

Sales outside of the United States for the year ended December 31, 2013 accounted for 54 percent of our net sales. Our financial statements reflect translation of items denominated in non-U.S. currencies to U.S. dollars. Therefore, if the U.S. dollar strengthens in relation to the principle non-U.S. currencies from which we derive revenue as compared to a prior period, our U.S. dollar reported revenue and income will effectively be decreased to the extent of the change in currency valuations, and vice-versa. Changes in the relative values of currencies occur regularly and in some instances, may have a significant effect on our financial condition, results of operations and cash flows.

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Our future revenue depends in part on the existence of and our ability to win new contracts for major capital projects.

A significant portion of our revenue in Technical Solutions and Flow Technologies is derived from major capital projects, including water pipeline and desalination projects in Flow Technologies. The number of such projects we may win in any year fluctuates, and is dependent upon the general availability of such projects and our ability to bid successfully for them. If negative market conditions arise, fewer such projects may be available, and if we fail to secure adequate financial arrangements or required governmental approvals we may not be able to pursue particular projects. Either condition could materially and adversely affect our business, financial condition, results of operations and cash flows.

We maintain a sizable backlog and the timing of our conversion of revenue out of backlog is uncertain. Our inability to convert backlog into revenue, whether due to factors that are within or outside of our control, could adversely affect our revenue and profitability.

The timing of our conversion of revenue out of backlog is subject to a variety of factors that may cause delays, many of which, including fluctuations in our customers’ delivery schedules, are beyond our control. This is especially true with respect to major global capital projects, where the extended timeline for project completion and invoice satisfaction increases the likelihood for delays in the conversion of backlog related to modifications and order cancellations. Such delays may lead to significant fluctuations in results of operations and cash flows from quarter to quarter, making it difficult to predict our financial performance on a quarterly basis. Further, while we believe that historical order cancellations have not been significant, if we were to experience a significant amount of cancellations of or reductions in orders, it would reduce our backlog and, consequently, our future sales and results of operations.

Material cost and other inflation have adversely affected and could continue to affect our results of operations.

In the past, we have experienced material cost and other inflation in a number of our businesses. We strive for productivity improvements and implement increases in selling prices to help mitigate cost increases in raw materials (especially metals and resins), energy and other costs such as pension, health care and insurance. We continue to implement operational initiatives in order to mitigate the impacts of this inflation and continuously reduce our costs. We cannot provide assurance, however, that these actions will be successful in managing our costs or increasing our productivity. Continued cost inflation or failure of our initiatives to generate cost savings or improve productivity would likely negatively impact our results of operations.

We are exposed to liquidated damages in many of our customer contracts.

Many of our customer contracts contain liquidated damages provisions in the event that we fail to perform our obligations thereunder in a timely manner or in accordance with agreed terms, conditions and standards. Liquidated damages provisions typically provide for a payment to be made by us to the customer if we fail to deliver a product or service on time. We generally try to limit our exposure to a maximum penalty within a contract. However, because our products are often components of large and complex systems or capital projects, if we incur liquidated damages they may materially and adversely affect our business, financial condition, results of operations and cash flows.

Certain of our products require certifications by regulators or standards organizations, and our failure to obtain or maintain such certifications could negatively impact our business.

In certain industries and for certain applications, in particular with respect to our pressure relief valves and valves used in the nuclear power generation industry, we must obtain certifications for our products or installations by regulators or standards organizations. As we expand our products offering into emerging markets, we will need to comply with additional and potentially different certification requirements. If we fail to obtain required certifications for our products, or if we fail to maintain such certifications on our products after they have been certified, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Intellectual property challenges may hinder our ability to develop, engineer and market our products.

Patents, non-compete agreements, proprietary technologies, customer relationships, trademarks, trade names and brand names are important to our business. Intellectual property protection, however, may not preclude competitors from developing products similar to ours or from challenging our names or products. Our pending patent applications, and our pending copyright and trademark registration applications, may not be allowed or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us a significant competitive advantage. Over the past few years, we have noticed an increasing tendency for participants in our markets to use conflicts over and challenges to intellectual property as a means to compete. Patent and trademark challenges increase our costs to develop, engineer and market our products. We may need to spend significant resources monitoring our intellectual property rights and we may or may not be able to detect infringement by third parties. If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could harm our business, financial condition, results of operations and cash flows.

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We have significant goodwill and intangible assets and future impairment of our goodwill and intangible assets could have a material negative impact on our financial results.

We test goodwill and indefinite-lived intangible assets for impairment on an annual basis, by comparing the estimated fair value of each of our reporting units to their respective carrying values on their balance sheets. As of December 31, 2013 our goodwill and intangible assets were $6,910.3 million and represented 59% of our total assets. Long-term declines in projected future cash flows could result in future goodwill and intangible asset impairments. Because of the significance of our goodwill and intangible assets, any future impairment of these assets could have a material adverse effect on our financial results.

In the fourth quarter of each year, we complete our annual goodwill and intangible assets impairment reviews. As a result, we recorded a pre-tax non-cash impairment charge of $11.0 million and $60.7 million for trade name intangibles in the fourth quarter of 2013 and 2012, respectively. These represent impairments of a trade name in Technical Solutions in 2013 and trade names in Flow Technologies, Process Technologies and Technical Solutions in 2012. The impairment charges were the result of rebranding strategies implemented in the fourth quarter of 2013 and 2012. In the fourth quarter of 2011, we recorded a pre-tax non-cash impairment charge of $200.5 million for goodwill in Process Technologies. The goodwill impairment charge resulted from changes in our forecasts in light of economic conditions and due to continued softness in the end-markets served by residential water treatment components.

We may be adversely affected by work stoppages, union negotiations, labor disputes and other matters associated with our labor force.

As of December 31, 2013, 10,900 of our employees were covered by collective bargaining agreements or works councils. Although we believe that our relations with the labor unions and work councils that represent our employees are generally good and we have experienced no material strikes and only minor work stoppages recently, no assurances can be made that we will not experience in the future these and other types of conflicts with labor unions, works councils, other groups representing employees or our employees generally, or that any future negotiations with our labor unions will not result in significant increases in our cost of labor.

Seasonality of sales and weather conditions may adversely affect our financial results.

We experience seasonal demand in a number of markets within Process Technologies, Flow Technologies and Technical Solutions. In Process Technologies, end-user demand for pool equipment in our primary markets follows warm weather trends and is at seasonal highs from April to August. In Flow Technologies, demand for residential water supply products, infrastructure and agricultural products follows warm weather trends and is at seasonal highs from April to August. The magnitude of the sales increase in both Process Technologies and Flow Technologies is partially mitigated by employing some advance sale or “early buy” programs (generally including extended payment terms and/or additional discounts). Also in Flow Technologies, we generally experience increased demand during Australia’s prime agricultural seasons. Seasonal effects may vary from year to year and are impacted by weather patterns, particularly by temperatures, heavy flooding and droughts. Technical Solutions generally experiences increased demand for thermal protection products and services during the fall and winter months in the Northern Hemisphere. We cannot provide assurance that seasonality and weather conditions will not have a material adverse effect on our results of operations.

Our share price may fluctuate significantly.

We cannot predict the prices at which our common shares may trade. The market price of our common shares may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

• actual or anticipated fluctuations in our operating results due to factors related to our business;

• success or failure of our business strategy;

• our quarterly or annual earnings, or those of other companies in our industry;

• our ability to obtain third-party financing as needed;

• announcements by us or our competitors of significant acquisitions or dispositions;

• changes in accounting standards, policies, guidance, interpretations or principles;

• changes in earnings estimates by us or securities analysts or our ability to meet those estimates;

• the operating and share price performance of other comparable companies;

• investor perception of us;

• natural or other environmental disasters that investors believe may affect us;

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• overall market fluctuations;

• results from any material litigation, including asbestos claims, government investigations or environmental liabilities;

• changes in laws and regulations affecting our business; and

• general economic conditions and other external factors.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common shares.

Risks Relating to Legal, Regulatory and Compliance Matters

Our subsidiaries are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows.

Our subsidiaries, along with numerous other companies, are named as defendants in a substantial number of lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third parties. Each case typically names between dozens to hundreds of corporate defendants. Historically, our subsidiaries have been identified as defendants in asbestos-related claims. We have experienced an increase in the number of asbestos-related lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims. A large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed or withdrawn. Our strategy has been, and continues to be, to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, only where appropriate, settling claims before trial. As of December 31, 2013, there were approximately 2,000 lawsuits pending against our subsidiaries. A lawsuit might include several claims, and we have approximately 2,200 claims outstanding as of December 31, 2013. We cannot predict with certainty the extent to which we will be successful in litigating or otherwise resolving lawsuits in the future and we continue to evaluate different strategies related to asbestos claims filed against us including entity restructuring and judicial relief. Unfavorable rulings, judgments or settlement terms could have a material adverse impact on our business and financial condition, results of operations and cash flows.

We currently record an estimated liability related to pending claims and future claims, including related defense costs, based on a number of key assumptions and estimation methodologies. These assumptions are derived from historical claims experience and reflect our expectations about future claim activities. These assumptions about the future may or may not prove accurate, and accordingly, we may incur additional liabilities in the future. A change in one or more of the inputs or the methodology that we use to estimate the asbestos liability could materially change the estimated liability and associated cash flows for pending and future claims. Although it is possible that we will incur additional costs for asbestos claims filed beyond what we have currently recorded, we do not believe there is a reasonable basis for estimating those costs at this time. On an annual basis, we review, and update as appropriate, such estimated asbestos liabilities and assets and the underlying assumptions. Such an update could result in a material change in such estimated assets and liabilities.

We also record an asset that represents our best estimate of probable recoveries from insurers or other responsible parties for the estimated asbestos liabilities. There are significant assumptions made in developing estimates of asbestos-related recoveries, such as policy triggers, policy or contract interpretation, success in litigation in certain cases, the methodology for allocating claims to policies and the continued solvency of the insurers or other responsible parties. The assumptions underlying the recorded asset may not prove accurate, and as a result, actual performance by our insurers and other responsible parties could result in lower receivables and cash flows expected to reduce our asbestos costs. We believe it is possible that the cost of asbestos claims filed beyond our estimation period, net of expected recoveries, could have a material adverse effect on our financial condition, results of operations and cash flows.

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We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws outside the United States.

The FCPA and similar anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or other persons for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity, with more frequent and aggressive investigations and enforcement proceedings by both the U.S. Department of Justice (“DOJ”) and the SEC, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that are recognized as having governmental and commercial corruption and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. Because many of our customers and end users are involved in infrastructure construction and energy production, they are often subject to increased scrutiny by regulators. We cannot assure you that our internal control policies and procedures will always protect us from reckless or criminal acts committed by our employees or third-party intermediaries. In the event that we believe or have reason to believe that our employees or agents have or may have violated applicable anti-corruption laws, including the FCPA we may be required to investigate or have outside counsel investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management. Violations of these laws may result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.

Prior to the Merger, the Flow Control business was subject to investigations by the DOJ and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the FCPA. Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco’s own internal investigations. As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ, pursuant to which the Flow Control business is for a three year period subject to yearly reporting to the DOJ concerning its continuing compliance efforts. As a result, the Flow Control business may be subject to investigations in other jurisdictions or suffer other criminal or civil penalties or adverse impacts, including being subject to lawsuits brought by private litigants, each of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our failure to satisfy international trade compliance regulations may adversely affect us.

Our global operations require importing and exporting goods and technology across international borders on a regular basis. Certain of the products we manufacture are “dual use” products, which are products that may have both civil and military applications, or may otherwise be involved in weapons proliferation, and are often subject to more stringent export controls. From time to time, we obtain or receive information alleging improper activity in connection with imports or exports. Our policy mandates strict compliance with U.S. and non-U.S. trade laws applicable to our products. However, even when we are in strict compliance with law and our policies, we may suffer reputational damage if certain of our products are sold through various intermediaries to entities operating in sanctioned countries. When we receive information alleging improper activity, our policy is to investigate that information and respond appropriately, including, if warranted, reporting our findings to relevant governmental authorities. Nonetheless, we cannot provide assurance that our policies and procedures will always protect us from actions that would violate U.S. and/or non-U.S. laws. Any improper actions could subject us to civil or criminal penalties, including material monetary fines, or other adverse actions including denial of import or export privileges, and could damage our reputation and business prospects.

Legislative action by the U.S. Congress could adversely affect us.

Legislative action could be taken by the U.S. Congress which, if ultimately enacted, could override tax treaties, or modify tax statutes or regulation upon which we rely. We cannot predict the outcome of any specific legislative proposals. If proposals were enacted that had the effect of disregarding our incorporation in Switzerland or limiting our ability as a Swiss company to take advantage of the tax treaties between Switzerland and the United States, we could be subject to increased taxation, which could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

We are exposed to potential environmental and other laws, liabilities and litigation.

We are subject to U.S. federal, state, local and Non-U.S. laws and regulations governing our environmental practices, public and worker health and safety, and the indoor and outdoor environment. Compliance with these environmental, health and safety regulations could require us to satisfy environmental liabilities, increase the cost of manufacturing our products or otherwise adversely affect our business, financial condition and results of operations. Any violations of these laws by us could cause us to incur unanticipated liabilities that could harm our operating results and cause our business to suffer. We are also required to comply with various environmental laws and maintain permits, some of which are subject to discretionary renewal from time to time, for many of our businesses and we could suffer if we are unable to renew existing permits or to obtain any additional

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permits that we may require. Compliance with environmental requirements also could require significant operating or capital expenditures or result in significant operational restrictions. We cannot assure you that we have been or will be at all times in compliance with environmental and health and safety laws. If we violate these laws, we could be fined, criminally charged or otherwise sanctioned by regulators.

We have been named as defendant, target or a potentially responsible party (“PRP”) in a number of environmental clean-ups relating to our current or former business units. We have disposed of a number of businesses in recent years and in certain cases, we have retained responsibility and potential liability for certain environmental obligations. We have received claims for indemnification from certain purchasers. We may be named as a PRP at other sites in the future for existing business units, as well as both divested and acquired businesses. In addition to cleanup actions brought by governmental authorities, private parties could bring personal injury or other claims due to the presence of, or exposure to, hazardous substances.

Certain environmental laws impose liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at their properties or at properties at which they have disposed of hazardous substances. We have projects underway at several current and former manufacturing facilities to investigate and remediate environmental contamination resulting from our past operations or by other businesses that previously owned or used the properties. The cost of cleanup and other environmental liabilities can be difficult to accurately predict. In addition, environmental requirements change and tend to become more stringent over time. Thus, we cannot provide assurance that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

We are exposed to potential regulatory, financial and reputational risks related to certain “conflict minerals."

In 2012, the SEC adopted disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo or adjoining countries, as required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The final rules impose inquiry, diligence and disclosure obligations with respect to “conflict minerals,” defined as tin, tantalum, tungsten and gold, that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. The first disclosure deadline under the final rules is May 31, 2014, and by that date, an SEC reporting company must make disclosures regarding products it sold in calendar 2013. Certain of these minerals are used extensively in components manufactured by our suppliers (or in components incorporated by our suppliers into components supplied to us) for use in our products. Under the final rules, an SEC reporting company must conduct a country of origin inquiry that is reasonably designed to determine whether any of the “conflict minerals” that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by the company originated in the Democratic Republic of the Congo or an adjoining country. If any such “conflict minerals” originated in the Democratic Republic of Congo or an adjoining country, the final rules require the issuer to exercise due diligence on the source of such “conflict minerals” and their chain of custody with the ultimate objective of determining whether the “conflict minerals” directly or indirectly financed or benefited armed groups in the Democratic Republic of the Congo or an adjoining country. The issuer must then prepare and file with the SEC a report regarding its diligence efforts. We have incurred and expect to incur significant costs to conduct our country of origin inquiry and, if necessary, to exercise such due diligence.

We have a very large number of suppliers and our supply chain is very complex and multifaceted. While we have no intention to use minerals sourced from the Democratic Republic of Congo or adjoining countries that are not “conflict free” (meaning that they do not contain “conflict minerals” that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country), a significant number of our suppliers are small businesses, and those small businesses have limited or no resources to track their sources of minerals. As a result, we expect significant difficulty in determining the country of origin or the source and chain of custody for all “conflict minerals” used in our products and disclosing that our products are “conflict free.” We may face reputational challenges if we are unable to verify the country of origin or the source and chain of custody for all “conflict minerals” used in our products or if we are unable to disclose that our products are “conflict free.” Implementation of these rules may also affect the sourcing and availability of some minerals necessary to the manufacture of our products and may affect the availability and price of “conflict minerals” capable of certification as “conflict free.” Accordingly, we may incur significant costs as a consequence of these rules, which may adversely affect our business, financial condition or results of operations.

We are exposed to certain regulatory and financial risks related to climate change.

Climate change is receiving ever increasing attention worldwide. Many scientists, legislators and others attribute global warming to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. The U.S. Congress and federal and state regulatory agencies have been considering legislation and regulatory proposals that would regulate and limit greenhouse gas emissions. It is uncertain whether, when and in what form a federal mandatory carbon dioxide emissions reduction program may be adopted. Similarly, certain countries have adopted the Kyoto Protocol and this and other existing international initiatives or those under consideration could affect our international operations. To the extent our customers, particularly those involved in the oil and gas, power generation, petrochemical processing or petroleum refining industries, are subject to any of these or other similar

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proposed or newly enacted laws and regulations, we are exposed to risks that the additional costs by customers to comply with such laws and regulations could impact their ability or desire to continue to operate at similar levels in certain jurisdictions as historically seen or as currently anticipated, which could negatively impact their demand for our products and services. In addition, new laws and regulations that might favor the increased use of non-fossil fuels, including nuclear, wind, solar and bio-fuels or that are designed to increase energy efficiency, could dampen demand for oil and gas production or power generation resulting in lower spending by customers for our products and services. These actions could also increase costs associated with our operations, including costs for raw materials and transportation. Because it is uncertain what laws will be enacted, we cannot predict the potential impact of such laws on our future financial condition, results of operations and cash flows.

Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services. We are exposed to potential regulatory, financial and reputational risks relating to the protection of our data.

We rely upon information technology systems and networks in connection with a variety of business activities, some of which are managed by third parties. Additionally, we collect and store data that is sensitive to Pentair and its employees, customers, dealers and suppliers. The secure operation of these information technology systems and networks, and the processing and maintenance of this data is critical to our business operations and strategy. Information technology security threats -- from user error to attacks designed to gain unauthorized access to our systems, networks and data -- are increasing in frequency and sophistication. Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats. These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of the data we process and maintain. Establishing systems and processes to address these threats and changes in legal requirements relating to data collection and storage may increase our costs. We have identified attempts to gain unauthorized access to our information technology systems and networks. To our knowledge, no such attack was ultimately successful in exporting sensitive data or controlling sensitive systems or networks. Should such an attack succeed it could expose us and our employees, customers, dealers and suppliers to misuse of information or systems, the compromising of confidential information, theft of assets, manipulation and destruction of data, defective products, production downtimes and operations disruptions, and breach of privacy, which may require notification under data privacy and other applicable laws. The occurrence of any of these events could adversely affect our reputation, competitive position, business and results of operations. In addition, such breaches in security could result in litigation, regulatory action and potential liability and the costs and operational consequences of implementing further data protection measures.

Our results of operations may be negatively impacted by litigation.

Our businesses expose us to potential litigation, such as product liability claims relating to the design, manufacture and sale of our products. While we currently maintain what we believe to be suitable product liability insurance, we cannot provide assurance that we will be able to maintain this insurance on acceptable terms or that this insurance will provide adequate protection against potential or previously existing liabilities. In addition, we self-insure a portion of product liability claims. Successful claims against us for significant amounts could materially and adversely affect our product reputation, financial condition, results of operations and cash flows.

Risks Relating to the Distribution and the Merger

We may not realize the growth opportunities and cost synergies that are anticipated from the Merger.

The benefits that are expected to result from the Merger will depend, in part, on our ability to realize the anticipated growth opportunities and cost synergies as a result of the Merger. Our success in realizing these growth opportunities and cost synergies, and the timing of this realization, depends on the successful integration of the Pentair, Inc. and Flow Control businesses. Even if we are able to integrate the Pentair, Inc. and Flow Control businesses successfully, this integration may not result in the realization of the full benefits of the growth opportunities and cost synergies that we currently expect from this integration or that these benefits will be achieved within the anticipated time frame or at all. For example, we may not be able to eliminate duplicative costs. Moreover, we may incur substantial expenses in connection with the integration of the Pentair, Inc. and Flow Control businesses. While we anticipate that certain expenses will be incurred, such expenses are difficult to estimate accurately, and may exceed current estimates. Accordingly, the benefits from the Merger may be offset by costs incurred or delays in integrating the businesses.

The integration of the Pentair, Inc. and Flow Control businesses following the Merger may present significant challenges.

There is a significant degree of difficulty and management distraction inherent in the process of integrating the Pentair, Inc. and Flow Control businesses. These difficulties include:

• the challenge of integrating the Pentair, Inc. and Flow Control businesses while carrying on the ongoing operations of each entity;

• the necessity of coordinating geographically separate organizations;

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• the challenge of integrating the business cultures of the Pentair, Inc. and Flow Control businesses, which may prove to be incompatible;

• the challenge and cost of integrating the information technology systems of the Pentair, Inc. and Flow Control businesses; and

• the potential difficulty in retaining key executives and personnel of the Pentair, Inc. and Flow Control businesses.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the Pentair, Inc. and Flow Control businesses. Members of our senior management may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage our company, service existing customers, attract new customers and develop new products or strategies. If senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, the Pentair, Inc. and Flow Control businesses could suffer. There can be no assurance that we will successfully or cost-effectively integrate the Pentair, Inc. and Flow Control businesses. The failure to do so could have a material adverse effect on our business, financial condition and results of operations.

We share responsibility for certain income tax liabilities for tax periods prior to and including the date of the Distribution.

In connection with the Distribution, we entered into a tax sharing agreement (the “2012 Tax Sharing Agreement”) with Tyco and The ADT Corporation (“ADT”), which governs the rights and obligations of ADT, Tyco and us for certain pre-Distribution tax liabilities, including Tyco's obligations under a separate tax sharing agreement (the “2007 Tax Sharing Agreement”) entered into by Tyco, Covidien Ltd. (“Covidien”) and TE Connectivity Ltd. (“TE Connectivity”) in connection with the 2007 distributions of Covidien and TE Connectivity by Tyco (the “2007 Separation”).

The 2007 Tax Sharing Agreement governs the rights and obligations of Tyco, Covidien and TE Connectivity with respect to certain pre-2007 Separation tax liabilities and certain tax liabilities arising in connection with the 2007 Separation. More specifically, Tyco, Covidien and TE Connectivity share 27%, 42% and 31%, respectively, of income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and TE Connectivity's U.S. and certain non-U.S. 2007 and prior income tax returns. In addition, in the event that the 2007 Separation or certain related transactions are determined to be taxable as a result of actions taken after the 2007 Separation by Tyco, Covidien or TE Connectivity, the party responsible for such failure would be responsible for all taxes imposed on Tyco, Covidien or TE Connectivity as a result thereof. If none of the companies is responsible for such failure, then Tyco, Covidien and TE Connectivity would be responsible for such taxes, in the same manner and in the same proportions as other shared tax liabilities under the 2007 Tax Sharing Agreement. Costs and expenses associated with the management of these shared tax liabilities are generally shared equally among the parties.

The 2012 Tax Sharing Agreement provides that we, Tyco and ADT will share (i) certain pre-Distribution income tax liabilities that arise from adjustments made by tax authorities to our, Tyco's and ADT's U.S. income tax returns, and (ii) payments required to be made by Tyco with respect to the 2007 Tax Sharing Agreement (the liabilities in clauses (i) and (ii) collectively, “Shared Tax Liabilities”). Tyco is responsible for the first $500 million of Shared Tax Liabilities. We and ADT will share 42% and 58%, respectively, of the next $225 million of Shared Tax Liabilities. We, ADT and Tyco will share 20%, 27.5% and 52.5%, respectively, of Shared Tax Liabilities above $725 million. Costs and expenses associated with the management of Shared Tax Liabilities will generally be shared 20% by us, 27.5% by ADT and 52.5% by Tyco.

With respect to years prior to and including the 2007 Separation, tax authorities have raised issues and proposed tax adjustments that are generally subject to the sharing provisions of the 2007 Tax Sharing Agreement and which may require Tyco to make a payment to a taxing authority, Covidien or TE Connectivity. With respect to adjustments raised by the IRS, although Tyco has resolved a substantial number of these adjustments, a few significant items remain open with respect to the audit of the 1997 through 2004 years. As of the date hereof, Tyco has not been able to resolve certain open items, which primarily involve the treatment of certain intercompany debt issued during the period, through the IRS appeals process. The ultimate resolution of these matters is uncertain and could result in Tyco being responsible for a greater amount than it expects under the 2007 Tax Sharing Agreement.

On July 1, 2013, Tyco announced that the Internal Revenue Service (“IRS”) issued Notices of Deficiency (“Tyco IRS Notices”) to Tyco asserting that several of Tyco's former U.S. subsidiaries collectively owe additional taxes in the aggregate amount of $883.3 million plus penalties of $154 million based on audits of the 1997 through 2000 tax years of Tyco and its subsidiaries as they existed at that time. These amounts exclude interest and do not reflect the impact on subsequent periods if the IRS challenge to Tyco's tax filings as described below is ultimately successful. If the IRS should successfully assert its position, our share of the collective liability, if any, would be determined pursuant to the 2007 Tax Sharing Agreement and the 2012 Tax Sharing Agreement. Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments.

As we have previously disclosed, in connection with U.S. federal tax audits of Tyco and its subsidiaries, the IRS has previously raised issues and proposed tax adjustments for periods beginning with the 1997 tax year. The adjustments now asserted by the

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IRS under the Tyco IRS Notices primarily relate to the treatment of certain intercompany debt transactions. The IRS has asserted in the Tyco IRS Notices that substantially all of the intercompany debt originated during the 1997 - 2000 period should not be treated as debt for U.S. federal income tax purposes, and has therefore disallowed interest and related deductions recognized associated with that intercompany debt on the U.S. income tax returns for those periods totaling approximately $2.9 billion. If the IRS is successful in asserting its claim, it would have an adverse impact on interest deductions related to the same Tyco intercompany debt in subsequent time periods, totaling approximately $6.6 billion, which Tyco has advised us that it expects the IRS to disallow. Under the 2012 Tax Sharing Agreement, Tyco has the right to administer, control, and settle all U.S. income tax audits for periods prior to and including the Distribution. As mentioned above, Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments.

Any payment that Tyco is required to make under the 2007 Tax Sharing Agreement, including if the IRS were to prevail with respect to the matter set forth above, could result in a material liability for us under the 2012 Tax Sharing Agreement. To the extent we are responsible for any liability under the 2012 Tax Sharing Agreement, and indirectly the 2007 Tax Sharing Agreement, there could be a material adverse impact on our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

If the Merger, Distribution or certain internal transactions undertaken in anticipation of the Distribution are determined to be taxable for U.S. federal income tax purposes, we, our shareholders or Tyco could incur significant U.S. federal income tax liabilities.

Pentair, Inc. and Tyco received private letter rulings from the IRS in connection with the Distribution and the Merger regarding the U.S. federal income tax consequences of the Distribution and the Merger to the effect that, for U.S. federal income tax purposes: the Distribution will qualify as tax-free under Sections 355 and 361 of the Internal Revenue Code of 1986, as amended (the “Code”), except for cash received in lieu of fractional shares; certain internal transactions undertaken in anticipation of the Distribution will qualify for favorable treatment under the Code; the Merger will qualify as a reorganization under Section 368(a) of the Code; certain anticipated post-closing transactions will not prevent the tax-free treatment of the Distribution or the Merger; and Section 367(a)(1) of the Code will not cause the Merger to be taxable to Pentair, Inc. shareholders (except for a U.S. shareholder who is or will be a “five-percent transferee shareholder” within the meaning of applicable Treasury Regulations but who does not enter into a “gain recognition agreement with the IRS). In addition, Tyco received a legal opinion confirming the tax-free status of the Distribution for U.S. federal income tax purposes

and Tyco and Pentair, Inc. received legal opinions to the effect that the Merger will qualify as a reorganization under section 368(a) of the Code and that Section 367(a)(1) of the Code will not cause the Merger to be taxable to Pentair, Inc. shareholders (except for a U.S. shareholder who is or will be a “five-percent transferee shareholder” within the meaning of applicable Treasury Regulations but who does not enter into a “gain recognition agreement” with the IRS).

The private letter rulings and opinions relied on certain facts and assumptions, and certain representations and undertakings, from us, Tyco and Pentair, Inc. Notwithstanding the private letter rulings and the opinions, the IRS could determine on audit that the Distribution, the internal transactions or the Merger should be treated as taxable transactions if it determines that any of these facts, assumptions, representations or undertakings is not correct or has been violated, or that the Distribution, the internal transactions or the Merger should be taxable for other reasons, including as a result of significant changes in share or asset ownership after the Merger.

If the Distribution ultimately is determined to be taxable, the Distribution could be treated as a taxable dividend or capital gain to Tyco shareholders for U.S. federal income tax purposes, and Tyco shareholders could incur significant U.S. federal income tax liabilities. In addition, Tyco would recognize a gain in an amount equal to the excess of the fair market value of our common shares distributed to Tyco shareholders on the Distribution date over Tyco’s tax basis in such common shares, but such gain, if recognized, generally would not be subject to U.S. federal income tax. However, Tyco could incur significant U.S. federal income tax liabilities if it is ultimately determined that certain internal transactions undertaken in anticipation of the Distribution are taxable. If the Merger ultimately is determined to be taxable, Pentair, Inc. shareholders would recognize taxable gain or loss on their disposition of Pentair, Inc. common shares in the Merger.

Under the terms of the 2012 Tax Sharing Agreement, in the event the Distribution, the ADT distribution, the internal transactions or the Merger were determined to be taxable as a result of actions taken after the Distribution by us, ADT or Tyco, the party responsible for such failure would be responsible for all taxes imposed as a result thereof. If such failure is not the result of actions taken after the Distribution by us, ADT or Tyco, then we, ADT and Tyco would be responsible for any taxes imposed as a result of such determination in the same manner and in the same proportions as we, ADT and Tyco are responsible for Shared Tax Liabilities. Such tax amounts could be significant. In the event that any party to the 2012 Tax Sharing Agreement defaults in its obligation to pay certain taxes to another party that arise as a result of no party’s fault, each non-defaulting party would be responsible for an equal amount of the defaulting party’s obligation to make a payment to another party in respect of such other party’s taxes. In addition, if another party to the 2012 Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, we could be

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legally liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, we may be obligated to pay amounts in excess of our agreed-upon share of our, Tyco’s and ADT’s tax liabilities.

If the Distribution or the Merger are determined to be taxable for Swiss withholding or other tax purposes, we could incur significant Swiss withholding tax or other tax liabilities.

Generally, Swiss withholding tax of 35% is due on dividends and similar distributions to Tyco’s shareholders, regardless of the place of residency of the shareholder. As of January 1, 2011, distributions to shareholders out of qualifying contributed surplus (Kapitaleinlage) accumulated on or after January 1, 1997 are exempt from Swiss withholding tax if certain conditions are met (Kapitaleinlageprinzip). Tyco has obtained a ruling from the Swiss Federal Tax Administration confirming that the Distribution qualifies as payment out of such qualifying contributed surplus and no amount will be withheld by Tyco when making the Distribution.

As a condition to closing of the Merger, Tyco obtained rulings from the Swiss Federal Tax Administration confirming: (i) that the Merger will be a transaction that is generally tax-free for Swiss federal, cantonal, and communal tax purposes (including with respect to Swiss stamp tax and Swiss withholding tax); (ii) the relevant Swiss tax base of an acquisition subsidiary of ours for Swiss tax (including federal and cantonal and communal) purposes; (iii) the relevant amount of capital contribution reserves (Kapitaleinlageprinzip) which will be exempt from Swiss withholding tax in the event of a distribution to our shareholders after the Merger; and (iv) that no Swiss stamp tax will be levied on certain post-Merger restructuring transactions.

These tax rulings rely on certain facts and assumptions, and certain representations and undertakings, from Tyco. Notwithstanding these tax rulings, the Swiss Federal Tax Administration could determine on audit that the Distribution or the Merger or certain internal transactions undertaken in anticipation of the Distribution should be treated as a taxable transaction for withholding tax or other tax purposes if it determines that any of these facts, assumptions, representations or undertakings is not correct or has been violated. If the Distribution or the Merger or certain internal transactions undertaken in anticipation of the Distribution ultimately are determined to be taxable for withholding tax or other tax purposes, we and Tyco could incur material Swiss withholding tax or other tax liabilities that could significantly detract from, or eliminate, the benefits of the Distribution and the Merger. In addition, we could become liable to indemnify Tyco for part of any Swiss withholding tax liabilities to the extent provided under the 2012 Tax Sharing Agreement.

We might not be able to engage in desirable strategic transactions and equity issuances because of restrictions relating to U.S. federal income tax requirements for tax-free distributions.

Our ability to engage in desirable strategic transactions or equity issuances could be significantly limited or restricted in order to preserve, for U.S. federal income tax purposes, the tax-free nature of the Distribution and certain related transactions. Even if the Distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may result in corporate-level gain to Tyco under Section 355(e) of the Code if 50% or more, by vote or value, of our shares or Tyco’s shares are acquired or issued as part of a plan or series of related transactions that includes the Distribution. Any acquisitions or issuances of our shares or Tyco’s shares within two years after the Distribution are generally presumed to be part of such a plan, although we or Tyco may be able to rebut that presumption. For purposes of this test, the Merger might be treated as part of such a plan or series of related transactions, but if so would not, by itself, cause the Distribution to be taxable to Tyco since Pentair, Inc. shareholders acquired less than 50% of our common shares in the Merger. The change in ownership resulting from the Merger, if treated as part of a plan or series of related transactions that includes the Distribution, would be aggregated with other acquisitions or issuances of our shares that occur as part of a plan or series of related transactions that include the Distribution in determining whether a 50% change in ownership has occurred. The process for determining whether a change of ownership has occurred under the tax rules is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. If we do not carefully monitor our compliance with these rules, we could inadvertently cause or permit a change of ownership to occur, triggering our obligation to indemnify Tyco or ADT pursuant to the 2012 Tax Sharing Agreement.

To preserve the tax-free treatment to Tyco of the Distribution, under the 2012 Tax Sharing Agreement, we are prohibited from taking or failing to take any action that prevents the Distribution and related transactions from being tax-free. Further, for the two-year period following the Distribution, without obtaining the consent of Tyco and ADT, a private letter ruling from the IRS or an unqualified opinion of a nationally recognized law firm, we may be prohibited from, among other things:

• approving or allowing any transaction that results in a change in ownership of more than 35% of our common shares, when combined with any other changes in ownership of our common shares,

• redeeming equity securities,

• selling or otherwise disposing of more than 35% of our assets, or

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• engaging in certain internal transactions.

These restrictions may limit our ability to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. Moreover, the 2012 Tax Sharing Agreement also provides that we are responsible for any taxes imposed on Tyco or any of its affiliates or on ADT or any of its affiliates as a result of the failure of the Distribution or the internal transactions to qualify for favorable treatment under the Code if such failure is attributable to certain actions taken after the Distribution by or in respect of us, any of our affiliates or our shareholders.

Risks Relating to Our Liquidity

Disruptions in the financial markets could adversely affect us, our customers and our suppliers by increasing funding costs or reducing availability of credit.

In the normal course of our business, we may access credit markets for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of common shares, capital expenditures and investments in our subsidiaries. Although we expect to have sufficient liquidity to meet our foreseeable needs, our access to and the cost of capital could be negatively impacted by disruptions in the credit markets, which have occurred in the past and made financing terms for borrowers unattractive or unavailable. These factors may make it more difficult or expensive for us to access credit markets if the need arises. In addition, these factors may make it more difficult for our suppliers to meet demand for their products or for prospective customers to commence new projects, as customers and suppliers may experience increased costs of debt financing or difficulties in obtaining debt financing. Disruptions in the financial markets have had adverse effects on other areas of the economy and have led to a slowdown in general economic activity that may continue to adversely affect our businesses. These disruptions may have other unknown adverse effects. One or more of these factors could adversely affect our business, financial condition, results of operations or cash flows.

Covenants in our debt instruments may adversely affect us.

Our credit agreements and indentures contain customary financial covenants. Our ability to meet the financial covenants can be affected by events beyond our control, and we cannot provide assurance that we will meet those tests. A breach of any of these covenants could result in a default under our credit agreements or indentures. Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and, in the case of credit facility lenders, terminate all commitments to extend further credit. If the lenders or trustees accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient assets to repay our credit facilities and our other indebtedness. Furthermore, acceleration of any obligation under any of our material debt instruments will permit the holders of our other material debt to accelerate their obligations, which could have a material adverse effect on our financial condition.

We may increase our debt or raise additional capital in the future, which could affect our financial condition, and may decrease our profitability.

As of December 31, 2013, we had $2.6 billion of total debt outstanding. We may increase our debt or raise additional capital in the future, subject to restrictions in our debt agreements. If our cash flow from operations is less than we anticipate, or if our cash requirements are more than we expect, we may require more financing. However, debt or equity financing may not be available to us on acceptable terms, if at all. If we incur additional debt or raise equity through the issuance of additional capital shares, the terms of the debt or capital shares issued may give the holders rights, preferences and privileges senior to those of holders of our common shares, particularly in the event of liquidation. The terms of the debt may also impose additional and more stringent restrictions on our operations than we currently have. If we raise funds through the issuance of additional equity, the percentage ownership of existing shareholders in our company would decline. If we are unable to raise additional capital when needed, our financial condition could be adversely affected. Also, regardless of the terms of our financings, the amount of our shares that we can issue may be limited because the issuance of our shares may cause the Distribution to be a taxable event for Tyco under Section 355(e) of the Code, and under the 2012 Tax Sharing Agreement, we could be required to indemnify Tyco for that tax. See discussion under “We might not be able to engage in desirable strategic transactions and equity issuances following the Distribution and the Merger because of restrictions relating to U.S. federal income tax requirements for tax-free distributions.”

Our leverage could have a material adverse effect on our business, financial condition or results of operations.

Our ability to make payments on and to refinance our indebtedness, including our existing debt as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or asset sales. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are not able to repay or refinance our debt as it becomes due, we may be forced to sell assets or take other disadvantageous actions, including (i) reducing financing in the future for working capital, capital expenditures and general corporate purposes or (ii) dedicating an unsustainable level of our cash flow from operations to the payment of principal and

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interest on our indebtedness. The lenders who hold such debt could also accelerate amounts due, which could potentially trigger a default or acceleration of any of our other debt.

Risks Relating to Our Jurisdiction of Incorporation in Switzerland

Our status as a Swiss corporation may limit our flexibility with respect to certain aspects of capital management and may cause us to be unable to make distributions without subjecting our shareholders to Swiss withholding tax.

Swiss law allows shareholders to authorize share capital that can be issued by the board of directors without additional shareholder approval. This authorization is limited to 50% of the existing registered share capital and must be renewed by the shareholders every two years. Additionally, subject to specified exceptions, Swiss law grants preemptive rights to existing shareholders to subscribe to any new issuance of shares. Swiss law also does not provide as much flexibility in the various terms that can attach to different classes of shares as the laws of some other jurisdictions. Swiss law also reserves for approval by shareholders certain corporate actions over which a board of directors would have authority in some other jurisdictions. These Swiss law requirements relating to our capital management may limit our flexibility, and situations may arise where greater flexibility would have provided substantial benefits to our shareholders.

Under Swiss law, a Swiss corporation may pay dividends only if the corporation has sufficient distributable profits from previous fiscal years, or if the corporation has distributable reserves, each as evidenced by its audited statutory balance sheet. Distributable reserves are generally recorded either as “free reserves” or as “qualifying contributed surplus” (contributions received from shareholders) in “Capital contribution reserve.” Distributions may be made out of registered share capital—the aggregate par value of a company’s registered shares—only by way of a capital reduction. After the Merger, the amount available for future dividends or capital reductions from reserve from capital contributions on a Swiss withholding tax free basis is CHF 8.8 billion. We will not be able to pay dividends or make other distributions to shareholders on a Swiss withholding tax free basis in excess of that amount unless we increase our share capital or our reserves from capital contributions. We would also be able to pay dividends out of distributable profits or freely distributable reserves, but such dividends would be subject to Swiss withholding tax. There can be no assurance that we will have sufficient distributable profits, free reserves, reserves from capital contributions or registered share capital to pay a dividend or effect a capital reduction or that we will be able to meet the other legal requirements for dividend payments or distributions as a result of capital reductions.

Generally, Swiss withholding tax of 35% is due on dividends and similar distributions to our shareholders, regardless of the place of residency of the shareholder, unless the distribution is made to shareholders out of (i) a reduction of par value or (ii) assuming certain conditions are met, qualifying contributed surplus accumulated on or after January 1, 1997. A U.S. holder that qualifies for benefits under the Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income (the “U.S.-Swiss Treaty”) may apply for a refund of the tax withheld in excess of the 15% treaty rate (or in excess of the 5% reduced treaty rate for qualifying corporate shareholders with at least 10% participation in our voting shares, or for a full refund in the case of qualified pension funds). There can be no assurance that we will have sufficient qualifying contributed surplus to pay dividends free from Swiss withholding tax or that Swiss withholding rules will not be changed in the future. In addition, there can be no assurance that the current Swiss law with respect to distributions out of qualifying contributed surplus will not be changed or that a change in Swiss law will not adversely affect us or our shareholders, in particular as a result of distributions out of qualifying contributed surplus becoming subject to additional corporate law or other restrictions. There are currently motions pending in the Swiss Parliament that purport to limit the distribution of qualifying contributed surplus. In addition, over the long term, the amount of par value available to us for par value reductions or qualifying contributed surplus available to us to pay out as distributions is limited. If we are unable to make a distribution through a reduction in par value or out of qualifying contributed surplus, we may not be able to make distributions without subjecting our shareholders to Swiss withholding taxes.

Under present Swiss tax laws, repurchases of shares for the purposes of cancellation are treated as a partial liquidation subject to 35% Swiss withholding tax on the difference between the repurchase price and the par value except, since January 1, 2011, to the extent attributable to qualifying contributed surplus (Kapitaleinlagereserven) if any. If, and to the extent that, the repurchase of shares is out of retained earnings or other taxable reserves, the Swiss withholding tax becomes due. No partial liquidation treatment applies and no withholding tax is triggered if the shares are not repurchased for cancellation but held by us as treasury shares. However, should we not resell such treasury shares within six years, the withholding tax becomes due at the end of the six year period.

Although we may follow a share repurchase process for future share repurchases, if any, similar to a “second trading line” on the SIX Swiss Exchange in which Swiss institutional investors sell shares to us and are generally able to receive a refund of the Swiss withholding tax, if we are unable to use this process successfully, we may not be able to repurchase shares for the purposes of capital reduction without triggering Swiss withholding tax if and to the extent that the repurchase of shares is made

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out of retained earnings or other taxable reserves. No withholding tax would be applicable if and to the extent that tax-free qualifying contributed surplus is attributable to the share repurchase.

Changes in the U.S. dollar/Swiss franc exchange rate could limit the amount of dividends authorized on our common shares, and there can be no assurance that we will be able to continue to pay dividends on our common shares.

On April 29, 2013, our shareholders approved at our 2013 annual general meeting of shareholders a proposal to pay quarterly cash dividends through the second quarter of 2014. The authorization provides that a dividend will be made out of our “contributed surplus” equity position in our statutory accounts to our shareholders in the amount of $0.25 for each of the third and fourth quarters of 2013 and the first and second quarters of 2014. The deduction to our contributed surplus in our statutory accounts, which is required to be made in Swiss francs, will be determined based on the aggregate amount of the dividend and will be calculated based on the U.S. dollar/Swiss franc exchange rate in effect on April 29, 2013. The U.S. dollar amount of the dividend will be capped at an amount such that the aggregate reduction to our contributed surplus will not exceed 396 million Swiss francs. To the extent that a dividend payment would exceed the cap, the U.S. dollar per share amount of the current or future dividends will be reduced on a pro rata basis so that the aggregate amount of all dividends paid does not exceed the cap. In addition, the aggregate reduction in contributed surplus will be increased for any shares issued, and decreased for any shares acquired, after April 29, 2013 and before the record date for the applicable dividend payment.

Any future dividends that may be proposed by our board of directors will be subject to approval by our shareholders at our annual general meeting. There can be no assurance that our shareholders will approve dividends. Whether our board of directors exercises its discretion to propose any dividends to holders of our common shares will depend on many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with debt obligations, legal requirements, regulatory constraints, industry practice and other factors that our board of directors deems relevant. There can be no assurance that we will continue to pay any dividend in the future.

Swiss laws differ from the laws in effect in the United States and may afford less protection to holders of our securities.

Because of differences between Swiss law and U.S. state and federal laws and differences between the governing documents of Swiss companies and those incorporated in the U.S., it may not be possible to enforce in Switzerland court judgments obtained in the United States against us based on the civil liability provisions of the federal or state securities laws of the United States. As a result, in a lawsuit based on the civil liability provisions of the U.S. federal or state securities laws, U.S. investors may find it difficult to:

• effect service within the United States upon us or our directors and officers located outside the United States;

• enforce judgments obtained against those persons in U.S. courts or in courts in jurisdictions outside the United States; and

• enforce against those persons in Switzerland, whether in original actions or in actions for the enforcement of judgments of U.S. courts, civil liabilities based solely upon the U.S. federal or state securities laws.

Original actions against persons in Switzerland based solely upon the U.S. federal or state securities laws are governed, among other things, by the principles set forth in the Swiss Federal Act on Private International Law. This statute provides that the application of provisions of non-Swiss law by the courts in Switzerland shall be precluded if the result was incompatible with Swiss public policy. Also, mandatory provisions of Swiss law may be applicable regardless of any other law that would otherwise apply.

Switzerland and the United States do not have a treaty providing for reciprocal recognition of and enforcement of judgments in civil and commercial matters. The recognition and enforcement of a judgment of the courts of the United States in Switzerland is governed by the principles set forth in the Swiss Federal Act on Private International Law. This statute provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland only if:

• the non-Swiss court had jurisdiction pursuant to the Swiss Federal Act on Private International Law;

• the judgment of such non-Swiss court has become final and non-appealable;

• the judgment does not contravene Swiss public policy;

• the court procedures and the service of documents leading to the judgment were in accordance with the due process of law; and

• no proceeding involving the same position and the same subject matter was first brought in Switzerland, or adjudicated in Switzerland, or that it was earlier adjudicated in a third state and this decision is recognizable in Switzerland.

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Risks Relating to Our Proposed Redomicile

The anticipated benefits of the Redomicile may not be realized.

We may not realize the benefits we anticipate from the Redomicile. Our failure to realize those benefits could have an adverse effect on our business, results of operations or financial condition.

The rights of Pentair shareholders will change as a result of the Redomicile.

The completion of the Redomicile will change the governing law that applies to our shareholders from Swiss law (which applies to the Pentair common shares) to Irish law (which applies to Pentair-Ireland ordinary shares). Many of the principal attributes of Pentair common shares and Pentair-Ireland ordinary shares will be materially similar. However, if the Redomicile is completed, Pentair shareholders’ future rights as shareholders under Irish corporate law will differ from their current rights as a shareholder under Swiss corporate law. In addition, Pentair-Ireland’s proposed articles of association will differ from the Pentair articles of association and organizational regulations.

A change in our tax residency could have a negative effect on our future profitability and taxes on dividends.

Under current Irish legislation, a company is regarded as resident for tax purposes in Ireland if it is centrally managed and controlled in Ireland, or, in certain circumstances, if it is incorporated in Ireland. Under current U.K. legislation, a company that is centrally managed and controlled in the U.K. is regarded as resident in the U.K. for taxation purposes. Where a company is treated as tax resident under the domestic laws of both the U.K. and Ireland then the provisions of article 4(3) of the Double Tax Convention between Ireland and the U.K. provide that such enterprise shall be treated as resident only in the jurisdiction in which its place of effective management is situated. Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that it is centrally managed and controlled in the U.K. and therefore has its tax residency only in the U.K. However, we cannot provide assurance that Pentair-Ireland will continue to be resident only in the U.K. for tax purposes. It is possible that in the future, whether as a result of a change in law or the practice of any relevant tax authority or as a result of any change in the conduct of its affairs, Pentair-Ireland could become, or be regarded as having become resident in a jurisdiction other than the U.K. If Pentair-Ireland was considered to be a tax resident of Ireland, Pentair-Ireland could become liable for Irish corporation tax and any dividends paid by it could be subject to Irish dividend withholding tax.

We will remain subject to changes in law and other factors after the Redomicile that may not allow Pentair-Ireland to maintain a worldwide effective corporate tax rate that is competitive in Pentair’s industry.

While we believe that the Redomicile should not affect our ability to maintain a worldwide effective corporate tax rate that is competitive in our industry, we cannot give any assurance as to what Pentair-Ireland’s effective tax rate will be after the Redomicile because of, among other things, uncertainty regarding tax policies of the jurisdictions where Pentair operates. Also, the tax laws of the U.S., the U.K., Ireland and other jurisdictions could change in the future, and such changes could cause a material change in Pentair-Ireland’s worldwide effective corporate tax rate. In particular, legislative action could be taken by the U.S., the U.K., Ireland or the European Union which could override tax treaties upon which we expect to rely and adversely affect Pentair-Ireland’s effective tax rate. As a result, Pentair-Ireland’s actual effective tax rate may be materially different from our expectations.

We expect to incur transaction costs in connection with the completion of the Redomicile, some of which will be incurred whether or not the Redomicile is completed.

We incurred in 2013 and expect to incur in 2014 a total of approximately $14 million in transaction costs in connection with the Redomicile. A majority of these costs will be incurred regardless of whether the Redomicile is completed and prior to the Extraordinary General Meeting.

Pentair-Ireland will seek Irish High Court approval of the creation of distributable reserves. Pentair-Ireland expects this will be forthcoming but cannot guarantee this.

Under Irish law, dividends may only be paid (and share repurchases and redemptions must generally be funded) out of “distributable reserves,” which Pentair-Ireland will not have immediately following the closing of the Redomicile. The creation of distributable reserves of Pentair-Ireland by way of a capital reduction of Pentair-Ireland requires the approval of the Irish High Court and, in connection with seeking such court approval, we are asking Pentair shareholders to approve the creation of distributable reserves for Pentair-Ireland (through the reduction of the share premium account of Pentair-Ireland) at the Extraordinary General Meeting. The approval of the Irish High Court is expected within approximately six to ten weeks following the closing. We are not aware of any reason why the Irish High Court would not approve the creation of distributable reserves. However, the issuance of the required order is a matter for the discretion of the Irish High Court. There will also be no guarantee that the approval of the creation of distributable reserves for Pentair-Ireland by Pentair shareholders will be obtained. Approval of the creation of distributable reserves by the Irish High Court may also take substantially longer than Pentair-Ireland anticipates. In the event that distributable reserves of Pentair-Ireland are not created, no distributions by way of dividends, share repurchases or otherwise will be permitted under Irish law until such time as the group has created sufficient distributable reserves from its trading activities.

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Transfers of Pentair-Ireland ordinary shares may be subject to Irish stamp duty.

For the majority of transfers of Pentair-Ireland shares, there will not be any Irish stamp duty. However, Irish stamp duty will become payable in respect of certain share transfers occurring after completion of the Redomicile. A transfer of Pentair-Ireland shares from a seller who holds shares beneficially (i.e. through The Depository Trust Company (the "DTC")) to a buyer who holds the acquired shares beneficially will not be subject to Irish stamp duty (unless the transfer involves a change in the nominee that is the record holder of the transferred shares). A transfer of Pentair-Ireland shares by a seller who holds shares directly (i.e. not through the DTC) to any buyer, or by a seller who holds the shares beneficially to a buyer who holds the acquired shares directly, may be subject to Irish stamp duty (currently at the rate of 1% of the price paid or the market value of the shares acquired, if higher) payable by the buyer. A shareholder who directly holds shares may transfer those shares into his or her own broker account to be held through the DTC (or vice versa) without giving rise to Irish stamp duty provided that the shareholder has confirmed to Pentair-Ireland’s transfer agent that there is no change in the ultimate beneficial ownership of the shares as a result of the transfer and the transfer is not in contemplation of a sale of the shares.

Because of the potential Irish stamp duty on transfers of Pentair-Ireland shares, we strongly recommend that all directly registered Pentair shareholders open broker accounts so they can transfer their shares into a broker account as soon as possible, and in any event prior to completion of the Redomicile. We also strongly recommend that any person who wishes to acquire Pentair-Ireland shares after completion of the Redomicile acquire such shares through the DTC or another securities depository.

Pentair-Ireland does not intend to pay any stamp duty on these transactions. However, Pentair-Ireland’s articles of association allow Pentair-Ireland, in its absolute discretion, to create an instrument of transfer and pay any stamp duty payable by a buyer. In the event of such payment, Pentair-Ireland reserves the right to (i) seek reimbursement from the buyer or seller (at its discretion), (ii) set-off the amount of the stamp duty against future dividends payable to the buyer or seller (at its discretion) and/or (iii) claim a lien against the Pentair-Ireland ordinary shares on which it has paid stamp duty. Parties to a share transfer should not assume that any stamp duty arising in respect of a transaction in Pentair-Ireland ordinary shares will be paid by Pentair-Ireland.

Pentair-Ireland ordinary shares, received by means of a gift or inheritance could be subject to Irish capital acquisitions tax.

Irish capital acquisitions tax (“CAT”) could apply to a gift or inheritance of Pentair-Ireland ordinary shares irrespective of the place of residence, ordinary residence or domicile of the parties. This is because Pentair-Ireland shares will be regarded as property situated in Ireland. The person who receives the gift or inheritance has primary liability for CAT. Gifts and inheritances passing between spouses are exempt from CAT. Children have a tax-free threshold of €225,000 per lifetime in respect of taxable gifts or inheritances received from their parents.

If Pentair-Ireland ordinary shares are not eligible for deposit and clearing within the facilities of the DTC, then transactions in Pentair-Ireland’s securities may be disrupted.

The facilities of the DTC are a widely-used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms.

Upon the completion of the Redomicile, Pentair-Ireland ordinary shares will be eligible for deposit and clearing within the DTC system. Pentair-Ireland expects to enter into arrangements with the DTC whereby Pentair-Ireland will agree to indemnify the DTC for any stamp duty and/or Stamp Duty Reserve Tax that may be assessed upon it as a result of its service as a depository and clearing agency for Pentair-Ireland’s ordinary shares.

The DTC is not obligated to accept Pentair-Ireland ordinary shares for deposit and clearing within its facilities at the closing and, even if the DTC does initially accept Pentair-Ireland ordinary shares, it will generally have discretion to cease to act as a depository and clearing agency for Pentair-Ireland ordinary shares. If the DTC determined prior to the completion of the Redomicile that Pentair-Ireland ordinary shares are not eligible for clearance within the DTC system, then we would not expect to complete the transactions contemplated by this proxy statement/prospectus in their current form. However, if the DTC determined at any time after the completion of the Redomicile that Pentair-Ireland ordinary shares were not eligible for continued deposit and clearance within its facilities, then we believe Pentair-Ireland ordinary shares would not be eligible for continued listing on a U.S. securities exchange or inclusion in the Standard & Poor’s 500 Index and trading in Pentair-Ireland ordinary shares would be disrupted. While Pentair-Ireland would pursue alternative arrangements to preserve its listing and maintain trading, any such disruption could have a material adverse effect on the trading price of the Pentair-Ireland ordinary shares.

The U.K.’s controlled foreign company legislation may apply to Pentair-Ireland.

Pentair-Ireland is seeking confirmation from HM Revenue and Customs that either Pentair-Ireland will not be subject to the U.K.’s controlled foreign company (“CFC”) legislation because it does not satisfy the “gateway” test or that the rules have no material effect because any chargeable profits which pass through the “gateway” benefit from an applicable exemption.

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Broadly the U.K.’s CFC rules may subject to U.K. corporation tax profits in non-U.K. tax resident subsidiaries which pass through a “gateway”. Although the rules are complex, profits of a non-U.K. tax resident company should not pass through the “gateway” unless the profits have been artificially diverted from the U.K.

The rules should therefore not apply to ordinary trading activities outside the U.K. In relation to a finance company, if profits pass through the “gateway”, specific exemptions apply including the “matched interest” rules which broadly speaking will exempt profits from the U.K. CFC rules if U.K. members of Pentair-Ireland do not have net finance expenses as determined by the U.K.’s worldwide debt cap rules.

Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that the U.K. CFC rules do not result in any material U.K. corporation tax liability. The treatment is intended to be discussed and agreed with HM Revenue and Customs, but if such agreement is not received and the U.K.’s CFC rules do indeed apply, this may adversely affect Pentair-Ireland’s effective tax rate.

We may choose to abandon the Redomicile.

We may decide to abandon the Redomicile at any time prior to the extraordinary general meeting of Pentair shareholders where we will seek shareholder approval of the Merger Agreement (the “Extraordinary General Meeting”), and in some circumstances, after obtaining shareholder approval at the Extraordinary General Meeting. After the Merger Agreement is approved by our shareholders, we anticipate filing the application to effect the Redomicile, unless one of the conditions to completing the Redomicile fails to be satisfied and such failure would have a material adverse effect on the Redomicile.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

Our principal office is located in leased premises in Schaffhausen, Switzerland, and our management office in the United States is located in leased premises in Minneapolis, Minnesota. Our operations are conducted in facilities throughout the world. These facilities house manufacturing and distribution operations, as well as sales and marketing, engineering and administrative offices.

We carry out our Valves & Controls manufacturing operations at 8 plants located throughout the United States and 34 plants located in 17 other countries. In addition, Valves & Controls has 31 distribution facilities, 57 sales offices and 51 service centers located in numerous countries throughout the world.

We carry out our Process Technologies manufacturing operations at 14 plants located throughout the United States and at 11 plants located in 8 other countries. In addition, Process Technologies has 10 distribution facilities and 22 sales offices located in numerous countries throughout the world.

We carry out our Flow Technologies manufacturing operations at 7 plants located throughout the United States and at 14 plants located in 10 other countries. In addition, Flow Technologies has 40 distribution facilities, 20 sales offices and 11 service centers located in numerous countries throughout the world.

We carry out our Technical Solutions manufacturing operations at 8 plants located throughout the United States and 9 plants located in 8 other countries. In addition, Technical Solutions has 11 distribution facilities and 52 sales offices located in numerous countries throughout the world.

We believe that our production facilities are suitable for their purpose and are adequate to support our businesses.

ITEM 3.  LEGAL PROCEEDINGS

We have been made parties to a number of actions filed or have been given notice of potential claims relating to the conduct of our business, including those pertaining to commercial disputes, product liability, asbestos, environmental, safety and health, patent infringement and employment matters.

While we believe that a material impact on our consolidated financial position, results of operations or cash flows from any such future claims or potential claims is unlikely, given the inherent uncertainty of litigation, a remote possibility exists that a future adverse ruling or unfavorable development could result in future charges that could have a material impact. We do and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and

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make appropriate adjustments to such estimates based on experience and developments in litigation. As a result, the current estimates of the potential impact on our consolidated financial position, results of operations and cash flows for the proceedings and claims described in the notes to our consolidated financial statements could change in the future.

Asbestos Matters

Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While we have observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. Our historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, we cannot predict the extent to which we will be successful in resolving lawsuits in the future.

As of December 31, 2013, there were approximately 2,000 lawsuits pending against our subsidiaries. A lawsuit might include several claims, and we have approximately 2,200 claims outstanding as of December 31, 2013. This amount is not adjusted for claims that are not actively being prosecuted, identified incorrect defendants, or duplicated other actions, which would ultimately reflect our current estimate of the number of viable claims made against us, our affiliates, or entities for which we assumed responsibility in connection with acquisitions or divestitures. In addition, the amount does not include certain claims pending against third parties for which we have been provided an indemnification.

Our estimated liability for asbestos-related claims was $254.7 million and $278.9 million as of December 31, 2013 and 2012, respectively, and was recorded in Other non-current liabilities in the Consolidated Balance Sheets for pending and future claims and related defense costs. Our estimated receivable for insurance recoveries was $119.6 million and $131.0 million at December 31, 2013 and 2012, all of which was acquired in the Merger, and was recorded in Other non-current assets in the Consolidated Balance Sheets.

Environmental Matters

We are involved in or have retained responsibility and potential liability for environmental obligations and legal proceedings related to our current business and, including pursuant to certain indemnification obligations, related to certain formerly owned businesses. We are responsible, or alleged to be responsible, for ongoing environmental investigation and/or remediation of sites in several countries. These sites are in various stages of investigation and/or remediation and at some of these sites our liability is considered de minimis. We received notification from the U.S. Environmental Protection Agency and from similar state and non-U.S. environmental agencies that several sites formerly or currently owned and/or operated by us, and other properties or water supplies that may be or may have been impacted from those operations, contain disposed or recycled materials or waste and require environmental investigation and/or remediation. Those sites include instances where we have been identified as a potentially responsible party under U.S. federal, state and/or non-U.S. environmental laws and regulations. For several formerly owned businesses, we have also received claims for indemnification from purchasers of these businesses.

Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors. In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known. Based upon our experience, current information regarding known contingencies and applicable laws, we have recorded reserves for these environmental matters of $39.3 million and $49.2 million as of December 31, 2013 and 2012, respectively. We do not anticipate these environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows. However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Product liability claims

We are subject to various product liability lawsuits and personal injury claims. A substantial number of these lawsuits and claims are insured and accrued for by Penwald, our captive insurance subsidiary. See discussion in ITEM 1 and ITEM 8, Note 1 of the Notes to Consolidated Financial Statements — Insurance subsidiary. Penwald records a liability for these claims based on actuarial projections of ultimate losses. For all other claims, accruals covering the claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The accruals are adjusted periodically as additional information becomes available. In 2004, we disposed of the Tools Group and we retained responsibility for certain product claims. We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims.

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Compliance Matters

Prior to the Merger, the Flow Control business was subject to investigations by the DOJ and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the Foreign Corrupt Practices Act. Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco’s own internal investigations. As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ, pursuant to which the Flow Control business is for a three year period subject to yearly reporting to the DOJ concerning its continuing compliance efforts.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Current executive officers of Pentair Ltd., their ages, current position and their business experience during at least the past five years are as follows:

Name	Age	Current Position and Business Experience
Randall J. Hogan	58	Chief Executive Officer since 2001 and Chairman of the Board since 2002; President and Chief Operating Officer, 1999 — 2000; Executive Vice President and President of Pentair’s Electrical and Electronic Enclosures Group, 1998 — 1999; United Technologies Carrier Transicold President, 1995 — 1997; Pratt & Whitney Industrial Turbines Vice President and General Manager, 1994 — 1995; General Electric various executive positions, 1988 — 1994; McKinsey & Company consultant, 1981 — 1987.
John L. Stauch	49	Executive Vice President and Chief Financial Officer since 2007; Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc., 2005 — 2007; Vice President, Finance and Chief Financial Officer of the Sensing and Controls unit of Honeywell International Inc., 2004 — 2005; Vice President, Finance and Chief Financial Officer of the Automation & Control Products unit of Honeywell International Inc., 2002 — 2004; Chief Financial Officer and IT Director of PerkinElmer Optoelectronics, a unit of PerkinElmer, Inc., 2000 — 2002; Various executive, investor relations and managerial finance positions with Honeywell International Inc. and its predecessor AlliedSignal Inc., 1994 — 2000.
Frederick S. Koury	53	Senior Vice President, Human Resources since 2003; Vice President of Human Resources at Limited Brands, 2000 — 2003; PepsiCo, Inc., various executive positions, 1985 — 2000.
Angela D. Lageson	45	Senior Vice President, General Counsel and Secretary since 2010; Assistant General Counsel, 2002 — 2010; Shareholder and Officer of the law firm of Henson & Efron, P.A., 2000 — 2002; Associate Attorney in the law firm of Henson & Efron, P.A. 1996 — 2000 and in the law firm of Felhaber Larson Fenlon & Vogt, P.A., 1992 — 1996.
Todd R. Gleason	43	Senior Vice President, Growth since 2013; President, Integration and Standardization, 2012 — 2013; Vice President, Marketing & Strategy, 2010 — 2012; Vice President, Investor Relations and Business Analysis and Planning, 2007 — 2010; Director of Investor Relations with American Standard (now Ingersoll Rand), 2005 — 2007; Various business leadership positions with Honeywell International Inc. and its predecessor AlliedSignal Inc., 1998 — 2005.
Michael G. Meyer	55	Vice President, Treasurer since 2012; Vice President of Treasury and Tax, 2004 – 2012; Treasurer, 2002 — 2004; Assistant Treasurer, 1994 — 2001; Various executive positions with Federal-Hoffman, Inc. (former subsidiary of Pentair), 1985 — 1994.
Mark C. Borin	46	Corporate Controller and Chief Accounting Officer since 2008; Partner in the audit practice of the public accounting firm KPMG LLP, 2000 — 2008; Various positions in the audit practice of KPMG LLP, 1989 — June 2000.
Karl R. Frykman	53	President, Aquatic Systems Global Business Unit since 2007; President of Aquatic Systems' National Pool Tile group, 1998— 2007; Vice President of Operations for American Products, 1995— 1998; Vice President of Anthony Pools, 1990 — 1995; Vice President of Poolsaver, 1988 — 1990.
Netha N. Johnson	43	President, Filtration & Process Global Business Unit since 2013; President, Process Technologies business, 2010 — 2013; President and General Manager of Dyneon (wholly owned subsidiary of 3M), 2007 — 2010; Various executive positions with Brooks Automation, Inc., 1999 — 2004.
Alok Maskara	42	President, Technical Solutions Global Business Unit since 2014; President, Thermal Management business, 2012 — 2014; President, Water Purification business, 2011 — 2012; President, Residential Filtration business, 2008 — 2011; General Manager of the Residential & Commercial water business at General Electric Corporation, 2006 — 2008; Manager Corporate Initiatives, General Electric Corporation, 2004 — 2006; Various executive positions with McKinsey & Company, 2000 — 2004.
Phil Pejovich	48	President, Flow Technologies Global Business Unit since 2014; President, Equipment Protection business, 2010 - 2014; Various executive positions within Whirlpool Corporation, including Business Strategy, North America Refrigeration, President, Whirlpool Greater China, 1999 — 2010; Various executive positions at TRW, Inc., Electrospace, and E-Systems, (divisions of Raytheon Company) 1987 - 1999.
Christopher Stevens	46	President, Valves & Controls Global Business Unit since 2014; Vice President of Product Management & Marketing, Valves & Controls business, 2012 — 2014; General Manager of Global Mining for Tyco International's Flow Control business, 2009 — 2012; Vice President of Strategy & Global Marketing for Tyco International's Flow Control business, 2007 — 2009; Director, Strategy & Business Planning, Tyco Engineered Products & Services, 2005 — 2006; Vice President of Worldwide Strategic Sourcing at Fisher Scientific International, 2002 — 2005; Various business positions with McKinsey & Company, CSC Index and Westinghouse Electric, 1990 — 2002.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common shares are listed for trading on the New York Stock Exchange and trade under the symbol “PNR.” As of December 31, 2013, there were 19,826 shareholders of record.

The high, low and closing sales price for our common shares and the dividends paid for each of the quarterly periods for 2013 and 2012 were as follows:

	2013								2012
	First		Second		Third		Fourth		First		Second		Third		Fourth
High	$	54.20	$	60.14	$	66.49	$	77.97	$	48.77	$	47.59	$	45.21	$	49.50
Low	49.39		49.67		57.38		62.80		33.88		36.31		37.43		40.30
Close	52.75		57.69		65.52		77.67		47.61		38.28		44.51		49.15
Dividends paid	0.23		0.23		0.25		0.25		0.22		0.22		0.22		0.22

Pentair has paid 152 consecutive quarterly dividends and has increased dividends each year for 37 consecutive years.

Future dividends on our common shares or reductions of registered share capital for distribution to shareholders, if any, must be approved by our shareholders. We expect to obtain shareholder approval of the annual dividend amount out of contributed surplus each year at our annual general meeting, and we expect to distribute the approved dividend amount in four quarterly installments. The timing, declaration and payment of future dividends to holders of our common shares will depend upon many factors, including our financial condition and results of operations, the capital requirements of our businesses, industry practice and any other relevant factors.

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Share Performance Graph

The following information under the caption “Share Performance Graph” in this ITEM 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934 and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate it by reference into such a filing.

The following graph sets forth the cumulative total shareholder return on our common shares for the last five years, assuming the investment of $100 on December 31, 2008 and the reinvestment of all dividends since that date to December 31, 2013. The graph also contains for comparison purposes the S&P 500 Index and the S&P 500 Industrials Index, assuming the same investment level and reinvestment of dividends.

By virtue of our market capitalization, we are a component of the S&P 500 Index. On the basis of our size and diversity of businesses, we believe the S&P 500 Industrials Index is an appropriate published industry index for comparison purposes.

	Base Period December 2008	INDEXED RETURNS Years ended December 31
Company / Index		2009	2010	2011	2012	2013
Pentair Ltd.	100	140.14	162.03	150.90	227.68	365.87
S&P 500 Index	100	126.46	145.51	148.59	172.37	228.19
S&P 500 Industrials Index	100	120.93	153.26	152.35	175.73	247.22

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Purchases of Equity Securities

The following table provides information with respect to purchases we made of our common shares during the fourth quarter of 2013:

	(a)	(b)		(c)	(d)
	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Dollar value of shares that may yet be purchased under the plans or programs
September 29 – October 26, 2013	966,101	$	65.58	915,485	$	265,555,373
October 27 – November 23, 2013	1,496,677	68.40		1,496,300	163,164,486
November 24 – December 31, 2013	191,493	71.15		185,200	1,150,014,432
Total	2,654,271			2,596,985

(a) The purchases in this column include 50,616 shares for the period September 29 – October 26, 2013, 377 shares for the period October 27 – November 23, 2013, and 6,293 shares for the period November 24 – December 31, 2013 deemed surrendered to us by participants in our 2012 Stock and Incentive Plan (the “2012 Plan”) and earlier stock incentive plans that are now outstanding under the 2012 Plan (collectively “the Plans”) to satisfy the exercise price or withholding of tax obligations related to the exercise of stock options and vesting of restricted shares.

(b) The average price paid in this column includes shares repurchased as part of our publicly announced plans and shares deemed surrendered to us by participants in the Plans to satisfy the exercise price of stock options and withholding tax obligations due upon stock option exercises and vesting of restricted shares.

(c) The number of shares in this column represents the number of shares repurchased as part of our publicly announced plans to repurchase our common shares up to a maximum dollar limit of $2.2 billion.

(d) Prior to the closing of the Merger, our board of directors, and Tyco as our sole shareholder, authorized the repurchase of our common shares with a maximum aggregate value of $400 million following the closing of the Merger. This authorization does not have an expiration date. On October 1, 2012, our board of directors authorized the repurchase of our common shares with a maximum aggregate value of $800 million. This authorization expires on December 31, 2015 and is in addition to the $400 million share repurchase authorization. In December 2013, our Board of Directors authorized the repurchase of our common shares up to a maximum dollar limit of $1.0 billion. This authorization is in addition to the combined $1.2 billion prior share repurchase authorization. The authorization expires on December 31, 2016.

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ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth our selected historical financial data for the five years ended December 31, 2013.

			Years ended December 31
In millions, except per-share data	2013		2012			2011			2010		2009
Consolidated statements of operations and comprehensive income (loss) data
Net sales	$	7,479.7	$	4,416.1		$	3,456.7		$	3,030.8	$	2,692.5
Operating income (loss)	774.0		(43.1		)	100.2			313.0		219.1
Net income (loss) attributable to Pentair Ltd.	536.8		(107.2		)	(7.5		)	185.5		115.0
Per-share data
Basic:
Earnings (loss) per share attributable to Pentair Ltd.	$	2.67	$	(0.84	)	$	(0.08	)	$	1.89	$	1.18
Weighted average shares	201.1		127.4			98.2			98.0		97.4
Diluted:
Earnings (loss) per share attributable to Pentair Ltd.	$	2.62	$	(0.84	)	$	(0.08	)	$	1.87	$	1.16
Weighted average shares	204.6		127.4			98.2			99.3		98.5
Cash dividends declared and paid per common share	$	0.96	$	0.88		$	0.80		$	0.76	$	0.72
Cash dividends declared and unpaid per common share	0.50		0.46			—			—		—
Consolidated balance sheets data
Total assets	$	11,743.3	$	11,882.7		$	4,586.3		$	3,973.5	$	3,911.3
Total debt	2,555.1		2,457.4			1,309.1			707.5		805.6
Total equity	6,217.7		6,487.5			2,047.4			2,205.0		2,126.3

Factors Affecting Comparability of our Selected Financial Data

For periods prior to 2012, the Consolidated Statements of Operations and Comprehensive Income (Loss) and Consolidated Statements of Cash Flows include the historical results of Pentair, Inc. Following the consummation of the Merger on September 28, 2012, the consolidated financial statements include the results of Flow Control.

In May 2011, we acquired as part of Process Technologies, the Clean Process Technologies division of privately held Norit Holding B.V. In the fourth quarter of 2011, we recorded a pre-tax non-cash goodwill impairment charge of $200.5 million.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This report contains statements that we believe to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact are forward-looking statements. 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,” “positioned,” “strategy,” “future” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to successfully complete the Redomicile (as defined below) and achieve the expected benefits from the Redomicile; the ability to successfully integrate Pentair, Inc. and the Flow Control (as defined below) business and achieve expected benefits from the Merger (as defined below); overall global economic and business conditions; competition and pricing pressures in the markets we serve; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including in Item 1A of this Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this report. Pentair Ltd. assumes no obligation, and disclaims any obligation, to update the information contained in this report.

Overview

Pentair Ltd. is a focused diversified industrial manufacturing company comprising four reporting segments: Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions. During the fourth quarter of 2013, we reorganized our business segments to reflect a new operating structure and management of our Global Business Units, resulting in a change from three reporting segments to four. All prior period amounts related to the segment change have been retrospectively reclassified throughout this Annual Report on Form 10-K to conform to the new presentation. We now have four reporting segments: Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions. We classify our operations into business segments based primarily on types of products offered and markets served. For the year ended December 31, 2013, Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions accounted for 33 percent, 23 percent, 22 percent and 22 percent of total revenues, respectively.

Pentair Ltd. took its current form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of Pentair Ltd. "Flow Control" refers to Pentair Ltd. prior the Merger. Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco. On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding common shares of Flow Control to Tyco’s shareholders (the “Distribution”), resulting in the distribution of approximately 110.9 million of our common shares to Tyco’s shareholders. The Merger was accounted for as a reverse acquisition under the purchase method of accounting with Pentair, Inc. treated as the acquirer.

In May 2011, Pentair, Inc. acquired, as part of Process Technologies, the Clean Process Technologies (“CPT”) division of privately held Norit Holding B.V. for $715.3 million (€502.7 million translated at the May 12, 2011 exchange rate). CPT’s results of operations have been included in our consolidated financial statements since the date of acquisition. CPT is a global leader in membrane solutions and clean process technologies in the high growth water and beverage filtration and separation segments.

On January 30, 2014, we acquired, as part of Process Technologies, the remaining 19.9 percent ownership interest in two entities, a U.S. entity and an international entity (collectively, Pentair Residential Filtration or “PRF”), from GE Water & Process Technologies (a unit of General Electric Company) (“GE”) for $134.3 million in cash. Prior to the acquisition, we held a 80.1 percent ownership equity interest in PRF, representing our and GE's respective global water softener and residential water filtration businesses.

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Key Trends and Uncertainties Regarding Our Existing Business

The following trends and uncertainties affected our financial performance in 2013 and 2012, and will likely impact our results in the future:

• In September 2012, we completed the Merger. With an acquisition of this magnitude and complexity, there are uncertainties and risks associated with realizing the amount and timing of anticipated growth opportunities and cost and tax synergies as described in ITEM 1A – Risk Factors.

• We identified specific market opportunities that we continue to pursue that we find attractive, both within and outside the United States. We are reinforcing our businesses to more effectively address these opportunities through targeted research and development and additional sales and marketing resources. Unless we successfully penetrate these product and geographic markets, our organic growth would likely be limited.

• End markets for new home building and new pool starts continue to show signs of rebound from their historically low levels in 2007—2011. New product introductions, expanded distribution, channel penetration and a recovering housing market resulted in volume increases for 2012 and 2013 in these end markets.

• Despite the overall strength of our end-markets, we experience differing levels of volatility depending on the end-market and may continue to do so over the medium and longer term. While we believe the general trends are favorable, factors specific to each of our major end-markets may affect the capital spending plans of our customers.

• Economic uncertainty in Australia has negatively impacted business results and may continue to do so for the foreseeable future.

• Through 2012 and 2013, we experienced material and other cost inflation. We strive for productivity improvements, and we implement increases in selling prices to help mitigate this inflation. We expect the current economic environment will result in continuing price volatility for many of our raw materials. Commodity prices have begun to moderate, but we are uncertain as to the timing and impact of these market changes.

• We have a long-term goal to consistently generate free cash flow that equals or exceeds 100 percent of our net income. We define free cash flow as cash flow from operating activities less capital expenditures plus proceeds from sale of property and equipment. Our free cash flow for the full year 2013 was $751.3 million, exceeding our goal of 100 percent net income conversion. We expect to generate free cash flow that equals or exceeds 105 percent of our net income in 2014. We are continuing to target reductions in working capital and particularly inventory as a percentage of sales. See the discussion of “Other financial measures” under “Liquidity and Capital Resources—Other financial measures” in this report for a reconciliation of our free cash flow.

In 2014, our operating objectives include the following:

• Continued integration of Pentair, Inc. and the Flow Control business;

• Increasing our presence in both fast growth and developed regions and vertical focus to grow in those markets in which we have competitive advantages;

• Focusing on developing global talent in light of our increased global presence;

• Optimizing our technological capabilities to increasingly generate innovative new products; and

• Driving operating excellence through lean enterprise initiatives, with specific focus on sourcing and supply management, cash flow management and lean operations.

We may seek to meet our objectives of expanding our geographic reach internationally and expanding our presence in our various channels to market by acquiring technologies and products to broaden our businesses’ capabilities to serve additional markets and through acquisitions. We may also consider the divestiture of discrete business units to further focus our businesses on our most attractive markets.

Proposed Redomicile

On December 10, 2013, Pentair Ltd. entered into a Merger Agreement (the “Merger Agreement”) with Pentair plc, a newly-formed Irish public limited company and subsidiary of Pentair (“Pentair-Ireland”). Under the Merger Agreement, and subject to the conditions set forth in the Merger Agreement, Pentair will merge with and into Pentair-Ireland, with Pentair-Ireland being the surviving company (the “Redomicile”), thereby changing the jurisdiction of organization of the publicly-traded parent

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company from Switzerland to Ireland. Pentair shareholders will receive one ordinary share of Pentair-Ireland for each common share of Pentair held immediately prior to the Redomicile.

Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that it is centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have its tax residency in the U.K. Pentair-Ireland will continue to own and conduct the same businesses as Pentair owned and conducted prior to the Merger, except that Pentair-Ireland will replace Pentair as the publicly-traded parent company. Pentair-Ireland will remain subject to U.S. Securities and Exchange Commission (“SEC”) reporting requirements and the applicable corporate governance rules of the New York Stock Exchange.

The Redomicile is subject to Pentair shareholder approval of the Merger Agreement and certain other conditions. Pentair’s shareholders will be asked to vote to approve the Merger Agreement at an extraordinary general meeting of shareholders, which Pentair expects to be held during the second quarter of 2014.

We anticipate that having our publicly-traded parent company incorporated in Ireland and tax resident in the U.K. will provide us the following benefits:

• Incorporation of our publicly-traded parent company in Ireland would enable us to benefit by being subject to a legal and regulatory structure in a jurisdiction with a well-developed legal system and corporate law with established standards of corporate governance.

• The U.K. has a developed, stable and internationally competitive tax system.

• The legal requirements we will be subject to as a company incorporated in Ireland, listed on the NYSE and subject to SEC disclosure and shareholder voting requirements strike the right balance between robust external governance oversight and regulation of our executive and director pay practices and the ability of our compensation committee consisting of independent directors to determine executive compensation to provide incentives to our executive management and to offer competitive salaries and benefits.

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CONSOLIDATED RESULTS OF OPERATIONS

The consolidated results of operations were as follows:

	Years ended December 31									% / point change
In millions	2013			2012			2011			2013 vs. 2012		2012 vs. 2011
Net sales	$	7,479.7		$	4,416.1		$	3,456.7		69.4	%	27.8	%
Cost of goods sold	5,006.8			3,146.5			2,383.0			59.1	%	32.0	%
Gross profit	2,472.9			1,269.6			1,073.7			94.8	%	18.2	%
% of net sales	33.1		%	28.7		%	31.1		%	4.4		(2.4	)
Selling, general and administrative	1,562.1			1,158.4			694.8			34.8	%	66.7	%
% of net sales	21.0		%	26.2		%	20.1		%	(5.2	)	6.1
Research and development	125.8			93.6			78.2			34.4	%	19.7	%
% of net sales	1.7		%	2.1		%	2.3		%	(0.4	)	(0.2	)
Operating income (loss)	774.0			(43.1		)	100.2			N.M.		(143.0	)%
% of net sales	10.3		%	(1.0		)%	2.9		%	11.3		(3.9	)
Gain on sale of businesses	(19.7		)	—			—			N.M.		—	%
Loss on early extinguishment of debt	—			75.4			—			(100.0	)%	N.M.
Net interest expense	69.1			67.6			58.9			2.2	%	14.8	%
Net income (loss) before income taxes and noncontrolling interest	726.4			(184.0		)	43.2			N.M.		N.M.
Provision (benefit) for income taxes	183.8			(79.4		)	46.4			N.M.		N.M.
Effective tax rate	25.3		%	43.1		%	107.3		%	(17.8	)	(64.2	)

N.M. Not Meaningful

Net sales

The components of the consolidated net sales change were as follows:

	2013 vs. 2012		2012 vs. 2011
Volume	7.3	%	(1.0	)%
Acquisition	62.1	%	28.3	%
Price	1.4	%	1.5	%
Currency	(1.4	)%	(1.0	)%
Total	69.4	%	27.8	%

The 69.4 percentage point increase in consolidated net sales in 2013 from 2012 was primarily the result of:

• sales volume of the Flow Control businesses of $3,725.7 million in 2013, compared to $886.5 million in 2012;

• organic sales growth in Process Technologies and Flow Technologies due to higher sales of certain pool products serving the North American residential housing market and increased demand for global food & beverage solutions;

• growth in developed regions led by strength in the U.S. and Western Europe;

• growth in emerging regions of the Middle East, Africa and Eastern Europe; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• lower sales in infrastructure; and

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• unfavorable foreign currency effects.

The 27.8 percentage point increase in consolidated net sales in 2012 from 2011 was primarily the result of:

• sales volume of the Flow Control businesses subsequent to the Merger of $886.5 million and higher sales volume related to the May 2011 acquisition of CPT;

• organic sales growth in Process Technologies and Flow Technologies primarily due to higher sales of certain pump, pool and filtration products primarily serving the North American residential housing market and other global markets;

• continued sales growth in fast growth regions including in Latin America and Eastern Europe; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• decreases in Technical Solutions sales volume in Western Europe and in the infrastructure vertical; and

• unfavorable foreign currency effects.

Gross profit

The 4.4 percentage point increase in gross profit as a percentage of sales in 2013 from 2012 was primarily the result of:

• lower cost of goods sold as a result of inventory fair value step-up and customer backlog recorded as part of the Merger purchase accounting, which decreased from $179.6 million in 2012 to $86.9 million in 2013;

• savings generated from our PIMS initiatives including lean and supply management practices and synergies from the combined operations subsequent to the Merger; and

• selective increases in selling prices across all business segments to mitigate inflationary cost increases.

These increases were partially offset by:

• inflationary increases related to raw materials and labor costs.

The 2.4 percentage point decrease in gross profit as a percentage of sales in 2012 from 2011 was primarily the result of:

• higher cost of goods sold of $179.6 million in 2012 as a result of inventory fair value step-up and customer backlog recorded as part of the Merger purchase accounting; and

• inflationary increases related to raw materials and labor costs.

These decreases were partially offset by:

• cost savings generated from our PIMS initiatives including lean and supply management practices;

• selective increases in selling prices in Process Technologies, Flow Technologies, and Technical Solutions to mitigate inflationary cost increases; and

• higher cost of goods sold in 2011 as a result of the inventory fair value step-up and customer backlog recorded as part of the CPT purchase accounting.

Selling, general and administrative ("SG&A")

The 5.2 percentage point decrease in SG&A expense as a percentage of sales in 2013 from 2012 was primarily the result of:

• "mark-to-market" actuarial gains related to pension and other post-retirement benefit plans of $63.2 million in 2013, compared to "mark-to-market" actuarial losses of $146.2 million in 2012;

• costs associated with the Merger in 2012 that did not reoccur in 2013, including $23.2 million in transaction advisory fees, $21.8 million of change of control costs and $34.1 million of other transaction costs;

• trade name impairment charge of $11.0 million for 2013, compared to $60.7 million in 2012;

• sales volume of the Flow Control businesses subsequent to the Merger, which resulted in increased leverage on our fixed operating expenses; and

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• savings generated from back-office consolidation, reduction in personnel and other lean initiatives.

These decreases were partially offset by:

• restructuring costs of $113.5 million in 2013, compared to $66.9 million in 2012;

• certain increases for labor and related costs; and

• intangible asset amortization associated with the Merger.

The 6.1 percentage point increase in SG&A expense as a percentage of sales in 2012 from 2011 was primarily the result of:

• “mark-to-market” actuarial losses related to pension and other post-retirement benefit plans of $146.2 million in 2012, an increase of $80.0 million from 2011;

• costs associated with the Merger, including $23.2 million in transaction advisory fees, $21.8 million of change of control costs and $34.1 million of other transaction costs;

• restructuring costs of $66.9 million in 2012, compared to $13.0 million in 2011;

• trade name impairment charge of $60.7 million;

• intangible asset amortization related to the Merger and to the May 2011 acquisition of CPT; and

• continued investments in future growth with emphasis on international markets, including personnel and business infrastructure investments.

These increases were partially offset by:

• a nonrecurring goodwill impairment charge in 2011 of $200.5 million in Process Technologies; and

• sales volume of the Flow Control businesses subsequent to the Merger, which resulted in increased leverage on our fixed operating expenses.

Research and development ("R&D")

The 0.4 percentage point decrease in R&D expense as a percentage of sales in 2013 from 2012 was primarily the result of:

• lower R&D expenditures in 2013 versus 2012 as compared to sales volume from the Flow Control businesses.

This decrease was partially offset by:

• continued investments in the development of innovative new products for future growth.

The 0.2 percentage point decrease in R&D expense as a percentage of sales in 2012 from 2011 was primarily the result of:

• sales volume of the Flow Control businesses subsequent to the Merger, which resulted in increased leverage on the R&D spending; and

• higher sales volumes in Process Technologies which resulted in increased leverage on the R&D spending.

These decreases were partially offset by:

• continued investments in the development of new products to generate growth.

Net interest expense

The 2.2 percentage point increase in net interest expense in 2013 from 2012 was primarily the result of:

• the impact of higher debt levels following the Merger; and

• additional interest expense of $2.1 million in the second quarter of 2013 for the working capital and net indebtedness adjustment related to the Merger.

These increases were partially offset by:

• reduced overall interest rates in effect on our outstanding debt; and

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• the impact of higher cash balances following the Merger.

The 14.8 percentage point increase in net interest expense in 2012 from 2011 was primarily the result of:

• the impact of higher debt levels following the Merger.

This increase was partially offset by:

• reduced overall interest rates in effect on our outstanding debt.

Gain on sale of businesses, net

During 2013, we sold businesses that were part of Technical Solutions and Flow Technologies for a cash purchase price of $30.1 million and $13.4 million, respectively, net of transaction costs, resulting in a net gain of $16.8 million and $2.9 million, respectively.

Loss on early extinguishment of debt

In October 2012, we redeemed the remaining outstanding aggregate principal of our 5.65% fixed rate senior notes due 2013-2017 totaling $400 million and our 1.05% floating rate senior notes due 2013 totaling $100 million (the “Fixed/Floating Rate Notes”). The redemptions included make-whole premiums of $65.8 million. Concurrent with the redemption of the Fixed/Floating Rate Notes, we terminated a related interest rate swap that was designated as a cash flow hedge, which resulted in the reclassification of $3.4 million of previously unrecognized variable to fixed swap losses from Accumulated Other Comprehensive Income (Loss) ("AOCI") to earnings in October 2012. All costs associated with the redemption were recorded as a Loss on the early extinguishment of debt including $0.6 million of unamortized deferred financing costs.

In December 2012, Pentair Finance S.A. (“PFSA”), completed an exchange offer pursuant to which it exchanged $373 million in aggregate principal amount of 5.00% Senior Notes due 2021 of Pentair, Inc. a wholly-owned, indirect subsidiary of the Company for a like amount of new 5.00% Senior Notes due 2021 of PFSA, plus $5.6 million in transaction-related costs which were recorded as a Loss on the early extinguishment of debt.

Provision (benefit) for income taxes

The 17.8% percentage point decrease in the effective tax rate in 2013 from 2012 was primarily due to:

• the mix of global earnings, including the impact of the Merger; and

• the decrease in non-deductible transaction costs during 2013 compared to 2012.

The decreases were partially offset by:

• the favorable tax impact related to the 2012 exchange offer that did not occur in 2013; and

• the favorable resolution of U.S. federal and state tax audits in 2012 that did not occur in 2013.

The 64.2 percentage point decrease in the effective tax rate in 2012 from 2011 was primarily due to:

• the unfavorable tax impact of the $200.5 million goodwill impairment charge in 2011;

• the favorable resolution of U.S. federal and state tax audits in 2012 that did not occur in 2011;

• the mix of global earnings, including the impact of the Merger and the CPT acquisition; and

• the favorable tax impact related to the 2012 exchange offer.

These decreases were partially offset by:

• nonrecurring impacts of the Merger, including non-deductible transaction costs and loss of domestic manufacturing deduction tax benefits.

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SEGMENT RESULTS OF OPERATIONS

This summary that follows provides a discussion of the results of operations of each of our four reportable operating segments (Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions). Each of these segments is comprised of various product offerings that serve multiple end markets.

Valves & Controls

The Valves & Controls segment designs, manufactures, markets and services valves, fittings, automation and controls and actuators for the energy and industrial verticals.

The net sales and operating income (loss) for Valves & Controls were as follows:

	Years ended December 31									% / point change
In millions	2013			2012			2011			2013 vs. 2012		2012 vs. 2011
Net sales	$	2,469.2		$	548.6		$	—		350.1	%	—	%
Operating income (loss)	161.4			(76.8		)	—			310.2	%	—	%
% of net sales	6.5		%	(14.0		)%	—		%	20.5		—

Net sales

The components of the change in Valves & Controls net sales were as follows:

	2013 vs. 2012
Volume	20.7	%
Acquisition	331.3	%
Price	1.7	%
Currency	(3.6	)%
Total	350.1	%

The 350.1 percentage point increase in Valves & Controls net sales in 2013 from 2012 was primarily the result of:

• a full year of sales volume in 2013, compared to one quarter in 2012; and

• continued sales growth in the Middle East and the oil & gas industry.

The Valves & Controls net sales in 2012 were the result of:

• sales volume of the Flow Control businesses subsequent to the Merger of $548.6 million. Valves & Controls was a new reporting segment, effective with the Merger and as a result, 2012 net sales represents the segment’s sales for the fourth quarter of 2012.

Operating income (loss)

The 20.5 percentage point increase in operating income for Valves & Controls as a percentage of net sales in 2013 from 2012 was primarily the result of:

• higher volume related to the acquisition of Flow Control, which resulted in increased leverage of our fixed cost base;

• lower cost of goods sold from inventory fair value step-up and customer backlog recorded as part of the Merger purchase accounting, which decreased from $113.5 million in 2012 to $80.6 million in 2013; and

• savings generated from our PIMS initiatives, including lean and supply management practices.

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These increases were partially offset by

• costs related to the Merger, including integration and standardization;

• restructuring costs of $51.0 million in 2013 compared to $5.1 million in 2012;

• low margin on large projects and unfavorable project mix; and

• inflationary increases related to raw materials and labor costs.

The operating loss for Valves & Controls in 2012 was the result of:

• Valves & Controls operations subsequent to the Merger. Valves & Controls was a new reporting segment, effective with the Merger and as a result, 2012 operating loss represents the segment’s operating results for the fourth quarter of 2012; and

• inventory fair value step-up and customer backlog of $113.5 million recorded as part of the Merger purchase accounting.

Process Technologies

The Process Technologies segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration, separation and fluid process management challenges in food and beverage, water, wastewater, swimming pools and aquaculture applications.

The net sales and operating income (loss) for Process Technologies were as follows:

	Years ended December 31									% / point change
In millions	2013			2012			2011			2013 vs. 2012		2012 vs. 2011
Net sales	$	1,765.9		$	1,521.1		$	1,345.9		16.1	%	13.0	%
Operating income (loss)	243.2			132.5			(40.2		)	83.5	%	N.M.
% of net sales	13.7		%	8.7		%	(3.0		)%	5.0		11.7

Net sales

The components of the change in Process Technologies net sales were as follows:

	2013 vs. 2012		2012 vs. 2011
Volume	8.2	%	2.5	%
Acquisition	6.3	%	9.9	%
Price	1.7	%	1.9	%
Currency	(0.1	)%	(1.3	)%
Total	16.1	%	13.0	%

The 16.1 percentage point increase in Process Technologies sales in 2013 from 2012 was primarily the result of:

• organic sales growth related to higher sales of certain pool products serving the North American Residential housing market and increased demand for global food & beverage solutions;

• higher sales volume related to the Merger and other acquisitions in the second half of 2012;

• growth in developed regions led by strength in U.S. and Western Europe; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• lower sales in India and Eastern Europe.

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The 13.0 percentage point increase in Process Technologies sales in 2012 from 2011 was primarily the result of:

• higher sales volume as a result of the May 2011 acquisition of CPT;

• continued sales growth in Latin America, India and emerging markets in the Asia Pacific region;

• increased sales in our Aquatics System business driven by pool dealer expansion and continued strong demand for our energy efficient products and solutions; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• decreases in sales due to weakness in the European market; and

• unfavorable foreign currency effects.

Operating income (loss)

The 5.0 percentage point increase in operating income for Process Technologies as a percentage of net sales in 2013 from 2012 was primarily the result of:

• higher sales volume, which resulted in increased leverage on operating expenses;

• savings generated from our PIMS initiatives including lean and supply management practices;

• decrease in restructuring costs from $23.9 million in 2012 to $8.8 million in 2013;

• trade name impairment charges of $23.2 million in 2012 that did not reoccur in 2013; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• inflationary costs related to raw materials and labors costs.

The 11.7 percentage point increase in operating income for Process Technologies as a percentage of net sales in 2012 from 2011 was primarily the result of:

• goodwill impairment charge of $200.5 million in 2011;

• nonrecurring CPT acquisition related charges in 2011;

• higher sales volume as a result of the CPT acquisition, which resulted in increased leverage of our fixed cost base;

• savings generated from our PIMS initiatives including lean and supply management practices; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• cost increases for certain raw materials and labor;

• increase in restructuring costs, from $3.9 million in 2011 to $23.9 million in 2012; and

• trade name impairment charges of $23.2 million in 2012.

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Flow Technologies

The Flow Technologies segment designs, manufactures and markets products and services designed for the transfer and flow of clean water, wastewater and a variety of industrial applications.

The net sales and operating income for Flow Technologies were as follows:

	Years ended December 31									% / point change
In millions	2013			2012			2011			2013 vs. 2012		2012 vs. 2011
Net sales	$	1,618.5		$	1,136.7		$	1,042.7		42.4	%	9.0	%
Operating income	149.7			35.5			97.9			N.M.		(63.7	)%
% of net sales	9.2		%	3.1		%	9.4		%	6.1		(6.3	)

Net sales

The components of the change in Flow Technologies net sales were as follows:

	2013 vs. 2012		2012 vs. 2011
Volume	10.0	%	(1.9	)%
Acquisition	35.4	%	10.5	%
Price	0.8	%	1.0	%
Currency	(3.8	)%	(0.6	)%
Total	42.4	%	9.0	%

The 42.4 percentage point increase in Flow Technologies sales in 2013 from 2012 was primarily the result of:

• sales volume of the Flow Control business of $490.1 million in 2013; compared to $112.1 million in 2012;

• selective increases in selling prices to mitigate inflationary cost increases;

• organic growth in agriculture sales due to strong new product results and international expansion;

• sales growth in the developed markets of the U.S. and Western Europe; and

• continued sales growth in fast growth regions, including the Middle East and Southeast Asia.

These increases were partially offset by:

• unfavorable foreign currency effects.

The 9.0 percentage point increase in Flow Technologies sales in 2012 from 2011 was primarily the result of:

• sales volume of the Flow Control business subsequent to the Merger of $112.1 million;

• organic sales growth primarily due to higher sales of certain pump products;

• continued sales growth in Latin America and emerging markets in the Asia Pacific region; and

• selective increases in selling prices to mitigate inflationary cost increases.

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These increases were partially offset by:

• low flood-related product sales in the U.S. due to unusually dry weather; and

• unfavorable foreign currency effects.

Operating income

The 6.1 percentage point increase in operating income for Flow Technologies as a percentage of net sales in 2013 from 2012 was primarily the result of:

• higher volume related to the acquisition of Flow Control, which resulted in increased leverage of our fixed cost base;

• savings generated from our PIMS initiatives including lean and supply management practices;

• trade name impairment charges of $25.9 million in 2012 that did not reoccur in 2013: and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• inflationary increases for certain raw materials and labor; and

• unfavorable foreign currency effects.

The 6.3 percentage point decrease in operating income for Flow Technologies as a percentage of net sales in 2012 from 2011 was primarily the result of:

• higher cost of goods sold of $21.9 million as a result of inventory fair value step-up and customer backlog recorded as part of the Merger purchase accounting;

• restructuring actions of $25.2 million taken in 2012, compared to $7.1 million in 2011;

• cost increases for certain raw materials and labor; and

• trade name impairment charges of $25.9 million in 2012.

These decreases were partially offset by:

• higher sales volume in Flow Technologies, which resulted in increased leverage of our fixed cost base;

• savings generated from our PIMS initiatives including lean and supply management practices; and

• selective increases in selling prices to mitigate inflationary cost increases.

Technical Solutions

The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electronics and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications.

The net sales and operating income for Technical Solutions were as follows:

	Years ended December 31									% / point change
In millions	2013			2012			2011			2013 vs. 2012		2012 vs. 2011
Net sales	$	1,663.4		$	1,236.4		$	1,086.8		34.5	%	13.8	%
Operating income	285.0			165.0			185.8			72.7	%	(11.2	)%
% of net sales	17.1		%	13.3		%	17.1		%	3.8		(3.8	)

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Net sales

The components of the change in Technical Solutions net sales were as follows:

	2013 vs. 2012		2012 vs. 2011
Volume	(2.9	)%	(4.7	)%
Acquisition	36.0	%	18.0	%
Price	1.4	%	1.5	%
Currency	—	%	(1.0	)%
Total	34.5	%	13.8	%

The 34.5 percentage point increase in Technical Solutions sales in 2013 from 2012 was primarily the result of:

• sales volume of the Flow Control business of $656.5 million in 2013 compared to $195.7 million in 2012; and

• selective increases in selling prices to mitigate inflationary cost increases.

The 13.8 percentage point increase in Technical Solutions sales in 2012 from 2011 was primarily the result of:

• sales volume of the Flow Control business subsequent to the Merger of $195.7 million;

• sales increases in our enclosures & cabinets businesses in the industrial vertical; and

• selective increases in selling prices to mitigate inflationary cost increases.

These increases were partially offset by:

• decreases in sales volume in Western Europe and the industrial vertical, including project delays; and

• unfavorable foreign currency effects.

Operating income

The 3.8 percentage point increase in operating income for Technical Solutions as a percentage of net sales in 2013 from 2012was primarily the result of:

• higher volume related to the acquisition of Flow Control, which resulted in increased leverage of our fixed cost base;

• selective increases in selling prices to mitigate inflationary cost increases; and

• savings generated from our PIMS initiatives including lean and supply management practices.

These increases were offset by:

• lower margin from higher costs related to the Merger; including integration and standardization;

• increase in restructuring costs from $12.7 million in 2012 to $19.4 million in 2013;

• intangible asset amortization associated with the Merger; and

• inflationary increases related to labor costs and certain raw materials.

The 3.8 percentage point decrease in operating income for Technical Solutions as a percentage of sales in 2012 from 2011 was primarily the result of:

• higher cost of goods sold of $42.7 million as a result of inventory fair value step-up and customer backlog recorded as part of the Merger purchase accounting;

• trade name impairment charges of $11.6 million in 2012;

• restructuring costs of $12.7 million in 2012, compared to $2.0 million in 2011;

• inflationary increases related to raw materials and labor related costs; and

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• continued investment in future growth with emphasis on international markets, including personnel and business infrastructure investments.

These decreases were offset by:

• savings generated from our PIMS initiatives including lean and supply management practices; and

• selective increases in selling prices to mitigate inflationary cost increases.

LIQUIDITY AND CAPITAL RESOURCES

We generally fund cash requirements for working capital, capital expenditures, equity investments, acquisitions, debt repayments, dividend payments and share repurchases from cash generated from operations, availability under existing committed revolving credit facilities and in certain instances, public and private debt and equity offerings. We have grown our businesses in significant part in the past through acquisitions financed by credit provided under our revolving credit facilities and from time to time, by private or public debt issuance. Our primary revolving credit facilities have generally been adequate for these purposes, although we have negotiated additional credit facilities as needed to allow us to complete acquisitions. We intend to issue commercial paper to fund our financing needs on a short-term basis and to use our revolving credit facility as back-up liquidity to support commercial paper.

We are focusing on increasing our cash flow and repaying existing debt, while continuing to fund our research and development, marketing and capital investment initiatives. Our intent is to maintain investment grade ratings and a solid liquidity position.

We experience seasonal cash flows primarily due to seasonal demand in a number of markets within Process Technologies and Flow Technologies. We generally borrow in the first quarter of our fiscal year for operational purposes, which usage reverses in the second quarter as the seasonality of our businesses peaks. End-user demand for pool and certain pumping equipment follows warm weather trends and is at seasonal highs from April to August. The magnitude of the sales spike is partially mitigated by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts). Demand for residential and agricultural water systems is also impacted by weather patterns, particularly by heavy flooding and droughts.

Operating activities

Cash provided by operating activities was $915.3 million in 2013, or $847.3 millionhigher than in 2012. The increase in cash provided by operating activities was due primarily to a $501.3 million increase in Net income (loss) before noncontrolling interest, net of the following non-cash items: depreciation and amortization, gain on sale of businesses, trade name impairment and pension and other post-retirement expense (income). Also attributing to the increase were accelerated contributions of pension and other post-retirement obligations in 2012 that reduced the need for ongoing contributions in 2013.

Cash provided by operating activities was $68.0 million in 2012, or $252.2 millionlower than in 2011. The decrease in cash provided by operating activities was due primarily to accelerated contributions of pension and other post-retirement obligations in 2012. Also attributing to the decrease was a $102.3 million increase in Net income (loss) before noncontrolling interest, net of the following non-cash items: depreciation and amortization, goodwill and trade name impairment and pension and other post-retirement expense.

Investing activities

Net cash used for investing activities was $211.2 million in 2013. Net cash provided by investing activities was $375.6 million in 2012. Net cash used for investing activities was $808.1 million in 2011.

Acquisitions

In June 2013, $84.4 million of cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment related to the Merger. In addition, in December 2013 we acquired a business as part of Process Technologies for cash consideration of $8 million, net of cash acquired.

In September 2012, we acquired $691.7 million of cash in conjunction with the Merger. In October 2012, we acquired, as part of Valves & Controls, the remaining 25 percent equity interest in Pentair Middle East Holding S.a.R.L. (“KEF”) for $100.0 million in cash. Additionally, during 2012, we completed other small acquisitions in Process Technologies with purchase prices totaling $121.2 million in cash, net of cash acquired.

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In May 2011, we acquired as part of Process Technologies, the CPT division of privately held Norit Holdings for $715.3 million. Additionally, during 2011, we completed other small acquisitions in Process Technologies with purchase prices totaling $21.6 million, consisting of $17.8 million in cash and $3.8 million as notes payable.

Divestitures

During 2013, we sold businesses that were part of Technical Solutions and Flow Technologies for a cash purchase price of $30.1 million and $13.4 million, respectively, net of transaction costs, resulting in a net gain of $16.8 million and $2.9 million, respectively.

Capital expenditures

Capital expenditures in 2013, 2012 and 2011 were $170.0 million, $94.5 million and $73.3 million, respectively. The increase in capital expenditures in 2012 from 2011 was primarily due to the Merger. We anticipate capital expenditures for fiscal 2014 to be approximately $175 million, primarily for capacity expansions of manufacturing facilities located in our low-cost countries, developing new products and general maintenance.

Financing activities

Net cash used for financing activities was $719.1 million in 2013. Cash used for financing activities in 2013 included share repurchases and payments of dividends, partially offset by net borrowings of commercial paper and revolving long-term debt to fund our operations in the normal course of business and cash received for shares issued to employees.

Net cash used for financing activities was $232.3 million in 2012. Cash used for financing activities in 2012 included payments of dividends, early debt termination fees and share repurchases, partially offset by net borrowings of long-term debt, as further described below.

Net cash provided by financing activities was $503.6 million in 2011. Cash provided by financing activities in 2011 primarily relates to borrowings used to fund the CPT acquisition in May 2011, partially offset by repayments of long-term debt, dividend payments and share repurchases.

In December 2012, our wholly-owned subsidiary, Pentair Finance S.A. (“PFSA”), completed an exchange offer (the “Exchange Offer”) pursuant to which it exchanged $373 million in aggregate principal amount of 5.00% Senior Notes due 2021 of Pentair, Inc., a wholly-owned, indirect subsidiary of the Company (the “2021 Notes”) for a like amount of new 5.00% Senior Notes due 2021 of PFSA (the “New 2021 Notes”) plus $5.6 million in transaction-related costs. Upon completion of the Exchange Offer, $127 million in aggregate principal amount of 2021 Notes remained outstanding. The remaining 2021 Notes and New 2021 Notes are guaranteed as to payment by Pentair Ltd.

In November 2012, PFSA completed a private offering of $350 million aggregate principal amount of 1.35% Senior Notes due 2015 (the “2015 Notes”) and $250 million aggregate principal amount of 2.65% Senior Notes due 2019 (the “2019 Notes” and, collectively, the “2015/2019 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances, PFSA may be required to pay additional interest on the 2015/2019 Notes. We used the net proceeds from the sale of the 2015/2019 Notes to repay commercial paper and for general corporate purposes.

In October 2012, we redeemed the remaining outstanding aggregate principal of our 5.65% fixed rate senior notes due 2013-2017 totaling $400 million and our 1.05% floating rate senior notes due 2013 totaling $100 million (the “Fixed/Floating Rate Notes”). The redemptions included make-whole premiums of $65.8 million. Concurrent with the redemption of the Fixed/Floating Rate Notes, we terminated a related interest rate swap that was designated as a cash flow hedge, which resulted in the reclassification of $3.4 million of previously unrecognized variable to fixed swap losses from AOCI to earnings in October 2012. All costs associated with the redemption were recorded as a Loss on the early extinguishment of debt including $0.6 million of unamortized deferred financing costs.

In September 2012, PFSA, completed a private offering of $550 million aggregate principal amount of 3.15% Senior Notes due 2022 (the “2022 Notes”) and $350 million aggregate principal amount of 1.875% Senior Notes due 2017 (the “2017 Notes” and, collectively, the “2017/2022 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances, PFSA may be required to pay additional interest on the 2017/2022 Notes. The 2017/2022 Notes remained outstanding after the Merger. A portion of the net proceeds from the 2017/2022 Notes offering were used to repay $435 million to Tyco in conjunction with the Distribution and the Merger.

In September 2012, Pentair, Inc. entered into a credit agreement providing for an unsecured, committed revolving credit facility (the “Credit Facility”) with initial maximum aggregate availability of up to $1,450 million. The Credit Facility replaced Pentair, Inc.’s $700 million Former Credit Facility (as defined below). The Credit Facility matures in September 2017. Upon the completion of the Merger, Pentair Ltd. became the guarantor under the Credit Facility and PFSA and certain other of our subsidiaries became affiliate borrowers under the Credit Facility. Borrowings under the Credit Facility generally bear interest at

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a variable rate equal to the London Interbank Offered Rate (“LIBOR”) plus a specified margin based upon PFSA’s credit ratings. PFSA must also pay a facility fee ranging from 10.0 to 30.0 basis points per annum (based upon PFSA’s credit ratings) on the amount of each lender’s commitment.

In May 2011, Pentair, Inc. completed a public offering of $500 million aggregate principal amount of the 2021 Notes. Pentair, Inc. used the net proceeds from the offering of the 2021 Notes to finance in part the CPT acquisition in 2011. The 2021 Notes which remain outstanding subsequent to the Exchange Offer are guaranteed as to payment by Pentair Ltd.

In April 2011, Pentair, Inc. entered into a Fourth Amended and Restated Credit Agreement that provided for an unsecured, committed revolving credit facility (the “Former Credit Facility”) of up to $700 million, with multi-currency sub-facilities to support investments outside the U.S. Borrowings under the Former Credit Facility bore interest at the rate of LIBOR plus 1.75%. We used borrowings under the Former Credit Facility to fund a portion of the CPT acquisition in 2011 and to repay $105 million of matured senior notes in May 2012. The Former Credit Facility was terminated in September 2012 in connection with the Merger and replaced by the Credit Facility, at which time the subsidiary guarantees in place under the Former Credit Facility ceased to exist.

PFSA is authorized to sell short-term commercial paper notes to the extent availability exists under the Credit Facility. PFSA uses the Credit Facility as back-up liquidity to support 100% of commercial paper outstanding. As of December 31, 2013 and 2012, we had $528.9 million and $424.7 million, respectively, of commercial paper outstanding, all of which was classified as long-term as we have the intent and the ability to refinance such obligations on a long-term basis under the Credit Facility.

We used borrowings under the Credit Facility and proceeds from the 2017/2022 Notes offering, to repay the Former Credit Facility and to pay other fees and expenses in connection with the Merger. Total availability under the Credit Facility was $921.1 million as of December 31, 2013, which was not limited by any covenants contained in the Credit Facility’s credit agreement. Subsequent to the Merger, we used the remaining proceeds from the 2017/2022 Notes offering and issuances of commercial paper to redeem the Fixed/Floating Rate Notes as discussed above, to repurchase shares in conjunction with our share repurchase as discussed in ITEM 8, Note 13 of the Notes to Consolidated Financial Statements and to purchase the remaining 25 percent interest in KEF for $100 million as discussed in ITEM 8, Note 2 of the Notes to Consolidated Financial Statements.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Credit Facility, including that we may not permit (i) the ratio of our consolidated debt plus synthetic lease obligations to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization, non-cash share-based compensation expense, and up to $40 million of costs and expenses incurred in connection with the Merger (“EBITDA”) for the four consecutive fiscal quarters then ended (the “Leverage Ratio”) to exceed 3.50 to 1.00 on the last day of each fiscal quarter, and (ii) the ratio of our EBITDA for the four consecutive fiscal quarters then ended to our consolidated interest expense, including consolidated yield or discount accrued as to outstanding securitization obligations (if any), for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter. For purposes of the Leverage Ratio, the Credit Facility provides for the calculation of EBITDA giving pro forma effect to the Merger and certain acquisitions, divestitures and liquidations during the period to which such calculation relates. As of December 31, 2013, we were in compliance with all financial covenants in our debt agreements.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $86.7 million, of which none was outstanding at December 31, 2013. Borrowings under these credit facilities bear interest at variable rates. Additionally, as part of the Merger and CPT acquisition we assumed certain capital leases with an outstanding balance of $21.5 million and $23.8 million at December 31, 2013 and 2012, respectively.

As of December 31, 2013, we have $113.0 million of cash held in certain countries in which the ability to repatriate is limited due to local regulations or significant potential tax consequences.

We expect to continue to have cash requirements to support working capital needs and capital expenditures, to pay interest and service debt and to pay dividends to shareholders quarterly. We believe we have the ability and sufficient capacity to meet these cash requirements by using available cash and internally generated funds and to borrow under our committed and uncommitted credit facilities.

Dividends

We paid dividends in 2013 of $194.2 million, or $0.96 per common share, compared with $112.4 million, or $0.88 per common share, in 2012 and $79.5 million, or $0.80 per common share in 2011. At our 2013 annual meeting of shareholders held on April 29, 2013, our shareholders approved a proposal to pay quarterly cash dividends through the second quarter of 2014. The authorization provided that dividends of $1.00 per share be made in quarterly installments of $0.25 for each of the third and fourth quarters of 2013 and first and second quarters of 2014 and we expect to continue paying dividends on a quarterly basis.

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We intend to seek authorization from our shareholders at our 2014 annual general meeting of shareholders to extend the increased dividend or increase the dividend for the remainder of 2014, which will mark the 38^th consecutive year we have increased dividends.

Authorized shares

Our authorized share capital consists of 213.0 million common shares with a par value of 0.50 Swiss francs per share. The board of directors is authorized to increase the total share capital until September 14, 2014 by a maximum amount of 106.5 million shares. In addition, our share capital may be increased by:

• a maximum of 81.5 million shares upon the exercise of conversion, option, exchange, warrant or similar rights for the subscription of shares granted to third parties or shareholders in connection with bonds, notes, options, warrants or other securities issued by us in national or international capital markets or pursuant to our existing and future contractual obligations (“Rights Bearing Obligations”); and/or

• a maximum of 25.0 million shares upon the exercise of rights related to Rights-Bearing Obligations granted to members of the board of directors, members of the executive management, employees, contractors, consultants or other persons providing services for our benefit.

Share repurchases

Prior to the closing of the Merger, our board of directors, and Tyco as our sole shareholder, authorized the repurchase of our common shares with a maximum aggregate value of $400.0 million following the closing of the Merger. This authorization does not have an expiration date. In October 2012, our board of directors authorized the repurchase of our common shares with a maximum aggregate value of $800.0 million. This authorization expires on December 31, 2015 and is in addition to the $400.0 million share repurchase authorization. As of December 31, 2013, we had repurchased 19.6 million of our common shares for $1.05 billion pursuant to these authorizations and had $150.0 million remaining available for repurchases under these authorizations.

In December 2013, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $1.0 billion. This authorization is in addition to the combined $1.2 billion prior share repurchase authorization. The authorization allows the company to commence share repurchases effective immediately and expires on December 31, 2016. No repurchases were made under this authorization in 2013.

Contractual obligations

The following summarizes our significant contractual obligations that impact our liquidity:

	Years ended December 31
In millions	2014		2015		2016		2017		2018		Thereafter		Total
Debt obligations	$	—	$	350.0	$	—	$	878.9	$	—	$	1,304.7	$	2,533.6
Capital lease obligations	2.5		5.5		0.5		0.5		0.5		12.0		21.5
Interest obligations on fixed-rate debt	60.2		60.2		55.5		55.5		49.0		138.5		418.9
Operating lease obligations, net of sublease rentals	54.5		39.8		29.4		21.4		13.4		23.4		181.9
Purchase obligations	43.2		7.0		0.4		0.3		0.2		0.2		51.3
Pension and other post-retirement plan contributions	24.6		29.9		41.1		15.4		17.5		168.5		297.0
Total contractual obligations, net	$	185.0	$	492.4	$	126.9	$	972.0	$	80.6	$	1,647.3	$	3,504.2

The majority of the purchase obligations represent commitments for raw materials to be utilized in the normal course of business. For purposes of the above table, arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction.

In addition to the summary of significant contractual obligations, we will incur annual interest expense on outstanding variable rate debt. As of December 31, 2013, variable interest rate debt was $528.9 million at a weighted average interest rate of 0.52%.

The total gross liability for uncertain tax positions at December 31, 2013 is estimated to be $60.8 million. We record penalties and interest related to unrecognized tax benefits in Provision for income taxes and Interest expense, respectively, which is consistent with our past practices. As of December 31, 2013, we had recorded $0.9 million for the possible payment of penalties and $8.9 million related to the possible payment of interest.

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Other financial measures

In addition to measuring our cash flow generation or usage based upon operating, investing and financing classifications included in the Consolidated Statements of Cash Flows, we also measure our free cash flow. We have a long-term goal to consistently generate free cash flow that equals or exceeds 100 percent conversion of net income. Free cash flow is a non-Generally Accepted Accounting Principles financial measure that we use to assess our cash flow performance. We believe free cash flow is an important measure of operating performance because it provides us and our investors a measurement of cash generated from operations that is available to pay dividends, make acquisitions, repay debt and repurchase shares. In addition, free cash flow is used as a criterion to measure and pay compensation-based incentives. Our measure of free cash flow may not be comparable to similarly titled measures reported by other companies. The following table is a reconciliation of free cash flow:

	Years ended December 31
In millions	2013			2012			2011
Net cash provided by operations	$	915.3		$	68.0		$	320.2
Capital expenditures	(170.0		)	(94.5		)	(73.3		)
Proceeds from sale of property and equipment	6.0			5.5			1.3
Free cash flow	$	751.3		$	(21.0	)	$	248.2

Off-balance sheet arrangements

At December 31, 2013, we had no off-balance sheet financing arrangements.

COMMITMENTS AND CONTINGENCIES

We have been made parties to a number of actions filed or have been given notice of potential claims relating to the conduct of our business, including those pertaining to commercial disputes, product liability, asbestos, environmental, safety and health, patent infringement and employment matters.

While we believe that a material impact on our consolidated financial position, results of operations or cash flows from any such future claims or potential claims is unlikely, given the inherent uncertainty of litigation, a remote possibility exists that a future adverse ruling or unfavorable development could result in future charges that could have a material impact. We do and will continue to periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and make appropriate adjustments to such estimates based on experience and developments in litigation. As a result, the current estimates of the potential impact on our consolidated financial position, results of operations and cash flows for the proceedings and claims described in ITEM 8, Note 16 of the Notes to Consolidated Financial Statements could change in the future.

Asbestos Matters

Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While we have observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. Our historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, we cannot predict the extent to which we will be successful in resolving lawsuits in the future.

As of December 31, 2013, there were approximately 2,000 lawsuits pending against our subsidiaries. A lawsuit might include several claims, and we have approximately 2,200 claims outstanding as of December 31, 2013. This amount is not adjusted for claims that are not actively being prosecuted, identified incorrect defendants, or duplicated other actions, which would ultimately reflect our current estimate of the number of viable claims made against us, our affiliates, or entities for which we assumed responsibility in connection with acquisitions or divestitures. In addition, the amount does not include certain claims pending against third parties for which we have been provided an indemnification.

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Our estimated liability for asbestos-related claims was $254.7 million and $278.9 million as of December 31, 2013 and 2012, respectively, and was recorded in Other non-current liabilities in the Consolidated Balance Sheets for pending and future claims and related defense costs. Our estimated receivable for insurance recoveries was $119.6 million and $131.0 million at December 31, 2013 and 2012, respectively, and was recorded in Other non-current assets in the Consolidated Balance Sheets.

Environmental Matters

We are involved in or have retained responsibility and potential liability for environmental obligations and legal proceedings related to our current business and, including pursuant to certain indemnification obligations, related to certain formerly owned businesses. We are responsible, or alleged to be responsible, for ongoing environmental investigation and/or remediation of sites in several countries. These sites are in various stages of investigation and/or remediation and at some of these sites our liability is considered de minimis. We received notification from the U.S. Environmental Protection Agency and from similar state and non-U.S. environmental agencies, that several sites formerly or currently owned and/or operated by us, and other properties or water supplies that may be or may have been impacted from those operations, contain disposed or recycled materials or waste and require environmental investigation and/or remediation. Those sites include instances where we have been identified as a potentially responsible party under U.S. federal, state and/or non-U.S. environmental laws and regulations. For several formerly owned businesses, we have also received claims for indemnification from purchasers of these businesses.

Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors. In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known. Based upon our experience, current information regarding known contingencies and applicable laws, we have recorded reserves for these environmental matters of $39.3 million and $49.2 million as of December 31, 2013 and 2012, respectively. We do not anticipate these environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows. However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Product liability claims

We are subject to various product liability lawsuits and personal injury claims. A substantial number of these lawsuits and claims are insured and accrued for by Penwald, our captive insurance subsidiary. See discussion in ITEM 1 and ITEM 8, Note 1 of the Notes to Consolidated Financial Statements — Insurance subsidiary. Penwald records a liability for these claims based on actuarial projections of ultimate losses. For all other claims, accruals covering the claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The accruals are adjusted periodically as additional information becomes available. In 2004, we disposed of the Tools Group and we retained responsibility for certain product claims. We have not experienced significant unfavorable trends in either the severity or frequency of product liability lawsuits or personal injury claims.

Compliance Matters

Prior to the Merger, the Flow Control business was subject to investigations by the U.S. Department of Justice (“DOJ”) and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the Foreign Corrupt Practices Act. Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco’s own internal investigations. As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ, pursuant to which the Flow Control business is for a three year period subject to yearly reporting to the DOJ concerning its continuing compliance efforts.

Stand-by Letters of Credit, Bank Guarantees and Bonds

In certain situations, Tyco guaranteed Flow Control’s performance to third parties or provided financial guarantees for financial commitments of Flow Control. In situations where Flow Control and Tyco were unable to obtain a release from these guarantees in connection with the spin-off, we will indemnify Tyco for any losses it suffers as a result of such guarantees.

In disposing of assets or businesses, we often provide representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to reasonably estimate the potential liability due to the inchoate and unknown nature of these potential liabilities. However, we have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows.

In the ordinary course of business, we are required to commit to bonds, letters of credit and bank guarantees that require payments to our customers for any non-performance. The outstanding face value of these instruments fluctuates with the value

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of our projects in process and in our backlog. In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs.

As of December 31, 2013 and 2012, the outstanding value of bonds, letters of credit and bank guarantees totaled $484.0 million and $493.2 million, respectively.

NEW ACCOUNTING STANDARDS

See ITEM 8, Note 1 of the Notes to Consolidated Financial Statements, included in this Form 10-K, for information pertaining to recently adopted accounting standards or accounting standards to be adopted in the future.

CRITICAL ACCOUNTING POLICIES

We have adopted various accounting policies to prepare the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our significant accounting policies are more fully described in ITEM 8, Note 1 of the Notes to Consolidated Financial Statements. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, our observance of trends in the industry and information available from other outside sources, as appropriate. We consider an accounting estimate to be critical if:

• it requires us to make assumptions about matters that were uncertain at the time we were making the estimate; and

• changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations.

Our critical accounting estimates include the following:

Impairment of goodwill and indefinite-lived intangibles

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.

Goodwill is tested at least annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit there is an indication that goodwill impairment exists and a second step must be completed in order to determine the amount of the goodwill impairment, if any that should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations.

In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions are determined over a six year long-term planning period. The six year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2019 are projected to grow at a perpetual growth rate of 3.0%.

Discount rate assumptions for each reporting unit take into consideration our assessment of risks inherent in the future cash flows of the respective reporting unit and our weighted-average cost of capital. We utilized discount rates ranging from 11.5% to 12.5% in determining the discounted cash flows in our fair value analysis.

In estimating fair value using the market approach, we identify a group of comparable publicly-traded companies for each reporting unit that are similar in terms of size and product offering. These groups of comparable companies are used to develop

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multiples based on total market-based invested capital as a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”). We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.

Impairment charge

We completed step one of our annual goodwill impairment evaluation during the fourth quarter of 2013 and 2012 with each reporting unit’s fair value exceeding its carrying value. Accordingly, step two of the impairment analysis was not required for 2013 or 2012.

In connection with our annual impairment test, we determined that the fair value of our Australian reporting unit within Flow Technologies did not exceed its carrying value by a significant amount. The percentage of excess fair value over carrying value of this reporting unit was approximately 13 percent for 2013. Goodwill for this reporting unit was $304.0 million as of the annual impairment testing date. If cash flow projections decreased by 13.6% or if the discount rate increased by 150 basis points (the discount rate used in the impairment analysis was 12.5%), this reporting unit would have failed the step one test and a step two analysis would have been required.

For the year ended December 31, 2011, we recorded a pre-tax non-cash impairment charge of $200.5 million as a result of our annual goodwill impairment test. This represented impairment of goodwill in Process Technologies. The impairment charge resulted from changes in our forecasts in light of economic conditions and due to continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include: customer relationships, trade names and trademarks, proprietary technology, backlog and patents. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We complete our annual impairment test during the fourth quarter each year for those identifiable assets not subject to amortization. Impairment charges of $11.0 million and $60.7 million were recorded in 2013 and 2012, respectively, related to trade names. These charges were recorded in Impairment of trade names and goodwill in our Consolidated Statements of Operations and Comprehensive Income (Loss). There was no impairment charge recorded in 2011 for identifiable intangible assets.

The impairment test consists of a comparison of the fair value of the trade name with its carrying value. Fair value is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The impairment charges recorded in 2013 and 2012 were the result of a rebranding strategies implemented in the fourth quarters of 2013 and 2012, respectively.

At December 31, 2013 our goodwill and intangible assets were $6,910.3 million and represented 59% of our total assets. If we experience future declines in sales and operating profit or do not meet our operating forecasts, we may be subject to future impairments. Additionally, changes in assumptions regarding the future performance of our businesses, increases in the discount rate used to determine the discounted cash flows of our businesses or significant declines in our share price or the market as a whole could result in additional impairment indicators. Because of the significance of our goodwill and intangible assets, any future impairment of these assets could have a material adverse effect on our financial results.

Impairment of long-lived assets

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. During 2013, we recorded impairment charges of $20.0 million in conjunction with restructuring activities. There were no material impairment charges recorded related to long-lived assets in 2012 or 2011.

Percentage of completion revenue recognition

Revenue from certain long-term contracts is recognized over the contractual period under the percentage of completion method of accounting. Under this method, sales and gross profit are recognized as work is performed either based on the relationship between the actual costs incurred and the total estimated costs at completion (“the cost-to-cost method”) or based on efforts

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expended for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and contract values. These reviews have not resulted in adjustments that were significant to our results of operations. Estimated losses are recorded when identified. Claims against customers are recognized as revenue upon settlement.

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. The amounts recognized in our consolidated financial statements related to our defined-benefit pension and other post-retirement plans are determined from actuarial valuations. Inherent in these valuations are assumptions, including: expected return on plan assets, discount rates, rate of increase in future compensation levels and health care cost trend rates. These assumptions are updated annually and are disclosed in ITEM 8, Note 12 to the Notes to Consolidated Financial Statements. Differences in actual experience or changes in assumptions may affect our pension and other post-retirement obligations and future expense.

We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year ("mark-to-market adjustment") and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change as they may each year. The primary factors contributing to actuarial gains and losses each year are (1) changes in the discount rate used to value pension and other post-retirement benefit obligations as of the measurement date and (2) differences between the expected and the actual return on plan assets. This accounting method also results in the potential for volatile and difficult to forecast mark-to-market adjustments. Mark-to-market adjustments resulted in pre-tax income of $63.2 million in 2013 and pre-tax charges of $146.2 million and $66.2 million in 2012 and 2011, respectively. The remaining components of pension expense, primarily service and interest costs and the expected return on plan assets, are recorded on a quarterly basis as ongoing pension expense.

Discount rate

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date. The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds available in the marketplace rated AA or higher, adjusted to eliminate the effects of call provisions. This produced a weighted-average discount rate for our U.S. plans of 4.51% in 2013, 3.67% in 2012 and 5.05% in 2011. The discount rates on our Non-U.S. plans ranged from 0.50% to 5.00% in 2013, 0.50% to 4.50% in 2012 and 0.75% to 5.00% in 2011. There are no known or anticipated changes in our discount rate assumption that will impact our pension expense in 2014.

Expected rate of return

Our expected rate of return on plan assets for our U.S. plans was 3.75% for 2013, 7.50% in 2012 and 8.00% in 2011. The expected rate of return on our Non-U.S. plans ranged from 1.00% to 6.50% in 2013, 1.00% to 4.60% in 2012 and 0.25% to 5.20% in 2011. The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns. In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader longer-term market indices.

During 2012, we adopted an investment strategy for our U.S. pension plans with a primary objective of preserving the funded status of the U.S. plans. This is achieved through investments in fixed interest instruments with interest rate sensitivity characteristics closely reflecting the interest rate sensitivity of our benefit obligations. The shifting of allocations away from equities to liability hedging fixed income investments, by reinvesting in fixed income instruments as equity investments were redeemed, was completed during 2013. As of December 31, 2013, the U.S. pension plans have an approximately 92 percent allocation to fixed income investments. As a result of the adoption of this investment strategy, we anticipate the expected rate of return on our U.S. funded pension plans will continue to be consistent with the discount rate.

See ITEM 8, Note 12 of the Notes to Consolidated Financial Statements for further information regarding pension and other post-retirement plans.

Loss contingencies

Accruals are recorded for various contingencies including legal proceedings, self-insurance and other claims that arise in the normal course of business. The accruals are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarially determined estimates. Additionally, we record receivables from third party insurers when recovery has been determined to be probable.

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We recognize asbestos-related liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Certain of these liabilities are subject to insurance coverage. Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. The process of estimating asbestos-related liabilities and the corresponding insurance recoveries receivable is complex and dependent primarily on our historical claim experience, estimates of potential future claims, our legal strategy for resolving these claims, the availability of insurance coverage, and the solvency and creditworthiness of insurers.

See ITEM 8, Note 16 of the Notes to Consolidated Financial Statements for further information regarding loss contingencies.

Income taxes

In determining taxable income for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of certain of the deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets we consider all available positive and negative evidence including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income. In estimating future taxable income, we develop assumptions including the amount of future pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses.

We currently have recorded valuation allowances that we will maintain until when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Our income tax expense recorded in the future may be reduced to the extent of decreases in our valuation allowances. The realization of our remaining deferred tax assets is primarily dependent on future taxable income in the appropriate jurisdiction. Any reduction in future taxable income including but not limited to any future restructuring activities may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance could result in additional income tax expense in such period and could have a significant impact on our future earnings.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management records the effect of a tax rate or law change on the Company’s deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company’s financial condition, results of operations or cash flows.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. We perform reviews of our income tax positions on a quarterly basis and accrue for uncertain tax positions. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the tax jurisdictions in which we operate based on our estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. As events change or resolution occurs, these liabilities are adjusted, such as in the case of audit settlements with taxing authorities. The ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential economic loss that may result from adverse changes in the fair value of financial instruments. We are exposed to various market risks, including changes in interest rates and foreign currency rates. Periodically, we use derivative financial instruments to manage or reduce the impact of changes in interest rates. Counterparties to all derivative contracts are major financial institutions. All instruments are entered into for other than trading purposes. The major accounting policies and utilization of these instruments is described more fully in ITEM 8, Note 1 of the Notes to Consolidated Financial Statements.

Interest rate risk

Our debt portfolio as of December 31, 2013, was comprised of debt predominantly denominated in U.S. dollars. This debt portfolio is comprised of 79% fixed-rate debt and 21% variable-rate debt. Changes in interest rates have different impacts on the fixed and variable-rate portions of our debt portfolio. A change in interest rates on the fixed portion of the debt portfolio impacts the fair value but has no impact on interest incurred or cash flows. A change in interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows but does not impact the net financial instrument position.

52

Based on the fixed-rate debt included in our debt portfolio, as of December 31, 2013, a 100 basis point increase or decrease in interest rates would result in a $99.1 million decrease or a $106.2 million increase in fair value, respectively.

Based on the variable-rate debt included in our debt portfolio as of December 31, 2013, a 100 basis point increase in interest rates would result in a $5.2 million increase in interest incurred. A decrease in our interest rates on our variable-rate debt of 52.2 basis points (to zero) would result in a decrease in interest incurred of $2.8 million.

Foreign currency risk

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. Periodically, we use derivative financial instruments to manage these risks. The functional currencies of our foreign operating locations are the local currency in the country of domicile. We manage these operating activities at the local level and revenues, costs, assets and liabilities are generally denominated in local currencies, thereby mitigating the risk associated with changes in foreign exchange. However, our results of operations and assets and liabilities are reported in U.S. dollars and thus will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar.

From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks. As the majority of our foreign currency contracts have an original maturity date of less than one year, there is no material foreign currency risk. Changes in the fair value of all derivatives are recognized immediately in income unless the derivative qualifies as a hedge of future cash flows. Gains and losses related to a hedge are deferred and recorded in the Consolidated Balance Sheets as a component of AOCI and subsequently recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affects net income.

53

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Pentair Ltd. and its subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, management used the criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2013, the Company’s internal control over financial reporting was effective based on those criteria.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2013. That attestation report is set forth immediately following this management report.

Randall J. Hogan	John L. Stauch
Chairman and Chief Executive Officer	Executive Vice President and Chief Financial Officer

54

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Pentair Ltd.

We have audited the internal control over financial reporting of Pentair Ltd. and subsidiaries (the “Company”) as of December 31, 2013, based on criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule listed in the Index at Item 15 as of and for the year ended December 31, 2013 of the Company and our report dated February 25, 2014 expressed an unqualified opinion on those financial statements and financial statement schedule.

Minneapolis, Minnesota

February 25, 2014

55

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Pentair Ltd.

We have audited the accompanying consolidated balance sheets of Pentair Ltd. and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations and comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Pentair Ltd. and subsidiaries at December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control—Integrated Framework(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2014 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Minneapolis, Minnesota

February 25, 2014

56

Pentair Ltd. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Years ended December 31
In millions, except per-share data	2013			2012			2011
Net sales	$	7,479.7		$	4,416.1		$	3,456.7
Cost of goods sold	5,006.8			3,146.5			2,383.0
Gross profit	2,472.9			1,269.6			1,073.7
Selling, general and administrative	1,562.1			1,158.4			694.8
Research and development	125.8			93.6			78.2
Impairment of trade names and goodwill	11.0			60.7			200.5
Operating income (loss)	774.0			(43.1		)	100.2
Other (income) expense
Gain on sale of businesses, net	(19.7		)	—			—
Loss on early extinguishment of debt	—			75.4			—
Equity income of unconsolidated subsidiaries	(1.8		)	(2.1		)	(1.9		)
Interest income	(7.6		)	(2.9		)	(1.4		)
Interest expense	76.7			70.5			60.3
Income (loss) before income taxes and noncontrolling interest	726.4			(184.0		)	43.2
Provision (benefit) for income taxes	183.8			(79.4		)	46.4
Net income (loss) before noncontrolling interest	542.6			(104.6		)	(3.2		)
Noncontrolling interest	5.8			2.6			4.3
Net income (loss) attributable to Pentair Ltd.	$	536.8		$	(107.2	)	$	(7.5	)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	542.6		$	(104.6	)	$	(3.2	)
Changes in cumulative translation adjustment	(29.1		)	31.4			(93.7		)
Amortization of pension and other post-retirement prior service cost, net of $0.2, $0.2 and $0 tax, respectively	(0.4		)	(0.3		)	—
Changes in market value of derivative financial instruments, net of $0.7, $3.7 and $2.9 tax, respectively	(0.3		)	(3.6		)	4.4
Total comprehensive income (loss)	512.8			(77.1		)	(92.5		)
Less: Comprehensive income (loss) attributable to noncontrolling interest	8.0			4.0			2.2
Comprehensive income (loss) attributable to Pentair Ltd.	$	504.8		$	(81.1	)	$	(94.7	)
Earnings (loss) per common share attributable to Pentair Ltd.
Basic	$	2.67		$	(0.84	)	$	(0.08	)
Diluted	$	2.62		$	(0.84	)	$	(0.08	)
Weighted average common shares outstanding
Basic	201.1			127.4			98.2
Diluted	204.6			127.4			98.2

See accompanying notes to consolidated financial statements.

57

Pentair Ltd. and Subsidiaries

Consolidated Balance Sheets

	December 31
In millions, except per-share data	2013			2012
Assets
Current assets
Cash and cash equivalents	$	265.1		$	261.3
Accounts and notes receivable, net of allowances of $115.1 and $37.5, respectively	1,334.3			1,274.6
Inventories	1,243.3			1,333.9
Other current assets	389.4			334.5
Total current assets	3,232.1			3,204.3
Property, plant and equipment, net	1,170.0			1,188.2
Other assets
Goodwill	5,134.2			5,111.0
Intangibles, net	1,776.1			1,926.9
Other non-current assets	430.9			452.3
Total other assets	7,341.2			7,490.2
Total assets	$	11,743.3		$	11,882.7
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	2.5		$	3.1
Accounts payable	596.6			567.0
Employee compensation and benefits	347.1			296.7
Other current liabilities	664.0			778.3
Total current liabilities	1,610.2			1,645.1
Other liabilities
Long-term debt	2,552.6			2,454.3
Pension and other post-retirement compensation and benefits	324.8			378.8
Deferred tax liabilities	580.6			421.9
Other non-current liabilities	457.4			495.1
Total liabilities	5,525.6			5,395.2
Equity
Common shares CHF 0.50 par value, 213.0 authorized and issued at December 31, 2013 and December 31,2012, respectively	113.5			113.5
Common shares held in treasury, 15.6 and 6.9 shares at December 31, 2013 and December 31, 2012, respectively	(875.1		)	(315.5		)
Capital contribution reserve	5,071.4			5,292.4
Retained earnings	1,829.1			1,292.3
Accumulated other comprehensive income (loss)	(43.6		)	(11.6		)
Shareholders’ equity attributable to Pentair Ltd.	6,095.3			6,371.1
Noncontrolling interest	122.4			116.4
Total equity	6,217.7			6,487.5
Total liabilities and equity	$	11,743.3		$	11,882.7

See accompanying notes to consolidated financial statements.

58

Pentair Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

	Years ended December 31
In millions	2013			2012			2011
Operating activities
Net income (loss) before noncontrolling interest	$	542.6		$	(104.6	)	$	(3.2	)
Adjustments to reconcile net income (loss) before noncontrolling interest to net cash provided by (used for) operating activities
Equity income of unconsolidated subsidiaries	(1.8		)	(2.1		)	(1.9		)
Depreciation	148.9			87.8			66.2
Amortization	137.2			76.0			41.9
Gain on sale of businesses, net	(19.7		)	—			—
Deferred income taxes	55.2			(146.9		)	(5.6		)
Share-based compensation	31.1			35.8			19.5
Impairment of trade names and goodwill	11.0			60.7			200.5
Loss on early extinguishment of debt	—			75.4			—
Excess tax benefits from share-based compensation	(16.8		)	(5.0		)	(3.3		)
Pension and other post-retirement expense (income)	(31.3		)	167.5			84.3
Pension and other post-retirement contributions	(34.0		)	(238.0		)	(40.3		)
Loss (gain) on sale of assets	3.4			(2.3		)	0.9
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable	(91.1		)	55.7			1.3
Inventories	67.7			125.1			18.3
Other current assets	(5.4		)	(6.7		)	10.0
Accounts payable	36.4			(62.0		)	(24.3		)
Employee compensation and benefits	56.7			(81.3		)	(20.5		)
Other current liabilities	(13.3		)	27.2			(8.0		)
Other non-current assets and liabilities	38.5			5.7			(15.6		)
Net cash provided by (used for) operating activities	915.3			68.0			320.2
Investing activities
Capital expenditures	(170.0		)	(94.5		)	(73.3		)
Proceeds from sale of property and equipment	6.0			5.5			1.3
Proceeds from sale of businesses, net	43.5			—			—
Acquisitions, net of cash acquired	(92.4		)	470.5			(733.1		)
Other	1.7			(5.9		)	(3.0		)
Net cash provided by (used for) investing activities	(211.2		)	375.6			(808.1		)
Financing activities
Net receipts (repayments) of short-term borrowings	—			(3.7		)	(1.2		)
Net receipts of commercial paper and revolving long-term debt	104.2			253.8			74.5
Proceeds from long-term debt	0.7			594.3			515.3
Repayment of long-term debt	(7.4		)	(617.2		)	(0.3		)
Debt issuance costs	(1.4		)	(9.7		)	(9.0		)
Debt extinguishment costs	—			(74.8		)	—
Excess tax benefits from share-based compensation	16.8			5.0			3.3
Shares issued to employees, net of shares withheld	80.0			68.2			13.3
Repurchases of common shares	(715.8		)	(334.2		)	(12.8		)
Dividends paid	(194.2		)	(112.4		)	(79.5		)
Distribution to noncontrolling interest	(2.0		)	(1.6		)	—
Net cash provided by (used for) financing activities	(719.1		)	(232.3		)	503.6
Effect of exchange rate changes on cash and cash equivalents	18.8			(0.1		)	(11.7		)
Change in cash and cash equivalents	3.8			211.2			4.0
Cash and cash equivalents, beginning of year	261.3			50.1			46.1
Cash and cash equivalents, end of year	$	265.1		$	261.3		$	50.1

See accompanying notes to consolidated financial statements.

59

Pentair Ltd. and Subsidiaries

Consolidated Statements of Changes in Equity

In millions	Common shares					Treasury shares					Capital contribution reserve			Retained earnings			Accumulated other comprehensive income (loss)			Total Pentair Ltd.			Non-controlling interest			Total
	Number		Amount			Number		Amount
Balance - December 31, 2010	98.4		$	47.4		—		$	—		$	443.5		$	1,552.8		$	49.5		$	2,093.2		$	111.8		$	2,205.0
Net income (loss)	—		—			—		—			—			(7.5		)	—			(7.5		)	4.3			(3.2		)
Other comprehensive income (loss), net of tax	—		—			—		—			—			—			(87.2		)	(87.2		)	(2.1		)	(89.3		)
Tax benefit of share-based compensation	—		—			—		—			3.9			—			—			3.9			—			3.9
Dividends declared	—		—			—		—			—			(79.5		)	—			(79.5		)	—			(79.5		)
Share repurchase	(0.4	)	(0.2		)	—		—			(12.6		)	—			—			(12.8		)	—			(12.8		)
Exercise of options, net of shares tendered for payment	0.7		0.3			—		—			14.4			—			—			14.7			—			14.7
Issuance of restricted shares, net of cancellations	—		—			—		—			1.5			—			—			1.5			—			1.5
Shares surrendered by employees to pay taxes	(0.1	)	—			—		—			(2.8		)	—			—			(2.8		)	—			(2.8		)
Share-based compensation	—		—			—		—			9.9			—			—			9.9			—			9.9
Balance - December 31, 2011	98.6		$	47.5		—		$	—		$	457.8		$	1,465.8		$	(37.7	)	$	1,933.4		$	114.0		$	2,047.4
Net income (loss)	—		—			—		—			—			(107.2		)	—			(107.2		)	2.6			(104.6		)
Other comprehensive income (loss), net of tax	—		—			—		—			—			—			26.1			26.1			1.4			27.5
Tax benefit of share-based compensation	—		—			—		—			5.6			—			—			5.6			—			5.6
Dividends declared	—		—			—		—			(141.1		)	(66.3		)	—			(207.4		)	—			(207.4		)
Distribution to noncontrolling interest	—		—			—		—			—			—			—			—			(1.6		)	(1.6		)
Issuance of shares related to the Merger	113.6		65.5			(2.7	)	(119.6		)	4,985.8			—			—			4,931.7						4,931.7
Share repurchase	—		—			(7.3	)	(334.2		)	—			—			—			(334.2		)	—			(334.2		)
Exercise of options, net of shares tendered for payment	0.7		0.4			2.3		97.6			(7.8		)	—			—			90.2			—			90.2
Issuance of restricted shares, net of cancellations	0.2		0.1			1.2		59.8			(40.9		)	—			—			19.0			—			19.0
Shares surrendered by employees to pay taxes	(0.1	)	—			(0.4	)	(19.1		)	(2.8		)	—			—			(21.9		)	—			(21.9		)
Share-based compensation	—		—			—		—			35.8			—			—			35.8			—			35.8
Balance - December 31, 2012	213.0		$	113.5		(6.9	)	$	(315.5	)	$	5,292.4		$	1,292.3		$	(11.6	)	$	6,371.1		$	116.4		$	6,487.5
Net income (loss)	—		—			—		—			—			536.8			—			536.8			5.8			542.6
Other comprehensive income (loss), net of tax	—		—			—		—			—			—			(32.0		)	(32.0		)	2.2			(29.8		)
Tax benefit of share-based compensation	—		—			—		—			22.6						—			22.6			—			22.6
Dividends declared	—		—			—		—			(198.5		)	—			—			(198.5		)	—			(198.5		)
Distribution to noncontrolling interest	—		—			—		—			—			—			—			—			(2.0		)	(2.0		)
Share repurchase	—		—			(12.3	)	(715.8		)	—			—			—			(715.8		)	—			(715.8		)
Exercise of options, net of shares tendered for payment	—		—			3.0		131.8			(35.6		)	—			—			96.2			—			96.2
Issuance of restricted shares, net of cancellations	—		—			0.9		37.0			(37.0		)	—			—			—			—			—
Shares surrendered by employees to pay taxes	—		—			(0.3	)	(12.6		)	(3.6		)	—			—			(16.2		)	—			(16.2		)
Share-based compensation	—		—			—		—			31.1			—			—			31.1			—			31.1
Balance - December 31, 2013	213.0		$	113.5		(15.6	)	$	(875.1	)	$	5,071.4		$	1,829.1		$	(43.6	)	$	6,095.3		$	122.4		$	6,217.7

See accompanying notes to consolidated financial statements.

60

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

1. Basis of Presentation and Summary of Significant Accounting Policies

Business

Pentair Ltd. and its consolidated subsidiaries ("the Company” or “Pentair") is a focused diversified industrial manufacturing company comprising four reporting segments: Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions. During the fourth quarter of 2013, we reorganized our business segments to reflect a new operating structure and management of our Global Business Units, resulting in a change from three reporting segments to four. All prior period amounts related to the segment change have been retrospectively reclassified throughout this Annual Report on Form 10-K to conform to the new presentation. For additional information on the Company’s segments, see Note 15.

Basis of presentation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both the U.S. and non-U.S, which we control. Intercompany accounts and transactions have been eliminated. Investments in companies of which we own 20% to 50% of the voting stock or have the ability to exercise significant influence over operating and financial policies of the investee are accounted for using the equity method of accounting and as a result, our share of the earnings or losses of such equity affiliates is included in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The consolidated financial statements have been prepared in United States dollars (“USD”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information described under Article 663-663h of the Swiss Code of Obligations has been presented in the Company’s Swiss statutory financial statements for the year ended December 31, 2013.

Fiscal year

Our fiscal year ends on December 31. We report our interim quarterly periods on a 13-week basis ending on a Saturday.

Use of estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include our accounting for valuation of long-lived assets, including goodwill and indefinite lived intangible assets, percentage of completion revenue recognition, assets acquired and liabilities assumed in acquisitions, contingent liabilities, income taxes and pension and other post-retirement benefits. Actual results could differ from our estimates.

Revenue recognition

We recognize revenue when it is realized or realizable and has been earned. Revenue is recognized when persuasive evidence of an arrangement exists; shipment or delivery has occurred (depending on the terms of the sale); our price to the buyer is fixed or determinable; and collectability is reasonably assured.

Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until substantially all obligations were satisfied.

Percentage of completion

Revenue from certain long-term contracts is recognized over the contractual period under the percentage of completion method of accounting. Under this method, sales and gross profit are recognized as work is performed either based on the relationship between the actual costs incurred and the total estimated costs at completion (“the cost-to-cost method”) or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. These reviews have not resulted in adjustments that were significant to our results of operations. Estimated losses are recorded when identified. Claims against customers are recognized as revenue upon settlement.

We record costs and earnings in excess of billings on uncompleted contracts within Other current assets and billings in excess of costs and earnings on uncompleted contracts within Other current liabilities in the Consolidated Balance Sheets. Amounts included in Other current assets related to these contracts were $100.8 million and $124.4 million at December 31, 2013 and 2012, respectively. Amounts included in Other current liabilities related to these contracts were $38.1 million and $61.1 million at December 31, 2013 and 2012, respectively.

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Notes to consolidated financial statements

Sales returns

The right of return may exist explicitly or implicitly with our customers. Generally, our return policy allows for customer returns only upon our authorization. Goods returned must be product we continue to market and must be in salable condition. Returns of custom or modified goods are normally not allowed. At the time of sale, we reduce revenue for the estimated effect of returns. Estimated sales returns include consideration of historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future.

Pricing and sales incentives

We record estimated reductions to revenue for customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives at the later of the date revenue is recognized or the incentive is offered. Sales incentives given to our customers are recorded as a reduction of revenue unless we (1) receive an identifiable benefit for the goods or services in exchange for the consideration and (2) we can reasonably estimate the fair value of the benefit received.

Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. However, one of our businesses allows customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying original equipment manufacturer customer. At the time of sale, we estimate the anticipated refund to be paid based on historical experience and reduce sales for the probable cost of the discount. The cost of these refunds is recorded as a reduction in gross sales.

Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, we reforecast the anticipated rebate to be paid based on forecasted sales levels. These forecasts are updated at least quarterly for each customer and sales are reduced for the anticipated cost of the rebate. If the forecasted sales for a customer changes, the accrual for rebates is adjusted to reflect the new amount of rebates expected to be earned by the customer.

Shipping and handling costs

Amounts billed to customers for shipping and handling are recorded in Net sales in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Shipping and handling costs incurred by Pentair for the delivery of goods to customers are included in Cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Research and development

We conduct research and development (“R&D”) activities in our own facilities, which consist primarily of the development of new products, product applications and manufacturing processes. We expense R&D costs as incurred. R&D expenditures during 2013, 2012 and 2011 were $125.8 million, $93.6 million and $78.2 million, respectively.

Cash equivalents

We consider highly liquid investments with original maturities of three months or less to be cash equivalents.

Trade receivables and concentration of credit risk

We record an allowance for doubtful accounts, reducing our receivables balance to an amount we estimate is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on current trends, aging of accounts receivable, periodic credit evaluations of our customers’ financial condition, and historical collection experience. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2013 or December 31, 2012.

Inventories

Inventories are stated at the lower of cost or market with substantially all inventories recorded using the first-in, first-out (“FIFO”) cost method and with an insignificant amount of inventories located outside the United States recorded using a moving average cost method which approximates FIFO.

Property, plant and equipment, net

Property, plant and equipment is stated at historical cost. We compute depreciation by the straight-line method based on the following estimated useful lives:

	Years
Land improvements	5 to 20
Buildings and leasehold improvements	5 to 50
Machinery and equipment	3 to 15

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Notes to consolidated financial statements

Significant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. There was no material impairment charge recorded related to long-lived assets.

Goodwill and identifiable intangible assets

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit there is an indication that goodwill impairment exists and a second step must be completed in order to determine the amount of the goodwill impairment, if any that should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital, are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions are determined over a six year long-term planning period. The six year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2019 are projected to grow at a perpetual growth rate of 3.0%.

Discount rate assumptions for each reporting unit take into consideration our assessment of risks inherent in the future cash flows of the respective reporting unit and our weighted-average cost of capital. We utilized discount rates ranging from 11.5% to 12.5% in determining the discounted cash flows in our fair value analysis.

In estimating fair value using the market approach, we identify a group of comparable publicly-traded companies for each reporting unit that are similar in terms of size and product offering. These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of earnings before interest, taxes, depreciation and amortization ("EBITDA"). We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.

Impairment charge

We completed step one of our annual goodwill impairment evaluation during the fourth quarter of 2013 and 2012 with each reporting unit’s fair value exceeding its carrying value. Accordingly, step two of the impairment analysis was not required for 2013 or 2012.

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Notes to consolidated financial statements

For the year ended December 31, 2011, we recorded a pre-tax non-cash impairment charge of $200.5 million in Process Technologies as a result of our annual goodwill impairment test. The impairment charge resulted from changes in our forecasts in light of economic conditions and continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include: customer relationships, trade names, proprietary technology, backlog and patents. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We completed our annual impairment test during the fourth quarter for those identifiable assets not subject to amortization. Impairment charges of $11.0 million and $60.7 million were recorded in 2013 and 2012, respectively, related to trade names. These charges were recorded in Impairment of trade names and goodwill in our Consolidated Statements of Operations and Comprehensive Income (Loss). There was no impairment charge recorded in 2011 for identifiable intangible assets.

The impairment test consists of a comparison of the fair value of the trade name with its carrying value. Fair value is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below. The impairment charges recorded in 2013 and 2012 were the result of rebranding strategies implemented in the fourth quarters of 2013 and 2012, respectively.

At December 31, 2013 our goodwill and intangible assets were $6,910.3 million and represented 59% of our total assets. If we experience future declines in sales and operating profit or do not meet our operating forecasts, we may be subject to future impairments. Additionally, changes in assumptions regarding the future performance of our businesses, increases in the discount rate used to determine the discounted cash flows of our businesses or significant declines in our share price or the market as a whole could result in additional impairment indicators. Because of the significance of our goodwill and intangible assets, any future impairment of these assets could have a material adverse effect on our financial results.

Equity and cost method investments

We have investments that are accounted for using the equity method. Our proportionate share of income or losses from investments accounted for under the equity method is recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). We write down or write off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. This requires significant judgment, including assessment of the investees’ financial condition and in certain cases the possibility of subsequent rounds of financing, as well as the investees’ historical and projected results of operations and cash flows. If the actual outcomes for the investees are significantly different from projections, we may incur future charges for the impairment of these investments. Our investment in and loans to equity method investees was $12.2 million and $10.3 million at December 31, 2013 and December 31, 2012, respectively, net of our proportionate share of the results of their operations.

Investments for which we do not have significant influence are accounted for under the cost method. The aggregate balance of these investments was $8.3 million and $6.9 million at December 31, 2013 and December 31, 2012.

Income taxes

We use the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. The pension and other post-retirement benefit costs for company-sponsored benefit plans are determined from actuarial assumptions and methodologies, including discount rates, expected returns on plan assets and health care cost trend rates. These assumptions are updated annually and are disclosed in Note 12.

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Notes to consolidated financial statements

We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year ("mark-to-market adjustment") and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change, as they may each year. The remaining components of pension expense, primarily service and interest costs and estimated return on plan assets, are recorded on a quarterly basis.

Environmental

We recognize environmental clean-up liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Such liabilities generally are not subject to insurance coverage. The cost of each environmental clean-up is estimated by engineering, financial and legal specialists based on current law. Such estimates are based primarily upon the estimated cost of investigation and remediation required and the likelihood that, where applicable, other potentially responsible parties (“PRPs”) will be able to fulfill their commitments at the sites where Pentair may be jointly and severally liable. The process of estimating environmental clean-up liabilities is complex and dependent primarily on the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, the uncertainty as to what remedy and technology will be required and the outcome of discussions with regulatory agencies and other PRPs at multi-party sites. In future periods, new laws or regulations, advances in clean-up technologies and additional information about the ultimate clean-up remedy that is used could significantly change our estimates. Accruals for environmental liabilities are included in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.

Asbestos Matters

We recognize asbestos-related liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Certain of these liabilities are subject to insurance coverage. Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. The process of estimating asbestos-related liabilities and the corresponding insurance recoveries receivable is complex and dependent primarily on our historical claim experience, estimates of potential future claims, our legal strategy for resolving these claims, the availability of insurance coverage, and the solvency and creditworthiness of insurers. On an annual basis, we review, and update as appropriate, such estimated asbestos liabilities and assets and the underlying assumptions.

Accruals for asbestos-related liabilities are included in Other non-current liabilities and the estimated receivable for insurance recoveries are recorded in Other non-current assets in the Consolidated Balance Sheets.

Insurance subsidiary

We insure certain general and product liability, property, workers’ compensation and automobile liability risks through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses. As of December 31, 2013 and 2012, reserves for policy claims were $51.1 million ($13.2 million included in Other current liabilities and $37.9 million included in Other non-current liabilities) and $42.9 million ($13.3 million included in Other current liabilities and $29.6 million included in Other non-current liabilities), respectively.

Share-based compensation

We account for share-based compensation awards on a fair value basis. The estimated grant date fair value of each option award is recognized in income on an accelerated basis over the requisite service period (generally the vesting period). The estimated fair value of each option award is calculated using the Black-Scholes option-pricing model. From time to time, we have elected to modify the terms of the original grant. These modified grants are accounted for as a new award and measured using the fair value method, resulting in the inclusion of additional compensation expense in our Consolidated Statements of Operations and Comprehensive Income (Loss). Restricted share awards and units are recorded as compensation cost on an accelerated basis over the requisite service periods based on the market value on the date of grant.

Earnings (loss) per common share

Basic earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding including the dilutive effects of common share equivalents.

Derivative financial instruments

We recognize all derivatives, including those embedded in other contracts, as either assets or liabilities at fair value in our Consolidated Balance Sheets. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in Accumulated other comprehensive income (loss) (“AOCI”) as a separate component of equity in

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Notes to consolidated financial statements

the Consolidated Balance Sheets and are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings. If the underlying hedged transaction ceases to exist or if the hedge becomes ineffective, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. For a derivative that is not designated as or does not qualify as a hedge, changes in fair value are reported in earnings immediately.

We use derivative instruments for the purpose of hedging interest rate and currency exposures, which exist as part of ongoing business operations. We do not hold or issue derivative financial instruments for trading or speculative purposes. All other contracts that contain provisions meeting the definition of a derivative also meet the requirements of and have been designated as, normal purchases or sales. Our policy is not to enter into contracts with terms that cannot be designated as normal purchases or sales. From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks.

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level 1: Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

Foreign currency translation

The financial statements of subsidiaries located outside of the U.S. are measured using the local currency as the functional currency, except for certain corporate entities outside of the U.S. which are measured using USD. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in AOCI, a separate component of equity.

New accounting standards

In February 2013, the Financial Accounting Standards Board issued authoritative guidance surrounding the presentation of items reclassified from AOCI to net income. This guidance requires entities to disclose, either in the notes to the consolidated financial statements or parenthetically on the face of the statement that reports comprehensive income, items reclassified out of AOCI and into net income in their entirety and the effect of the reclassification on each affected net income line item. In addition, for AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required disclosures is required. This guidance was effective for fiscal years and interim periods beginning after December 15, 2012. The adoption of this guidance on January 1, 2013 did not impact our financial condition or results of operations. The reclassifications out of AOCI and into net income were not material for the year ended December 31, 2013.

2. Acquisitions and Divestitures

Material acquisitions

Pentair Ltd. took its current form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of Pentair Ltd. "Flow Control" refers to Pentair Ltd. prior the Merger. Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco. On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding common shares of Flow Control to Tyco’s shareholders (the “Distribution”), resulting in the distribution of approximately 110.9 million of our common shares to Tyco’s shareholders. The Merger was accounted for as a reverse acquisition under the purchase method of accounting with Pentair, Inc. treated as the acquirer.

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Notes to consolidated financial statements

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)	119.8
Cash paid to Tyco in settlement of the working capital and net indebtedness adjustment (3)	84.4
Cash paid to Tyco shareholders in lieu of fractional common shares (4)	0.5
Total purchase price	$	5,016.1

(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) In June 2013, cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment.

(4) 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.

The purchase price was allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the Merger. During 2013, the Company recorded fair value adjustments to the preliminary purchase price allocation reported at December 31, 2012. Purchase price adjustments were applied retrospectively back to the date of the Merger. These adjustments did not have a material impact on net income (loss) in 2012 and, therefore, the Company has not adjusted its net income (loss) attributable to Pentair Ltd. for the year ended December 31, 2012.

The following table summarizes the fair values of the assets acquired and liabilities assumed in the Merger as originally reported in the Company's Form 10-K for the year ended December 31, 2012 and as revised for adjustments made during 2013:

In millions	As Originally Reported			As Revised
Cash and cash equivalents	$	691.7		$	691.7
Accounts and notes receivable	771.6			753.5
Inventories	1,046.2			999.7
Other current assets	98.2			94.1
Property, plant and equipment	822.0			785.7
Goodwill	2,520.1			2,741.8
Intangibles	1,425.1			1,441.9
Other non-current assets	275.1			241.1
Current liabilities	(856.3		)	(881.4		)
Long-term debt	(914.5		)	(914.5		)
Income taxes, including current and deferred	(364.6		)	(304.0		)
Other liabilities and redeemable noncontrolling interest	(591.5		)	(633.5		)
Total purchase price	$	4,923.1		$	5,016.1

The fair value of the business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of purchase price over tangible net assets and identified intangible assets acquired was allocated to goodwill in the amount of $2,741.8 million. Goodwill was allocated to our reporting segments as follows: $1,511.6 million to Valves & Controls, $30.1 million to Process Technologies, $318.5 million to Flow Technologies, and $881.6 million to Technical Solutions. None of the goodwill recognized from the Merger is expected to be deductible for income tax purposes. Goodwill

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Notes to consolidated financial statements

recognized from the Merger reflects the current value of the expected future income resulting from synergies of our combined operations. Identifiable intangible assets acquired as part of the Merger were $1,441.9 million and include $362.3 million of indefinite life trade name intangibles and the following definite-lived intangibles: $920.0 million of customer relationships with a weighted average useful life of 14.2 years, $115.9 million of proprietary technology with a weighted average useful life of 13.7 years and $43.7 million of customer backlog with a weighted average useful life of less than one year.

In May 2011, we acquired, as part of Process Technologies, the Clean Process Technologies (“CPT”) division of privately held Norit Holding B.V. for $715.3 million (€502.7 million translated at the May 12, 2011 exchange rate). CPT’s results of operations have been included in our consolidated financial statements since the date of acquisition. CPT is a global leader in membrane solutions and clean process technologies in the high growth water and beverage filtration and separation segments. CPT provides sustainable purification systems and solutions for desalination, water reuse, industrial applications and beverage segments that effectively address the increasing challenges of clean water scarcity, rising energy costs and pollution. CPT’s product offerings include innovative ultrafiltration and nanofiltration membrane technologies, aseptic valves, CO2 recovery and control systems and specialty pumping equipment. Based in the Netherlands, CPT has broad sales diversity with the majority of revenues generated in European Union and Asia-Pacific countries.

The fair value of the CPT business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value acquired over the identifiable assets acquired and liabilities assumed is reflected as goodwill. Goodwill recorded as part of the purchase price allocation was $451.8 million, none of which is tax deductible. Identifiable intangible assets acquired as part of the acquisition were $197.2 million, including definite-lived intangibles, such as customer relationships and proprietary technology with a weighted average amortization period of approximately 10 years.

Pro forma results of material acquisitions

The following unaudited pro forma condensed consolidated financial results of operations are presented as if the Merger had been completed on January 1, 2011 and as though the CPT acquisition had been completed on January 1, 2010:

	Years ended December 31
In millions, except per-share data	2012		2011
Pro forma net sales	$	7,409.9	$	7,326.4
Pro forma net income (loss) attributable to Pentair Ltd.	157.5		(47.4		)
Diluted earnings (loss) per common share attributable to Pentair Ltd.	0.75		(0.23		)

The 2011 unaudited pro forma net income includes the impact of $262.0 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog, $21.8 million of change of control costs and $8.7 million of transaction costs associated with the Merger. The 2011 unaudited pro forma net income excludes the impact of $12.9 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog and $8.0 million, respectively, of transaction costs associated with the CPT acquisition.

The 2012 unaudited pro forma net income excludes the impact of $57.3 million of transaction related costs, $21.8 million of change of control costs and $178.1 million of non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog associated with the Merger.

The pro forma consolidated financial information was prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may have differed materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of Flow Control. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the business combination occurred at the beginning of the period presented or of future results of the consolidated entities.

Other acquisitions

On January 30, 2014, we acquired, as part of Process Technologies, the remaining 19.9 percent ownership interest in two entities, a U.S. entity and an international entity (collectively, Pentair Residential Filtration or “PRF”), from GE Water & Process Technologies (a unit of General Electric Company) (“GE”) for $134.3 million in cash. Prior to the acquisition, we held a 80.1 percent ownership equity interest in PRF, representing our and GE's respective global water softener and residential water filtration businesses. There was no pro forma impact from this acquisition as the results of PRF were consolidated into our financial statements prior to acquiring the remaining interest.

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Notes to consolidated financial statements

On October 4, 2012, we acquired, as part of Valves & Controls, the remaining 25 percent equity interest in Pentair Middle East Holding S.a.r.l. (“KEF”), a privately held company, for $100.0 million in cash. Prior to the acquisition, we held a 75 percent equity interest in KEF, a vertically integrated valve manufacturer in the Middle East. There was no pro forma impact from this acquisition as the results of KEF were consolidated into Flow Control’s financial statements prior to acquiring the remaining 25 percent interest in KEF.

Additionally, during the year ended December 31, 2012, we completed other small acquisitions as part of Process Technologies with purchase prices totaling $121.2 million in cash, net of cash acquired. Total goodwill recorded as part of the purchase price allocations was $80.9 million, $67.1 million of which is tax deductible.

During the year ended December 31, 2011, we completed other small acquisitions as part of Process Technologies with purchase prices totaling $21.6 million, consisting of $17.8 million in cash and $3.8 million as notes payable. Total goodwill recorded as part of the purchase price allocations was $14.4 million, none of which is tax deductible. The pro forma impact of these acquisitions was not material.

Total transaction costs related to acquisition activities in 2013, 2012, and 2011 were $8.2 million, $57.3 million and $8.2 million, respectively, and were expensed as incurred and recorded in Selling, general and administrative in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Divestitures

During 2013, we sold businesses that were part of Technical Solutions and Flow Technologies for a cash purchase price of $30.1 million and $13.4 million, respectively, net of transaction costs, resulting in a net gain of $16.8 million and $2.9 million, respectively. Goodwill of $5.3 million and $5.7 million was included in the assets of the business sold for Technical Solutions and Flow Technologies, respectively.

3. Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows:

	Years ended December 31
In millions, except per share data	2013		2012			2011
Net income (loss) attributable to Pentair Ltd.	$	536.8	$	(107.2	)	$	(7.5	)
Weighted average common shares outstanding
Basic	201.1		127.4			98.2
Dilutive impact of stock options and restricted stock awards	3.5		—			—
Diluted	204.6		127.4			98.2
Earnings (loss) per common share attributable to Pentair Ltd.
Basic earnings (loss) per common share	$	2.67	$	(0.84	)	$	(0.08	)
Diluted earnings (loss) per common share	$	2.62	$	(0.84	)	$	(0.08	)
Anti-dilutive stock options excluded from the calculation of diluted earnings per share	0.2		16.0			8.4

4. Restructuring

During 2013, 2012 and 2011, we initiated certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. The 2013 initiatives included the reduction in hourly and salaried headcount of approximately 1,150 employees, which included 500 in Valves & Controls, 150 in Process Technologies, 200 in Flow Technologies and 300 in Technical Solutions. The 2012 initiatives included the reduction in hourly and salaried headcount of approximately 1,000 employees, which included 300 in Valves & Controls, 200 in Process Technologies, 300 in Flow Technologies and 200 in Technical Solutions. The 2011 initiatives included the reduction in hourly and salaried headcount of approximately 210 employees, which included 60 in Process Technologies, 100 in Flow Technologies and 50 in Technical Solutions.

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Notes to consolidated financial statements

Restructuring related costs included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss) included costs for severance and other restructuring costs as follows:

	Years ended December 31
In millions	2013		2012		2011
Severance and related costs	$	87.3	$	61.6	$	11.5
Other	26.2		5.3		1.5
Total restructuring costs	$	113.5	$	66.9	$	13.0

Other restructuring costs primarily consist of asset impairment and various contract termination costs.

Total restructuring costs related to Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions were $51.0 million, $8.8 million, $24.3 million and $19.4 million, respectively, for the year ended December 31, 2013. In addition, $10.0 million of restructuring costs were incurred during 2013 related to corporate restructuring initiatives. Total restructuring costs related to Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions were $5.1 million, $23.9 million, $25.2 million and $12.7 million, respectively, for the year ended December 31, 2012. Total restructuring costs related to Process Technologies, Flow Technologies and Technical Solutions were $3.9 million, $7.1 million and $2.0 million, respectively, for the year ended December 31, 2011.

We assumed $20.1 million of restructuring accruals in 2012 from actions initiated by Flow Control prior to the Merger relating to employee severance, facility exit and other restructuring costs. Activity in the restructuring accrual recorded in Other current liabilities and Employee compensation and benefits in the Consolidated Balance Sheets is summarized as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	59.6		$	12.8
Acquired	—			20.1
Costs incurred	87.3			61.6
Cash payments and other	(68.3		)	(34.9		)
Ending balance	$	78.6		$	59.6

5. Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the year ended December 31, 2013 and December 31, 2012 by reportable segment were as follows:

In millions	December 31, 2012		Acquisitions/ divestitures			Foreign currency translation/other		December 31, 2013
Valves & Controls	$	1,511.6	$	—		$	—	$	1,511.6
Process Technologies	1,500.4		7.6			16.5		1,524.5
Flow Technologies	937.3		(5.7		)	8.5		940.1
Technical Solutions	1,161.7		(5.3		)	1.6		1,158.0
Total goodwill	$	5,111.0	$	(3.4	)	$	26.6	$	5,134.2

In millions	December 31, 2011		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2012
Valves & Controls	$	—	$	1,511.6	$	—		$	1,511.6
Process Technologies	1,396.9		111.0		(7.5		)	1,500.4
Flow Technologies	597.9		318.5		20.9			937.3
Technical Solutions	279.1		881.6		1.0			1,161.7
Total goodwill	$	2,273.9	$	2,822.7	$	14.4		$	5,111.0

In 2011, we recorded an impairment charge of $200.5 million in Process Technologies. Accumulated goodwill impairment losses were $200.5 million as of December 31, 2013 and December 31, 2012.

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Notes to consolidated financial statements

Identifiable intangible assets consisted of the following at December 31:

	2013							2012
In millions	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net
Finite-life intangibles
Customer relationships	$	1,286.8	$	(243.8	)	$	1,043.0	$	1,291.5	$	(152.8	)	$	1,138.7
Trade names	2.1		(0.9		)	1.2		1.5		(0.7		)	0.8
Proprietary technology and patents	264.6		(80.1		)	184.5		263.7		(57.7		)	206.0
Backlog	2.6		(1.2		)	1.4		43.7		(18.2		)	25.5
Total finite-life intangibles	1,556.1		(326.0		)	1,230.1		1,600.4		(229.4		)	1,371.0
Indefinite-life intangibles
Trade names	546.0		—			546.0		555.9		—			555.9
Total intangibles	$	2,102.1	$	(326.0	)	$	1,776.1	$	2,156.3	$	(229.4	)	$	1,926.9

Identifiable intangible asset amortization expense in 2013, 2012 and 2011 was $137.2 million, $76.0 million and $41.9 million, respectively.

In 2013 we recorded an impairment charge for trade name intangible assets of $11.0 million in Technical Solutions. In 2012 we recorded an impairment charge for trade name intangible assets of $23.2 million, $25.9 million and $11.6 million in Process Technologies, Flow Technologies and Technical Solutions, respectively.

Estimated future amortization expense for identifiable intangible assets during the next five years is as follows:

In millions	2014		2015		2016		2017		2018
Estimated amortization expense	$	115.9	$	115.5	$	114.4	$	112.9	$	110.2

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Notes to consolidated financial statements

6. Supplemental Balance Sheet Information

	December 31
In millions	2013		2012
Inventories
Raw materials and supplies	$	557.2	$	615.1
Work-in-process	166.5		207.6
Finished goods	519.6		511.2
Total inventories	$	1,243.3	$	1,333.9
Other current assets
Cost in excess of billings	$	100.8	$	124.4
Prepaid expenses	103.9		89.0
Deferred income taxes	162.0		82.6
Other current assets	22.7		38.5
Total other current assets	$	389.4	$	334.5
Property, plant and equipment, net
Land and land improvements	$	251.3	$	248.6
Buildings and leasehold improvements	516.8		474.4
Machinery and equipment	1,208.0		1,073.0
Construction in progress	72.6		102.9
Total property, plant and equipment	2,048.7		1,898.9
Accumulated depreciation and amortization	878.7		710.7
Total property, plant and equipment, net	$	1,170.0	$	1,188.2
Other non-current assets
Asbestos-related insurance receivable	$	119.6	$	131.0
Deferred income taxes	93.6		68.7
Other non-current assets	217.7		252.6
Total other non-current assets	$	430.9	$	452.3
Other current liabilities
Deferred revenue and customer deposits	$	92.4	$	127.2
Dividends payable	98.7		95.0
Billings in excess of cost	38.1		61.1
Accrued warranty	56.6		54.3
Other current liabilities	378.2		440.7
Total other current liabilities	$	664.0	$	778.3
Other non-current liabilities
Asbestos-related liabilities	$	254.7	$	278.9
Taxes payable	48.9		50.5
Other non-current liabilities	153.8		165.7
Total other non-current liabilities	$	457.4	$	495.1

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Notes to consolidated financial statements

7. Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information:

	Years ended December 31
In millions	2013		2012		2011
Cash paid for interest, net	$	69.4	$	66.7	$	54.5
Cash paid for income taxes, net	92.9		82.2		64.4

8. Accumulated Other Comprehensive Income (Loss)

Components of AOCI consist of the following:

	December 31
In millions	2013			2012
Unrecognized pension and other post-retirement benefit costs, net of tax	$	—		$	0.4
Cumulative translation adjustments	(34.7		)	(3.4		)
Market value of derivative financial instruments, net of tax	(8.9		)	(8.6		)
Accumulated other comprehensive income (loss)	$	(43.6	)	$	(11.6	)

9. Debt

Debt and the average interest rates on debt outstanding were as follows:

In millions	Average interest rate at December 31, 2013	Maturity year	December 31
			2013			2012
Commercial paper	0.522%	2017	$	528.9		$	424.7
Senior notes - fixed rate	1.350%	2015	350.0			350.0
Senior notes - fixed rate	1.875%	2017	350.0			350.0
Senior notes - fixed rate	2.650%	2019	250.0			250.0
Senior notes - fixed rate	5.000%	2021	500.0			500.0
Senior notes - fixed rate	3.150%	2022	550.0			550.0
Other	0.017%	2015-2030	4.7			8.9
Capital lease obligations	4.086%	2014-2025	21.5			23.8
Total debt			2,555.1			2,457.4
Less: Current maturities and short-term borrowings			(2.5		)	(3.1		)
Long-term debt			$	2,552.6		$	2,454.3

The 2015 Notes, 2017 Notes, 2019 Notes, New 2021 Notes and 2022 Notes (as defined below and, collectively, the “Notes”) were all issued in transactions exempt from the registration requirements of the Securities Act of 1933, as amended. In March 2013, Pentair Ltd. and our 100 percent-owned subsidiary, Pentair Finance S.A. (“PFSA”), filed a Registration Statement with the SEC offering to exchange the Notes for new, registered Notes. The exchange offer expired on April 19, 2013 and did not impact the aggregate principle amount or the terms of the Notes outstanding. The new, registered Notes issued in such exchange offer are guaranteed as to payment by Pentair Ltd.

In December 2012, PFSA completed an exchange offer (the “Exchange Offer”) pursuant to which it exchanged $373.0 million in aggregate principal amount of 5.00% Senior Notes due 2021 of Pentair, Inc., a wholly-owned, indirect subsidiary of the Company (the “2021 Notes”) for a like amount of new 5.00% Senior Notes due 2021 of PFSA (the “New 2021 Notes”) plus $5.6 million in transaction-related costs. Upon completion of the Exchange Offer, $127.0 million in aggregate principal amount of 2021 Notes remained outstanding. The remaining 2021 Notes and New 2021 Notes are guaranteed as to payment by Pentair Ltd.

In November 2012, PFSA completed a private offering of $350.0 million aggregate principal amount of 1.35% Senior Notes due 2015 (the “2015 Notes”) and $250.0 million aggregate principal amount of 2.65% Senior Notes due 2019 (the “2019 Notes” and, collectively, the “2015/2019 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances,

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Notes to consolidated financial statements

PFSA may be required to pay additional interest on the 2015/2019 Notes. We used the net proceeds from the sale of the 2015/2019 Notes to repay commercial paper and for general corporate purposes.

In October 2012, we redeemed the remaining outstanding aggregate principal of our 5.65% fixed rate senior notes due 2013-2017 totaling $400.0 million and our 1.05% floating rate senior notes due 2013 totaling $100.0 million (the “Fixed/Floating Rate Notes”). The redemptions included make-whole premiums of $65.8 million. Concurrent with the redemption of the Fixed/Floating Rate Notes, we terminated a related interest rate swap that was designated as a cash flow hedge, which resulted in the reclassification of $3.4 million of previously unrecognized variable to fixed swap losses from AOCI to earnings in October 2012. All costs associated with the redemption were recorded as a Loss on the early extinguishment of debt including $0.6 million of unamortized deferred financing costs.

In September 2012, PFSA, completed a private offering of $550.0 million aggregate principal amount of 3.15% Senior Notes due 2022 (the “2022 Notes”) and $350 million aggregate principal amount of 1.875% Senior Notes due 2017 (the “2017 Notes” and, collectively, the “2017/2022 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances, PFSA may be required to pay additional interest on the 2017/2022 Notes. The 2017/2022 Notes remained outstanding after the Merger. A portion of the net proceeds from the 2017/2022 Notes offering were used to repay $435.0 million to Tyco in conjunction with the Distribution and the Merger.

In September 2012, Pentair, Inc. entered into a credit agreement providing for an unsecured, committed revolving credit facility (the “Credit Facility”) with initial maximum aggregate availability of up to $1,450.0 million. The Credit Facility replaced Pentair, Inc.’s $700.0 million Former Credit Facility (as defined below). The Credit Facility matures in September 2017. Upon the completion of the Merger, Pentair Ltd. became the guarantor under the Credit Facility and PFSA and certain other of our subsidiaries became affiliate borrowers under the Credit Facility. Borrowings under the Credit Facility generally bear interest at a variable rate equal to the London Interbank Offered Rate (“LIBOR”) plus a specified margin based upon PFSA’s credit ratings. PFSA must also pay a facility fee ranging from 10.0 to 30.0 basis points per annum (based upon PFSA’s credit ratings) on the amount of each lender’s commitment.

In May 2011, Pentair, Inc. completed a public offering of $500.0 million aggregate principal amount of the 2021 Notes. Pentair, Inc. used the net proceeds from the offering of the 2021 Notes to finance in part the CPT acquisition in 2011. The 2021 Notes which remain outstanding subsequent to the Exchange Offer are guaranteed as to payment by Pentair Ltd.

In April 2011, Pentair, Inc. entered into a Fourth Amended and Restated Credit Agreement that provided for an unsecured, committed revolving credit facility (the “Former Credit Facility”) of up to $700.0 million, with multi-currency sub-facilities to support investments outside the U.S. Borrowings under the Former Credit Facility bore interest at the rate of LIBOR plus 1.75%. We used borrowings under the Former Credit Facility to fund a portion of the CPT acquisition in 2011 and to repay $105.0 million of matured senior notes in May 2012. The Former Credit Facility was terminated in September 2012 in connection with the Merger and replaced by the Credit Facility, at which time the subsidiary guarantees in place under the Former Credit Facility ceased to exist.

PFSA is authorized to sell short-term commercial paper notes to the extent availability exists under the Credit Facility. PFSA uses the Credit Facility as back-up liquidity to support 100% of commercial paper outstanding. As of December 31, 2013 and 2012, we had $528.9 million and $424.7 million, respectively, of commercial paper outstanding, all of which was classified as long-term as we have the intent and the ability to refinance such obligations on a long-term basis under the Credit Facility.

We used borrowings under the Credit Facility and proceeds from the 2017/2022 Notes offering, to repay the Former Credit Facility and to pay other fees and expenses in connection with the Merger. Total availability under the Credit Facility was $921.1 million, of which none was outstanding as of December 31, 2013, which was not limited by any covenants contained in the Credit Facility’s credit agreement. Subsequent to the Merger, we used the remaining proceeds from the 2017/2022 Notes offering and issuances of commercial paper to redeem the Fixed/Floating Rate Notes as discussed above, to repurchase shares in conjunction with our share repurchase as discussed in Note 13 and to purchase the remaining 25 percent interest in KEF for $100.0 million as discussed in Note 2.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Credit Facility, including that we may not permit (i) the ratio of our consolidated debt plus synthetic lease obligations to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization, non-cash share-based compensation expense, and up to $40.0 million of costs and expenses incurred in connection with the Merger ("EBITDA") for the four consecutive fiscal quarters then ended (the “Leverage Ratio”) to exceed 3.50 to 1.00 on the last day of each fiscal quarter, and (ii) the ratio of our EBITDA for the four consecutive fiscal quarters then ended to our consolidated interest expense, including consolidated yield or discount accrued as to outstanding securitization obligations (if any), for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter. For purposes of the Leverage Ratio, the Credit Facility provides for the calculation of EBITDA giving pro forma effect to the Merger and certain acquisitions, divestitures and

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Notes to consolidated financial statements

liquidations during the period to which such calculation relates. As of December 31, 2013, we were in compliance with all financial covenants in our debt agreements.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $86.7 million, of which none was outstanding at December 31, 2013. Borrowings under these credit facilities bear interest at variable rates.

Debt outstanding at December 31, 2013 matures on a calendar year basis as follows:

In millions	2014		2015		2016		2017		2018		Thereafter		Total
Contractual debt obligation maturities	$	—	$	350.0	$	—	$	878.9	$	—	$	1,304.7	$	2,533.6
Capital lease obligations	2.5		5.5		0.5		0.5		0.5		12.0		21.5
Total maturities	$	2.5	$	355.5	$	0.5	$	879.4	$	0.5	$	1,316.7	$	2,555.1

As part of the Merger and CPT acquisition, we assumed capital lease obligations related primarily to land and buildings. As of December 31, 2013 and 2012, the recorded values of the assets acquired under those capital leases were $41.7 million and $40.5 million, respectively, less accumulated amortization of $7.6 million and $6.0 million, respectively, all of which were included in Property, plant and equipment, net on the Consolidated Balance Sheets.

Capital lease obligations consist of total future minimum lease payments of $23.3 million less the imputed interest of $1.8 million as of December 31, 2013.

10. Derivatives and Financial Instruments

Derivative financial instruments

We are exposed to market risk related to changes in foreign currency exchange rates and interest rates on our floating rate indebtedness. To manage the volatility related to these exposures, we periodically enter into a variety of derivative financial instruments. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency rates and interest rates. The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements. The amount of such credit risk is generally limited to the unrealized gains, if any, in such contracts. Such risk is minimized by limiting those counterparties to major financial institutions of high credit quality.

Interest rate swaps

During 2012 and 2011, we used floating to fixed rate interest rate swaps to mitigate our exposure to future changes in interest rates related to our floating rate indebtedness. We designated these interest rate swap arrangements as cash flow hedges. As a result, changes in the fair value of the interest rate swaps were recorded in AOCI on the Consolidated Balance Sheets throughout the contractual term of each of the interest rate swap arrangements.

During the year ended December 31, 2012, all of our interest rate swaps expired or were terminated and, as a result, we had no outstanding interest rate swap arrangements at December 31, 2012 or December 31, 2013.

In September 2005, we entered into a $100.0 million interest rate swap agreement with several major financial institutions to exchange variable rate interest payment obligations for fixed rate obligations without the exchange of the underlying principal amounts in order to manage interest rate exposures. The effective date of the fixed rate swap was April 25, 2006. The swap agreement has a fixed interest rate of 4.68% and was set to expire in July 2013. The fixed interest rate of 4.68% plus the 0.60% interest rate spread over LIBOR results in an effective fixed interest rate of 5.28%. This swap was terminated in October 2012. A loss of $3.3 million was recognized upon termination and was recorded in Loss on early extinguishment of debt in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012.

Derivative gains and losses included in AOCI were reclassified into earnings at the time the related interest expense was recognized or the settlement of the related commitment occurred. Interest expense from swaps was $5.3 million and $9.3 million in 2012 and 2011, respectively, and was recorded in Interest expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In April 2011, as part of our planned debt issuance to fund the CPT acquisition, we entered into interest rate swap contracts to hedge movement in interest rates through the expected date of closing for a portion of the expected fixed rate debt offering. The swaps had a notional amount of $400.0 million with an average interest rate of 3.65%. In May 2011, upon the sale of the 2021 Notes, the swaps were terminated at a cost of $11.0 million. Because we used the contracts to hedge future interest payments, this was recorded in AOCI in the Consolidated Balance Sheets and will be amortized as interest expense over the 10 year life of

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Notes to consolidated financial statements

the 2021 Notes. The ending unrealized net loss in AOCI at December 31, 2013 and 2012 was $8.1 million and $9.2 million, respectively.

Foreign currency contracts

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative financial instruments. Our objective in holding these derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates. The majority of our foreign currency contracts have an original maturity date of less than one year. At December 31, 2013 and 2012, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $143.0 million and $163.7 million, respectively. The impact of these contracts on the Consolidated Statements of Operations and Comprehensive Income (Loss) is not material for any period presented.

Gains or losses on foreign currency contracts designated as hedges are reclassified out of AOCI and into Selling, general and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) upon settlement. Such reclassifications during 2013, 2012 and 2011 were not material.

Fair value of financial instruments

The following methods were used to estimate the fair values of each class of financial instrument:

• short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;

• long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and

• interest rate swaps and foreign currency contract agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance.

The recorded amounts and estimated fair values of total debt at December 31 were as follows:

	2013				2012
In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value
Variable rate debt	$	528.9	$	528.9	$	427.7	$	427.7
Fixed rate debt	2,026.2		2,002.2		2,029.7		2,081.3
Total debt	$	2,555.1	$	2,531.1	$	2,457.4	$	2,509.0

Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows:

Recurring fair value measurements	December 31, 2013
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	3.6		$	—	$	3.6
Foreign currency contract liabilities	—		(0.9		)	—		(0.9		)
Deferred compensation plan assets (1)	32.1		—			—		32.1
Total recurring fair value measurements	$	32.1	$	2.7		$	—	$	34.8
Nonrecurring fair value measurements(2)

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Notes to consolidated financial statements

Recurring fair value measurements	December 31, 2012
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	2.9		$	—	$	2.9
Foreign currency contract liabilities	—		(0.5		)	—		(0.5		)
Deferred compensation plan assets (1)	22.4		—			—		22.4
Total recurring fair value measurements	$	22.4	$	2.4		$	—	$	24.8
Nonrecurring fair value measurements
Trade name intangibles (2)	$	—	$	—		$	63.7	$	63.7

(1) Deferred compensation plan assets include mutual funds and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of these assets was based on quoted market prices in active markets.

(2) In the fourth quarter of 2013 and 2012, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $11.0 million and $60.7 million for trade names intangibles in 2013 and 2012, respectively. The impairment charge in 2013 reduced the fair value of the impacted trade name intangibles to $0. The fair value of trade names is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

11. Income Taxes

Income (loss) before income taxes and noncontrolling interest consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Federal (1)	$	328.7	$	39.2		$	(31.5	)
International	397.7		(223.2		)	74.7
Income (loss) before income taxes and noncontrolling interest	$	726.4	$	(184.0	)	$	43.2

(1) As a result of the Merger, “Federal” reflects income (loss) before income taxes and noncontrolling interest for Switzerland in 2013 and 2012 and for the U.S. in 2011.

The provision (benefit) for income taxes consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Currently payable
Federal (1)	$	17.4	$	6.5		$	51.2
State	—		—			7.0
International (2)	111.2		61.0			23.9
Total current taxes	128.6		67.5			82.1
Deferred
Federal (1)	18.9		1.3			(26.2		)
International (2)	36.3		(148.2		)	(9.5		)
Total deferred taxes	55.2		(146.9		)	(35.7		)
Total provision (benefit) for income taxes	$	183.8	$	(79.4	)	$	46.4

(1) As a result of the Merger, “Federal” represents Swiss taxes for 2013 and 2012 and U.S. taxes for 2011.

(2) As a result of the Merger, "International" represents non-Swiss taxes for 2013 and 2012 and non-U.S. taxes for 2011.

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Notes to consolidated financial statements

Reconciliations of the federal statutory income tax rate to our effective tax rate were as follows:

	Years ended December 31
Percentages	2013	2012		2011
Federal statutory income tax rate (1)	7.8	7.8		35.0
Tax effect of international operations (2)	10.5	23.6		(25.3	)
Change in valuation allowances	5.5	—		—
Withholding taxes	1.0	—		—
Interest limitations	0.5	—		—
Non-deductible transaction costs	—	(4.7	)	—
Impact of debt-financing	—	10.8		—
Resolution of tax audits	—	5.6		—
Goodwill	—	—		104.4
Domestic manufacturing deduction	—	—		(8.4	)
State income taxes, net of federal tax benefit	—	—		4.3
All other, net	—	—		(2.7	)
Effective tax rate	25.3	43.1		107.3

(1) As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, the statutory rate reflects the U.S. statutory rate of 35 percent.

(2) As a result of the Merger, the tax effect of international operations for 2013 and 2012 consists of non-Swiss jurisdictions. For 2011, the tax effect of international operations consists of non-U.S. jurisdictions.

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:

	Years ended December 31
In millions	2013			2012			2011
Beginning balance	$	53.4		$	26.5		$	24.3
Gross increases for tax positions in prior periods	12.2			2.2			2.1
Gross decreases for tax positions in prior periods	(0.6		)	(0.6		)	(0.2		)
Gross increases based on tax positions related to the current year	2.7			13.6			3.2
Gross decreases related to settlements with taxing authorities	(5.1		)	(13.2		)	(2.5		)
Reductions due to statute expiration	(1.8		)	(0.4		)	(0.4		)
Gross increases due to acquisitions	—			25.3			—
Ending balance	$	60.8		$	53.4		$	26.5

Included in the $60.8 million of total gross unrecognized tax benefits as of December 31, 2013 was $58.5 million of tax benefits that, if recognized, would impact the effective tax rate. It is reasonably possible that the gross unrecognized tax benefits as of December 31, 2013 may decrease by a range of $0 to $32.6 million during 2014, primarily as a result of the resolution of non-Swiss examinations, including U.S. federal and state examinations, and the expiration of various statutes of limitations.

The determination of annual income tax expense takes into consideration amounts which may be needed to cover exposures for open tax years. The Internal Revenue Service (“IRS”) has examined the Pentair, Inc. U.S. federal income tax returns through 2010 with no material adjustments. A number of tax periods from 2003 to present are under audit by tax authorities in various jurisdictions, including France, Germany, India and Italy. We anticipate that several of these audits may be concluded in the foreseeable future. We are also subject to the 2012 Tax Sharing Agreement, discussed below, which generally applies to pre-Distribution Tyco tax periods beginning in 1997 which remain subject to audit by the IRS.

We record penalties and interest related to unrecognized tax benefits in Provision (benefit) for income taxes and Interest expense, respectively. As of December 31, 2013 and 2012, we have liabilities of $0.9 million and $1.3 million, respectively, for the possible payment of penalties and $8.9 million and $8.2 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated Balance Sheets.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Deferred taxes in the amount of $16.2 million have been provided on undistributed earnings of certain subsidiaries. Taxes have not been provided on undistributed earnings of subsidiaries where it is our intention to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. It is not practicable to estimate the amount of tax that might be payable if such earnings were to be remitted.

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which we received a tax deduction but the tax impact has not yet been recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss)).

Deferred taxes were recorded in the Consolidated Balance Sheets as follows:

	December 31
In millions	2013		2012
Other current assets	$	162.0	$	82.6
Other non-current assets	93.6		68.7
Deferred tax liabilities	580.6		421.9
Net deferred tax liabilities	$	325.0	$	270.6

The tax effects of the major items recorded as deferred tax assets and liabilities were as follows:

	December 31
In millions	2013		2012
Deferred tax assets
Accrued liabilities and reserves	$	194.8	$	172.8
Pension and other post-retirement benefits	77.3		73.7
Employee compensation & benefits	84.4		94.5
Tax loss and credit carryforwards	355.0		377.8
Other	—		9.4
Total deferred tax assets	711.5		728.2
Valuation allowance	237.4		174.4
Deferred tax assets, net of valuation allowance	474.1		553.8
Deferred tax liabilities
Property, plant and equipment	60.4		80.3
Goodwill and other intangibles	708.8		744.1
Other liabilities	29.9		—
Total deferred tax liabilities	799.1		824.4
Net deferred tax liabilities	$	325.0	$	270.6

As of December 31, 2013, tax loss carryforwards of $1,258.1 million were available to offset future income. A valuation allowance of $208.1 million exists for deferred income tax benefits related to the tax loss carryforwards which may not be realized. We believe sufficient taxable income will be generated in the respective jurisdictions to allow us to fully recover the remainder of the tax losses. The tax losses relate to Non-U.S. carryforwards of $979.3 million which are subject to varying expiration periods and will begin to expire in 2014. In addition, there were $144.9 million of U.S. federal and $133.9 million of state tax loss carryforwards as of December 31, 2013, which will expire in future years through 2033.

On September 13, 2013, the U.S. Treasury and the IRS issued final regulations regarding the deduction and capitalization of expenditures related to tangible property. The final regulations under Internal Revenue Code Sections 162, 167 and 263(a) apply to amounts paid to acquire, produce, or improve tangible property as well as dispositions of such property and are generally effective for tax years beginning on or after January 1, 2014. We have evaluated these regulations and determined they will not have a material impact on our consolidated results of operations, cash flows or financial position.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Tax sharing agreement and other income tax matters

In connection with the Distribution, we entered into a tax sharing agreement (the “2012 Tax Sharing Agreement”) with Tyco and The ADT Corporation (“ADT”), which governs the rights and obligations of Tyco, ADT and us for certain pre-Distribution tax liabilities, including Tyco’s obligations under a separate tax sharing agreement (the “2007 Tax Sharing Agreement”) that Tyco, Covidien Ltd. (“Covidien”) and TE Connectivity Ltd. (“TE Connectivity”) entered into in connection with the 2007 distributions of Covidien and TE Connectivity by Tyco (the “2007 Separation”). The 2007 Tax Sharing Agreement governs the rights and obligations of Tyco, Covidien and TE Connectivity with respect to certain pre-2007 Separation tax liabilities and certain tax liabilities arising in connection with the 2007 Separation. More specifically, Tyco, Covidien and TE Connectivity share 27%, 42% and 31%, respectively, of income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and TE Connectivity's U.S. and certain non-U.S. 2007 and prior income tax returns.

The 2012 Tax Sharing Agreement provides that we, Tyco and ADT will share (i) certain pre-Distribution income tax liabilities that arise from adjustments made by tax authorities to our, Tyco’s and ADT’s U.S. income tax returns, and (ii) payments required to be made by Tyco in respect to the 2007 Tax Sharing Agreement (collectively, “Shared Tax Liabilities”). Tyco is responsible for the first $500 million of Shared Tax Liabilities. We and ADT will share 42% and 58%, respectively, of the next $225 million of Shared Tax Liabilities. We, ADT and Tyco will share 20%, 27.5% and 52.5%, respectively, of Shared Tax Liabilities above $725 million. Under these tax sharing agreements, the amount ultimately assessed would have to be in excess of $1.85 billion before we would be required to pay any of the amounts assessed.

In the event the Distribution, the spin-off of ADT, or certain internal transactions undertaken in connection therewith were determined to be taxable as a result of actions taken after the Distribution by us, ADT or Tyco, the party responsible for such failure would be responsible for all taxes imposed on us, ADT or Tyco as a result thereof. Taxes resulting from the determination that the Distribution, the spin-off of ADT, or any internal transaction is taxable are referred to herein as “Distribution Taxes.” If such failure is not the result of actions taken after the Distribution by us, ADT or Tyco, then we, ADT and Tyco would be responsible for any Distribution Taxes imposed on us, ADT or Tyco as a result of such determination in the same manner and in the same proportions as the Shared Tax Liabilities. ADT will have sole responsibility for any income tax liability arising as a result of Tyco’s acquisition of Brink’s Home Security Holdings, Inc. (“BHS”) in May 2010, including any liability of BHS under the tax sharing agreement between BHS and The Brink’s Company dated October 31, 2008 (collectively, the “BHS Tax Liabilities”). Costs and expenses associated with the management of Shared Tax Liabilities, Distribution Taxes and BHS Tax Liabilities will generally be shared 20% by us, 27.5% by ADT and 52.5% by Tyco. We are responsible for all of our own taxes that are not shared pursuant to the 2012 Tax Sharing Agreement’s sharing formulae. In addition, Tyco and ADT are responsible for their tax liabilities that are not subject to the 2012 Tax Sharing Agreement’s sharing formula.

The 2012 Tax Sharing Agreement also provides that, if any party were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party’s fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the 2012 Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, we could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, we may be obligated to pay amounts in excess of our agreed-upon share of our, Tyco’s and ADT’s tax liabilities.

On July 1, 2013, Tyco announced that the Internal Revenue Service (“IRS”) issued Notices of Deficiency (“Tyco IRS Notices”) to Tyco asserting that several of Tyco's former U.S. subsidiaries collectively owe additional taxes in the aggregate amount of $883.3 million plus penalties of $154 million based on audits of the 1997 through 2000 tax years of Tyco and its subsidiaries as they existed at that time. These amounts exclude interest and do not reflect the impact on subsequent periods if the IRS challenge to Tyco's tax filings as described below is ultimately successful. If the IRS should successfully assert its position, our share of the collective liability, if any, would be determined pursuant to the 2007 Tax Sharing Agreement and the 2012 Tax Sharing Agreement. Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments.

As we have previously disclosed, in connection with U.S. federal tax audits of Tyco and its subsidiaries, the IRS has previously raised issues and proposed tax adjustments for periods beginning with the 1997 tax year. The adjustments now asserted by the IRS under the Tyco IRS Notices primarily relate to the treatment of certain intercompany debt transactions. The IRS has asserted in the Tyco IRS Notices that substantially all of the intercompany debt originated during the 1997 - 2000 period should not be treated as debt for U.S. federal income tax purposes, and has therefore disallowed interest and related deductions recognized associated with that intercompany debt on the U.S. income tax returns for those periods totaling approximately $2.9 billion. If the IRS is successful in asserting its claim, it would have an adverse impact on interest deductions related to the same Tyco intercompany debt in subsequent time periods, totaling approximately $6.6 billion, which Tyco has advised us that it expects the IRS to disallow. Under the 2012 Tax Sharing Agreement, Tyco has the right to administer, control, and settle all U.S. income tax audits for periods prior to and including the Distribution. As mentioned above, Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments. Tyco has advised us that it strongly disagrees with the IRS position and believes

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

(i) it has meritorious defenses for the respective tax filings, (ii) the IRS positions with regard to these matters are inconsistent with applicable tax laws and Treasury regulations, and (iii) the previously reported taxes for the years in question are appropriate.

No payments with respect to these matters would be required until the dispute is resolved in the U.S. Tax Court, which Tyco has advised us, based on the experience of other companies, could take several years. However, the ultimate resolution of these matters is uncertain, and to the extent we are responsible for any Shared Tax Liability or Distribution Tax, including if the IRS were to prevail with respect to the matter set forth above, there could be a material adverse impact on our financial condition, results of operations, or cash flows in future reporting periods.

12. Benefit Plans

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. Pension benefits are based principally on an employee’s years of service and/or compensation levels near retirement. In addition, we provide certain post-retirement health care and life insurance benefits. Generally, the post-retirement health care and life insurance plans require contributions from retirees. In December 2007, we announced that we will be freezing certain U.S. pension plans as of December 31, 2017. Since the announcement, we have pursued a strategy of gradually shifting our U.S. pension asset allocations towards liability hedging assets such as fixed income instruments and away from equity securities. During the last quarter of 2012 we made significant progress in reducing the risk and volatility of our U.S. pension plans by taking the following steps:

• We paid $331.0 million to settle pension obligations through a combination of lump sum payments to deferred vested participants and through the purchase of an annuity contract to settle obligations to plan participants in retiree status.

• We made a special contribution of $190.0 million to fund our U.S. pension plans.

• We accelerated our transition to increase the allocations of investments to liability hedging assets.

81

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Obligations and funded status

The following tables present reconciliations of plan benefit obligations, fair value of plan assets and the funded status of pension plans and other post-retirement plans as of and for the years ended December 31, 2013 and 2012:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
In millions	2013			2012			2013			2012			2013			2012
Change in benefit obligations
Benefit obligation beginning of year	$	394.3		$	572.1		$	460.8		$	89.5		$	59.3		$	35.1
Service cost	15.6			12.9			8.4			3.3			0.3			0.2
Interest cost	14.3			28.2			17.9			7.5			1.9			1.9
Amendments	—			0.4			—			—			—			—
Benefit obligations assumed in Merger	—			10.8			—			338.6			—			16.7
Actuarial (gain) loss	(56.9		)	128.8			(16.6		)	26.6			(15.9		)	8.2
Translation loss	—			—			9.7			1.5			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Benefit obligation end of year	$	346.9		$	394.3		$	462.0		$	460.8		$	42.4		$	59.3
Change in plan assets
Fair value of plan assets beginning of year	$	326.2		$	408.8		$	249.0		$	10.9		$	—		$	—
Actual return on plan assets	(28.9		)	43.9			28.6			6.4			—			—
Plan assets acquired in Merger	—			7.6			—			227.3			—			—
Company contributions	8.9			224.8			21.9			10.4			3.2			2.8
Translation gain	—			—			5.2			0.2			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Fair value of plan assets end of year	$	285.8		$	326.2		$	286.5		$	249.0		$	—		$	—
Funded status
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

Amounts recorded in the Consolidated Balance Sheets were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post- retirement plans
In millions	2013			2012			2013			2012			2013			2012
Other non-current assets	$	0.7		$	—		$	3.7		$	—		$	—		$	—
Current liabilities	(3.9		)	(3.5		)	(4.7		)	(4.9		)	(3.7		)	(4.5		)
Non-current liabilities	(57.9		)	(64.6		)	(174.5		)	(207.0		)	(38.7		)	(54.8		)
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

The accumulated benefit obligation for all defined benefit plans was $772.2 million and $804.2 million at December 31, 2013 and 2012, respectively.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Information for pension plans with an accumulated benefit obligation or projected benefit obligation in excess of plan assets as of December 31 are as follows:

	Projected benefit obligation exceeds the fair value of plan assets				Accumulated benefit  obligation exceeds the fair value of plan assets
In millions	2013		2012		2013		2012
U.S. pension plans
Projected benefit obligation	$	76.3	$	158.1	$	76.3	$	87.1
Fair value of plan assets	14.5		85.3		14.5		15.5
Accumulated benefit obligation	N/A		N/A		73.1		77.2
Non-U.S. pension plans
Projected benefit obligation	$	438.2	$	436.7	$	420.4	$	431.3
Fair value of plan assets	259.0		222.4		244.5		217.2
Accumulated benefit obligation	N/A		N/A		411.5		420.0

Components of net periodic benefit expense (income) for our pension plans for the years ended December 31 were as follows:

	U. S. pension plans									Non-U.S. pension plans
In millions	2013			2012			2011			2013			2012			2011
Service cost	$	15.6		$	12.9		$	10.3		$	8.4		$	3.3		$	2.2
Interest cost	14.3			28.2			28.6			17.9			7.5			4.1
Expected return on plan assets	(9.7		)	(29.4		)	(27.9		)	(15.2		)	(3.9		)	(0.5		)
Amortization of prior year service cost (benefit)	0.4			—			—			(0.2		)	—			—
Net actuarial (gain) loss	(18.3		)	114.3			59.0			(30.0		)	24.2			4.2
Net periodic benefit expense (income)	$	2.3		$	126.0		$	70.0		$	(19.1	)	$	31.1		$	10.0

Components of net periodic benefit expense (income) for our other post-retirement plans for the years ended December 31 were as follows:

	Other post-retirement plans
In millions	2013			2012		2011
Service cost	$	0.3		$	0.2	$	0.2
Interest cost	1.9			1.9		1.9
Amortization of prior year service benefit	(0.8		)	—		—
Net actuarial (gain) loss	(15.9		)	8.1		2.4
Net periodic benefit (income) expense	$	(14.5	)	$	10.2	$	4.5

83

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Assumptions

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	4.51	%	3.67	%	5.05	%	4.13	%	3.85	%	4.82	%	4.35	%	3.40	%	5.05	%
Rate of compensation increase	4.00	%	4.37	%	4.00	%	3.02	%	3.02	%	2.98	%	—		—		—

Weighted-average assumptions used to determine net periodic benefit expense (income) for years ended December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	3.67	%	5.05	%	5.90	%	3.85	%	4.82	%	5.13	%	3.40	%	5.05	%	5.90	%
Expected long-term return on plan assets	3.75	%	7.50	%	8.00	%	5.98	%	4.09	%	4.50	%	—		—		—
Rate of compensation increase	4.37	%	4.21	%	4.00	%	3.02	%	2.98	%	2.98	%	—		—		—

Uncertainty in the securities markets and U.S. economy could result in investment returns less than those assumed. Should the securities markets decline or medical and prescription drug costs increase at a rate greater than assumed, we would expect increasing annual combined net pension and other post-retirement costs for the next several years. Should actual experience differ from actuarial assumptions, the projected pension benefit obligation and net pension cost and accumulated other post-retirement benefit obligation and other post-retirement benefit cost would be affected in future years.

Discount rates

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date. The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds rated AA or higher available in the marketplace, adjusted to eliminate the effects of call provisions. This produced a weighted-average discount rate for our U.S. pension plans of 4.51%, 3.67% and 5.05% in 2013, 2012 and 2011, respectively. The discount rates on our non-U.S. pension plans ranged from 0.50% to 5.00%, 0.50% to 4.50% and 0.75% to 5.00% in 2013, 2012 and 2011, respectively. There are no known or anticipated changes in our discount rate assumptions that will impact our pension expense in 2014.

Expected rates of return

Our expected rates of return on U.S. pension plan assets were 3.75%, 7.50% and 8.00% for 2013, 2012 and 2011, respectively. The expected rates of return on non-U.S. pension plan assets ranged from 1.00% to 6.50%, 1.00% to 4.60% and 0.25% to 5.20% in 2013, 2012 and 2011, respectively. The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns. In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader longer-term market indices. U.S. pension plan assets yielded returns of (9.90)%, 10.80% and 7.80% in 2013, 2012 and 2011, respectively. As a result of our de-risking strategy to reduce U.S. pension plan liability, we anticipate the expected rate of return on our U.S. funded pension plans will continue to be consistent with the discount rate utilized. Any difference in the expected rate and actual returns will be included with the actuarial gain or loss recorded in the fourth quarter when our plans are remeasured.

Healthcare cost trend rates

The assumed healthcare cost trend rates for other post-retirement plans as of December 31 were as follows:

	2013		2012
Healthcare cost trend rate assumed for following year	7.0	%	7.4	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.5	%	4.5	%
Year the cost trend rate reaches the ultimate trend rate	2027		2027

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

The assumed healthcare cost trend rates can have a significant effect on the amounts reported for healthcare plans. A one-percentage-point change in the assumed healthcare cost trend rates would have the following effects as of and for the year ended December 31, 2013:

	One Percentage Point
In millions	Increase		Decrease
Increase (decrease) in annual service and interest cost	$	0.1	$	(0.1	)
Increase (decrease) in other post-retirement benefit obligations	1.2		(1.0		)

Pension plans assets

Objective

The primary objective of our investment strategy is to meet the pension obligation to our employees at a reasonable cost to us. This is primarily accomplished through growth of capital and safety of the funds invested.

During 2012, we adopted an investment strategy for our U.S. pension plans with a primary objective of preserving the funded status of the U.S. plans. This is achieved through investments in fixed interest instruments with interest rate sensitivity characteristics closely reflecting the interest rate sensitivity of our benefit obligations. Shifting of allocations away from equities to liability hedging fixed income investments, by reinvesting in fixed income instruments as equity investments were redeemed, was completed during 2013. As of December 31, 2013, the U.S. pension plans have an approximately 92 percent allocation to fixed income investments.

Asset allocation

Our actual overall asset allocation for our U.S. and non-U.S. pension plans as compared to our investment policy goals as of December 31 was as follows:

	U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	—	%	32	%	—		—
Fixed income	92	%	56	%	100	%	100	%
Alternative	7	%	7	%	—		—
Cash	1	%	5	%	—		—

	Non-U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	54	%	51	%	56	%	55	%
Fixed income	41	%	42	%	44	%	45	%
Alternative	3	%	3	%	—		—
Cash	2	%	4	%	—		—

While the target allocations do not have a percentage allocated to cash, the plan assets will always include some cash due to cash flow requirements.

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Notes to consolidated financial statements

Fair value measurement

The fair values of our pension plan assets and their respective levels in the fair value hierarchy as of December 31, 2013 and December 31, 2012 were as follows:

	December 31, 2013
In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1.8	$	5.9	$	—	$	7.7
Fixed income:
Corporate and non U.S. government	—		262.2		—		262.2
U.S. treasuries	—		75.5		—		75.5
Mortgage-backed securities	—		8.7		—		8.7
Other	—		34.1		—		34.1
Global equity securities:
Mid cap equity	—		7.3		—		7.3
Large cap equity	—		43.5		—		43.5
International equity	—		101.9		—		101.9
Long/short equity	—		0.6		—		0.6
Other investments	—		11.8		19.0		30.8
Total fair value of plan assets	$	1.8	$	551.5	$	19.0	$	572.3

	December 31, 2012
In millions	Level 1		Level 2		Level 3		Total
Cash equivalents	$	6.2	$	21.2	$	—	$	27.4
Fixed income:
Corporate and non U.S. government	—		164.3		—		164.3
U.S. treasuries	—		69.4		—		69.4
Mortgage-backed securities	—		23.4		—		23.4
Other	—		28.1		—		28.1
Global equity securities:
Mid cap equity	—		6.7		—		6.7
Large cap equity	—		89.0		—		89.0
International equity	—		89.8		—		89.8
Long/short equity	—		47.6		—		47.6
Other investments	—		11.2		18.3		29.5
Total fair value of plan assets	$	6.2	$	550.7	$	18.3	$	575.2

Valuation methodologies used for investments measured at fair value were as follows:

• Cash and cash equivalents: Cash consists of cash held in bank accounts and was classified as Level 1. Cash equivalents consist of investments in commingled funds valued based on observable market data. Such investments were classified as Level 2.

• Fixed income: Investments in corporate bonds, government securities, mortgages and asset backed securities were value based upon quoted market prices for similar securities and other observable market data. Investments in commingled funds were generally valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service. Such investments were classified as Level 2.

• Global equity securities: Investments in commingled funds were valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service. Such investments were classified as Level 2.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

• Other investments: Other investments include investments in commingled funds with diversified investment strategies. Investments in commingled funds that were valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service were classified as Level 2. Investments in commingled funds that were valued based on unobservable inputs due to liquidation restrictions were classified as Level 3.

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2013 and 2012, respectively:

In millions	January 1, 2013		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2013
Other investments	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0
Total	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0

In millions	January 1, 2012		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2012
Other investments	$	19.0	$	1.1	$	(1.8	)	$	—	$	18.3
Fixed income investments	1.0		—		(1.0		)	—		—
Total	$	20.0	$	1.1	$	(2.8	)	$	—	$	18.3

Cash flows

Contributions

Pension contributions totaled $30.8 million and $235.2 million in 2013 and 2012, respectively. Our 2014 pension contributions are expected to be approximately $32.0 million to $37.0 million. The 2014 expected contributions will equal or exceed our minimum funding requirements.

Estimated future benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans for the years ended December 31 as follows:

In millions	U.S. pension plans		Non-U.S. pension plans		Other post- retirement plans
2014	$	8.6	$	18.6	$	3.7
2015	9.8		16.2		3.5
2016	12.3		17.2		3.4
2017	13.7		18.5		3.4
2018	16.2		19.8		3.3
2019-2023	103.8		113.1		14.9

Savings plan

We have a 401(k) plan (“the 401(k) plan”) with an employee share ownership (“ESOP”) bonus component, which covers certain union and all non-union U.S. employees who meet certain age requirements. Under the 401(k) plan, eligible U.S. employees may voluntarily contribute a percentage of their eligible compensation. We match contributions made by employees who meet certain eligibility and service requirements. Our matching contribution is 100% of eligible employee contributions for the first 1% of eligible compensation and 50% of the next 5% of eligible compensation.

In addition to the matching contribution, all employees who meet certain service requirements receive a discretionary ESOP contribution equal to 1.5% of annual eligible compensation.

Additionally, we have a 401(k) plan acquired as part of the Merger (“the Flow 401(k) plan”) which covers certain union and all non-union U.S. employees who meet certain age requirements. Under the Flow 401(k) plan, eligible U.S. employees may voluntarily contribute a percentage of their eligible compensation. We match contributions made by employees who meet certain eligibility and service requirements. Our matching contribution is 500% of eligible employee contributions for the first 1% of eligible compensation. Additional company match is based on years of service, as follows: an additional 1% match at 10

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

– 19 years of service, an additional 2% match at 20 – 24 years, an additional 3% match at 25 – 29 years and an additional 4% match at 30+ years. Participants are 100% vested in the employer match after 3 years of service.

On December 31, 2013, the Flow 401(k) plan merged into the 401(k) plan and all employees covered by the Flow 401(k) plan became fully vested in their Flow 401(k) plan employer matching contributions and all future employer matching contributions will be made under the 401(k) plan matching contribution formula.

Our combined expense for the 401(k) plan, the Flow 401(k) plan and the ESOP was $26.8 million, $19.7 million and $15.8 million in 2013, 2012 and 2011, respectively.

Other retirement compensation

Total other accrued retirement compensation, primarily related to deferred compensation and supplemental retirement plans, was $53.3 million and $52.6 million as of December 31, 2013 and 2012, respectively, and is included in Pension and other post-retirement compensation and benefits in the Consolidated Balance Sheets.

Multi-employer defined benefit plans

We participate in a number of multi-employer defined benefit plans on behalf of certain employees. Pension expense related to multi-employer plans was not material in 2013, 2012 and 2011.

13. Shareholders’ Equity

Authorized shares

Our authorized share capital consists of 213.0 million common shares with a par value of 0.50 Swiss francs per share. The board of directors is authorized to increase the total share capital until September 14, 2014 by a maximum amount of 106.5 million shares. In addition, our share capital may be increased by:

• a maximum of 81.5 million shares upon the exercise of conversion, option, exchange, warrant or similar rights for the subscription of shares granted to third parties or shareholders in connection with bonds, notes, options, warrants or other securities issued by us in national or international capital markets or pursuant to our existing and future contractual obligations (“Rights Bearing Obligations”); and/or

• a maximum of 25.0 million shares upon the exercise of rights related to Rights-Bearing Obligations granted to members of the board of directors, members of the executive management, employees, contractors, consultants or other persons providing services for our benefit.

Share repurchases

In December 2011, the Board of Directors authorized the repurchase of our common shares up to a maximum dollar limit of $25.0 million. No repurchases were made under this authorization in 2012, and the authorization expired on September 28, 2012 in connection with the closing of the Merger.

Prior to the closing of the Merger, our board of directors, and Tyco as our sole shareholder, authorized the repurchase of our common shares with a maximum aggregate value of $400.0 million following the closing of the Merger. This authorization does not have an expiration date. On October 1, 2012, our board of directors authorized the repurchase of our common shares with a maximum aggregate value of $800.0 million. This authorization expires on December 31, 2015 and is in addition to the $400.0 million share repurchase authorization. As of December 31, 2013, we had repurchased 19.6 million of our common shares for $1.05 billion pursuant to these authorizations and had $150.0 million remaining available for repurchases under these authorizations.

In December 2013, the Board of Directors authorized the repurchase of our common shares up to a maximum dollar limit of $1.0 billion. This authorization is in addition to the combined $1.2 billion prior share repurchase authorization. The authorization expires on December 31, 2016. No repurchases were made under this authorization in 2013.

Dividends payable

At our 2013 annual meeting of shareholders held on April 29, 2013, our shareholders approved a proposal to pay quarterly cash dividends through the second quarter of 2014. The authorization provides that dividends of $1.00 per share will be made out of our Capital contribution reserve equity position in our statutory accounts to our shareholders in quarterly installments of $0.25 for each of the third and fourth quarters of 2013 and first and second quarters of 2014. As a result, the balance of dividends payable included in Other current liabilities on our Consolidated Balance Sheets was $98.7 million at December 31, 2013. Dividends paid per common share were $0.96, $0.88 and $0.80 for the years ended December 31, 2013, 2012 and 2011, respectively.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

14. Share Plans

Share-based compensation expense

Total share-based compensation expense for 2013, 2012 and 2011 was $31.1 million, $35.8 million and $19.5 million, respectively. The expense for 2012 included $13.5 million of expense due to the Merger triggering change of control provisions of Pentair, Inc. share-based compensation plans resulting in immediate vesting of certain outstanding awards.

Share Incentive Plans

Prior to the Merger, our board of directors approved, and Tyco as our sole shareholder approved, the Pentair Ltd. 2012 Stock and Incentive Plan (the “2012 Plan”). The 2012 Plan became effective on September 28, 2012 and authorizes the issuance of 9.0 million of our common shares. The shares may be issued as new shares or from shares held in treasury. Our practice is to settle equity-based awards from shares held in treasury. The 2012 Plan terminates in September 2022. The 2012 Plan allows for the granting to our officers, directors, employees and consultants of nonqualified stock options, incentive stock options, stock appreciation rights, performance shares, performance units, restricted shares, restricted stock units, deferred stock rights, annual incentive awards, dividend equivalent units and other equity-based awards.

The 2012 Plan is administered by our compensation committee (the “Committee”), which is made up of independent members of our board of directors. Employees eligible to receive awards under the 2012 Plan are managerial, administrative or other key employees who are in a position to make a material contribution to the continued profitable growth and long-term success of our company. The Committee has the authority to select the recipients of awards, determine the type and size of awards, establish certain terms and conditions of award grants and take certain other actions as permitted under the 2012 Plan. The 2012 Plan prohibits the Committee from re-pricing awards or cancelling and reissuing awards at lower prices.

In connection with the Distribution, we issued a total of $109.0 million like-kind equity-based awards under the 2012 Plan to former Tyco equity-based award holders in replacement of a portion of their Tyco equity-based awards. Such awards do not deplete the 9.0 million of our common shares reserved for issuance under the 2012 Plan. Of the total issued, $39.8 million in like-kind equity-based awards were issued to former holders who are active employees of our company, and $69.2 million like-kind equity-based awards were issued to former holders who are not employees of our company. As no change of control provisions related to Tyco equity-based awards were triggered by the Distribution or the Merger, the original vesting and exercise term provisions remain in effect for all such replacement equity-based awards.

The 2008 Omnibus Stock Incentive Plan as Amended and Restated (the “2008 Plan”) terminated upon the completion of the Merger. Prior grants of restricted stock units and stock options made under the 2008 Plan and earlier stock incentive plans outstanding at completion of the Merger were converted into equity-based awards with respect to our common shares and were assumed by us on the terms in effect at the time of grant and are outstanding under the 2012 Plan.

Non-qualified and incentive stock options

Under the 2012 Plan, we may grant stock options to any eligible employee with an exercise price equal to the market value of the shares on the dates the options were granted. Options generally vest over a three-year period commencing on the grant date and expire ten years after the grant date. Annual expense for the fair value of stock options was $10.9 million in 2013, $11.6 million in 2012 and $8.9 million in 2011.

Restricted shares and restricted stock units

Under the 2012 Plan, eligible employees may be awarded restricted shares or restricted stock units of our common stock. Restricted shares and restricted stock units generally vest three to four years after issuance, subject to continuous employment and certain other conditions. Restricted shares and restricted stock units are valued at market value on the date of grant and are expensed over the vesting period. Annual expense for the fair value of restricted shares and restricted stock units was $20.2 million in 2013, $24.2 million in 2012 and $10.6 million in 2011.

Stock appreciation rights, performance shares and performance units

Under the 2012 Plan, the Committee is permitted to issue these awards which are generally earned over a three-year vesting period and tied to specific financial metrics.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Stock options

The following table summarizes stock option activity under all plans for the year ended December 31, 2013:

Shares and intrinsic value in millions	Number of shares		Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value
Outstanding as of January 1, 2013	8.4		$	32.13
Granted	1.0		50.83
Exercised	(2.9	)	30.84
Forfeited	(0.2	)	37.25
Expired	(0.1	)	28.82
Outstanding as of December 31, 2013	6.2		$	35.53	5.6	$	255.3
Options exercisable as of December 31, 2013	4.7		$	32.78	4.7	$	205.8
Options expected to vest as of December 31, 2013	1.5		$	44.27	8.5	$	48.0

Fair value of options granted

The weighted average grant date fair value of options granted under Pentair plans in 2013, 2012 and 2011 was estimated to be $13.96, $9.63 and $9.98 per share, respectively. The weighted-average grant date fair value of options assumed in the Merger was estimated to be $11.76. The total intrinsic value of options that were exercised during 2013, 2012 and 2011 was $68.9 million, $41.6 million and $10.9 million, respectively. At December 31, 2013, the total unrecognized compensation cost related to stock options was $5.3 million. This cost is expected to be recognized over a weighted average period of 1.4 years.

We estimated the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model, modified for dividends and using the following weighted average assumptions:

	December 31
	2013		2012				2011
	Granted by Pentair plans		Assumed in Merger		Granted by Pentair plans		Granted by Pentair plans
Risk-free interest rate	0.69	%	0.02 - 0.68%		0.96	%	1.51	%
Expected dividend yield	2.01	%	2.12	%	2.48	%	2.32	%
Expected share price volatility	36.0	%	33.0	%	36.5	%	35.5	%
Expected term (years)	5.7		0.1 - 5.1		5.7		5.5

These estimates require us to make assumptions based on historical results, observance of trends in our share price, changes in option exercise behavior, future expectations and other relevant factors. If other assumptions had been used, share-based compensation expense, as calculated and recorded under the accounting guidance, could have been affected.

We based the expected life assumption on historical experience as well as the terms and vesting periods of the options granted. For purposes of determining expected volatility, we considered a rolling average of historical volatility measured over a period approximately equal to the expected option term. The risk-free rate for periods that coincide with the expected life of the options is based on the U.S. Treasury Department yield curve in effect at the time of grant.

Cash received from option exercises for the years ended December 31, 2013, 2012 and 2011 was $102.3 million, $91.6 million and $14.7 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $23.5 million, $12.2 million and $4.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Restricted stock units

The following table summarizes restricted stock unit activity under all plans for the year ended December 31, 2013:

Shares in millions	Number of shares		Weighted average grant date fair value
Outstanding as of January 1, 2013	1.6		$	38.97
Granted	0.4		50.80
Vested	(0.5	)	34.49
Forfeited	(0.2	)	41.48
Outstanding as of December 31, 2013	1.3		$	43.25

As of December 31, 2013, there was $25.3 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2012 Plan and previous plans. That cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the years ended December 31, 2013, 2012 and 2011, was $23.4 million, $58.0 million and $10.2 million, respectively. The actual tax benefits realized related to restricted share compensation arrangements totaled $7.2 million, $18.8 million and $3.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.

15. Segment Information

We classify our operations into the following business segments based primarily on types of products offered and markets served:

• Valves & Controls — The Valves & Controls segment designs, manufactures, markets and services valves, fittings, automation and controls and actuators for the energy and industrial verticals and operates as a stand-alone Global Business Unit ("GBU").

• Process Technologies — The Process Technologies segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration, separation and fluid process management challenges in food and beverage, water, wastewater, swimming pools and aquaculture applications. The Filtration & Process and Aquatic Systems GBUs comprise this segment.

• Flow Technologies — The Flow Technologies segment designs, manufactures and markets products and services designed for the transfer and flow of clean water, wastewater and a variety of industrial applications. The Flow Technologies segment operates as a stand-alone GBU.

• Technical Solutions — The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electronics and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications. The Technical Solutions segment operates as a stand-alone GBU.

• Other — Other is primarily composed of unallocated corporate expenses, our captive insurance subsidiary, intermediate finance companies, merger-related costs and divested operations.

The accounting policies of our reporting segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on the sales and operating income of the segments and use a variety of ratios to measure performance. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Financial information by reportable segment is included in the following summary:

	2013			2012			2011			2013			2012			2011
In millions	Net sales									Operating income (loss)
Valves & Controls	$	2,469.2		$	548.6		$	—		$	161.4		$	(76.8	)	$	—
Process Technologies	1,765.9			1,521.1			1,345.9			243.2			132.5			(40.2		)
Flow Technologies	1,618.5			1,136.7			1,042.7			149.7			35.5			97.9
Technical Solutions	1,663.4			1,236.4			1,086.8			285.0			165.0			185.8
Other	(37.3		)	(26.7		)	(18.7		)	(65.3		)	(299.3		)	(143.3		)
Consolidated	$	7,479.7		$	4,416.1		$	3,456.7		$	774.0		$	(43.1	)	$	100.2
	Identifiable assets (1)									Depreciation
Valves & Controls	$	4,204.0		$	4,369.6		$	—		$	64.0		$	15.1		$	—
Process Technologies	2,707.7			2,670.2			2,476.2			29.2			29.2			27.1
Flow Technologies	2,050.4			2,112.4			1,316.0			22.1			16.6			15.5
Technical Solutions	2,093.4			2,154.2			651.7			23.6			18.9			17.7
Other	687.8			576.3			142.4			10.0			8.0			5.9
Consolidated	$	11,743.3		$	11,882.7		$	4,586.3		$	148.9		$	87.8		$	66.2
	Amortization									Capital expenditures
Valves & Controls	$	69.3		$	21.7		$	—		$	67.2		$	21.9		$	—
Process Technologies	26.0			24.4			21.8			45.2			31.2			30.6
Flow Technologies	16.7			13.6			17.8			26.2			18.7			18.8
Technical Solutions	25.2			16.2			2.3			16.2			13.5			15.6
Other	—			0.1			—			15.2			9.2			8.3
Consolidated	$	137.2		$	76.0		$	41.9		$	170.0		$	94.5		$	73.3

(1) All cash and cash equivalents are included in “Other.”

The following tables present certain geographic information:

	2013		2012		2011		2013		2012		2011
In millions	Net sales						Long-lived assets
U.S.	$	3,431.3	$	2,624.3	$	2,336.8	$	365.4	$	372.8	$	195.6
Europe	1,912.0		912.6		701.9		462.4		394.2		140.3
Australia	761.2		213.2		52.3		145.7		170.5		0.5
Asia and other	1,375.2		666.0		365.7		196.5		250.7		51.1
Consolidated	$	7,479.7	$	4,416.1	$	3,456.7	$	1,170.0	$	1,188.2	$	387.5

Net sales are based on the location in which the sale originated. Long-lived assets represent property, plant and equipment, net of related depreciation.

We offer a broad array of products and systems to multiple markets and customers for which we do not have the information systems to track revenues by primary product category. However, our net sales by segment are representative of our sales by major product category. We sell our products through various distribution channels including wholesale and retail distributors, original equipment manufacturers and home centers. No customer accounted for more than 10% of net sales in 2013, 2012, or 2011.

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

16. Commitments and Contingencies

Operating lease commitments

Net rental expense under operating leases was as follows:

	Years ended December 31
In millions	2013			2012			2011
Gross rental expense	$	78.7		$	45.3		$	39.9
Sublease rental income	(0.9		)	(0.5		)	(0.5		)
Net rental expense	$	77.8		$	44.8		$	39.4

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, machinery, equipment and vehicles as of December 31, 2013 were as follows:

In millions	2014			2015			2016			2017			2018			Thereafter			Total
Minimum lease payments	$	55.5		$	40.7		$	30.1		$	21.5		$	13.5		$	23.5		$	184.8
Minimum sublease rentals	(1.0		)	(0.9		)	(0.7		)	(0.1		)	(0.1		)	(0.1		)	(2.9		)
Net future minimum lease commitments	$	54.5		$	39.8		$	29.4		$	21.4		$	13.4		$	23.4		$	181.9

Asbestos Matters

Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While we have observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. Our historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, we cannot predict the extent to which we will be successful in resolving lawsuits in the future.

As of December 31, 2013, there were approximately 2,000 lawsuits pending against our subsidiaries. A lawsuit might include several claims, and we have approximately 2,200 claims outstanding as of December 31, 2013. This amount is not adjusted for claims that are not actively being prosecuted, identified incorrect defendants, or duplicated other actions, which would ultimately reflect our current estimate of the number of viable claims made against us, our affiliates, or entities for which we assumed responsibility in connection with acquisitions or divestitures. In addition, the amount does not include certain claims pending against third parties for which we have been provided an indemnification.

Periodically, we perform an analysis with the assistance of outside counsel and other experts to update our estimated asbestos-related assets and liabilities. Our estimate of the liability and corresponding insurance recovery for pending and future claims and defense costs is based on our historical claim experience and estimates of the number and resolution cost of potential future claims that may be filed. Our legal strategy for resolving claims also impacts these estimates.

Our estimate of asbestos-related insurance recoveries represents estimated amounts due to us for previously paid and settled claims and the probable reimbursements relating to our estimated liability for pending and future claims. In determining the amount of insurance recoverable, we consider a number of factors, including available insurance, allocation methodologies and the solvency and creditworthiness of insurers.

Our estimated liability for asbestos-related claims was $254.7 million and $278.9 million as of December 31, 2013 and 2012, respectively, and was recorded in Other non-current liabilities in the Consolidated Balance Sheets for pending and future claims and related defense costs. Our estimated receivable for insurance recoveries was $119.6 million and $131.0 million, respectively, at December 31, 2013 and 2012 and was recorded in Other non-current assets in the Consolidated Balance Sheets.

The amounts recorded by us for asbestos-related liabilities and insurance-related assets are based on our strategies for resolving our asbestos claims and currently available information as well as estimates and assumptions. Key variables and assumptions include the number and type of new claims filed each year, the average cost of resolution of claims, the resolution of coverage issues with insurance carriers, the amounts of insurance and the related solvency risk with respect to our insurance carriers, and the indemnifications we have provided to third parties. Furthermore, predictions with respect to these variables are subject to greater uncertainty in the latter portion of the projection period. Other factors that may affect our liability and cash payments

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Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries. As a result, actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in our calculations vary significantly from actual results.

Environmental Matters

We are involved in or have retained responsibility and potential liability for environmental obligations and legal proceedings related to our current business and, including pursuant to certain indemnification obligations, related to certain formerly owned businesses. We are responsible, or alleged to be responsible, for ongoing environmental investigation and/or remediation of sites in several countries. These sites are in various stages of investigation and/or remediation and at some of these sites our liability is considered de minimis. We received notification from the U.S. Environmental Protection Agency and from similar state and non-U.S. environmental agencies, that several sites formerly or currently owned and/or operated by us, and other properties or water supplies that may be or may have been impacted from those operations, contain disposed or recycled materials or waste and require environmental investigation and/or remediation. Those sites include instances where we have been identified as a potentially responsible party under U.S. federal, state and/or non-U.S. environmental laws and regulations. For several formerly owned businesses, we have also received claims for indemnification from purchasers of these businesses.

Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors. In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known. Based upon our experience, current information regarding known contingencies and applicable laws, we have recorded reserves for these environmental matters of $39.3 million and $49.2 million as of December 31, 2013 and 2012, respectively. We do not anticipate these environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows. However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Compliance Matters

Prior to the Merger, the Flow Control business was subject to investigations by the U.S. Department of Justice (“DOJ”) and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the Foreign Corrupt Practices Act. Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco’s own internal investigations. As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ, pursuant to which the Flow Control business is for a three year period subject to yearly reporting to the DOJ concerning its continuing compliance efforts.

Other Matters

In addition to the matters described above, from time to time, we are subject to disputes, administrative proceedings and other claims arising out of the normal conduct of our business. These matters generally relate to disputes arising out of the use or installation of our products, product liability litigation, personal injury claims, commercial and contract disputes and employment related matters. On the basis of information currently available to it, management does not believe that existing proceedings and claims will have a material impact on our Consolidated Financial Statements. However, litigation is unpredictable, and we could incur judgments or enter into settlements for current or future claims that could adversely affect our financial statements.

Warranties and guarantees

In connection with the disposition of our businesses or product lines, we may agree to indemnify purchasers for various potential liabilities relating to the sold business, such as pre-closing tax, product liability, warranty, environmental, or other obligations. The subject matter, amounts and duration of any such indemnification obligations vary for each type of liability indemnified and may vary widely from transaction to transaction.

Generally, the maximum obligation under such indemnifications is not explicitly stated and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial condition or results of operations.

We recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.

We provide service and warranty policies on our products. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant.

94

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

The changes in the carrying amount of service and product warranties for the years ended December 31, 2013 and 2012 were as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	54.3		$	29.4
Service and product warranty provision	63.4			55.7
Payments	(61.2		)	(53.3		)
Acquired	—			22.1
Translation	0.1			0.4
Ending balance	$	56.6		$	54.3

Stand-by Letters of Credit, Bank Guarantees and Bonds

In certain situations, Tyco guaranteed Flow Control’s performance to third parties or provided financial guarantees for financial commitments of Flow Control. In situations where Flow Control and Tyco were unable to obtain a release from these guarantees in connection with the spin-off of Flow Control from Tyco, we will indemnify Tyco for any losses it suffers as a result of such guarantees.

In disposing of assets or businesses, we often provide representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to reasonably estimate the potential liability due to the inchoate and unknown nature of these potential liabilities. However, we have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows.

In the ordinary course of business, we are required to commit to bonds, letters of credit and bank guarantees that require payments to our customers for any non-performance. The outstanding face value of these instruments fluctuates with the value of our projects in process and in our backlog. In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs.

As of December 31, 2013 and 2012, the outstanding value of bonds, letters of credit and bank guarantees totaled $484.0 million and $493.2 million, respectively.

95

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

17. Selected Quarterly Data (Unaudited)

The following table presents 2013 and 2012 quarterly financial information:

	2013
In millions, except per-share data	First		Second		Third		Fourth		Year
Net sales	$	1,774.5	$	1,963.7	$	1,824.8	$	1,916.7	$	7,479.7
Gross profit	523.8		667.4		637.6		644.1		2,472.9
Operating income	74.3		225.9		240.0		233.8		774.0
Net income before noncontrolling interest	53.3		155.4		174.2		159.7		542.6
Net income attributable to Pentair Ltd.	51.7		154.1		172.8		158.2		536.8
Earnings per common share attributable to Pentair Ltd. (1)
Basic	$	0.25	$	0.76	$	0.87	$	0.80	$	2.67
Diluted	0.25		0.75		0.85		0.78		2.62

	2012
In millions, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	858.2	$	941.5	$	865.5	$	1,750.9		$	4,416.1
Gross profit	280.7		312.1		278.1		398.7			1,269.6
Operating income (loss)	86.5		119.3		55.2		(304.1		)	(43.1		)
Net income (loss) before noncontrolling interest	63.1		74.4		32.6		(274.7		)	(104.6		)
Net income (loss) attributable to Pentair Ltd.	61.7		72.8		31.4		(273.1		)	(107.2		)
Earnings (loss) per common share attributable to Pentair Ltd. (1)
Basic	$	0.63	$	0.73	$	0.31	$	(1.31	)	$	(0.84	)
Diluted	0.62		0.72		0.31		(1.31		)	(0.84		)

(1) Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.

Fourth quarter 2013 includes an increase in operating income of $63.2 million related to "mark-to-market" actuarial gains on pension and other post-retirement benefit plans for 2013. Fourth quarter 2013 also includes decreases in operating income due to restructuring costs of $61.6 million and impairment charges of $11.0 million related to trade name intangibles.

First quarter 2013 includes a decrease in operating income of $76.8 million due to inventory step-up and customer backlog related to the Merger and restructuring costs of $27.4 million.

Third quarter 2012 includes a decrease in operating income of $52.7 million due to costs and expenses related to the Merger.

Fourth quarter 2012 includes the results of the operations acquired in the Merger. Flow Control’s net sales and net loss for the period from the acquisition date to December 31, 2012 were $886.5 million and $117.0 million, respectively. Fourth quarter 2012 also includes decreases in operating income related to "mark-to-market" actuarial losses on pension and other post-retirement benefit plans of $146.3 million, inventory step-up and customer backlog related to the Merger of $179.6 million, loss on early extinguishment of debt of $75.4 million, impairment charges of $60.7 million related to trade name intangibles, restructuring costs of $55.3 million and acquisition costs and expenses of $12.0 million.

96

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

18. Financial Statements of Parent Company Guarantor

Pentair Ltd. (the “Parent Company Guarantor”), fully and unconditionally, guarantees the 1.35% Senior Notes due 2015, 1.875% Senior Notes due 2017, 2.65% Senior Notes due 2019, 5.00% Senior Notes due 2021 and 3.15% Senior Notes due 2022 (collectively, the “Notes”) of Pentair Finance S.A. (the “Subsidiary Issuer”). The Subsidiary Issuer is a Luxembourg public limited liability company formed in January 2012 and 100 percent-owned subsidiary of the Parent Company Guarantor.

The following supplemental financial information sets forth the financial information of:

• Parent Company Guarantor;

• Subsidiary Issuer;

• Non-guarantor Subsidiaries of Pentair Ltd. on a combined basis;

• Consolidating entries and eliminations representing adjustments to:

a. eliminate intercompany transactions between or among the Parent Company Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries;

b. eliminate the investments in subsidiaries; and

c. record consolidating entries.

• Pentair Ltd. and subsidiaries on a consolidated basis.

Each entity in the consolidating financial information follows the same accounting policies as described in Note 1.

The following present the Company’s Condensed Consolidating Statement of Operations and Comprehensive Income (Loss), Condensed Consolidating Balance Sheet and Condensed Consolidating Statement of Cash Flows as of and for the years ended December 31, 2013 and 2012. Since the Parent Company Guarantor and the Subsidiary Issuer were acquired in the Merger, there was no guarantee of the Notes in effect prior to the Merger. The historical consolidated financial statements of Pentair Ltd. for the year ended December 31, 2011 include all non-guarantor subsidiaries. Consequently, no consolidating financial information for the year ended December 31, 2011 is presented.

97

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	7,479.7		$	—		$	7,479.7
Cost of goods sold	—			—			5,006.8			—			5,006.8
Gross profit	—			—			2,472.9			—			2,472.9
Selling, general and administrative	21.0			13.3			1,527.8			—			1,562.1
Research and development	—			—			125.8			—			125.8
Impairment of trade names and goodwill	—			—			11.0			—			11.0
Operating (loss) income	(21.0		)	(13.3		)	808.3			—			774.0
Loss (earnings) from investment in subsidiaries	(564.1		)	(533.7		)	—			1,097.8			—
Other (income) expense:
Gain on sale of businesses, net	—			—			(19.7		)	—			(19.7		)
Equity income of unconsolidated subsidiaries	—			—			(1.8		)	—			(1.8		)
Interest income	—			(99.2		)	(56.6		)	148.2			(7.6		)
Interest expense	5.6			106.0			113.3			(148.2		)	76.7
Income (loss) before income taxes and noncontrolling interest	537.5			513.6			773.1			(1,097.8		)	726.4
Provision for income taxes	0.7			1.4			181.7			—			183.8
Net income (loss) before noncontrolling interest	536.8			512.2			591.4			(1,097.8		)	542.6
Noncontrolling interest	—			—			5.8			—			5.8
Net income (loss) attributable to Pentair Ltd.	$	536.8		$	512.2		$	585.6		$	(1,097.8	)	$	536.8
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	536.8		$	512.2		$	591.4		$	(1,097.8	)	$	542.6
Changes in cumulative translation adjustment	(31.3		)	(31.3		)	(29.1		)	62.6			(29.1		)
Amortization of pension and other post-retirement prior service cost	(0.4		)	(0.4		)	(0.4		)	0.8			(0.4		)
Changes in market value of derivative financial instruments	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Total comprehensive income (loss)	504.8			480.2			561.6			(1,033.8		)	512.8
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			8.0			—			8.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	504.8		$	480.2		$	553.6		$	(1,033.8	)	$	504.8

98

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2013

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	0.5	$	47.0	$	217.6	$	—		$	265.1
Accounts and notes receivable, net	2.9		4.0		1,391.0		(63.6		)	1,334.3
Inventories	—		—		1,243.3		—			1,243.3
Other current assets	1.4		0.6		387.4		—			389.4
Total current assets	4.8		51.6		3,239.3		(63.6		)	3,232.1
Property, plant and equipment, net	—		—		1,170.0		—			1,170.0
Other assets
Investments in subsidiaries	6,224.7		8,066.6		—		(14,291.3		)	—
Goodwill	—		—		5,134.2		—			5,134.2
Intangibles, net	—		—		1,776.1		—			1,776.1
Other non-current assets	31.6		1,302.7		393.3		(1,296.7		)	430.9
Total other assets	6,256.3		9,369.3		7,303.6		(15,588.0		)	7,341.2
Total assets	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	2.5	$	—		$	2.5
Accounts payable	48.1		8.6		603.5		(63.6		)	596.6
Employee compensation and benefits	0.5		—		346.6		—			347.1
Other current liabilities	99.6		11.7		552.7		—			664.0
Total current liabilities	148.2		20.3		1,505.3		(63.6		)	1,610.2
Other liabilities
Long-term debt	—		2,401.9		1,447.4		(1,296.7		)	2,552.6
Pension and other post-retirement compensation and benefits	—		—		324.8		—			324.8
Deferred tax liabilities	—		2.2		578.4		—			580.6
Other non-current liabilities	17.6		—		439.8		—			457.4
Total liabilities	165.8		2,424.4		4,295.7		(1,360.3		)	5,525.6
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,095.3		6,996.5		7,294.8		(14,291.3		)	6,095.3
Noncontrolling interest	—		—		122.4		—			122.4
Total equity	6,095.3		6,996.5		7,417.2		(14,291.3		)	6,217.7
Total liabilities and equity	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3

99

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	534.2		$	514.0		$	964.9		$	(1,097.8	)	$	915.3
Investing activities
Capital expenditures	—			—			(170.0		)	—			(170.0		)
Proceeds from sale of property and equipment	—			—			6.0			—			6.0
Proceeds from sale of businesses, net	—			—			43.5			—			43.5
Acquisitions, net of cash acquired	—			—			(92.4		)	—			(92.4		)
Other	—			—			1.7			—			1.7
Net cash provided by (used for) investing activities	—			—			(211.2		)	—			(211.2		)
Financing activities
Net receipts from commercial paper and revolving long-term debt	—			104.2			—			—			104.2
Proceeds from long-term debt	—			—			0.7			—			0.7
Repayment of long-term debt	—			—			(7.4		)	—			(7.4		)
Debt issuance costs	—			(1.4		)	—			—			(1.4		)
Net change in advances to subsidiaries	(339.5		)	(569.8		)	(188.5		)	1,097.8			—
Excess tax benefits from share-based compensation	—			—			16.8			—			16.8
Shares issued to employees, net of shares withheld	—			—			80.0			—			80.0
Repurchases of common shares	—			—			(715.8		)	—			(715.8		)
Dividends paid	(194.2		)	—			—			—			(194.2		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(533.7		)	(467.0		)	(816.2		)	1,097.8			(719.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			18.8			—			18.8
Change in cash and cash equivalents	0.5			47.0			(43.7		)	—			3.8
Cash and cash equivalents, beginning of year	—			—			261.3			—			261.3
Cash and cash equivalents, end of year	$	0.5		$	47.0		$	217.6		$	—		$	265.1

100

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	4,416.1		$	—		$	4,416.1
Cost of goods sold	—			—			3,146.5			—			3,146.5
Gross profit	—			—			1,269.6			—			1,269.6
Selling, general and administrative	5.0			(3.8		)	1,157.2			—			1,158.4
Research and development	—			—			93.6			—			93.6
Impairment of trade names and goodwill	—			—			60.7			—			60.7
Operating (loss) income	(5.0		)	3.8			(41.9		)	—			(43.1		)
Loss (earnings) from investment in subsidiaries	101.4			102.3			—			(203.7		)	—
Other (income) expense:
Loss on early extinguishment of debt	—			—			75.4			—			75.4
Equity income of unconsolidated subsidiaries	—			—			(2.1		)	—			(2.1		)
Interest income	—			(9.2		)	(2.9		)	9.2			(2.9		)
Interest expense	0.1			10.2			69.4			(9.2		)	70.5
Income (loss) before income taxes and noncontrolling interest	(106.5		)	(99.5		)	(181.7		)	203.7			(184.0		)
Provision (benefit) for income taxes	0.7			1.1			(81.2		)	—			(79.4		)
Net income (loss) before noncontrolling interest	(107.2		)	(100.6		)	(100.5		)	203.7			(104.6		)
Noncontrolling interest	—			—			2.6			—			2.6
Net income (loss) attributable to Pentair Ltd.	$	(107.2	)	$	(100.6	)	$	(103.1	)	$	203.7		$	(107.2	)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	(107.2	)	$	(100.6	)	$	(100.5	)	$	203.7		$	(104.6	)
Changes in cumulative translation adjustment	30.0			30.0			31.4			(60.0		)	31.4
Amortization of pension and other post-retirement prior service cost	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Changes in market value of derivative financial instruments	(3.6		)	(3.6		)	(3.6		)	7.2			(3.6		)
Total comprehensive income (loss)	(81.1		)	(74.5		)	(73.0		)	151.5			(77.1		)
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			4.0			—			4.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	(81.1	)	$	(74.5	)	$	(77.0	)	$	151.5		$	(81.1	)

101

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2012

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	261.3	$	—		$	261.3
Accounts and notes receivable, net	20.2		1,458.3		1,330.7		(1,534.6		)	$	1,274.6
Inventories	—		—		1,333.9		—			$	1,333.9
Other current assets	85.8		—		333.1		(84.4		)	$	334.5
Total current assets	106.0		1,458.3		3,259.0		(1,619.0		)	3,204.3
Property, plant and equipment, net	—		—		1,188.2		—			1,188.2
Other assets
Investments in subsidiaries	6,486.3		7,464.6		—		(13,950.9		)	—
Goodwill	—		—		5,111.0		—			5,111.0
Intangibles, net	—		—		1,926.9		—			1,926.9
Other non-current assets	31.6		6.9		413.8		—			452.3
Total other assets	6,517.9		7,471.5		7,451.7		(13,950.9		)	7,490.2
Total assets	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	3.1	$	—		$	3.1
Accounts payable	54.3		1.7		587.3		(76.3		)	567.0
Employee compensation and benefits	—		—		296.7		—			296.7
Other current liabilities	180.9		11.5		670.3		(84.4		)	778.3
Total current liabilities	235.2		13.2		1,557.4		(160.7		)	1,645.1
Other liabilities
Long-term debt	—		2,297.7		1,614.9		(1,458.3		)	2,454.3
Pension and other post-retirement compensation and benefits	—		—		378.8		—			378.8
Deferred tax liabilities	—		—		421.9		—			421.9
Other non-current liabilities	17.6		—		477.5		—			495.1
Total liabilities	252.8		2,310.9		4,450.5		(1,619.0		)	5,395.2
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,371.1		6,618.9		7,332.0		(13,950.9		)	6,371.1
Noncontrolling interest	—		—		116.4		—			116.4
Total equity	6,371.1		6,618.9		7,448.4		(13,950.9		)	6,487.5
Total liabilities and equity	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7

102

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	(109.0	)	$	(88.2	)	$	61.5		$	203.7		$	68.0
Investing activities
Capital expenditures	—			—			(94.5		)	—			(94.5		)
Proceeds from sale of property and equipment	—			—			5.5			—			5.5
Acquisitions, net of cash acquired	—			300.1			170.4			—			470.5
Other	—			—			(5.9		)	—			(5.9		)
Net cash provided by (used for) investing activities	—			300.1			75.5			—			375.6
Financing activities
Net repayments on short-term borrowings	—			—			(3.7		)	—			(3.7		)
Net receipts (repayments) from commercial paper and revolving long-term debt	—			424.7			(170.9		)	—			253.8
Proceeds from long-term debt	—			594.3			—			—			594.3
Repayment of long-term debt	—			—			(617.2		)	—			(617.2		)
Debt issuance costs	—			(8.7		)	(1.0		)	—			(9.7		)
Debt extinguishment costs	—			—			(74.8		)	—			(74.8		)
Net change in advances to subsidiaries	157.0			(1,222.2		)	1,268.9			(203.7		)	—
Excess tax benefits from share-based compensation	—			—			5.0			—			5.0
Shares issued to employees, net of shares withheld	—			—			68.2			—			68.2
Repurchases of common shares	—			—			(334.2		)	—			(334.2		)
Dividends paid	(48.0		)	—			(64.4		)	—			(112.4		)
Distributions to noncontrolling interest	—			—			(1.6		)	—			(1.6		)
Net cash provided by (used for) financing activities	109.0			(211.9		)	74.3			(203.7		)	(232.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.1		)	—			(0.1		)
Change in cash and cash equivalents	—			—			211.2			—			211.2
Cash and cash equivalents, beginning of year	—			—			50.1			—			50.1
Cash and cash equivalents, end of year	$	—		$	—		$	261.3		$	—		$	261.3

103

Pentair Ltd. and Subsidiaries

Notes to consolidated financial statements

19. Disclosures Required by Swiss Law

We are subject to statutory reporting requirements in Switzerland. The following disclosures are presented in accordance with, and are based on definitions contained in, the Swiss Code of Obligations.

Personnel expenses

Total personnel expenses were $2,114.3 million and $1,233.7 million in 2013 and 2012, respectively.

Fire insurance value

The fire insurance values of property, plant, and equipment was $4,913.3 million at December 31, 2013.

Risk assessment

Our board of directors is responsible for assessing our major risks and overseeing that appropriate risk management and control procedures are in place. The audit committee of the board meets to review and discuss, as determined to be appropriate, our major financial and accounting risk exposures and related policies and practices with management, the internal auditors and the independent registered public accountants to assess and control such exposures and assist the board in fulfilling its oversight responsibilities regarding our policies and guidelines with respect to risk assessment and risk management. Our risk assessment process was in place during fiscal 2013 and 2012 and followed by the board of directors.

20. Proposed Redomicile

On December 10, 2013, Pentair Ltd. entered into a Merger Agreement (the “Merger Agreement”) with Pentair plc, a newly-formed Irish public limited company and subsidiary of Pentair (“Pentair-Ireland”). Under the Merger Agreement, and subject to the conditions set forth in the Merger Agreement, Pentair will merge with and into Pentair-Ireland, with Pentair-Ireland being the surviving company (the “Redomicile”), thereby changing the jurisdiction of organization of the publicly-traded parent company from Switzerland to Ireland. Pentair shareholders will receive one ordinary share of Pentair-Ireland for each common share of Pentair held immediately prior to the Redomicile.

Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that it is centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have its tax residency in the U.K. Pentair-Ireland will continue to own and conduct the same businesses as Pentair owned and conducted prior to the Merger, except that Pentair-Ireland will replace Pentair as the publicly-traded parent company. Pentair-Ireland will remain subject to U.S. Securities and Exchange Commission reporting requirements and the applicable corporate governance rules of the New York Stock Exchange.

The Redomicile is subject to Pentair shareholder approval of the Merger Agreement and certain other conditions. Pentair’s shareholders will be asked to vote to approve the Merger Agreement at an extraordinary general meeting of shareholders, which Pentair expects to be held during the second quarter of 2014.

104

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year ended December 31, 2013, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (“the Exchange Act”). Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the year ended December 31, 2013 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control Over Financial Reporting

The report of management required under this ITEM 9A is contained in ITEM 8 of this Annual Report on Form 10-K under the caption “Management’s Report on Internal Control Over Financial Reporting.”

Attestation Report of Independent Registered Public Accounting Firm

The attestation report required under this ITEM 9A is contained in ITEM 8 of this Annual Report on Form 10-K under the caption “Report of Independent Registered Public Accounting Firm.”

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

None.

105

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required under this item with respect to directors is contained in our Proxy Statement for our 2014 annual general meeting of shareholders under the captions “Corporate Governance Matters,” “Proposal 1 Re-election of Nine Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference.

Information required under this item with respect to executive officers is contained in Part I of this Form 10-K under the caption “Executive Officers of the Registrant.”

Our Board of Directors has adopted Pentair’s Code of Business Conduct and Ethics and designated it as the code of ethics for the Company’s Chief Executive Officer and senior financial officers. The Code of Business Conduct and Ethics also applies to all employees and directors in accordance with New York Stock Exchange Listing Standards. We have posted a copy of Pentair’s Code of Business Conduct and Ethics on our website at http://pentair.com/about-us/our-approach/code-of-conduct.html. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to or waivers from, Pentair’s Code of Business Conduct and Ethics by posting such information on our website at http://pentair.com/about-us/our-approach/code-of-conduct.html.

We are not including the information contained on our website as part of, or incorporating it by reference into, this report.

ITEM 11. EXECUTIVE COMPENSATION

Information required under this item is contained in our Proxy Statement for our 2014 annual general meeting of shareholders under the captions “Corporate Governance Matters — Committees of the Board — Compensation Committee,” “Corporate Governance Matters — Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” and “Director Compensation” and is incorporated herein by reference.

106

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required under this item with respect to security ownership is contained in our Proxy Statement for our 2014 annual general meeting of shareholders under the caption “Security Ownership” and is incorporated herein by reference.

The following table summarizes, as of December 31, 2013, information about compensation plans under which our equity securities are authorized for issuance:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders:
2012 Stock and Incentive Plan (1)	3,126,023	(1)	$	41.77	(2)	7,696,028	(3)
2008 Omnibus Stock Incentive Plan (2)	3,043,654	(4)	32.98		(2)	—	(5)
2004 Omnibus Stock Incentive Plan (2)	1,615,325		33.56			—	(5)
Outside Directors Non-qualified Stock Option Plan (2)	242,259		36.17			—	(5)
Total	8,027,261		$	36.62	(2)	7,696,028

(1) Consists of 2,030,193 shares subject to stock options and 1,095,830 shares subject to restricted stock units.

(2) Represents the weighted average exercise price of outstanding stock options and does not take into account outstanding restricted stock units.

(3) Represents securities remaining available for issuance under the 2012 Stock and Incentive Plan.

(4) Consists of 2,772,321 shares subject to stock options and 271,333 shares subject to restricted stock units.

(5) The 2008 Omnibus Stock Incentive Plan was terminated in connection with the Merger. The 2004 Omnibus Plan and the Directors Plan were terminated in 2008. Options previously granted under these plans and restricted stock units granted under the 2008 Omnibus Stock Incentive Plan remain outstanding, but no further options or shares may be granted or issued under either plan.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information required under this item is contained in our Proxy Statement for our 2014 annual general meeting of shareholders under the captions “Corporate Governance Matters — Board Governance,” “Corporate Governance Matters — Independent Directors,” and “Corporate Governance Matters — Policies and Procedures Regarding Related Person Transactions” and is incorporated herein by reference.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required under this item is contained in our Proxy Statement for our 2014 annual general meeting of shareholders under the caption “Proposal 7 Election of Auditors – Service Fees Paid to the Independent Registered Public Accounting Firm” and is incorporated herein by reference.

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) List of documents filed as part of this report:

(1) Financial Statements

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31,     2013, 2012 and 2011

Consolidated Balance Sheets as of December 31, 2013 and 2012

Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011

Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011

Notes to Consolidated Financial Statements

(2) Financial Statement Schedule

Schedule II — Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(3) Exhibits

The exhibits of this Annual Report on Form 10-K included herein are set forth on the attached Exhibit Index.

108

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 25, 2014.

PENTAIR LTD.
By	/s/ John L. Stauch
	John L. Stauch
	Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on February 25, 2014.

Signature	Title
/s/  Randall J. Hogan	Chairman and Chief Executive Officer
Randall J. Hogan
/s/  John L. Stauch	Executive Vice President and Chief Financial Officer
John L. Stauch
/s/  Mark C. Borin	Corporate Controller and Chief Accounting Officer
Mark C. Borin
*	Director
Leslie Abi-Karam
*	Director
Glynis A. Bryan
*	Director
Jerry W. Burris
*	Director
Carol Anthony (John) Davidson
*	Director
T. Michael Glenn
*	Director
Charles A. Haggerty
*	Director
David H. Y. Ho
*	Director
David A. Jones
*	Director
Ronald L. Merriman
*	Director
William T. Monahan

*By	/s/  Angela D. Lageson
	Angela D. Lageson
	Attorney-in-fact

109

Schedule II — Valuation and Qualifying Accounts

Pentair Ltd. and Subsidiaries

In millions	Beginning balance		Additions charged to costs and expenses		Deductions (1)		Other changes (2)			Ending balance
Allowances for doubtful accounts
Year ended December 31, 2013	$	14.0	$	51.8	$	2.4	$	(2.6	)	$	60.8
Year ended December 31, 2012	$	16.0	$	1.6	$	4.0	$	0.4		$	14.0
Year ended December 31, 2011	$	17.1	$	4.4	$	4.7	$	(0.8	)	$	16.0

(1) Uncollectible accounts written off, net of recoveries

(2) Result of foreign currency effects

110

EXHIBIT INDEX

Exhibit Number	Exhibit
2.1	Merger Agreement, dated as of March 27, 2012, among Tyco International Ltd., Pentair Ltd. (formerly Tyco Flow Control International Ltd.), Panthro Acquisition Co., Panthro Merger Sub, Inc. and Pentair, Inc. (Incorporated by reference to Exhibit 2.1 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on March 30, 2012 (File No. 000-04689)).
2.2	Amendment No. 1, dated as of July 25, 2012, to the Merger Agreement, dated as of March 27, 2012, among Tyco International Ltd., Pentair Ltd. (formerly Tyco Flow Control International Ltd.), Panthro Acquisition Co., Panthro Merger Sub, Inc. and Pentair, Inc. (Incorporated by reference to Exhibit 2.1 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on July 31, 2012 (File No. 000-04689)).
2.3	Amended and Restated Separation and Distribution Agreement, dated September 27, 2012 among Tyco International Ltd., Pentair Ltd. and The ADT Corporation (Incorporated by reference to Exhibit 2.3 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
2.4	Merger Agreement, dated December 10, 2013, between Pentair Ltd. and Pentair plc (Incorporated by reference to Exhibit 2.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 10, 2013 (File No. 011-11625)).*
3.1	Amended and Restated Articles of Association of Pentair Ltd. (Incorporated by reference to Exhibit 3.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
3.2	Organizational Regulations of Pentair Ltd. (Incorporated by reference to Exhibit 3.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
4.1	Indenture, dated as of September 24, 2012, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.) (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
4.2	First Supplemental Indenture, dated as of September 24, 2012, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.) (as Issuer), Pentair Ltd. (as Guarantor), Pentair, Inc. and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
4.3	Second Supplemental Indenture, dated as of September 24, 2012, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.) (as Issuer), Pentair Ltd. (as Guarantor), Pentair, Inc. and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.3 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
4.4	Third Supplemental Indenture, dated as of November 26, 2012, among Pentair Finance S.A. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on November 28, 2012 (File No. 001-11625)).
4.5	Fourth Supplemental Indenture, dated as of November 26, 2012, among Pentair Finance S.A. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on November 28, 2012 (File No. 001-11625)).
4.6	Fifth Supplemental Indenture, dated as of December 18, 2012, among Pentair Finance S.A. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 18, 2012 (File No. 001-11625)).
4.7	Exchange and Registration Rights Agreement, among Pentair Finance S.A. (formerly Tyco Flow Control International Finance S.A.), Pentair Ltd., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S. Bancorp Investments, Inc. (as representatives of the several Purchasers), dated as of September 24, 2012 (Incorporated by reference to Exhibit 4.4 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
4.8	Exchange and Registration Rights Agreement among Pentair Finance S.A., Pentair Ltd. and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S. Bancorp Investments, Inc. (as representatives of the several Purchasers), dated as of November 26, 2012 (Incorporated by reference to Exhibit 4.3 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on November 28, 2012 (File No. 001-11625)).

111

4.9	Exchange and Registration Rights Agreement among Pentair Finance S.A., Pentair Ltd. and the dealer managers named therein, dated as of December 18, 2012 (Incorporated by reference to Exhibit 4.3 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 18, 2012 (File No. 001-11625)).
4.10	Senior Indenture, dated May 2, 2011 by and among Pentair, Inc. and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 4.5 to Pentair, Inc.’s Registration Statement on Form S-3 (Registration 333-173829)).
4.11	First Supplemental Indenture, dated as of May 9, 2011, among Pentair, Inc., the guarantors named therein and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on May 9, 2011 (File No. 000-04689)).
4.12	Third Supplemental Indenture, dated October 1, 2012, among Pentair Ltd., Pentair, Inc. and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).
4.13	Fourth Supplemental Indenture, dated as of December 17, 2012, among Pentair, Inc. (as Issuer), Pentair Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee) (Incorporated by reference to Exhibit 4.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on December 18, 2012 (File No. 001-11625)).
4.14	Credit Agreement, dated as of September 21, 2012 among Pentair, Inc., certain of its affiliates and the lenders and agents party thereto (Incorporated by reference to Exhibit 4.1 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on September 24, 2012 (File No. 000-04689)).
10.1	Tax Sharing Agreement, dated September 28, 2012 by and among Pentair Ltd., Tyco International Ltd. and The ADT Corporation (Incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on September 28, 2012 (File No. 001-11625)).
10.2	Form of Indemnification Agreement for directors and executive officers of Pentair Ltd. (Incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).
10.3	Pentair Ltd. 2012 Stock and Incentive Plan, as amended and restated (Incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 4, 2013 (File No. 001-11625)).*
10.4	Form of Executive Officer Stock Option Grant Agreement (Incorporated by reference to Exhibit 10.4 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.5	Form of Executive Officer Restricted Stock Unit Grant Agreement (Incorporated by reference to Exhibit 10.5 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 4, 2013 (File No. 001-11625)).*
10.6	Form of Executive Officer Performance Unit Grant Agreement (Incorporated by reference to Exhibit 10.6 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.7	Form of Non-Employee Director Stock Option Grant Agreement (Incorporated by reference to Exhibit 10.7 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.8	Form of Non-Employee Director Restricted Stock Unit Grant Agreement (Incorporated by reference to Exhibit 10.8 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.9	Pentair Ltd. 2008 Omnibus Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.9 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.10	Pentair Ltd. Omnibus Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.10 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.11	Pentair Ltd. Outside Directors Nonqualified Stock Option Plan, as amended (Incorporated by reference to Exhibit 10.11 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*

112

10.12	Form of Assignment and Assumption Agreement, among Pentair, Inc., Pentair Ltd. and the executive officers of Pentair Ltd. relating to Key Executive Employment and Severance Agreement (Incorporated by reference to Exhibit 10.12 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.13	Form of Key Executive Employment and Severance Agreement for Randall J. Hogan (Incorporated by reference to Exhibit 10.10 in the Annual Report on Form 10-K of Pentair, Inc. for the year ended December 31, 2008 (File No. 000-04689)).*
10.14	Form of Key Executive Employment and Severance Agreement for Michael V. Schrock, Frederick S. Koury and Michael G. Meyer (Incorporated by reference to Exhibit 10.11 in the Annual Report on Form 10-K of Pentair, Inc. for the year ended December 31, 2008 (File No. 000-04689)).*
10.15	Form of Key Executive Employment and Severance Agreement for John L. Stauch, Mark C. Borin, Angela D. Lageson and Todd R. Gleason (Incorporated by reference to Exhibit 10.12 in the Annual Report on Form 10-K of Pentair, Inc. for the year ended December 31, 2008 (File No. 000-04689)).*
10.16	Form of Key Executive Employment and Severance Agreement for Karl R. Frykman, Netha N. Johnson, Alok Maskara, Philip Pejovich and Christopher Stevens.
10.17	Form of Letter regarding RSU Grants and Waiver of Certain KEESA Rights, between Pentair, Inc. and certain executives of Pentair, Inc., dated March 27, 2012 (Incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on March 30, 2012 (File No. 000-04689)).*
10.18	Form of Restricted Stock Unit Grant Agreement (Incorporated by reference to Exhibit 10.2 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.19	Pentair Ltd. Compensation Plan for Non-Employee Directors, as amended (Incorporated by reference to Exhibit 10.13 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.20	Pentair Ltd. Employee Stock Purchase and Bonus Plan (Incorporated by reference to Exhibit 10.14 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.21	Pentair, Inc. Non-Qualified Deferred Compensation Plan effective January 1, 1996 (Incorporated by reference to Exhibit 10.17 in the Annual Report on Form 10-K of Pentair, Inc. for the year ended December 31, 2005 (File No. 000-04689)).*
10.22	Trust Agreement for Pentair, Inc. Non-Qualified Deferred Compensation Plan between Pentair, Inc. and Fidelity Management Trust Company (Incorporated by reference to Exhibit 10.18 contained in the Annual Report on Form 10-K of Pentair, Inc. for the year ended December 31, 1995 (File No. 000-04689)).*
10.23	Amendment effective August 23, 2000 to Pentair, Inc. Non-Qualified Deferred Compensation Plan effective January 1, 1996 (Incorporated by reference to Exhibit 10.8 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on September 21, 2000 (File No. 000-04689)).*
10.24	Pentair, Inc. Non-Qualified Deferred Compensation Plan effective January 1, 2009, as amended and restated as of September 28, 2012 (Incorporated by reference to Exhibit 10.15 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.25	Pentair, Inc. 1999 Supplemental Executive Retirement Plan as Amended and Restated effective August 23, 2000 (Incorporated by reference to Exhibit 10.2 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on September 21, 2000 (File No. 000-04689)).*
10.26	Pentair, Inc. Supplemental Executive Retirement Plan effective January 1, 2009, as amended and restated as of September 28, 2012 (Incorporated by reference to Exhibit 10.16 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.27	Pentair, Inc. Restoration Plan as Amended and Restated effective August 23, 2000 (Incorporated by reference to Exhibit 10.3 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on September 21, 2000 (File No. 000-04689)).*
10.28	Pentair, Inc. Restoration Plan effective January 1, 2009, as amended and restated as of September 28, 2012 (Incorporated by reference to Exhibit 10.17 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on October 1, 2012 (File No. 001-11625)).*
10.29	Confidentiality and Non-Competition Agreement, dated January 6, 2005, between Pentair, Inc. and Michael Schrock (Incorporated by reference to Exhibit 10.2 in the Current Report on Form 8-K of Pentair, Inc. filed with the Commission on January 10, 2005 (File No. 000-04689)).*

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10.30	Agreement, dated March 6, 2013, between Pentair Ltd. and Randall J. Hogan (Incorporated by reference to Exhibit 10.1 in the Current Report on Form 8-K of Pentair Ltd. filed with the Commission on March 8, 2013 (File No. 011-11625)*
21	List of Pentair Ltd. subsidiaries.
23	Consent of Independent Registered Public Accounting Firm — Deloitte & Touche LLP.
24	Power of attorney.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Pentair Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2013 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2013, 2012 and 2011, (ii) the Consolidated Balance Sheets as of December 31, 2013 and 2012, (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011, (iv) the Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011 and (v) the Notes to the Consolidated Financial Statements.

* Denotes a management contract or compensatory plan or arrangement.

114

EX-10.16

Exhibit 10.16

KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

THIS AGREEMENT, made and entered into as of the ____ day of ________, 20__, by and between Pentair, Inc., a Minnesota corporation (hereinafter referred to as the “Company”), and _____________________ (hereinafter referred to as the “Executive”).

WITNESSETH

WHEREAS, the Executive is employed by the Company and/or a subsidiary of the Company (hereinafter referred to collectively as the “Employer”) in a key executive capacity and the Executive’s services are valuable to the conduct of the business of the Company;

WHEREAS, the Company desires to continue to attract and retain dedicated and skilled management employees in a period of industry consolidation, consistent with achieving the best possible value for its shareholders in any change in control of the Company;

WHEREAS, the Company recognizes that circumstances may arise in which a change in control of the Company occurs, through acquisition or otherwise, thereby causing a potential conflict of interest between the Company’s needs for the Executive to remain focused on the Company’s business and for the necessary continuity in management prior to and following a change in control, and the Executive’s reasonable personal concerns regarding future employment with the Employer and economic protection in the event of loss of employment as a consequence of a change in control;

WHEREAS, the Company and the Executive are desirous that any proposal for a change in control or acquisition of the Company will be considered by the Executive objectively and with reference only to the best interests of the Company and its shareholders;

WHEREAS, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable economic security, as provided in this Agreement, against altered conditions of employment which could result from any such change in control or acquisition;

WHEREAS, the Executive possesses intimate knowledge of the business and affairs of the Company and has acquired certain confidential information and data with respect to the Company; and

WHEREAS, the Company desires to insure, insofar as possible, that it will continue to have the benefit of the Executive’s services and to protect its confidential information and goodwill.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows:

1.Definitions.

(a)409A Affiliate. The term “409A Affiliate” means each entity that is required to be included in the Company’s controlled group of corporations within the meaning of Section 414(b) of the Code, or that is under common control with the Company within the meaning of Section 414(c) of the Code; provided, however, that the phrase “at least 50 percent” shall be used in place of the phrase “at least 80 percent” each place it appears therein or in the regulations thereunder.

(b)Accrued Benefits. The Executive’s “Accrued Benefits” shall include the following amounts, payable as described herein: (i) all base salary for the time period ending with the Termination Date; (ii) reimbursement for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Employer for the time period ending with the Termination Date; (iii) any and all other cash earned through the Termination Date and deferred at the election of the Executive or pursuant to any deferred compensation plan then in effect; (iv) notwithstanding any provision of any bonus or incentive compensation plan applicable to the Executive, but subject to any irrevocable deferral election then in effect, a lump sum amount, in cash, equal to the sum of (A) any bonus or incentive compensation that has been allocated or awarded to the Executive for a fiscal year or other measuring period under the plan that ends prior to the Termination Date but has not yet been paid (pursuant to Section 5(f) or otherwise) and (B) a pro rata portion to the Termination Date of the aggregate value of all contingent bonus or incentive compensation awards to the Executive for all uncompleted periods under the plan calculated as to each such award as if the Goals with respect to such bonus or incentive compensation award had been attained reduced by any amounts paid to the Executive pursuant to Section(b)(iii) and Section 3(b)(iv) under the plan for the fiscal year in

which the Termination Date occurs; and (v) all other payments and benefits to which the Executive (or in the event of the Executive’s death, the Executive’s surviving spouse or other beneficiary) may be entitled on the Termination Date as compensatory fringe benefits or under the terms of any benefit plan of the Employer, excluding severance payments under any Employer severance policy, practice or agreement in effect on the Termination Date. Payment of Accrued Benefits shall be made promptly in accordance with the Company’s prevailing practice with respect to clauses (i) and (ii) or, with respect to clauses (iii), (iv) and (v), pursuant to the terms of the benefit plan or practice establishing such benefits; provided that payments pursuant to clause (iv)(B) shall be paid on the first day of the seventh month following the month in which the Executive’s Separation from Service occurs, unless the Executive’s Separation from Service is due to death, in which event such payment shall be made within ninety (90) days of the date of Executive’s death.

(c)Act. The term “Act” means the Securities Exchange Act of 1934, as amended.

(d)Affiliate and Associate. The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under the Act.

(e)Annual Cash Compensation. The term “Annual Cash Compensation” shall mean the sum of (i) the Executive’s Annual Base Salary (determined as of the time of the Change in Control of the Company or, if higher, immediately prior to the date the Notice of Termination is given) plus (ii) an amount equal to the greater of the Executive’s annual incentive target bonus for the fiscal year in which the Termination Date occurs or the annual incentive bonus the Executive received for the fiscal year prior to the Change in Control of the Company (the aggregate amount set forth in clause (i) and clause (ii) shall hereafter be referred to as the “Annual Cash Compensation”),

(f)Beneficial Owner. A Person shall be deemed to be the “Beneficial Owner” of any securities:

(i)which such Person or any of such Person’s Affiliates or Associates has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (A) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase, or (B) securities issuable upon exercise of Rights issued pursuant to the terms of the Company’s Rights Agreement, dated as of December 10, 2004, as amended from time to time (or any successor to such Rights Agreement), at any time before the issuance of such securities;

(ii)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule l3d-3 of the General Rules and Regulations under the Act), including pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this clause (ii) as a result of an agreement, arrangement or understanding to vote such security if the agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations under the Act and (B) is not also then reportable on a Schedule l3D under the Act (or any comparable or successor report); or

(iii)which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (ii) above) or disposing of any voting securities of the Company.

(g)Cause. “Cause” for termination by the Employer of the Executive’s employment in connection with a Change in Control of the Company shall be limited to (i) the engaging by the Executive in intentional conduct that the Company establishes, by clear and convincing evidence, has caused demonstrable and serious financial injury to the Employer, as evidenced by a determination in a binding and final judgment, order or decree of a court or administrative agency of competent jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal, administrative or investigative; (ii) conviction of a felony (as evidenced by binding and final judgment, order or decree of a court of competent jurisdiction, in effect after exhaustion of all rights of appeal); or (iii) continuing willful and unreasonable refusal by the Executive to perform the Executive’s duties or responsibilities (unless significantly changed without the Executive’s consent).

(h)Change in Control of the Company. A “Change in Control of the Company” shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:

(i)any Person (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company (“Excluded Persons”)) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the date of this Agreement, pursuant to express authorization by the Board that refers to this exception) representing 30% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(ii)the following individuals cease for any reason to constitute a majority of the number of directors of the Company then serving: (A) individuals who, on the date of this Agreement constituted the Board and (B) any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, as such terms are used in Rule 14a‑11 of Regulation 14A under the Act) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date of this Agreement, or whose appointment, election or nomination for election was previously so approved (collectively the “Continuing Directors”); provided, however, that individuals who are appointed to the Board pursuant to or in accordance with the terms of an agreement relating to a merger, consolidation, or share exchange involving the Company (or any direct or indirect subsidiary of the Company) shall not be Continuing Directors for purposes of this Agreement until after such individuals are first nominated for election by a vote of at least two-thirds (2/3) of the then Continuing Directors and are thereafter elected as directors by the shareholders of the Company at a meeting of shareholders held following consummation of such merger, consolidation, or share exchange; and, provided further, that in the event the failure of any such persons appointed to the Board to be Continuing Directors results in a Change in Control of the Company, the subsequent qualification of such persons as Continuing Directors shall not alter the fact that a Change in Control of the Company occurred; or

(iii)the consummation of a merger, consolidation or share exchange of the Company with any other corporation or the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect subsidiary of the Company), in each case, which requires approval of the shareholders of the Company, other than (A) a merger, consolidation or share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange, or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the date of this Agreement, pursuant to express authorization by the Board that refers to this exception) representing 30% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

(iv)the consummation of a plan of complete liquidation or dissolution of the Company or a sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of 24 consecutive months), in each case, which requires approval of the shareholders of the Company, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no “Change in Control of the Company” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to own, directly or indirectly, in the same

proportions as their ownership in the Company, an entity that owns all or substantially all of the assets or voting securities of the Company immediately following such transaction or series of transactions.

(i)Code. The term “Code” means the Internal Revenue Code of 1986, including any amendments thereto or successor tax codes thereof.

(j)Covered Termination. Subject to Section 2(b), the term “Covered Termination” means any Termination of Employment during the Employment Period where the Termination Date or the date Notice of Termination is delivered is any date prior to the end of the Employment Period.

(k)Employment Period. Subject to Section 2(b), the term “Employment Period” means a period commencing on the date of a Change in Control of the Company, and ending at 11:59 p.m. Central Time on the earlier of the second anniversary of such date or the Executive’s Normal Retirement Date.

(l)Good Reason. The Executive shall have “Good Reason” for termination of employment in connection with a Change in Control of the Company in the event of:

(i)any breach of this Agreement by the Employer, including specifically any breach by the Employer of the agreements contained in Section 3, Section 4, Section 5, or Section 6, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith that the Employer remedies promptly after receipt of notice thereof given by the Executive;

(ii)any reduction in the Executive’s base salary, percentage of base salary available as incentive compensation or bonus opportunity or benefits, in each case relative to those most favorable to the Executive in effect at any time during the 180-day period prior to the Change in Control of the Company or, to the extent more favorable to the Executive, those in effect at any time during the Employment Period;

(iii)the removal of the Executive from, or any failure to reelect or reappoint the Executive to, any of the positions held with the Employer on the date of the Change in Control of the Company or any other positions with the Employer to which the Executive shall thereafter be elected, appointed or assigned, except in the event that such removal or failure to reelect or reappoint relates to the termination by the Employer of the Executive’s employment for Cause or by reason of disability pursuant to Section 12;

(iv)a good faith determination by the Executive that there has been a material adverse change, without the Executive’s written consent, in the Executive’s working conditions or status with the Employer relative to the most favorable working conditions or status in effect during the 180-day period prior to the Change in Control of the Company, or, to the extent more favorable to the Executive, those in effect at any time during the Employment Period, including but not limited to (A) a significant change in the nature or scope of the Executive’s authority, powers, functions, duties or responsibilities, or (B) a significant reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements, but in each case excluding for this purpose an isolated, insubstantial and inadvertent event not occurring in bad faith that the Employer remedies within ten (10) days after receipt of notice thereof given by the Executive;

(v)the relocation of the Executive’s principal place of employment to a location more than 50 miles from the Executive’s principal place of employment on the date 180 days prior to the Change in Control of the Company;

(vi)the Employer requires the Executive to travel on Employer business 20% in excess of the average number of days per month the Executive was required to travel during the 180-day period prior to the Change in Control of the Company; or

(vii)failure by the Company to obtain the Agreement referred to in Section 17(a) as provided therein.

(m)Normal Retirement Date. The term “Normal Retirement Date” means “Normal Retirement Date” as defined in the primary qualified defined benefit pension plan applicable to the Executive, or any successor plan, as in effect on the date of the Change in Control of the Company.

(n)Person. The term “Person” shall mean any individual, firm, partnership, corporation or other entity, including any successor (by merger or otherwise) of such entity, or a group of any of the foregoing acting in concert.

(o)Separation from Service. For purposes of this Agreement, the term “Separation from Service” means the Executive’s Termination of Employment, or if the Executive continues to provide services following his or her Termination of Employment, such later date as is considered a separation from service from the Company and its 409A Affiliates within the meaning of Code Section 409A. Specifically, if the Executive continues to provide services to the Company or a 409A Affiliate in a capacity other than as an employee, such shift in status is not automatically a Separation from Service.

(p)Termination of Employment. For purposes of this Agreement, the Executive’s termination of employment shall be presumed to occur when the Company and Executive reasonably anticipate that no further services will be performed by the Executive for the Company and its 409A Affiliates or that the level of bona fide services the Executive will perform as an employee of the Company and its 409A Affiliates will permanently decrease to no more than 20% of the average level of bona fide services performed by the Executive (whether as an employee or independent contractor) for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser period of services). Whether the Executive has experienced a Termination of Employment shall be determined by the Employer in good faith and consistent with Section 409A of the Code. Notwithstanding the foregoing, if the Executive takes a leave of absence for purposes of military leave, sick leave or other bona fide reason, the Executive will not be deemed to have incurred a Separation from Service for the first 6 months of the leave of absence, or if longer, for so long as the Executive’s right to reemployment is provided either by statute or by contract, including this Agreement; provided that if the leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the leave may be extended by the Employer for up to 29 months without causing a Termination of Employment.

(q)Termination Date. Except as otherwise provided in Section 2(b), Section 10(b), and Section 17(a), the term “Termination Date” means (i) if the Executive’s Termination of Employment is by the Executive’s death, the date of death; (ii) if the Executive’s Termination of Employment is by reason of voluntary early retirement, as agreed in writing by the Employer and the Executive, the date of such early retirement which is set forth in such written agreement; (iii) if the Executive’s Termination of Employment is, for purposes of this Agreement, by reason of disability pursuant to Section 12, the earlier of thirty days after the Notice of Termination is given or one day prior to the end of the Employment Period; (iv) if the Executive’s Termination of Employment is by the Executive voluntarily (other than for Good Reason), the date the Notice of Termination is given; and (v) if the Executive’s Termination of Employment is by the Employer (other than by reason of disability pursuant to Section 12) or by the Executive for Good Reason, the earlier of thirty days after the Notice of Termination is given or one day prior to the end of the Employment Period. Notwithstanding the foregoing,

(A)If termination is for Cause pursuant to Section 1(f)(iii) and if the Executive has cured the conduct constituting such Cause as described by the Employer in its Notice of Termination within such 30-day or shorter period, then the Executive’s employment hereunder shall continue as if the Employer had not delivered its Notice of Termination.

(B)If the Executive shall in good faith give a Notice of Termination for Good Reason and the Employer notifies the Executive that a dispute exists concerning the termination within the 15-day period following receipt thereof, then the Executive may elect to continue his or her employment during such dispute and the Termination Date shall be determined under this paragraph. If the Executive so elects and it is thereafter determined that Good Reason did exist, the Termination Date shall be the earliest of (1) the date on which the dispute is finally determined, either (x) by mutual written agreement of the parties or (y) in accordance with Section 22, (2) the date of the Executive’s death or (3) one day prior to the end of the Employment Period. If the Executive so elects and it is thereafter determined that Good Reason did not exist, then the employment of the Executive hereunder shall continue after such determination as if the Executive had not delivered the Notice of Termination asserting Good Reason and there shall be no Termination Date arising out of such Notice. In either case, this Agreement continues, until the Termination Date, if any, as if the Executive had not delivered the Notice of Termination except that, if it is finally determined that Good Reason did exist, the Executive shall in no case be denied the benefits described in Section 9 (including a Termination Payment) based on events occurring after the Executive delivered his Notice of Termination.

(C)Except as provided in Section 1(n)(B), if the party receiving the Notice of Termination notifies the other party that a dispute exists concerning the termination within the appropriate period following receipt thereof and it is finally determined that the reason asserted in such Notice of Termination did not exist, then (1) if such Notice was delivered by the Executive, the Executive will be deemed to have voluntarily terminated his employment and the Termination Date shall be the earlier of the date 15 days after the Notice of Termination is given or one day prior to the end of the Employment Period and (2) if delivered by the Company, the Company will be deemed to have terminated the Executive other than by reason of death, disability or Cause.

2.Termination or Cancellation Prior to Change in Control.

(a)Subject to Section 2(b), the Employer and the Executive shall each retain the right to terminate the employment of the Executive at any time prior to a Change in Control of the Company. Subject to Section 2(b), in the event that prior to a Change in Control of the Company (i) the Executive’s employment is terminated or (ii) as determined in writing by the Compensation Committee of the Board of Directors of the Company in its sole discretion, the Executive’s authority, powers, functions, duties, responsibilities or pay grade are materially reduced, this Agreement shall be terminated and cancelled and of no further force and effect, and any and all rights and obligations of the parties hereunder shall cease.

(b)Anything in this Agreement to the contrary notwithstanding, if a Change in Control of the Company occurs and if the Executive’s employment with the Employer is terminated (other than a termination due to the Executive’s death or as a result of the Executive’s disability) during the period of 180 days prior to the date on which the Change in Control of the Company occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control of the Company or (ii) otherwise arose in connection with or in anticipation of a Change in Control of the Company, then for all purposes of this Agreement such termination of employment shall be deemed a “Covered Termination,” “Notice of Termination” shall be deemed to have been given, and the “Employment Period” shall be deemed to have begun on the date of such termination which shall be deemed to be the “Termination Date” and the date of the Change of Control of the Company for purposes of this Agreement. Anything in this Agreement to the contrary notwithstanding, if a Change in Control of the Company occurs and if the Executive’s authority, powers, functions, duties, responsibilities or pay grade were reduced pursuant to Section 2(a)(ii) during the period of 180 days prior to the date on which the Change in Control of the Company occurs, and if it is reasonably demonstrated by the Executive that such reduction in authority, powers, functions, duties, responsibilities or pay grade (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control of the Company or (ii) otherwise arose in connection with or in anticipation of a Change in Control of the Company, then the termination and cancellation of this Agreement pursuant to Section 2(a) shall be deemed null and void, this Agreement shall be deemed to remain in full force and effect with any and all rights and obligations of the parties hereunder continuing and such reduction in authority, powers, functions, duties, responsibilities or pay grade shall be considered “Good Reason” for the Executive to terminate employment in connection with a Change in Control of the Company.

3.Employment Period; Vesting and Payment of Certain Benefits.

(a)If a Change in Control of the Company occurs when the Executive is employed by the Employer, the Employer will continue thereafter to employ the Executive during the Employment Period, and the Executive will remain in the employ of the Employer in accordance with and subject to the terms and provisions of this Agreement. Any Termination of Employment during the Employment Period, whether by the Company or the Employer, shall be deemed a termination by the Company for purposes of this Agreement.

(b)If a Change in Control of the Company occurs when the Executive is employed by the Employer, (i) the Company shall cause all restrictions on restricted stock awards made to the Executive prior to the Change in Control of the Company to lapse such that the Executive is fully and immediately vested in the Executive’s restricted stock upon such a Change in Control of the Company; (ii) the Company shall cause all stock options granted to the Executive prior to the Change in Control of the Company pursuant to the Company’s stock option plan(s) to be fully and immediately vested upon such a Change in Control of the Company; (iii) the Company shall cause all incentive compensation units and performance awards granted to the Executive pursuant to any long-term incentive plan maintained by the Company to be paid to the Executive, subject to any irrevocable deferral election then in effect, within ten (10) business days after the Change in Control of the Company (A) at one-third (1/3) of target, if the award cycle has been in effect less than twelve (12) months, (B) at two thirds (2/3) of the then current value pursuant to such plan, if the award cycle has been in effect twelve (12) or more months but less than twenty-four (24) months, and (C) at the then current value pursuant to such plan, if the award cycle has been in effect twenty-four (24) or more months, in each case as if all performance or incentive requirements and periods had been satisfied; and (iv) the Company shall pay to the Executive within ten (10) business days after the Change in Control of the Company an amount equal to the Executive’s annual incentive target bonus for the fiscal year in which the Change in Control of the Company occurs, subject to any irrevocable deferral election then in effect.

4.Duties. During the Employment Period, the Executive shall, in the same capacities and positions held by the Executive at the time of the Change in Control of the Company or in such other capacities and positions as may be agreed to by the Employer and the Executive in writing, devote the Executive’s best efforts and all of the Executive’s business time, attention and skill to the business and affairs of the Employer, as such business and affairs now exist and as they may hereafter be conducted.

5.Compensation. During the Employment Period, the Executive shall be compensated as follows:

(a)The Executive shall receive, at reasonable intervals (but not less often than monthly) and in accordance with such standard policies as may be in effect immediately prior to the Change in Control of the Company, an annual base salary in

cash equivalent of not less than twelve times the Executive’s highest monthly base salary for the twelve-month period immediately preceding the month in which the Change in Control of the Company occurs or, if higher, annual base salary at the rate in effect immediately prior to the Change in Control of the Company (which base salary shall, unless otherwise agreed in writing by the Executive or subject to any irrevocable deferral election then in effect, include the current receipt by the Executive of any amounts which, prior to the Change in Control of the Company, the Executive had elected to defer, whether such compensation is deferred under Section 401(k) of the Code or otherwise), subject to adjustment as hereinafter provided in Section 6 (such salary amount as adjusted upward from time to time is hereafter referred to as the “Annual Base Salary”).

(b)The Executive shall receive fringe benefits at least equal in value to the highest value of such benefits provided for the Executive at any time during the 180-day period immediately prior to the Change in Control of the Company or, if more favorable to the Executive, those provided generally at any time during the Employment Period to any executives of the Employer of comparable status and position to the Executive; and shall be reimbursed, at such intervals and in accordance with such standard policies that are most favorable to the Executive that were in effect at any time during the 180-day period immediately prior to the Change in Control of the Company, for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Employer, including travel expenses.

(c)The Executive and/or the Executive’s family, as the case may be, shall be included, to the extent eligible thereunder (which eligibility shall not be conditioned on the Executive’s salary grade or on any other requirement which excludes persons of comparable status to the Executive unless such exclusion was in effect for such plan or an equivalent plan at any time during the 180-day period immediately prior to the Change in Control of the Company), in any and all plans providing benefits for the Employer’s salaried employees in general, including but not limited to group life insurance, hospitalization, medical, dental, profit sharing and stock bonus plans; provided, that, (i) in no event shall the aggregate level of benefits under such plans in which the Executive is included be less than the aggregate level of benefits under plans of the Employer of the type referred to in this Section 5(c) in which the Executive was participating at any time during the 180-day period immediately prior to the Change in Control of the Company and (ii) in no event shall the aggregate level of benefits under such plans be less than the aggregate level of benefits under plans of the type referred to in this Section 5(c) provided at any time after the Change in Control of the Company to any executive of the Employer of comparable status and position to the Executive.

(d)The Executive shall annually be entitled to not less than the amount of paid vacation and not fewer than the highest number of paid holidays to which the Executive was entitled annually at any time during the 180-day period immediately prior to the Change in Control of the Company or such greater amount of paid vacation and number of paid holidays as may be made available annually to other executives of the Employer of comparable status and position to the Executive at any time during the Employment Period.

(e)The Executive shall be included in all plans providing additional benefits to executives of the Employer of comparable status and position to the Executive, including but not limited to deferred compensation, split-dollar life insurance, supplemental retirement, stock option, stock appreciation, stock bonus and similar or comparable plans; provided, that, (i) in no event shall the aggregate level of benefits under such plans be less than the highest aggregate level of benefits under plans of the Employer of the type referred to in this Section 5(e) in which the Executive was participating at any time during the 180-day period immediately prior to the Change in Control of the Company; (ii) in no event shall the aggregate level of benefits under such plans be less than the aggregate levels of benefits under plans of the type referred to in this Section 5(e) provided at any time after the Change in Control of the Company to any executive of the Employer comparable in status and position to the Executive; and (iii) the Employer’s obligation to include the Executive in bonus or incentive compensation plans shall be determined by Section 5(f).

(f)To assure that the Executive will have an opportunity to earn incentive compensation after a Change in Control of the Company, the Executive shall be included in a bonus plan of the Employer which shall satisfy the standards described below (such plan, the “Bonus Plan”). Bonuses under the Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Employer as the Employer shall establish (the “Goals”), all of which Goals shall be attainable, prior to the end of the Employment Period, with approximately the same degree of probability as the most attainable goals under the Employer’s bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control of the Company (whether one or more, the “Company Bonus Plan”) and in view of the Employer’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “Bonus Amount”) that the Executive is eligible to earn under the Bonus Plan shall be no less than 200% of the Executive’s target award provided in such Company Bonus Plan (such bonus amount herein referred to as the “Targeted Bonus”), and in the event the Goals are not achieved such that the entire Targeted Bonus is not payable, the Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Payment of the Bonus Amount shall not be affected by any circumstance occurring subsequent to the end of the Employment Period, including the Executive’s Termination of Employment.

6.Annual Compensation Adjustments. During the Employment Period, the Board of Directors of the Company (or an appropriate committee thereof) will consider and appraise, at least annually, the contributions of the Executive to the Company, and in accordance with the Company’s practice prior to the Change in Control of the Company, due consideration shall be given to the upward adjustment of the Executive’s Annual Base Salary, at least annually, (a) commensurate with increases generally given to other executives of the Company of comparable status and position to the Executive, and (b) as the scope of the Company’s operations or the Executive’s duties expand.

7.Termination For Cause or Without Good Reason. If there is a Covered Termination for Cause or due to the Executive’s voluntarily terminating his or her employment other than for Good Reason (any such terminations to be subject to the procedures set forth in Section 13), then the Executive shall be entitled to receive only Accrued Benefits.

8.Termination Giving Rise to a Termination Payment. If there is a Covered Termination by the Executive for Good Reason, or by the Company other than by reason of (i) death, (ii) disability pursuant to Section 12, or (iii) Cause (any such terminations to be subject to the procedures set forth in Section 13), then the Executive shall be entitled to receive, and the Company shall promptly pay, Accrued Benefits and, in lieu of further base salary for periods following the Termination Date, as liquidated damages and additional severance pay and in consideration of the covenant of the Executive set forth in Section 14(a), the Termination Payment pursuant to Section 9(a).

9.Payments Upon Termination.

(a)Termination Payment. The “Termination Payment” shall be an amount equal to the Annual Cash Compensation times two. The Termination Payment shall be paid to the Executive in cash equivalent on the first day of the seventh month following the month in which the Executive’s Separation from Service occurs, without interest thereon; provided that, if on the date of the Executive’s Separation from Service, neither the Company nor any other entity that is considered a “service recipient” with respect to the Executive within the meaning of Code Section 409A has any stock which is publicly traded on an established securities market (within the meaning of Treasury Regulation Section 1.897-1(m)) or otherwise, then the Termination Payment shall be paid to the Executive in cash equivalent within ten (10) business days after the Termination Date. Notwithstanding the foregoing, in the event the Executive’s Termination Date is pursuant to Section 2(b), the Termination Payment shall be paid within ten (10) business days after the date of the Change in Control of the Company (as defined without reference to Section 2(b)), without interest. Such lump sum payment shall not be reduced by any present value or similar factor, and the Executive shall not be required to mitigate the amount of the Termination Payment by securing other employment or otherwise, nor will such Termination Payment be reduced by reason of the Executive securing other employment or for any other reason. The Termination Payment shall be in lieu of, and acceptance by the Executive of the Termination Payment shall constitute the Executive’s release of any rights of the Executive to, any other cash severance payments under any Company severance policy, practice or agreement.

(b)    Certain Additional Payments by the Company.

(i)    Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment or any other payment under this Agreement, or under any other agreement with or plan of the Employer (in the aggregate, “Total Payments”), would constitute an “excess parachute payment” as defined in Section 280G of the Code (or any successor provision), then the Company shall pay the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive after deduction of any excise tax imposed under Section 4999 of the Code (or any successor provision) and any interest charges or penalties in respect of the imposition of such excise tax (collectively, the “Excise Tax”) (but not any federal, state or local income tax, or employment tax) on the Total Payments, and any federal, state and local income tax, employment tax, and excise tax upon the payment provided for by this Section 9(b)(i), shall be equal to the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s domicile for income tax purposes on the date the Gross-Up Payment is made, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. Notwithstanding the foregoing, if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excise Tax if the Total Payments were reduced by an amount that is less than 10% of the Total Payments that would be treated as “parachute payments” under Section 280G of the Code (or any successor provision), then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to the Executive. For purposes of reducing the Total Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Total Payments) shall be reduced. If

the reduction of the amounts payable hereunder would not result in a reduction of the Total Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision.

(ii)    For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Section 280G of the Code (or any successor provision) and such “parachute payments” shall be valued as provided therein. Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Promptly following a Covered Termination or notice by the Company to the Executive of its belief that there is a payment or benefit due the Executive which will result in an “excess parachute payment” as defined in Section 280G of the Code (or any successor provision), the Executive and the Company, at the Company’s expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel (“National Tax Counsel”) selected by the Company’s independent auditors and reasonably acceptable to the Executive (which may be regular outside counsel to the Company), which opinion sets forth (A) the amount of the Base Period Income, (B) the amount and present value of Total Payments, (C) the amount and present value of any excess parachute payments, and (D) the amount of any Gross-Up Payment or the reduction of any Total Payments to the Safe Harbor Cap, as the case may be. As used in this Agreement, the term “Base Period Income” means an amount equal to the Executive’s “annualized includable compensation for the base period” as defined in Section 280G(d)(1) of the Code. For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Section 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive. The opinion of National Tax Counsel shall be addressed to the Company and the Executive and shall be binding upon the Company and the Executive. If such National Tax Counsel so requests in connection with the opinion required by this Section 9(b), the Executive and the Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive solely with respect to its status under Section 280G of the Code and the regulations thereunder. The Company shall pay the Executive the Gross-Up Payment, if any, at the same time as the Termination Payment is paid, or if the Executive’s Covered Termination is pursuant to Section 2(b), then within 90 days following the Change in Control of the Company (determined without regard to Section 2(b)); provided that if prior to such date the Executive is required to remit the excise tax under Section 4999 of the Code to the Internal Revenue Service, then upon written notice by the Executive to the Company, the Company shall promptly reimburse the Executive for the Gross-Up Payment (but based on Executive’s actual rate of taxation).

(iii)    In the event that upon any audit by the Internal Revenue Service, or by a state or local taxing authority, of the Total Payments or Gross-Up Payment, a change is finally determined to be required in the amount of taxes paid by the Executive, appropriate adjustments shall be made under this Agreement such that the net amount which is payable to the Executive after taking into account the provisions of Section 4999 of the Code (or any successor provision) shall reflect the intent of the parties as expressed in this Section 9, in the manner determined by the National Tax Counsel. If the Company is required to make a payment to the Executive, such payment shall be paid following the date of the final determination by a court or the Internal Revenue Service and within thirty (30) days after the date Executive provides the Company a written request for reimbursement thereof (accompanied by proof of taxes paid), but in no event shall the reimbursement be made later than the end of the calendar year following the year in which the Executive remits the excise tax to the Internal Revenue Service.

(iv)    The Company agrees to bear all costs associated with, and to indemnify and hold harmless, the National Tax Counsel of and from any and all claims, damages, and expenses resulting from or relating to its determinations pursuant to this Section 9(b), except for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm.

(b)Additional Benefits. If there is a Covered Termination and the Executive is entitled to Accrued Benefits and the Termination Payment, then the Company shall provide to the Executive the following additional benefits:

(i)The Executive shall receive until the end of the second calendar year following the calendar year in which the Executive’s Separation from Service occurs, at the expense of the Company, outplacement services, on an individualized basis at a level of service commensurate with the Executive’s status with the Company immediately prior to the date of the Change in Control of the Company (or, if higher, immediately prior to the Executive’s Termination of Employment), provided by a nationally recognized executive placement

firm selected by the Company; provided that the cost to the Company of such services shall not exceed 10% of the Executive’s Annual Base Salary.

(ii)Until the earlier of the end of the Employment Period or such time as the Executive has obtained new employment and is covered by benefits which in the aggregate are at least equal in value to the following benefits, the Executive shall continue to be covered, at the expense of the Company, by the same or equivalent life insurance, hospitalization, medical and dental coverage as was required hereunder with respect to the Executive immediately prior to the date the Notice of Termination is given, subject to the following:

(A)Following the end of the COBRA continuation period, if such hospitalization, medical or dental coverage is provided under a health plan that is subject to Section 105(h) of the Code, benefits payable under such health plan shall comply with the requirements of Treasury regulation section 1.409A-3(i)(1)(iv) and, if necessary, the Company shall amend such health plan to comply therewith.

(B)During the first six months following the Executive’s Separation from Service, the Executive shall pay the Company for any life insurance coverage that provides a benefit in excess of $50,000 under a group term life insurance policy. After the end of such six month period, the Company shall make a cash equivalent payment to the Executive equal to the aggregate premiums paid by the Executive for such coverage, and thereafter such coverage shall be provided at the expense of the Company for the remainder of the period as set forth above; provided that this clause (B) shall cease to apply if on the date of the Executive’s Separation from Service, neither the Company nor any other entity that is considered a “service recipient” with respect to the Executive within the meaning of Code Section 409A has any stock which is publicly traded on an established securities market (within the meaning of Treasury Regulation Section 1.897-1(m)) or otherwise.

If the Executive is entitled to the Termination Payment pursuant to Section 2(b), then within ten (10) days following the Change in Control of the Company (determined without regard to Section 2(b)), the Company shall reimburse the Executive for any COBRA premiums the Executive paid for his or her hospitalization, medical and dental coverage under COBRA from the Executive’s Termination Date through the date of the Change in Control of the Company (determined without regard to Section 2(b)).

(iii)The Company shall bear up to $15,000 in the aggregate of fees and expenses of consultants and/or legal or accounting advisors engaged by the Executive to advise the Executive as to matters relating to the computation of benefits due and payable under this Section 9.

(iv)    The Company shall cause the Executive to be fully and immediately vested in his accrued benefit under the Pentair, Inc. 1999 Supplemental Executive Retirement Plan (“SERP”) and the Pentair, Inc. Restoration Plan (“Restoration Plan”) or any successor plans thereto (the “Plans”) (to the extent the Executive participates in the Plans) and in any nonqualified defined contribution retirement plan of the Employer. The amount of benefits under the Plans shall be determined as if the Executive had completed additional years of Benefit Service (as such term is defined in the Plans) equal to the lesser of (A) three years or (B) the greater of (x) seven minus the years of Benefit Service credited to such Executive under the Plans, determined without regard to the terms of this Agreement, as of the end of the calendar year which includes the date of the Change in Control of the Company, or (y) zero. In addition, if the Executive is described in Appendix A to the SERP, the additional benefit therein provided for the Executive shall be fully vested and the amount of such additional benefit shall be no less than if the Executive had continued in qualified employment through the end of the calendar year in which he would attain age 62. In addition, the Executive’s accrued benefit under the Restoration Plan shall be appropriately increased by the value of the Executive’s accrued benefit, if any, under the Company’s tax-qualified defined benefit plan which is forfeited due to the Executive’s failure to become fully vested thereunder.

10.Death.

(a)Except as provided in Section 10(b), in the event of a Covered Termination due to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall receive all the Executive’s Accrued Benefits through the Termination Date.

(b)In the event the Executive dies after a Notice of Termination is given (i) by the Company or (ii) by the Executive for Good Reason, the Executive’s estate, heirs and beneficiaries shall be entitled to the benefits described in Section 10(a) and, subject to the provisions of this Agreement, to such Termination Payment as the Executive would have been entitled to had the Executive lived, except that the Termination Payment shall be paid within 90 days following the date of the Executive’s death, without interest thereon. For purposes of this Section 10(b), the Termination Date shall be the earlier of 30 days following the

giving of the Notice of Termination, subject to extension pursuant to Section 1(n), or one day prior to the end of the Employment Period.

11.Retirement. If, during the Employment Period, the Executive and the Employer shall execute an agreement providing for the early retirement of the Executive from the Employer, or the Executive shall otherwise give notice that he is voluntarily choosing to retire early from the Employer, the Executive shall receive Accrued Benefits through the Termination Date; provided, that if the Executive’s employment is terminated by the Executive for Good Reason or by the Company other than by reason of death, disability or Cause and the Executive also, in connection with such termination, elects voluntary early retirement, the Executive shall also be entitled to receive a Termination Payment pursuant to Section 8.

12.Termination for Disability. If, during the Employment Period, as a result of the Executive’s disability due to physical or mental illness or injury (regardless of whether such illness or injury is job-related), the Executive shall have been absent from the Executive’s duties hereunder on a full-time basis for a period of six consecutive months and, within 30 days after the Company notifies the Executive in writing that it intends to terminate the Executive’s employment (which notice shall not constitute the Notice of Termination contemplated below), the Executive shall not have returned to the performance of the Executive’s duties hereunder on a full-time basis, the Company may terminate the Executive’s employment for purposes of this Agreement pursuant to a Notice of Termination given in accordance with Section 13. If the Executive’s employment is terminated on account of the Executive’s disability in accordance with this Section, the Executive shall receive Accrued Benefits through the Termination Date and shall remain eligible for all benefits provided by any long term disability programs of the Employer in effect at the time of such termination.

13.Termination Notice and Procedure. Any Covered Termination by the Company or the Executive (other than a termination of the Executive’s employment that is a Covered Termination by virtue of Section 2(b)) shall be communicated by a written notice of termination (“Notice of Termination”) to the Executive, if such Notice is given by the Company, and to the Company, if such Notice is given by the Executive, all in accordance with the following procedures and those set forth in Section 24:

(a)If such termination is for disability, Cause or Good Reason, the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such termination.

(b)Any Notice of Termination by the Company shall have been approved, prior to the giving thereof to the Executive, by a resolution duly adopted by a majority of the directors of the Company (or any successor corporation) then in office.

(c)If the Notice is given by the Executive for Good Reason, the Executive may cease performing his duties hereunder on or after the date fifteen days after the delivery of Notice of Termination and shall in any event cease employment on the Termination Date. If the Notice is given by the Company, then the Executive may cease performing his duties hereunder on the date of receipt of the Notice of Termination, subject to the Executive’s rights hereunder.

(d)The Executive shall have thirty days, or such longer period as the Company may determine to be appropriate, to cure any conduct or act, if curable, alleged to provide grounds for termination of the Executive’s employment for Cause under this Agreement pursuant to Section 1(f)(iii).

(e)The recipient of any Notice of Termination shall personally deliver or mail in accordance with Section 24 written notice of any dispute relating to such Notice of Termination to the party giving such Notice within 15 days after receipt thereof; provided, however, that if the Executive’s conduct or act alleged to provide grounds for termination by the Company for Cause is curable, then such period shall be 30 days. After the expiration of such period, the contents of the Notice of Termination shall become final and not subject to dispute.

14.Further Obligations of the Executive.

(a)Competition. The Executive agrees that, in the event of any Covered Termination where the Executive is entitled to Accrued Benefits and the Termination Payment, the Executive shall not, for a period expiring one year after the Termination Date, without the prior written approval of the Company’s Board of Directors, (i) solicit for employment an employee of the Company or its subsidiaries or (ii) participate in the management of, be employed by or own any business enterprise at a location within the United States that engages in substantial competition with the Company or its subsidiaries, where such enterprise’s revenues from any competitive activities amount to 10% or more of such enterprise’s net revenues and sales for its most recently completed fiscal year; provided, however, that nothing in this Section 14(a) shall prohibit the Executive from owning stock or other securities of a competitor amounting to less than five percent of the outstanding capital stock of such competitor.

(b)Confidentiality. During and following the Executive’s employment by the Company, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any confidential information or proprietary

data of the Company (including that of the Employer), except to the extent authorized in writing by the Board of Directors of the Company or required by any court or administrative agency, other than to an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of duties as an executive of the Company. Confidential information shall not include any information known generally to the public or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of the Company. All records, files, documents and materials, or copies thereof, relating to the business of the Company which the Executive shall prepare, or use, or come into contact with, shall be and remain the sole property of the Company and shall be promptly returned to the Company upon termination of employment with the Company.

15.Expenses and Interest. If, after a Change in Control of the Company, (a) a dispute arises with respect to the enforcement of the Executive’s rights under this Agreement or (b) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, in either case so long as the Executive is not acting in bad faith, then the Company shall reimburse the Executive for any reasonable attorneys’ fees and necessary costs and disbursements incurred as a result of the dispute, legal or arbitration proceeding (“Expenses”), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at the rate of interest announced by U.S. Bank National Association, Minneapolis, Minnesota, from time to time at its prime or base lending rate from the date that payments to him or her should have been made under this Agreement. Within ten days after the Executive’s written request therefore (but in no event later than the end of the calendar year following the calendar year in which such Expense is incurred), the Company shall reimburse the Executive, or such other person or entity as the Executive may designate in writing to the Company, the Executive’s reasonable Expenses.

16.Payment Obligations Absolute. The Company’s obligation during and after the Employment Period to pay the Executive the amounts and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which the Company may have against him or anyone else. Except as provided in Section 15, all amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever.

17.Successors.

(a)If the Company sells, assigns or transfers all or substantially all of its business and assets to any Person or if the Company merges into or consolidates or otherwise combines (where the Company does not survive such combination) with any Person (any such event, a “Sale of Business”), then the Company shall assign all of its right, title and interest in this Agreement as of the date of such event to such Person, and the Company shall cause such Person, by written agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Company. Failure of the Company to obtain such agreement prior to the effective date of such Sale of Business shall be a breach of this Agreement constituting “Good Reason” hereunder, except that for purposes of implementing the foregoing the date upon which such Sale of Business becomes effective shall be deemed the Termination Date. In case of such assignment by the Company and of assumption and agreement by such Person, as used in this Agreement, “Company” shall thereafter mean such Person which executes and delivers the agreement provided for in this Section 17 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, such Person. The Executive shall, in his or her discretion, be entitled to proceed against any or all of such Persons, any Person which theretofore was such a successor to the Company and the Company (as so defined) in any action to enforce any rights of the Executive hereunder. Except as provided in this Section 17(a), this Agreement shall not be assignable by the Company. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company.

(b)This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive under Sections 3, 7, 8, 9, 10, 11, 12 and 15 if the Executive had lived shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs and representatives; provided, however, that the foregoing shall not be construed to modify any terms of any benefit plan of the Employer, as such terms are in effect on the date of the Change in Control of the Company, that expressly govern benefits under such plan in the event of the Executive’s death.

18.Severability. The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

19.Contents of Agreement; Waiver of Rights; Amendment. This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and shall supersede in all respects, and the Executive hereby waives all rights under, any prior or other agreement or understanding between the parties with respect to such subject matter, including, but not limited to the Management Assurance Agreement and any Key Executive Employment and Severance Agreement between the Company and the Executive entered into prior to the date hereof. This Agreement may not be amended or modified at any time except by written instrument executed by the Company and the Executive.

20.Withholding. The Company shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal, state or local withholding or other taxes or charges which it is from time to time required to withhold; provided, that the amount so withheld shall not exceed the minimum amount required to be withheld by law. In addition, if prior to the date of payment of the Termination Payment hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due with respect to any payment or benefit to be provided hereunder, the Company may provide for an immediate payment of the amount needed to pay the Executive’s portion of such tax (plus an amount equal to the taxes that will be due on such amount) and the Executive’s Termination Payment shall be reduced accordingly. The Company shall be entitled to rely on an opinion of the National Tax Counsel if any question as to the amount or requirement of any such withholding shall arise.

21.Certain Rules of Construction. No party shall be considered as being responsible for the drafting of this Agreement for the purpose of applying any rule construing ambiguities against the drafter or otherwise. No draft of this Agreement shall be taken into account in construing this Agreement. Any provision of this Agreement which requires an agreement in writing shall be deemed to require that the writing in question be signed by the Executive and an authorized representative of the Company.

22.Governing Law; Resolution of Disputes. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Minnesota. Any dispute arising out of this Agreement shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be Minneapolis, Minnesota or, at the Executive’s election, if the Executive is not then residing or working in the Minneapolis, Minnesota metropolitan area, in the judicial district encompassing the city in which the Executive resides; provided, that, if the Executive is not then residing in the United States, the election of the Executive with respect to such venue shall be either Minneapolis, Minnesota or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at the Termination Date) which is closest to the Executive’s residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

23.Additional Section 409A Provisions. (a) If, after the date of a Change in Control of the Company, any payment amount or the value of any benefit under this Agreement is required to be included in the Executive’s income prior to the date such amount is actually paid or the benefit provided as a result of the failure of this Agreement (or any other arrangement that is required to be aggregated with this Agreement under Code Section 409A) to comply with Code Section 409A, then the Executive shall receive a distribution, in a lump sum, within 90 days after the date it is finally determined that the Agreement (or such other arrangement that is required to be aggregated with this Agreement) fails to meet the requirements of Section 409A of the Code; such distribution shall equal the amount required to be included in the Executives income as a result of such failure and shall reduce the amount of payments or benefits otherwise due hereunder.

(a)The Company and the Executive intend the terms of this Agreement to be in compliance with Section 409A of the Code. The Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit, including but not limited to consequences related to Section 409A of the Code. To the maximum extent permissible, any ambiguous terms of this Agreement shall be interpreted in a manner that avoids a violation of Section 409A of the Code.

(b)If the Executive believes he or she is entitled to a payment or benefit pursuant to the terms of this Agreement that was not timely paid or provided, and such payment or benefit is considered deferred compensation subject to the requirements of Section 409A of the Code, the Executive acknowledges that to avoid an additional tax on such payment or benefit pursuant to the provisions of Section 409A of the Code, the Executive must make a reasonable, good faith effort to collect such payment or benefit no later than 90 days after the latest date upon which the payment could have been timely made or benefit timely provided without violating Section 409A of the Code, and if not paid or provided, must take further enforcement measures within 180 days after such latest date.

24.Notice. Notices given pursuant to this Agreement shall be in writing and, except as otherwise provided by Section 13(d), shall be deemed given when actually received by the Executive or actually received by the Company’s Secretary or any officer of the Company other than the Executive. If mailed, such notices shall be mailed by United States registered or

certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to Pentair, Inc., Attention: Secretary (or Chief Executive Officer, if the Executive is then Secretary), 5500 Wayzata Blvd., Suite 800, Golden Valley, Minnesota 55416, or if to the Executive, at the address set forth below the Executive’s signature to this Agreement, or to such other address as the party to be notified shall have theretofore given to the other party in writing.

25.No Waiver. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.

26.Headings. The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	PENTAIR INC.
	By:
	Its:
Attest:
	Its:
	EXECUTIVE:
	Address:

EX-21

Exhibit 21

Pentair Ltd. and subsidiaries as of December 31, 2013

Name of Company	Jurisdiction of Incorporation
A.C.N. 095 652 645 Pty Limited	Australia
Alberta Electronic Company Limited	Hong Kong
Alliance Integrated Systems, Inc.	United States
Aplex Industries, Inc.	United States
Apno, S.A. de C.V.	Mexico
Beijing Pentair Environmental Protection Equipment Co., Ltd.	China
Biffi Italia S.r.l.	Italy
Calmark Europe Limited	Ireland
Century Industries Company	Canada
Century Mfg. Co.	United States
Chansuba Pumps Private Limited 1	India
Chemat GmbH Armaturen fur Industrie - und Nuklearanlage	Germany
Coastline Foundry (Qld) Pty Limited	Australia
Combinatie Nijuis-Ippel V.o.f. 2	Netherlands
Conception et Representation de Technologie de Controle C.R.T. Controle	France
Crosby Valve, LLC	United States
Davies Pumps & Co Limited	New Zealand
Dongguan Jieming Tianyuan Water Treatment Equipment Co., Ltd.	China
Edward Barber & Company Limited	United Kingdom
Edward Barber (U.K.) Limited	United Kingdom
Electronic Enclosures, LLC	United States
Emirates Techno Casting FZE	United Arab Emirates
Emirates Techno Casting Holdings Limited 3	United Arab Emirates
Emirates Techno Casting LLC	United Arab Emirates
Epps, Ltd.	Mauritius
Erichs Armatur AB2	Sweden
Erste Korschenbroicher Armaturen GmbH & Co. KG	Germany
Erste Korschenbroicher Armaturen Hungary Kereskedellmi Kft. 4	Hungary
Erste Korschenbroicher Armaturen Verwaltungs GmbH	Germany
ETC - CP (M) Sdn Bhd	Malaysia
ETE Coliban Pty Limited	Australia
Euratech (Malaysia) Sdn. Bhd.	Malaysia
EuroPentair GmbH	Germany
Everpure Japan K.K.	Japan
FARADYNE Motors (Suzhou) Co., Ltd2	China
Faradyne Motors LLC2	United States
FilterSoft, LLC	United States
Filtrix B.V.	Netherlands
Fleck Controls, Inc.	United States
Flo-Check Valves Limited	Ireland
Flow Control Holding GmbH & Co. KG	Germany
Flow Control Holding Verwaltungs GmbH	Germany
Flow Control Technologies SA 5	France
Flow Control US Holding Corporation	United States
Flow Shares Ltd.	Bahamas
Generale de Robinetterie Industrielle et de Systemes de Surete (GRISS) S.A.5	France
Goyen Controls Co Pty Limited	Australia
Goyen Controls Co UK Limited	United Kingdom
Goyen Valve LLC	United States

Greenspan Environmental Technology Pty Ltd	Australia
Greenspan Singapore Private Limited	Singapore
Greenspan Technology Pty Ltd	Australia
Gulf Valve FZE	United Arab Emirates
Haffmans B.V.	Netherlands
Haffmans North America, Inc.	United States
Hawley Group Canada Limited	Canada
Hindle Cockburns Limited	United Kingdom
Hiter Industria e Comercio de Controles Termo-Hidraulicos Ltda.	Brazil
Hoffman Enclosures (Mex.), LLC	United States
Hoffman Enclosures Inc.	United States
Hoffman Enclosures Mexico, S. de R.L. de C.V.	Mexico
Hoffman Schroff PTE Ltd	Singapore
Holding Nijhuis Pompen B.V.	Netherlands
Hypro EU Limited	United Kingdom
Infinite Water Solutions Private Limited2	India
Investim Chile S.A.	Chile
J.R. Clarkson Company LLC, The	United States
JCF Fluid Flow India Private Limited 6	India
Jung Pumpen GmbH	Germany
Keystone Asia Pacific Pty Limited	Australia
Keystone Canada Co.	Canada
Keystone Germany Holdings Corp.	United States
Keystone Saudi, Inc.	United States
Keystone Valve (Korea) LLC	Korea, Republic of
Keystone Valve (U.K.) Ltd.	United Kingdom
Leushuis China Ltd.	Hong Kong
Leushuis Projects International B.V.	Netherlands
Limited Liability Company Pentair Rus	Russian Federation
Lincoln Automotive Company	United States
M.M. Participacoes Ltda.	Brazil
McNeil (Ohio) Corporation	United States
Mecafrance (Deutschland) GmbH	Germany
MECAIR S.r.L.	Italy
Milperra Developments Pty Limited	Australia
Moraine Properties, LLC	United States
Nano Terra, Inc. 7	United States
Neotecha AG	Switzerland
Nijhuis International B.V.	Netherlands
Nijhuis Pompen B.V.	Netherlands
Nijhuis Pompen BVBA	Belgium
Nijhuis Pompen Exploitatiemaatschappij B.V.	Netherlands
Nijhuis Pompen GmbH	Germany
Nocchi Pompes Europe S.a.r.l.	France
Norse Valves AS 8	Norway
Onga Pump Shop Pty. Ltd.	Australia
Optima Enclosures Limited	United Kingdom
Panthro Acquisition Co.	United States
Pentair (Brazil) Luxembourg S.a.r.l.	Luxembourg
Pentair (NZ) Limited	New Zealand
Pentair (Thailand) Ltd.	Thailand
Pentair Aquatic Eco-Systems (Canada), Inc.	Canada
Pentair Aquatic Eco-Systems, Inc.	United States

Pentair Asia PTE Ltd.	Singapore
Pentair Bermuda Holdings 9	Bermuda
Pentair Bermuda, LLC	United States
Pentair Beteiligungs GmbH	Germany
Pentair Brasil Holdings Ltda.	Brazil
Pentair Brazil Holding S.a.r.l.	Luxembourg
Pentair Brazil, LLC	United States
Pentair Canada, Inc.	Canada
Pentair China (Switzerland) GmbH	Switzerland
Pentair Clean Process Technologies India Private Limited	India
Pentair DMP Corp.	United States
Pentair Electronic Packaging de Mexico, S. de R.L. de C.V.	Mexico
Pentair Enclosures Inc.	United States
Pentair Enclosures S. de R.L. de C.V.	Mexico
Pentair Engineered Products (UK) Ltd	United Kingdom
Pentair Environmental Systems Ltd	United Kingdom
Pentair Epsilon Limited	Bermuda
Pentair European Investments Deutschland GmbH	Germany
Pentair European Security Holdings SA	France
Pentair European Steel Strip Limited	United Kingdom
Pentair Federal Pump, LLC	United States
Pentair Filtration Solutions, LLC	United States
Pentair Finance Group GmbH	Switzerland
Pentair Finance Holding GmbH	Switzerland
Pentair Finance S.A.	Luxembourg
Pentair Flow Control (Beijing) Co., Ltd.	China
Pentair Flow Control (UK) Limited	United Kingdom
Pentair Flow Control AG	Switzerland
Pentair Flow Control Chile Holding LLC	United States
Pentair Flow Control Company LLC	United States
Pentair Flow Control Europe SAS	France
Pentair Flow Control Holding NL B.V.	Netherlands
Pentair Flow Control Holdings Ltd	Isle of Man
Pentair Flow Control International Holdings A, LLC	United States
Pentair Flow Control International Holdings B, LLC	United States
Pentair Flow Control International Holdings C, LLC	United States
Pentair Flow Control International Holdings D, LLC	United States
Pentair Flow Control International Pty Limited	Australia
Pentair Flow Control Italia S.r.l.	Italy
Pentair Flow Control Middle East FZE	United Arab Emirates
Pentair Flow Control Pacific Pty Limited	Australia
Pentair Flow Services AG	Switzerland
Pentair Flow Technologies, LLC	United States
Pentair France SARL	France
Pentair Germany GmbH	Germany
Pentair Global Holdings B.V.	Netherlands
Pentair Global S.à r.l.	Luxembourg
Pentair Gulf Holding Limited	United Arab Emirates
Pentair Hidro Filtros do Brasil Indústria e Comércio de Filtros Ltda.	Brazil
Pentair Holding III (Denmark) ApS	Denmark
Pentair Holdings S.à r.l.	Luxembourg
Pentair Holdings Switzerland GmbH	Switzerland
Pentair Housing, Inc.	United States
Pentair Housing, LP	United States

Pentair International Armaturen Holding GmbH	Germany
Pentair International Holding S.a.r.l.	Luxembourg
Pentair International PLT Deutschland GmbH	Germany
Pentair International PLT Klartechnik GmbH	Germany
Pentair International PLT Umwelttechnik GmbH	Germany
Pentair International Sarl	Switzerland
Pentair Janus Holding LLC	United States
Pentair Janus Holdings	Bermuda
Pentair Luxembourg S.à r.l.	Luxembourg
Pentair Magyarország Kft.	Hungary
Pentair Management Company	United States
Pentair Manufacturing Belgium BVBA	Belgium
Pentair Manufacturing France S.A.S.	France
Pentair Manufacturing Italy, S.r.L.	Italy
Pentair Middle East FZE	United Arab Emirates
Pentair Middle East Holding S.a.r.l.	Luxembourg
Pentair Nanosoft Bermuda Holdings	Bermuda
Pentair Nanosoft US Holdings, LLC	United States
Pentair Netherlands Holding B.V.	Netherlands
Pentair Netherlands Holding, Inc.	United States
Pentair Pacific Rim (Water) Limited 9	Hong Kong
Pentair Pacific Rim Limited 9	Hong Kong
Pentair Pipe Systems Pte. Ltd.	Singapore
Pentair Poland Sp.z.o.o.	Poland
Pentair Project Services Canada, Inc.	Canada
Pentair Services France S.A.S.	France
Pentair Services Holding GmbH	Switzerland
Pentair Shenzhen Enclosure Company, Ltd.	China
Pentair Switzerland GmbH	Switzerland
Pentair Taunus Eletrometalurgica Ltda	Brazil
Pentair Technical Products China	China
Pentair Technical Products Holdings, Inc.	United States
Pentair Technical Products India Private Limited	India
Pentair Technical Products SáRL	Luxembourg
Pentair Technical Products Service Co.	United States
Pentair Technical Products Shanghai	China
Pentair Technical Products, Inc.	United States
Pentair Technical Products, S. de R.L. de C.V.	Mexico
Pentair Teknoloji Sistemleri Ticaret Limited Sirketi	Turkey
Pentair Thermal Controls (Huzhou) Co., Ltd.	China
Pentair Thermal Controls (Shanghai) Engineering Co., Ltd.	China
Pentair Thermal Management Belgium NV	Belgium
Pentair Thermal Management Canada Ltd.	Canada
Pentair Thermal Management France SAS	France
Pentair Thermal Management Germany GmbH	Germany
Pentair Thermal Management Holdings B LLC	United States
Pentair Thermal Management Holdings Germany GmbH	Germany
Pentair Thermal Management Holdings LLC	United States
Pentair Thermal Management India Private Limited	India
Pentair Thermal Management Japan Co., Ltd.	Japan
Pentair Thermal Management Korea Ltd.	Korea, Republic of
Pentair Thermal Management KZ LLP	Kazakhstan
Pentair Thermal Management LLC	United States
Pentair Thermal Management Netherlands B.V.	Netherlands

Pentair Thermal Management Nordic AB	Sweden
Pentair Thermal Management Norway AS	Norway
Pentair Thermal Management Polska Sp. z.o.o.	Poland
Pentair Thermal Management Romania SRL	Romania
Pentair Thermal Management UK Limited	United Kingdom
Pentair Trading (Shanghai) Co., Ltd.	China
Pentair Transport, Inc.	United States
Pentair Tubing Limited	United Kingdom
Pentair UK Group Limited	United Kingdom
Pentair Umwelttechnik GmbH	Germany
Pentair Valves & Controls (Shanghai) Co., Ltd.	China
Pentair Valves & Controls (Sichuan) Co., Ltd.	China
Pentair Valves & Controls (Taiwan) Ltd	Taiwan
Pentair Valves & Controls (Thailand) Ltd.	Thailand
Pentair Valves & Controls (UK) Limited	United Kingdom
Pentair Valves & Controls Africa (PTY) LTD	South Africa
Pentair Valves & Controls Argentina S.A.	Argentina
Pentair Valves & Controls Brasil Ltda.	Brazil
Pentair Valves & Controls Canada Inc.	Canada
Pentair Valves & Controls Chile S.A.	Chile
Pentair Valves & Controls Czech s.r.o.	Czech Republic
Pentair Valves & Controls de Mexico, S.A. de C.V.	Mexico
Pentair Valves & Controls del Uruguay S.A.	Uruguay
Pentair Valves & Controls Denmark A/S	Denmark
Pentair Valves & Controls France S.C.A. 10	France
Pentair Valves & Controls Germany GmbH	Germany
Pentair Valves & Controls Gulf Limited	United Kingdom
Pentair Valves & Controls Hong Kong Limited	Hong Kong
Pentair Valves & Controls Hungary Ltd.	Hungary
Pentair Valves & Controls Italia S.r.l.	Italy
Pentair Valves & Controls Japan Co., Ltd.	Japan
Pentair Valves & Controls Malaysia Sdn. Bhd.	Malaysia
Pentair Valves & Controls Middle East, Inc.	United States
Pentair Valves & Controls Netherlands B.V.	Netherlands
Pentair Valves & Controls Peru S.A.	Peru
Pentair Valves & Controls Polska Sp.z.o.o.	Poland
Pentair Valves & Controls Singapore Pte Ltd.	Singapore
Pentair Valves & Controls South Africa (Proprietary) Limited	South Africa
Pentair Valves & Controls US LP	United States
Pentair Valves & Controls, Inc.	United States
Pentair Valves and Controls India Private Limited10	India
Pentair Valves and Controls Ireland Limited	Ireland
Pentair Valves and Controls U.A.E., Inc. 11	United States
Pentair Valves Limited	United Kingdom
Pentair Verwaltungs GmbH and Co. KG	Germany
Pentair Water (Suzhou) Co. Ltd.	China
Pentair Water Asia Pacific Ltd.	Singapore
Pentair Water Australia Pty Ltd	Australia
Pentair Water Belgium BVBA	Belgium
Pentair Water Components & Services B.V.	Netherlands
Pentair Water Corp.	United States
Pentair Water do Brasil Ltda.	Brazil
Pentair Water France SAS	France

Pentair Water Germany GmbH	Germany
Pentair Water Group, Inc.	United States
Pentair Water Holdings Pty Ltd	Australia
Pentair Water Holdings, LLC	United States
Pentair Water India Private Limited	India
Pentair Water Italy s.r.l.	Italy
Pentair Water Latinamérica S.A.	Argentina
Pentair Water Membraan Technologie B.V.	Netherlands
Pentair Water Middle East FZE	United Arab Emirates
Pentair Water New Zealand Limited	New Zealand
Pentair Water Polska Sp.zoo	Poland
Pentair Water Pool and Spa, Inc.	United States
Pentair Water Proces Technologie Holding B.V.	Netherlands
Pentair Water Process Technology B.V.	Netherlands
Pentair Water Projects International B.V.	Netherlands
Pentair Water Purification Systems (Shanghai) Co. Ltd.	China
Pentair Water Solutions Pty Limited	Australia
Pentair Water South Africa (Proprietary) Limited	South Africa
Pentair Water Spain, S.L.	Spain
Pentair Water Treatment (OH) Company	United States
Pentair Water Treatment Company	United States
Pentair Water Treatment Pvt. Ltd.	India
Pentair Water Winkelsteeg B.V.	Netherlands
Pentair Water, LLC	United States
Pentair Water-Mexico, S. de R.L. de C.V.	Mexico
Pentair Waterworks (Pty) Ltd.	South Africa
Pentair, Inc.	United States
Penwald Insurance Company	United States
PFAM, Inc.	United States
Plymouth Products, Inc.	United States
Point Four S.A.	Chile
Point Four Water Quality Technologies (Suzhou) Co., Ltd.	Unknown
Porter-Cable de Mexico S.A. de C.V.	Mexico
PT Pentair Eurapipe Indonesia 12	Indonesia
PTG Accessories Corp.	United States
Purification Valley C.V. 9	Netherlands
Raychem HTS Limited	United Kingdom
S.C. FCT Industrial SRL	Romania
SABO-Armaturen Service GmbH	Germany
Safety Systems UK Limited	United Kingdom
Safety Systems UK Pte. Ltd.	Singapore
Schroff Co. Ltd. Taiwan	Taiwan
Schroff GmbH	Germany
Schroff S.r.l.	Italy
Schroff SAS	France
Schroff Scandinavia AB	Sweden
Schroff UK Limited	United Kingdom
Seghers-Applied Pty Ltd	Australia
Sempell GmbH	Germany
Seneca Enterprises Co.	United States
Servicios Tyco Internacional VE 1060, C.A.	Venezuela, Bolivarian Republic of
Shanxi Jieming Environmental Protection Equipment Co., Ltd.	China
Shurofu Kabushiki Kaisha	Japan
Sibrape Indústria e Comércio de Artigos para Lazer Ltda.	Brazil

Spensall Engineering Limited	United Kingdom
Sta-Rite de Mexico, S.A. de C.V.	Mexico
Sta-Rite de Puerto Rico, Inc.	United States
Sta-Rite Industries, LLC	United States
Steel Mains Proprietary Limited	Australia
Steel Support Systems Limited	United Kingdom
Südmo (UK) Ltd.	United Kingdom
Südmo Components GmbH	Germany
Südmo Holding GmbH	Germany
Sudmo North America, Inc.	United States
Sudmo Projects GmbH	Germany
Surewood Acquisition Corporation	United States
Taiwan Valve Co., Ltd	Taiwan
TopAq Pty Limited	Australia
Tracer Canada Incorporated	Canada
Tracer Construction LLC	United States
Tracer Field Services Canada Ltd.	Canada
Tracer Industries Canada Limited	Canada
Tracer Industries Management LLC	United States
Tracer Industries, Inc.	United States
Tupelo Real Estate, LLC	United States
TV&C GP Holding, LLC	United States
Tyco Flow Control de Venezuela, C.A.	Venezuela, Bolivarian Republic of
Tyco Gulf FZE	United Arab Emirates
Tyco Thermal Controls (Shanghai) Trading Co. Ltd	China
Tyco Thermal Controls Construction Corporation	Canada
Tyco Thermal Controls Czech s.r.o.	Czech Republic
Tyco Thermal Controls Finland Oy	Finland
Tyco Water Valve (Shanghai) Co., Ltd	China
Valvulas Crosby Industria e Comercio Ltda.	Brazil
Vierte Korschenbroicher Armaturen GmbH & Co. KG	Germany
Vierte Korschenbroicher Armaturen Verwaltungs GmbH	Germany
Voltea Ltd. 13	United Kingdom
Water Infrastructure Group Pty Ltd	Australia
Water Reticulation Systems (Virginia) Pty Limited	Australia
Water Reticulation Systems Hire Pty Limited	Australia
Webster Electric Company, LLC	United States
Westlock Controls Corporation	United States
Westlock Controls Holdings, Inc.	United States
Westlock Controls Limited	United Kingdom
Westlock Equipamentos de Controle Ltda.	Brazil
WICOR Industries (Australia) Pty. Ltd.	Australia
X-Flow B.V.	Netherlands
Yabaida Electronics (Shenzhen) Company Limited	China

(1)	47% owned
(2)	50% owned
(3)	1% owned
(4)	96.67% owned
(5)	96.94% owned
(6)	96.34% owned
(7)	4.81% owned
(8)	15.1% owned
(9)	99% owned
(10)	99.99% owned
(11)	49% owned
(12)	99.66% owned
(13)	10% owned

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-184150, 333-184151 and 333-184152 on Form S-8 and Registration Statement No. 333-184149 on Form S-3 of our reports dated February 25, 2014 relating to the financial statements and financial statement schedule of Pentair Ltd. and subsidiaries, and the effectiveness of Pentair Ltd.’s internal control over financial reporting, appearing in this report on Form 10-K of Pentair Ltd. for the year ended December 31, 2013.

/s/ Deloitte & Touche LLP

Minneapolis, Minnesota

February 25, 2014

EX-24

Exhibit 24

Power of Attorney

KNOW ALL MEN BY THESE PRESENTS that the undersigned directors of Pentair Ltd., an entity organized under the laws of Switzerland, hereby constitute and appoint John L. Stauch and Angela D. Lageson, or either of them, his/her attorney-in-fact and agent, with full power of substitution, for the purpose of signing on his/her behalf as a director of Pentair Ltd. the Annual Report on Form 10-K, to be filed with the Securities and Exchange Commission within the next sixty days, and to file the same, with all exhibits thereto and other supporting documents, with the Commission, granting unto such attorney-in-fact, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers herein expressly granted.

Date: February 25, 2014

Signature	Title
/s/ Leslie Abi-Karam	Director
Leslie Abi-Karam
/s/ Glynis A. Bryan	Director
Glynis A. Bryan
/s/ Jerry W. Burris	Director
Jerry W. Burris
/s/ Carol A. Davidson	Director
Carol A. Davidson
/s/ T. Michael Glenn	Director
T. Michael Glenn
/s/ Charles A. Haggerty	Director
Charles A. Haggerty
/s/ David H. Y. Ho	Director
David H. Y. Ho
/s/ David A. Jones	Director
David A. Jones
/s/ Ronald L. Merriman	Director
Ronald L. Merriman
/s/ William T. Monahan	Director
William T. Monahan

EX-31.1

Exhibit 31.1

Certification

I, Randall J. Hogan, certify that:

1. I have reviewed this annual report on Form 10-K of Pentair Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 25, 2014	/s/ Randall J. Hogan
		Randall J. Hogan
		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, John L. Stauch, certify that:

1. I have reviewed this annual report on Form 10-K of Pentair Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 25, 2014	/s/ John L. Stauch
		John L. Stauch
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Annual Report of Pentair Ltd. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randall J. Hogan, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	February 25, 2014	/s/ Randall J. Hogan
		Randall J. Hogan
		Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Annual Report of Pentair Ltd. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John L. Stauch, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	February 25, 2014	/s/ John L. Stauch
		John L. Stauch
		Executive Vice President and Chief Financial Officer

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Derivatives and Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Recorded Amounts and Estimated Fair Values of Long-term Debt and Derivative Financial Instruments

The recorded amounts and estimated fair values of total debt at December 31 were as follows:

	2013				2012
In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value
Variable rate debt	$	528.9	$	528.9	$	427.7	$	427.7
Fixed rate debt	2,026.2		2,002.2		2,029.7		2,081.3
Total debt	$	2,555.1	$	2,531.1	$	2,457.4	$	2,509.0

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows:

Recurring fair value measurements	December 31, 2013
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	3.6		$	—	$	3.6
Foreign currency contract liabilities	—		(0.9		)	—		(0.9		)
Deferred compensation plan assets (1)	32.1		—			—		32.1
Total recurring fair value measurements	$	32.1	$	2.7		$	—	$	34.8
Nonrecurring fair value measurements(2)

Recurring fair value measurements	December 31, 2012
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	2.9		$	—	$	2.9
Foreign currency contract liabilities	—		(0.5		)	—		(0.5		)
Deferred compensation plan assets (1)	22.4		—			—		22.4
Total recurring fair value measurements	$	22.4	$	2.4		$	—	$	24.8
Nonrecurring fair value measurements
Trade name intangibles (2)	$	—	$	—		$	63.7	$	63.7

(1) Deferred compensation plan assets include mutual funds and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of these assets was based on quoted market prices in active markets.

(2) In the fourth quarter of 2013 and 2012, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $11.0 million and $60.7 million for trade names intangibles in 2013 and 2012, respectively. The impairment charge in 2013 reduced the fair value of the impacted trade name intangibles to $0. The fair value of trade names is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

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Schedule II - Valuation and Qualifying Accounts - Disclosure Table (Detail) (Allowance for Doubtful Accounts, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Allowance for Doubtful Accounts
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning balance	$ 14.0		$ 16.0		$ 17.1
Additions charged to costs and expenses	51.8		1.6		4.4
Deductions	2.4	[1]	4.0	[1]	4.7	[1]
Other changes	(2.6)	[2]	0.4	[2]	(0.8)	[2]
Ending balance	$ 60.8		$ 14.0		$ 16.0

[1] Uncollectible accounts written off, net of recoveries

[2] Result of foreign currency effects

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Earnings (Loss) Per Share - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2013		Sep. 28, 2013		Jun. 29, 2013		Mar. 30, 2013		Dec. 31, 2012		Sep. 29, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Computation Of Earnings Per Share Line Items
Net income (loss) attributable to Pentair Ltd.	$ 158.2		$ 172.8		$ 154.1		$ 51.7		$ (273.1)		$ 31.4		$ 72.8		$ 61.7		$ 536.8		$ (107.2)		$ (7.5)
Weighted average common shares outstanding
Basic (shares)																	201.1		127.4		98.2
Dilutive impact of stock options and restricted stock awards (shares)																	3.5		0		0
Diluted (shares)																	204.6		127.4		98.2
Earnings (loss) per common share attributable to Pentair Ltd.
Basic earnings (loss) per common share (USD per share)	$ 0.80	[1]	$ 0.87	[1]	$ 0.76	[1]	$ 0.25	[1]	$ (1.31)	[1]	$ 0.31	[1]	$ 0.73	[1]	$ 0.63	[1]	$ 2.67	[1]	$ (0.84)	[1]	$ (0.08)
Diluted earnings (loss) per common share (USD per share)	$ 0.78	[1]	$ 0.85	[1]	$ 0.75	[1]	$ 0.25	[1]	$ (1.31)	[1]	$ 0.31	[1]	$ 0.72	[1]	$ 0.62	[1]	$ 2.62	[1]	$ (0.84)	[1]	$ (0.08)
Anti-dilutive stock options excluded from the calculation of diluted earnings per share																	0.2		16.0		8.4

[1] Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period

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Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Detail)	12 Months Ended
	Dec. 31, 2013
Land Improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	5 years
Land Improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	20 years
Buildings and Leasehold Improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	5 years
Buildings and Leasehold Improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	50 years
Machinery and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	3 years
Machinery and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful lives	15 years

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Derivatives and Financial Instruments - Assets and Liabilities Measured at Fair Value (Detail) (USD $)	Dec. 31, 2013		Dec. 31, 2012
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency contract assets	$ 3,600,000		$ 2,900,000
Foreign currency contract liabilities	(900,000)		(500,000)
Deferred compensation plan assets	32,100,000	[1]	22,400,000	[1]
Total recurring fair value measurements	34,800,000		24,800,000
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Indefinite-Lived Trade Names	0	[2]	63,700,000	[2]
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	32,100,000	[1]	22,400,000	[1]
Total recurring fair value measurements	32,100,000		22,400,000
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency contract assets	3,600,000		2,900,000
Foreign currency contract liabilities	(900,000)		(500,000)
Total recurring fair value measurements	2,700,000		2,400,000
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Indefinite-Lived Trade Names			$ 63,700,000	[2]

[1] Deferred compensation plan assets include mutual funds and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of these assets was based on quoted market prices in active markets.

[2] In the fourth quarter of 2013 and 2012, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $11.0 million and $60.7 million for trade names intangibles in 2013 and 2012, respectively. The impairment charge in 2013 reduced the fair value of the impacted trade name intangibles to $0. The fair value of trade names is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

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Restructuring - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Person	Dec. 31, 2012 Person	Dec. 31, 2011 Person
Restructuring Cost and Reserve [Line Items]
Number of employees	1,150	1,000	210
Restructuring costs	$ 113.5	$ 66.9	$ 13.0
Acquired	0	20.1
Valves & Controls
Restructuring Cost and Reserve [Line Items]
Number of employees	500	300
Restructuring costs	51.0	5.1
Process Technologies
Restructuring Cost and Reserve [Line Items]
Number of employees	150	200	60
Restructuring costs	8.8	23.9	3.9
Flow Technologies
Restructuring Cost and Reserve [Line Items]
Number of employees	200	300	100
Restructuring costs	24.3	25.2	7.1
Technical Solutions
Restructuring Cost and Reserve [Line Items]
Number of employees	300	200	50
Restructuring costs	19.4	12.7	2.0
All Other Segments
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 10.0

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Income Taxes - Deferred Tax Assets and Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred tax assets
Accrued liabilities and reserves	$ 194.8	$ 172.8
Pension and other post-retirement benefits	77.3	73.7
Employee compensation & benefits	84.4	94.5
Tax loss and credit carryforwards	355.0	377.8
Other	0	9.4
Total deferred tax assets	711.5	728.2
Valuation allowance	237.4	174.4
Deferred tax assets, net of valuation allowance	474.1	553.8
Deferred tax liabilities
Property, plant and equipment	60.4	80.3
Goodwill and other intangibles	708.8	744.1
Other liabilities	29.9	0
Total deferred tax liabilities	799.1	824.4
Net deferred tax liabilities	$ 325.0	$ 270.6

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Commitments and Contingencies - Warranty Reserve Rollforward (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 54.3	$ 29.4
Service and product warranty provision	63.4	55.7
Payments	(61.2)	(53.3)
Acquired	0	22.1
Translation	0.1	0.4
Ending balance	$ 56.6	$ 54.3

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Financial Statements of Parent Company Guarantor (Tables)

12 Months Ended

Dec. 31, 2013

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	7,479.7		$	—		$	7,479.7
Cost of goods sold	—			—			5,006.8			—			5,006.8
Gross profit	—			—			2,472.9			—			2,472.9
Selling, general and administrative	21.0			13.3			1,527.8			—			1,562.1
Research and development	—			—			125.8			—			125.8
Impairment of trade names and goodwill	—			—			11.0			—			11.0
Operating (loss) income	(21.0		)	(13.3		)	808.3			—			774.0
Loss (earnings) from investment in subsidiaries	(564.1		)	(533.7		)	—			1,097.8			—
Other (income) expense:
Gain on sale of businesses, net	—			—			(19.7		)	—			(19.7		)
Equity income of unconsolidated subsidiaries	—			—			(1.8		)	—			(1.8		)
Interest income	—			(99.2		)	(56.6		)	148.2			(7.6		)
Interest expense	5.6			106.0			113.3			(148.2		)	76.7
Income (loss) before income taxes and noncontrolling interest	537.5			513.6			773.1			(1,097.8		)	726.4
Provision for income taxes	0.7			1.4			181.7			—			183.8
Net income (loss) before noncontrolling interest	536.8			512.2			591.4			(1,097.8		)	542.6
Noncontrolling interest	—			—			5.8			—			5.8
Net income (loss) attributable to Pentair Ltd.	$	536.8		$	512.2		$	585.6		$	(1,097.8	)	$	536.8
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	536.8		$	512.2		$	591.4		$	(1,097.8	)	$	542.6
Changes in cumulative translation adjustment	(31.3		)	(31.3		)	(29.1		)	62.6			(29.1		)
Amortization of pension and other post-retirement prior service cost	(0.4		)	(0.4		)	(0.4		)	0.8			(0.4		)
Changes in market value of derivative financial instruments	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Total comprehensive income (loss)	504.8			480.2			561.6			(1,033.8		)	512.8
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			8.0			—			8.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	504.8		$	480.2		$	553.6		$	(1,033.8	)	$	504.8

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	4,416.1		$	—		$	4,416.1
Cost of goods sold	—			—			3,146.5			—			3,146.5
Gross profit	—			—			1,269.6			—			1,269.6
Selling, general and administrative	5.0			(3.8		)	1,157.2			—			1,158.4
Research and development	—			—			93.6			—			93.6
Impairment of trade names and goodwill	—			—			60.7			—			60.7
Operating (loss) income	(5.0		)	3.8			(41.9		)	—			(43.1		)
Loss (earnings) from investment in subsidiaries	101.4			102.3			—			(203.7		)	—
Other (income) expense:
Loss on early extinguishment of debt	—			—			75.4			—			75.4
Equity income of unconsolidated subsidiaries	—			—			(2.1		)	—			(2.1		)
Interest income	—			(9.2		)	(2.9		)	9.2			(2.9		)
Interest expense	0.1			10.2			69.4			(9.2		)	70.5
Income (loss) before income taxes and noncontrolling interest	(106.5		)	(99.5		)	(181.7		)	203.7			(184.0		)
Provision (benefit) for income taxes	0.7			1.1			(81.2		)	—			(79.4		)
Net income (loss) before noncontrolling interest	(107.2		)	(100.6		)	(100.5		)	203.7			(104.6		)
Noncontrolling interest	—			—			2.6			—			2.6
Net income (loss) attributable to Pentair Ltd.	$	(107.2	)	$	(100.6	)	$	(103.1	)	$	203.7		$	(107.2	)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	(107.2	)	$	(100.6	)	$	(100.5	)	$	203.7		$	(104.6	)
Changes in cumulative translation adjustment	30.0			30.0			31.4			(60.0		)	31.4
Amortization of pension and other post-retirement prior service cost	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Changes in market value of derivative financial instruments	(3.6		)	(3.6		)	(3.6		)	7.2			(3.6		)
Total comprehensive income (loss)	(81.1		)	(74.5		)	(73.0		)	151.5			(77.1		)
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			4.0			—			4.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	(81.1	)	$	(74.5	)	$	(77.0	)	$	151.5		$	(81.1	)

Condensed Consolidating Balance Sheet

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2012

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	261.3	$	—		$	261.3
Accounts and notes receivable, net	20.2		1,458.3		1,330.7		(1,534.6		)	$	1,274.6
Inventories	—		—		1,333.9		—			$	1,333.9
Other current assets	85.8		—		333.1		(84.4		)	$	334.5
Total current assets	106.0		1,458.3		3,259.0		(1,619.0		)	3,204.3
Property, plant and equipment, net	—		—		1,188.2		—			1,188.2
Other assets
Investments in subsidiaries	6,486.3		7,464.6		—		(13,950.9		)	—
Goodwill	—		—		5,111.0		—			5,111.0
Intangibles, net	—		—		1,926.9		—			1,926.9
Other non-current assets	31.6		6.9		413.8		—			452.3
Total other assets	6,517.9		7,471.5		7,451.7		(13,950.9		)	7,490.2
Total assets	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	3.1	$	—		$	3.1
Accounts payable	54.3		1.7		587.3		(76.3		)	567.0
Employee compensation and benefits	—		—		296.7		—			296.7
Other current liabilities	180.9		11.5		670.3		(84.4		)	778.3
Total current liabilities	235.2		13.2		1,557.4		(160.7		)	1,645.1
Other liabilities
Long-term debt	—		2,297.7		1,614.9		(1,458.3		)	2,454.3
Pension and other post-retirement compensation and benefits	—		—		378.8		—			378.8
Deferred tax liabilities	—		—		421.9		—			421.9
Other non-current liabilities	17.6		—		477.5		—			495.1
Total liabilities	252.8		2,310.9		4,450.5		(1,619.0		)	5,395.2
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,371.1		6,618.9		7,332.0		(13,950.9		)	6,371.1
Noncontrolling interest	—		—		116.4		—			116.4
Total equity	6,371.1		6,618.9		7,448.4		(13,950.9		)	6,487.5
Total liabilities and equity	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2013

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	0.5	$	47.0	$	217.6	$	—		$	265.1
Accounts and notes receivable, net	2.9		4.0		1,391.0		(63.6		)	1,334.3
Inventories	—		—		1,243.3		—			1,243.3
Other current assets	1.4		0.6		387.4		—			389.4
Total current assets	4.8		51.6		3,239.3		(63.6		)	3,232.1
Property, plant and equipment, net	—		—		1,170.0		—			1,170.0
Other assets
Investments in subsidiaries	6,224.7		8,066.6		—		(14,291.3		)	—
Goodwill	—		—		5,134.2		—			5,134.2
Intangibles, net	—		—		1,776.1		—			1,776.1
Other non-current assets	31.6		1,302.7		393.3		(1,296.7		)	430.9
Total other assets	6,256.3		9,369.3		7,303.6		(15,588.0		)	7,341.2
Total assets	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	2.5	$	—		$	2.5
Accounts payable	48.1		8.6		603.5		(63.6		)	596.6
Employee compensation and benefits	0.5		—		346.6		—			347.1
Other current liabilities	99.6		11.7		552.7		—			664.0
Total current liabilities	148.2		20.3		1,505.3		(63.6		)	1,610.2
Other liabilities
Long-term debt	—		2,401.9		1,447.4		(1,296.7		)	2,552.6
Pension and other post-retirement compensation and benefits	—		—		324.8		—			324.8
Deferred tax liabilities	—		2.2		578.4		—			580.6
Other non-current liabilities	17.6		—		439.8		—			457.4
Total liabilities	165.8		2,424.4		4,295.7		(1,360.3		)	5,525.6
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,095.3		6,996.5		7,294.8		(14,291.3		)	6,095.3
Noncontrolling interest	—		—		122.4		—			122.4
Total equity	6,095.3		6,996.5		7,417.2		(14,291.3		)	6,217.7
Total liabilities and equity	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3

Condensed Consolidating Statement of Cash Flows

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	534.2		$	514.0		$	964.9		$	(1,097.8	)	$	915.3
Investing activities
Capital expenditures	—			—			(170.0		)	—			(170.0		)
Proceeds from sale of property and equipment	—			—			6.0			—			6.0
Proceeds from sale of businesses, net	—			—			43.5			—			43.5
Acquisitions, net of cash acquired	—			—			(92.4		)	—			(92.4		)
Other	—			—			1.7			—			1.7
Net cash provided by (used for) investing activities	—			—			(211.2		)	—			(211.2		)
Financing activities
Net receipts from commercial paper and revolving long-term debt	—			104.2			—			—			104.2
Proceeds from long-term debt	—			—			0.7			—			0.7
Repayment of long-term debt	—			—			(7.4		)	—			(7.4		)
Debt issuance costs	—			(1.4		)	—			—			(1.4		)
Net change in advances to subsidiaries	(339.5		)	(569.8		)	(188.5		)	1,097.8			—
Excess tax benefits from share-based compensation	—			—			16.8			—			16.8
Shares issued to employees, net of shares withheld	—			—			80.0			—			80.0
Repurchases of common shares	—			—			(715.8		)	—			(715.8		)
Dividends paid	(194.2		)	—			—			—			(194.2		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(533.7		)	(467.0		)	(816.2		)	1,097.8			(719.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			18.8			—			18.8
Change in cash and cash equivalents	0.5			47.0			(43.7		)	—			3.8
Cash and cash equivalents, beginning of year	—			—			261.3			—			261.3
Cash and cash equivalents, end of year	$	0.5		$	47.0		$	217.6		$	—		$	265.1

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	(109.0	)	$	(88.2	)	$	61.5		$	203.7		$	68.0
Investing activities
Capital expenditures	—			—			(94.5		)	—			(94.5		)
Proceeds from sale of property and equipment	—			—			5.5			—			5.5
Acquisitions, net of cash acquired	—			300.1			170.4			—			470.5
Other	—			—			(5.9		)	—			(5.9		)
Net cash provided by (used for) investing activities	—			300.1			75.5			—			375.6
Financing activities
Net repayments on short-term borrowings	—			—			(3.7		)	—			(3.7		)
Net receipts (repayments) from commercial paper and revolving long-term debt	—			424.7			(170.9		)	—			253.8
Proceeds from long-term debt	—			594.3			—			—			594.3
Repayment of long-term debt	—			—			(617.2		)	—			(617.2		)
Debt issuance costs	—			(8.7		)	(1.0		)	—			(9.7		)
Debt extinguishment costs	—			—			(74.8		)	—			(74.8		)
Net change in advances to subsidiaries	157.0			(1,222.2		)	1,268.9			(203.7		)	—
Excess tax benefits from share-based compensation	—			—			5.0			—			5.0
Shares issued to employees, net of shares withheld	—			—			68.2			—			68.2
Repurchases of common shares	—			—			(334.2		)	—			(334.2		)
Dividends paid	(48.0		)	—			(64.4		)	—			(112.4		)
Distributions to noncontrolling interest	—			—			(1.6		)	—			(1.6		)
Net cash provided by (used for) financing activities	109.0			(211.9		)	74.3			(203.7		)	(232.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.1		)	—			(0.1		)
Change in cash and cash equivalents	—			—			211.2			—			211.2
Cash and cash equivalents, beginning of year	—			—			50.1			—			50.1
Cash and cash equivalents, end of year	$	—		$	—		$	261.3		$	—		$	261.3

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Restructuring (Tables)

12 Months Ended

Dec. 31, 2013

Restructuring Related Costs

Restructuring related costs included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss) included costs for severance and other restructuring costs as follows:

	Years ended December 31
In millions	2013		2012		2011
Severance and related costs	$	87.3	$	61.6	$	11.5
Other	26.2		5.3		1.5
Total restructuring costs	$	113.5	$	66.9	$	13.0

Restructuring Accrual Activity Recorded on Consolidated Balance Sheets

Activity in the restructuring accrual recorded in Other current liabilities and Employee compensation and benefits in the Consolidated Balance Sheets is summarized as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	59.6		$	12.8
Acquired	—			20.1
Costs incurred	87.3			61.6
Cash payments and other	(68.3		)	(34.9		)
Ending balance	$	78.6		$	59.6

XML

Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Line Items]
Gross unrecognized tax benefits	$ 60,800,000	$ 53,400,000	$ 26,500,000	$ 24,300,000
Amount of tax benefits that, if recognized, would impact the effective tax rate	58,500,000
Payment of penalties	900,000	1,300,000
Payment of interest expense	8,900,000	8,200,000
Deferred taxes on undistributed earnings of certain subsidiaries	16,200,000
Tax loss carryforwards	1,258,100,000
Deferred tax assets, valuation allowance	237,400,000	174,400,000
Non-U.S. tax losses available for carry forward	979,300,000
U.S. federal loss available for carry forward	144,900,000
State tax losses available for carry forward	133,900,000
Shared tax liabilities description	Costs and expenses associated with the management of Shared Tax Liabilities, Distribution Taxes and BHS Tax Liabilities will generally be shared 20% by us, 27.5% by ADT and 52.5% by Tyco
Minimum
Income Taxes [Line Items]
Possible amount of decrease during the next twelve months primarily as a result of the resolution of federal, state and foreign examinations and the expiration of various statutes of limitations	0
Maximum
Income Taxes [Line Items]
Possible amount of decrease during the next twelve months primarily as a result of the resolution of federal, state and foreign examinations and the expiration of various statutes of limitations	32,600,000
Operating loss carryforwards expiration year	2033
2012 Tax Sharing Agreement
Income Taxes [Line Items]
Shared tax liabilities description	Tyco is responsible for the first $500 million of Shared Tax Liabilities. We and ADT will share 42% and 58%, respectively, of the next $225 million of Shared Tax Liabilities. We, ADT and Tyco will share 20%, 27.5% and 52.5%, respectively, of Shared Tax Liabilities above $725 million.
Next $225 million of Shared Tax Liabilities | 2012 Tax Sharing Agreement
Income Taxes [Line Items]
Percentage of shared tax liabilities	42.00%
Tax Liabilities above $725 million | 2012 Tax Sharing Agreement
Income Taxes [Line Items]
Percentage of shared tax liabilities	20.00%
Foreign Country
Income Taxes [Line Items]
Deferred tax assets, valuation allowance	208,100,000
Operating losses expiration period	subject to varying expiration periods and will begin to expire in 201
ADT
Income Taxes [Line Items]
Percentage of shared tax liabilities	27.50%
ADT | Next $225 million of Shared Tax Liabilities | 2012 Tax Sharing Agreement
Income Taxes [Line Items]
Percentage of shared tax liabilities	58.00%
ADT | Tax Liabilities above $725 million | 2012 Tax Sharing Agreement
Income Taxes [Line Items]
Percentage of shared tax liabilities	27.50%
Adt Corporation and Pentair
Income Taxes [Line Items]
Tax sharing, liability	225,000,000
Tyco
Income Taxes [Line Items]
Tax sharing, liability	500,000,000
Percentage of shared tax liabilities	52.50%
Tyco | Minimum
Income Taxes [Line Items]
Tax sharing, liability	1,850,000,000
Tyco | Next $225 million of Shared Tax Liabilities | Agreement Two Member [Member]
Income Taxes [Line Items]
Percentage of shared tax liabilities	27.00%
Tyco | Tax Liabilities above $725 million | 2012 Tax Sharing Agreement
Income Taxes [Line Items]
Percentage of shared tax liabilities	52.50%
Pentair [Member]
Income Taxes [Line Items]
Percentage of shared tax liabilities	20.00%
Pentair ADT Tyco
Income Taxes [Line Items]
Tax sharing, liability	725,000,000
Covidien | Next $225 million of Shared Tax Liabilities | Agreement Two Member [Member]
Income Taxes [Line Items]
Percentage of shared tax liabilities	42.00%
TE Connectivity | Next $225 million of Shared Tax Liabilities | Agreement Two Member [Member]
Income Taxes [Line Items]
Percentage of shared tax liabilities	31.00%
Tax Liability | Tyco
Income Taxes [Line Items]
Tax sharing, liability	883,300,000
Tax Penalties | Tyco
Income Taxes [Line Items]
Tax sharing, liability	154,000,000
Period One | Tyco
Income Taxes [Line Items]
Disallowed interest and related tax deductions	2,900,000,000
Period Two | Tyco
Income Taxes [Line Items]
Disallowed interest and related tax deductions	$ 6,600,000,000

XML

Income Taxes - Provision for Income Taxes (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Currently payable
Federal	$ 17.4	[1]	$ 6.5	[1]	$ 51.2	[1]
State	0		0		7.0
International	111.2	[2]	61.0	[2]	23.9	[2]
Total current taxes	128.6		67.5		82.1
Deferred
Federal	18.9	[1]	1.3	[1]	(26.2)	[1]
International	36.3	[2]	(148.2)	[2]	(9.5)	[2]
Total deferred taxes	55.2		(146.9)		(35.7)
Total provision (benefit) for income taxes	$ 183.8		$ (79.4)		$ 46.4

[1] As a result of the Merger, “Federal” represents Swiss taxes for 2013 and 2012 and U.S. taxes for 2011.

[2] As a result of the Merger, "International" represents non-Swiss taxes for 2013 and 2012 and non-U.S. taxes for 2011

XML

Benefit Plans - Actual Overall Asset Allocation for U.S. And Non-U.S. Plans as Compared to Investment Policy Goals (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Target Allocation
Asset allocation	92.00%
U.S. Pension Plans | Equity securities
Plan Assets
Asset allocation	0.00%	32.00%
Target Allocation
Asset allocation	0.00%	0.00%
U.S. Pension Plans | Fixed income
Plan Assets
Asset allocation	92.00%	56.00%
Target Allocation
Asset allocation	100.00%	100.00%
U.S. Pension Plans | Alternative
Plan Assets
Asset allocation	7.00%	7.00%
Target Allocation
Asset allocation	0.00%	0.00%
U.S. Pension Plans | Cash
Plan Assets
Asset allocation	1.00%	5.00%
Target Allocation
Asset allocation	0.00%	0.00%
Non-US Pension Plans | Equity securities
Plan Assets
Asset allocation	54.00%	51.00%
Target Allocation
Asset allocation	56.00%	55.00%
Non-US Pension Plans | Fixed income
Plan Assets
Asset allocation	41.00%	42.00%
Target Allocation
Asset allocation	44.00%	45.00%
Non-US Pension Plans | Alternative
Plan Assets
Asset allocation	3.00%	3.00%
Target Allocation
Asset allocation	0.00%	0.00%
Non-US Pension Plans | Cash
Plan Assets
Asset allocation	2.00%	4.00%
Target Allocation
Asset allocation	0.00%	0.00%

XML

Restructuring - Accrual Activity recorded on Condensed Consolidated Balance Sheets (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Restructuring Reserve [Roll Forward]
Beginning balance	$ 59.6	$ 12.8
Acquired	0	20.1
Costs incurred	87.3	61.6
Cash payments and other	(68.3)	(34.9)
Ending balance	$ 78.6	$ 59.6

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Financial Statements of Parent Company Guarantor - Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 265.1		$ 261.3		$ 50.1		$ 46.1
Accounts and notes receivable, net	1,334.3		1,274.6
Inventories	1,243.3		1,333.9
Other current assets	389.4		334.5
Total current assets	3,232.1		3,204.3
Property, plant and equipment, net	1,170.0		1,188.2		387.5
Other assets
Investments in subsidiaries	0		0
Goodwill	5,134.2		5,111.0		2,273.9
Intangibles, net	1,776.1		1,926.9
Other non-current assets	430.9		452.3
Total other assets	7,341.2		7,490.2
Total assets	11,743.3	[1]	11,882.7	[1]	4,586.3	[1]
Current liabilities
Current maturities of long-term debt and short-term borrowings	2.5		3.1
Accounts payable	596.6		567.0
Employee compensation and benefits	347.1		296.7
Other current liabilities	664.0		778.3
Total current liabilities	1,610.2		1,645.1
Other liabilities
Long-term debt	2,552.6		2,454.3
Pension and other post-retirement compensation and benefits	324.8		378.8
Deferred tax liabilities	580.6		421.9
Other non-current liabilities	457.4		495.1
Total liabilities	5,525.6		5,395.2
Equity
Shareholders' equity attributable to Pentair Ltd. and subsidiaries	6,095.3		6,371.1
Noncontrolling interest	122.4		116.4
Total equity	6,217.7		6,487.5		2,047.4		2,205.0
Total liabilities and equity	11,743.3		11,882.7
Pentair Ltd.
Current assets
Cash and cash equivalents	0.5		0		0
Accounts and notes receivable, net	2.9		20.2
Inventories	0		0
Other current assets	1.4		85.8
Total current assets	4.8		106.0
Property, plant and equipment, net	0		0
Other assets
Investments in subsidiaries	6,224.7		6,486.3
Goodwill	0		0
Intangibles, net	0		0
Other non-current assets	31.6		31.6
Total other assets	6,256.3		6,517.9
Total assets	6,261.1		6,623.9
Current liabilities
Current maturities of long-term debt and short-term borrowings	0		0
Accounts payable	48.1		54.3
Employee compensation and benefits	0.5		0
Other current liabilities	99.6		180.9
Total current liabilities	148.2		235.2
Other liabilities
Long-term debt	0		0
Pension and other post-retirement compensation and benefits	0		0
Deferred tax liabilities	0		0
Other non-current liabilities	17.6		17.6
Total liabilities	165.8		252.8
Equity
Shareholders' equity attributable to Pentair Ltd. and subsidiaries	6,095.3		6,371.1
Noncontrolling interest	0		0
Total equity	6,095.3		6,371.1
Total liabilities and equity	6,261.1		6,623.9
Subsidiary Issuer
Current assets
Cash and cash equivalents	47.0		0		0
Accounts and notes receivable, net	4.0		1,458.3
Inventories	0		0
Other current assets	0.6		0
Total current assets	51.6		1,458.3
Property, plant and equipment, net	0		0
Other assets
Investments in subsidiaries	8,066.6		7,464.6
Goodwill	0		0
Intangibles, net	0		0
Other non-current assets	1,302.7		6.9
Total other assets	9,369.3		7,471.5
Total assets	9,420.9		8,929.8
Current liabilities
Current maturities of long-term debt and short-term borrowings	0		0
Accounts payable	8.6		1.7
Employee compensation and benefits	0		0
Other current liabilities	11.7		11.5
Total current liabilities	20.3		13.2
Other liabilities
Long-term debt	2,401.9		2,297.7
Pension and other post-retirement compensation and benefits	0		0
Deferred tax liabilities	2.2		0
Other non-current liabilities	0		0
Total liabilities	2,424.4		2,310.9
Equity
Shareholders' equity attributable to Pentair Ltd. and subsidiaries	6,996.5		6,618.9
Noncontrolling interest	0		0
Total equity	6,996.5		6,618.9
Total liabilities and equity	9,420.9		8,929.8
Non-Guarantor Subsidiaries
Current assets
Cash and cash equivalents	217.6		261.3		50.1
Accounts and notes receivable, net	1,391.0		1,330.7
Inventories	1,243.3		1,333.9
Other current assets	387.4		333.1
Total current assets	3,239.3		3,259.0
Property, plant and equipment, net	1,170.0		1,188.2
Other assets
Investments in subsidiaries	0		0
Goodwill	5,134.2		5,111.0
Intangibles, net	1,776.1		1,926.9
Other non-current assets	393.3		413.8
Total other assets	7,303.6		7,451.7
Total assets	11,712.9		11,898.9
Current liabilities
Current maturities of long-term debt and short-term borrowings	2.5		3.1
Accounts payable	603.5		587.3
Employee compensation and benefits	346.6		296.7
Other current liabilities	552.7		670.3
Total current liabilities	1,505.3		1,557.4
Other liabilities
Long-term debt	1,447.4		1,614.9
Pension and other post-retirement compensation and benefits	324.8		378.8
Deferred tax liabilities	578.4		421.9
Other non-current liabilities	439.8		477.5
Total liabilities	4,295.7		4,450.5
Equity
Shareholders' equity attributable to Pentair Ltd. and subsidiaries	7,294.8		7,332.0
Noncontrolling interest	122.4		116.4
Total equity	7,417.2		7,448.4
Total liabilities and equity	11,712.9		11,898.9
Eliminations
Current assets
Cash and cash equivalents	0		0		0
Accounts and notes receivable, net	(63.6)		(1,534.6)
Inventories	0		0
Other current assets	0		(84.4)
Total current assets	(63.6)		(1,619.0)
Property, plant and equipment, net	0		0
Other assets
Investments in subsidiaries	(14,291.3)		(13,950.9)
Goodwill	0		0
Intangibles, net	0		0
Other non-current assets	(1,296.7)		0
Total other assets	(15,588.0)		(13,950.9)
Total assets	(15,651.6)		(15,569.9)
Current liabilities
Current maturities of long-term debt and short-term borrowings	0		0
Accounts payable	(63.6)		(76.3)
Employee compensation and benefits	0		0
Other current liabilities	0		(84.4)
Total current liabilities	(63.6)		(160.7)
Other liabilities
Long-term debt	(1,296.7)		(1,458.3)
Pension and other post-retirement compensation and benefits	0		0
Deferred tax liabilities	0		0
Other non-current liabilities	0		0
Total liabilities	(1,360.3)		(1,619.0)
Equity
Shareholders' equity attributable to Pentair Ltd. and subsidiaries	(14,291.3)		(13,950.9)
Noncontrolling interest	0		0
Total equity	(14,291.3)		(13,950.9)
Total liabilities and equity	$ (15,651.6)		$ (15,569.9)

[1] All cash and cash equivalents are included in “Other.”

XML

Income Taxes - Reconciliations of Gross Unrecognized Tax Benefits (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 53.4	$ 26.5	$ 24.3
Gross increases for tax positions in prior periods	12.2	2.2	2.1
Gross decreases for tax positions in prior periods	(0.6)	(0.6)	(0.2)
Gross increases based on tax positions related to the current year	2.7	13.6	3.2
Gross decreases related to settlements with taxing authorities	(5.1)	(13.2)	(2.5)
Reductions due to statute expiration	(1.8)	(0.4)	(0.4)
Gross increases due to acquisitions	0	25.3	0
Ending balance	$ 60.8	$ 53.4	$ 26.5

XML

Benefit Plans - Weighted-Average Assumptions Used (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.51%	3.67%	5.05%
Net Periodic Benefit Costs | U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.67%	5.05%	5.90%
Expected long-term return on plan assets	3.75%	7.50%	8.00%
Rate of compensation increase	4.37%	4.21%	4.00%
Net Periodic Benefit Costs | Non-US Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.85%	4.82%	5.13%
Expected long-term return on plan assets	5.98%	4.09%	4.50%
Rate of compensation increase	3.02%	2.98%	2.98%
Net Periodic Benefit Costs | Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.40%	5.05%	5.90%
Expected long-term return on plan assets	0.00%	0.00%	0.00%
Rate of compensation increase	0.00%	0.00%	0.00%

XML

Benefit Plans - Reconciliations of Benefit Obligations, Fair Value of Plan Assets and Funded Status of Pension Plans and Other Post-Retirement Plans (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Change in benefit obligations
Service cost		$ 0.2
Change in plan assets
Fair value of plan assets end of year	572.3	575.2
U.S. Pension Plans
Change in benefit obligations
Benefit obligation beginning of year	394.3	572.1
Service cost	15.6	12.9	10.3
Interest cost	14.3	28.2	28.6
Amendments	0	0.4
Benefit obligations assumed in Merger	0	10.8
Actuarial loss	(56.9)	128.8
Translation (gain) loss	0	0
Benefits paid	(20.4)	(358.9)
Benefit obligation end of year	346.9	394.3	572.1
Change in plan assets
Fair value of plan assets beginning of year	326.2	408.8
Actual return on plan assets	(28.9)	43.9
Plan assets acquired in Merger	0	7.6
Company contributions	8.9	224.8
Translation gain (loss)	0	0
Benefits paid	(20.4)	(358.9)
Fair value of plan assets end of year	285.8	326.2	408.8
Funded status
Plan assets less than benefit obligation	(61.1)	(68.1)
Non-US Pension Plans
Change in benefit obligations
Benefit obligation beginning of year	460.8	89.5
Service cost	8.4	3.3	2.2
Interest cost	17.9	7.5	4.1
Amendments	0	0
Benefit obligations assumed in Merger	0	338.6
Actuarial loss	(16.6)	26.6
Translation (gain) loss	9.7	1.5
Benefits paid	(18.2)	(6.2)
Benefit obligation end of year	462.0	460.8	89.5
Change in plan assets
Fair value of plan assets beginning of year	249.0	10.9
Actual return on plan assets	28.6	6.4
Plan assets acquired in Merger	0	227.3
Company contributions	21.9	10.4
Translation gain (loss)	5.2	0.2
Benefits paid	(18.2)	(6.2)
Fair value of plan assets end of year	286.5	249.0	10.9
Funded status
Plan assets less than benefit obligation	(175.5)	(211.9)
Post-retirement
Change in benefit obligations
Benefit obligation beginning of year	59.3	35.1
Service cost	0.3	0.2	0.2
Interest cost	1.9	1.9	1.9
Amendments	0	0
Benefit obligations assumed in Merger	0	16.7
Actuarial loss	(15.9)	8.2
Translation (gain) loss	0	0
Benefits paid	(3.2)	(2.8)
Benefit obligation end of year	42.4	59.3	35.1
Change in plan assets
Fair value of plan assets beginning of year	0	0
Actual return on plan assets	0	0
Plan assets acquired in Merger	0	0
Company contributions	3.2	2.8
Translation gain (loss)	0	0
Benefits paid	(3.2)	(2.8)
Fair value of plan assets end of year	0	0	0
Funded status
Plan assets less than benefit obligation	$ (42.4)	$ (59.3)

XML

Benefit Plans - Assumed Health Care Cost Trend Rates (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Healthcare cost trend rate assumed for following year	7.00%	7.40%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.50%	4.50%
Year the cost trend rate reaches the ultimate trend rate	2027	2027

XML

Income Taxes - Deferred Taxes (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Line Items]
Other current assets	$ 162.0	$ 82.6
Other non-current assets	93.6	68.7
Deferred tax liabilities	580.6	421.9
Net deferred tax liabilities	$ 325.0	$ 270.6

XML

Derivatives and Financial Instruments - Assets and Liabilities Measured at Fair Value (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Indefinite-lived Intangible Assets, Impairment Losses	$ 11.0	$ 60.7

XML

Financial Statements of Parent Company Guarantor

12 Months Ended

Dec. 31, 2013

Financial Statements of Parent Company Guarantor

Financial Statements of Parent Company Guarantor

Pentair Ltd. (the “Parent Company Guarantor”), fully and unconditionally, guarantees the 1.35% Senior Notes due 2015, 1.875% Senior Notes due 2017, 2.65% Senior Notes due 2019, 5.00% Senior Notes due 2021 and 3.15% Senior Notes due 2022 (collectively, the “Notes”) of Pentair Finance S.A. (the “Subsidiary Issuer”). The Subsidiary Issuer is a Luxembourg public limited liability company formed in January 2012 and 100 percent-owned subsidiary of the Parent Company Guarantor.

The following supplemental financial information sets forth the financial information of:

• Parent Company Guarantor;

• Subsidiary Issuer;

• Non-guarantor Subsidiaries of Pentair Ltd. on a combined basis;

• Consolidating entries and eliminations representing adjustments to:

a. eliminate intercompany transactions between or among the Parent Company Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries;

b. eliminate the investments in subsidiaries; and

c. record consolidating entries.

• Pentair Ltd. and subsidiaries on a consolidated basis.

Each entity in the consolidating financial information follows the same accounting policies as described in Note 1.

The following present the Company’s Condensed Consolidating Statement of Operations and Comprehensive Income (Loss), Condensed Consolidating Balance Sheet and Condensed Consolidating Statement of Cash Flows as of and for the years ended December 31, 2013 and 2012. Since the Parent Company Guarantor and the Subsidiary Issuer were acquired in the Merger, there was no guarantee of the Notes in effect prior to the Merger. The historical consolidated financial statements of Pentair Ltd. for the year ended December 31, 2011 include all non-guarantor subsidiaries. Consequently, no consolidating financial information for the year ended December 31, 2011 is presented.

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	7,479.7		$	—		$	7,479.7
Cost of goods sold	—			—			5,006.8			—			5,006.8
Gross profit	—			—			2,472.9			—			2,472.9
Selling, general and administrative	21.0			13.3			1,527.8			—			1,562.1
Research and development	—			—			125.8			—			125.8
Impairment of trade names and goodwill	—			—			11.0			—			11.0
Operating (loss) income	(21.0		)	(13.3		)	808.3			—			774.0
Loss (earnings) from investment in subsidiaries	(564.1		)	(533.7		)	—			1,097.8			—
Other (income) expense:
Gain on sale of businesses, net	—			—			(19.7		)	—			(19.7		)
Equity income of unconsolidated subsidiaries	—			—			(1.8		)	—			(1.8		)
Interest income	—			(99.2		)	(56.6		)	148.2			(7.6		)
Interest expense	5.6			106.0			113.3			(148.2		)	76.7
Income (loss) before income taxes and noncontrolling interest	537.5			513.6			773.1			(1,097.8		)	726.4
Provision for income taxes	0.7			1.4			181.7			—			183.8
Net income (loss) before noncontrolling interest	536.8			512.2			591.4			(1,097.8		)	542.6
Noncontrolling interest	—			—			5.8			—			5.8
Net income (loss) attributable to Pentair Ltd.	$	536.8		$	512.2		$	585.6		$	(1,097.8	)	$	536.8
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	536.8		$	512.2		$	591.4		$	(1,097.8	)	$	542.6
Changes in cumulative translation adjustment	(31.3		)	(31.3		)	(29.1		)	62.6			(29.1		)
Amortization of pension and other post-retirement prior service cost	(0.4		)	(0.4		)	(0.4		)	0.8			(0.4		)
Changes in market value of derivative financial instruments	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Total comprehensive income (loss)	504.8			480.2			561.6			(1,033.8		)	512.8
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			8.0			—			8.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	504.8		$	480.2		$	553.6		$	(1,033.8	)	$	504.8

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2013

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	0.5	$	47.0	$	217.6	$	—		$	265.1
Accounts and notes receivable, net	2.9		4.0		1,391.0		(63.6		)	1,334.3
Inventories	—		—		1,243.3		—			1,243.3
Other current assets	1.4		0.6		387.4		—			389.4
Total current assets	4.8		51.6		3,239.3		(63.6		)	3,232.1
Property, plant and equipment, net	—		—		1,170.0		—			1,170.0
Other assets
Investments in subsidiaries	6,224.7		8,066.6		—		(14,291.3		)	—
Goodwill	—		—		5,134.2		—			5,134.2
Intangibles, net	—		—		1,776.1		—			1,776.1
Other non-current assets	31.6		1,302.7		393.3		(1,296.7		)	430.9
Total other assets	6,256.3		9,369.3		7,303.6		(15,588.0		)	7,341.2
Total assets	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	2.5	$	—		$	2.5
Accounts payable	48.1		8.6		603.5		(63.6		)	596.6
Employee compensation and benefits	0.5		—		346.6		—			347.1
Other current liabilities	99.6		11.7		552.7		—			664.0
Total current liabilities	148.2		20.3		1,505.3		(63.6		)	1,610.2
Other liabilities
Long-term debt	—		2,401.9		1,447.4		(1,296.7		)	2,552.6
Pension and other post-retirement compensation and benefits	—		—		324.8		—			324.8
Deferred tax liabilities	—		2.2		578.4		—			580.6
Other non-current liabilities	17.6		—		439.8		—			457.4
Total liabilities	165.8		2,424.4		4,295.7		(1,360.3		)	5,525.6
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,095.3		6,996.5		7,294.8		(14,291.3		)	6,095.3
Noncontrolling interest	—		—		122.4		—			122.4
Total equity	6,095.3		6,996.5		7,417.2		(14,291.3		)	6,217.7
Total liabilities and equity	$	6,261.1	$	9,420.9	$	11,712.9	$	(15,651.6	)	$	11,743.3

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	534.2		$	514.0		$	964.9		$	(1,097.8	)	$	915.3
Investing activities
Capital expenditures	—			—			(170.0		)	—			(170.0		)
Proceeds from sale of property and equipment	—			—			6.0			—			6.0
Proceeds from sale of businesses, net	—			—			43.5			—			43.5
Acquisitions, net of cash acquired	—			—			(92.4		)	—			(92.4		)
Other	—			—			1.7			—			1.7
Net cash provided by (used for) investing activities	—			—			(211.2		)	—			(211.2		)
Financing activities
Net receipts from commercial paper and revolving long-term debt	—			104.2			—			—			104.2
Proceeds from long-term debt	—			—			0.7			—			0.7
Repayment of long-term debt	—			—			(7.4		)	—			(7.4		)
Debt issuance costs	—			(1.4		)	—			—			(1.4		)
Net change in advances to subsidiaries	(339.5		)	(569.8		)	(188.5		)	1,097.8			—
Excess tax benefits from share-based compensation	—			—			16.8			—			16.8
Shares issued to employees, net of shares withheld	—			—			80.0			—			80.0
Repurchases of common shares	—			—			(715.8		)	—			(715.8		)
Dividends paid	(194.2		)	—			—			—			(194.2		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(533.7		)	(467.0		)	(816.2		)	1,097.8			(719.1		)
Effect of exchange rate changes on cash and cash equivalents	—			—			18.8			—			18.8
Change in cash and cash equivalents	0.5			47.0			(43.7		)	—			3.8
Cash and cash equivalents, beginning of year	—			—			261.3			—			261.3
Cash and cash equivalents, end of year	$	0.5		$	47.0		$	217.6		$	—		$	265.1

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	4,416.1		$	—		$	4,416.1
Cost of goods sold	—			—			3,146.5			—			3,146.5
Gross profit	—			—			1,269.6			—			1,269.6
Selling, general and administrative	5.0			(3.8		)	1,157.2			—			1,158.4
Research and development	—			—			93.6			—			93.6
Impairment of trade names and goodwill	—			—			60.7			—			60.7
Operating (loss) income	(5.0		)	3.8			(41.9		)	—			(43.1		)
Loss (earnings) from investment in subsidiaries	101.4			102.3			—			(203.7		)	—
Other (income) expense:
Loss on early extinguishment of debt	—			—			75.4			—			75.4
Equity income of unconsolidated subsidiaries	—			—			(2.1		)	—			(2.1		)
Interest income	—			(9.2		)	(2.9		)	9.2			(2.9		)
Interest expense	0.1			10.2			69.4			(9.2		)	70.5
Income (loss) before income taxes and noncontrolling interest	(106.5		)	(99.5		)	(181.7		)	203.7			(184.0		)
Provision (benefit) for income taxes	0.7			1.1			(81.2		)	—			(79.4		)
Net income (loss) before noncontrolling interest	(107.2		)	(100.6		)	(100.5		)	203.7			(104.6		)
Noncontrolling interest	—			—			2.6			—			2.6
Net income (loss) attributable to Pentair Ltd.	$	(107.2	)	$	(100.6	)	$	(103.1	)	$	203.7		$	(107.2	)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	(107.2	)	$	(100.6	)	$	(100.5	)	$	203.7		$	(104.6	)
Changes in cumulative translation adjustment	30.0			30.0			31.4			(60.0		)	31.4
Amortization of pension and other post-retirement prior service cost	(0.3		)	(0.3		)	(0.3		)	0.6			(0.3		)
Changes in market value of derivative financial instruments	(3.6		)	(3.6		)	(3.6		)	7.2			(3.6		)
Total comprehensive income (loss)	(81.1		)	(74.5		)	(73.0		)	151.5			(77.1		)
Less: Comprehensive income (loss) attributable to noncontrolling interest	—			—			4.0			—			4.0
Comprehensive income (loss) attributable to Pentair Ltd.	$	(81.1	)	$	(74.5	)	$	(77.0	)	$	151.5		$	(81.1	)

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2012

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	261.3	$	—		$	261.3
Accounts and notes receivable, net	20.2		1,458.3		1,330.7		(1,534.6		)	$	1,274.6
Inventories	—		—		1,333.9		—			$	1,333.9
Other current assets	85.8		—		333.1		(84.4		)	$	334.5
Total current assets	106.0		1,458.3		3,259.0		(1,619.0		)	3,204.3
Property, plant and equipment, net	—		—		1,188.2		—			1,188.2
Other assets
Investments in subsidiaries	6,486.3		7,464.6		—		(13,950.9		)	—
Goodwill	—		—		5,111.0		—			5,111.0
Intangibles, net	—		—		1,926.9		—			1,926.9
Other non-current assets	31.6		6.9		413.8		—			452.3
Total other assets	6,517.9		7,471.5		7,451.7		(13,950.9		)	7,490.2
Total assets	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	3.1	$	—		$	3.1
Accounts payable	54.3		1.7		587.3		(76.3		)	567.0
Employee compensation and benefits	—		—		296.7		—			296.7
Other current liabilities	180.9		11.5		670.3		(84.4		)	778.3
Total current liabilities	235.2		13.2		1,557.4		(160.7		)	1,645.1
Other liabilities
Long-term debt	—		2,297.7		1,614.9		(1,458.3		)	2,454.3
Pension and other post-retirement compensation and benefits	—		—		378.8		—			378.8
Deferred tax liabilities	—		—		421.9		—			421.9
Other non-current liabilities	17.6		—		477.5		—			495.1
Total liabilities	252.8		2,310.9		4,450.5		(1,619.0		)	5,395.2
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries	6,371.1		6,618.9		7,332.0		(13,950.9		)	6,371.1
Noncontrolling interest	—		—		116.4		—			116.4
Total equity	6,371.1		6,618.9		7,448.4		(13,950.9		)	6,487.5
Total liabilities and equity	$	6,623.9	$	8,929.8	$	11,898.9	$	(15,569.9	)	$	11,882.7

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Year ended December 31, 2012

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	(109.0	)	$	(88.2	)	$	61.5		$	203.7		$	68.0
Investing activities
Capital expenditures	—			—			(94.5		)	—			(94.5		)
Proceeds from sale of property and equipment	—			—			5.5			—			5.5
Acquisitions, net of cash acquired	—			300.1			170.4			—			470.5
Other	—			—			(5.9		)	—			(5.9		)
Net cash provided by (used for) investing activities	—			300.1			75.5			—			375.6
Financing activities
Net repayments on short-term borrowings	—			—			(3.7		)	—			(3.7		)
Net receipts (repayments) from commercial paper and revolving long-term debt	—			424.7			(170.9		)	—			253.8
Proceeds from long-term debt	—			594.3			—			—			594.3
Repayment of long-term debt	—			—			(617.2		)	—			(617.2		)
Debt issuance costs	—			(8.7		)	(1.0		)	—			(9.7		)
Debt extinguishment costs	—			—			(74.8		)	—			(74.8		)
Net change in advances to subsidiaries	157.0			(1,222.2		)	1,268.9			(203.7		)	—
Excess tax benefits from share-based compensation	—			—			5.0			—			5.0
Shares issued to employees, net of shares withheld	—			—			68.2			—			68.2
Repurchases of common shares	—			—			(334.2		)	—			(334.2		)
Dividends paid	(48.0		)	—			(64.4		)	—			(112.4		)
Distributions to noncontrolling interest	—			—			(1.6		)	—			(1.6		)
Net cash provided by (used for) financing activities	109.0			(211.9		)	74.3			(203.7		)	(232.3		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.1		)	—			(0.1		)
Change in cash and cash equivalents	—			—			211.2			—			211.2
Cash and cash equivalents, beginning of year	—			—			50.1			—			50.1
Cash and cash equivalents, end of year	$	—		$	—		$	261.3		$	—		$	261.3

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Acquisitions and Divestitures - Purchase Price of Common Stock and Outstanding Common Stock (Detail) (Tyco Flow Control International, Ltd, USD $) In Millions, unless otherwise specified	Sep. 28, 2012
Tyco Flow Control International, Ltd
Business Combination Allocation of Purchase Price [Line Items]
Value of common shares issued to Tyco shareholders	$ 4,811.4	[1]
Value of replacement equity-based awards to holders of Tyco equity-based awards	119.8	[2]
Cash paid to Tyco in settlement of the working capital and net indebtedness adjustment	84.4	[3]
Cash paid to Tyco shareholders in lieu of fractional common shares	0.5	[4]
Total purchase price	$ 5,016.1

[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] In June 2013, cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment.

[4] 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.

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Share Plans (Tables)

12 Months Ended

Dec. 31, 2013

Stock Option Activity

The following table summarizes stock option activity under all plans for the year ended December 31, 2013:

Shares and intrinsic value in millions	Number of shares		Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value
Outstanding as of January 1, 2013	8.4		$	32.13
Granted	1.0		50.83
Exercised	(2.9	)	30.84
Forfeited	(0.2	)	37.25
Expired	(0.1	)	28.82
Outstanding as of December 31, 2013	6.2		$	35.53	5.6	$	255.3
Options exercisable as of December 31, 2013	4.7		$	32.78	4.7	$	205.8
Options expected to vest as of December 31, 2013	1.5		$	44.27	8.5	$	48.0

Stock Option Fair Value Assumptions

We estimated the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model, modified for dividends and using the following weighted average assumptions:

	December 31
	2013		2012				2011
	Granted by Pentair plans		Assumed in Merger		Granted by Pentair plans		Granted by Pentair plans
Risk-free interest rate	0.69	%	0.02 - 0.68%		0.96	%	1.51	%
Expected dividend yield	2.01	%	2.12	%	2.48	%	2.32	%
Expected share price volatility	36.0	%	33.0	%	36.5	%	35.5	%
Expected term (years)	5.7		0.1 - 5.1		5.7		5.5

Restricted Stock Activity

The following table summarizes restricted stock unit activity under all plans for the year ended December 31, 2013:

Shares in millions	Number of shares		Weighted average grant date fair value
Outstanding as of January 1, 2013	1.6		$	38.97
Granted	0.4		50.80
Vested	(0.5	)	34.49
Forfeited	(0.2	)	41.48
Outstanding as of December 31, 2013	1.3		$	43.25

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Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Income Taxes [Line Items]
Statutory income tax rate	7.80%	[1]	7.80%	[1]	35.00%	[1]
SWITZERLAND
Income Taxes [Line Items]
Statutory income tax rate	7.80%		7.80%
U.S.
Income Taxes [Line Items]
Statutory income tax rate					35.00%

[1] As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, the statutory rate reflects the U.S. statutory rate of 35 percent.

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Share Plans - Restricted Stock Units (Detail) (Restricted Stock Units, USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Restricted Stock Units
Restricted Shares Outstanding Shares
Beginning balance	1.6
Granted	0.4
Vested	(0.5)
Forfeited	(0.2)
Ending Balance	1.3
Weighted Average Grant Date Fair Value
Beginning balance (USD per share)	$ 38.97
Granted (USD per share)	$ 50.80
Vested (USD per share)	$ 34.49
Forfeited (USD per share)	$ 41.48
Ending balance (USD per share)	$ 43.25

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2013

Components of Accumulated Other Comprehensive Income (Loss)

Components of AOCI consist of the following:

	December 31
In millions	2013			2012
Unrecognized pension and other post-retirement benefit costs, net of tax	$	—		$	0.4
Cumulative translation adjustments	(34.7		)	(3.4		)
Market value of derivative financial instruments, net of tax	(8.9		)	(8.6		)
Accumulated other comprehensive income (loss)	$	(43.6	)	$	(11.6	)

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Acquisitions and Divestitures - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) (Tyco Flow Control International, Ltd, USD $) In Millions, unless otherwise specified	Sep. 28, 2012
Business Combination Allocation of Purchase Price [Line Items]
Goodwill	$ 2,741.8
Intangibles	1,441.9
Total purchase price	5,016.1
Previously Reported
Business Combination Allocation of Purchase Price [Line Items]
Cash and cash equivalents	691.7
Accounts and notes receivable	771.6
Inventories	1,046.2
Other current assets	98.2
Property, plant and equipment	822.0
Goodwill	2,520.1
Intangibles	1,425.1
Other non-current assets	275.1
Current liabilities	(856.3)
Long-term debt	(914.5)
Income taxes, including current and deferred	(364.6)
Other liabilities and redeemable noncontrolling interest	(591.5)
Total purchase price	4,923.1
Restatement Adjustment [Member]
Business Combination Allocation of Purchase Price [Line Items]
Cash and cash equivalents	691.7
Accounts and notes receivable	753.5
Inventories	999.7
Other current assets	94.1
Property, plant and equipment	785.7
Goodwill	2,741.8
Intangibles	1,441.9
Other non-current assets	241.1
Current liabilities	(881.4)
Long-term debt	(914.5)
Income taxes, including current and deferred	(304.0)
Other liabilities and redeemable noncontrolling interest	(633.5)
Total purchase price	$ 5,016.1

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Debt - Debt Outstanding Amounts Maturing (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Debt Disclosure [Line Items]
Debt outstanding maturities 2014	$ 2.5
Debt outstanding maturities 2015	355.5
Debt outstanding maturities 2016	0.5
Debt outstanding maturities 2017	879.4
Debt outstanding maturities 2018	0.5
Debt outstanding maturities Thereafter	1,316.7
Total debt	2,555.1	2,457.4
Contractual Maturity
Debt Disclosure [Line Items]
Debt outstanding maturities 2014	0
Debt outstanding maturities 2015	350.0
Debt outstanding maturities 2016	0
Debt outstanding maturities 2017	878.9
Debt outstanding maturities 2018	0
Debt outstanding maturities Thereafter	1,304.7
Total debt	2,533.6
Capital Lease Obligations
Debt Disclosure [Line Items]
Debt outstanding maturities 2014	2.5
Debt outstanding maturities 2015	5.5
Debt outstanding maturities 2016	0.5
Debt outstanding maturities 2017	0.5
Debt outstanding maturities 2018	0.5
Debt outstanding maturities Thereafter	12.0
Total debt	$ 21.5

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Disclosures Required By Swiss Law - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Regulatory Liabilities [Line Items]
Total personnel expenses	$ 2,114.3	$ 1,233.7
Fire insurance values of property, plant, and equipment	$ 4,913.3

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Goodwill and Other Identifiable Intangible Assets - Estimated Future Amortization Expense for Identifiable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Expected Amortization Expense
Estimated amortization expense 2014	$ 115.9
Estimated amortization expense 2015	115.5
Estimated amortization expense 2016	114.4
Estimated amortization expense 2017	112.9
Estimated amortization expense 2018	$ 110.2

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Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenue Recognition
Cost in excess of billings	$ 100.8	$ 124.4	$ 100.8	$ 124.4
Billings in excess of cost	38.1	61.1	38.1	61.1
Research and development
Research and development			125.8	93.6	78.2
Goodwill and identifiable intangible assets
Goodwill planning period			6 years
Perpetual growth rate			3.00%
Impairment charges, related to trade names	11.0	60.7	11.0	60.7	0
Goodwill and intangible assets	6,910.3		6,910.3
Goodwill and intangible assets as a percentage of total assets	59.00%		59.00%
Equity and cost method investments
Investments in and loans to equity method investees	12.2	10.3	12.2	10.3
Aggregate balance cost method investments	8.3	6.9	8.3	6.9
Insurance subsidiary
Reserve for policy claims	51.1	42.9	51.1	42.9
Minimum
Basis of presentation
Equity method investment, ownership percentage	20.00%		20.00%
Goodwill and identifiable intangible assets
Discounted cash flows discount rate	11.50%		11.50%
Maximum
Basis of presentation
Equity method investment, ownership percentage	50.00%		50.00%
Goodwill and identifiable intangible assets
Discounted cash flows discount rate	12.50%		12.50%
Income taxes
Percentage of recognized income tax positions that could be realized at the largest amount	50.00%		50.00%
Other Current Liabilities
Insurance subsidiary
Reserve for policy claims	13.2	13.3	13.2	13.3
Other Noncurrent Liabilities
Insurance subsidiary
Reserve for policy claims	37.9	29.6	37.9	29.6
Credit Concentration Risk
Trade receivables and concentration of credit risk
Customer receivable balances to total trade receivables			10.00%	10.00%
Number of customers	0	0	0	0
Process Technologies
Goodwill and identifiable intangible assets
Pre-tax non-cash Impairment charge on goodwill					200.5
Impairment charges, related to trade names				$ 23.2

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Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2013

Acquisitions and Divestitures

Acquisitions and Divestitures

Material acquisitions

Pentair Ltd. took its current form on September 28, 2012 as a result of a reverse acquisition (the "Merger") involving Pentair, Inc. and an indirect, wholly-owned subsidiary of Flow Control (defined below), with Pentair, Inc. surviving as an indirect, wholly-owned subsidiary of Pentair Ltd. "Flow Control" refers to Pentair Ltd. prior the Merger. Prior to the Merger, Tyco International Ltd. ("Tyco") engaged in an internal restructuring whereby it transferred to Flow Control certain assets related to the flow control business of Tyco, and Flow Control assumed from Tyco certain liabilities related to the flow control business of Tyco. On September 28, 2012 prior to the Merger, Tyco effected a spin-off of Flow Control through the pro-rata distribution of 100% of the outstanding common shares of Flow Control to Tyco’s shareholders (the “Distribution”), resulting in the distribution of approximately 110.9 million of our common shares to Tyco’s shareholders. The Merger was accounted for as a reverse acquisition under the purchase method of accounting with Pentair, Inc. treated as the acquirer.

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)	119.8
Cash paid to Tyco in settlement of the working capital and net indebtedness adjustment (3)	84.4
Cash paid to Tyco shareholders in lieu of fractional common shares (4)	0.5
Total purchase price	$	5,016.1

(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) In June 2013, cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment.

(4) 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.

The purchase price was allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the Merger. During 2013, the Company recorded fair value adjustments to the preliminary purchase price allocation reported at December 31, 2012. Purchase price adjustments were applied retrospectively back to the date of the Merger. These adjustments did not have a material impact on net income (loss) in 2012 and, therefore, the Company has not adjusted its net income (loss) attributable to Pentair Ltd. for the year ended December 31, 2012.

The following table summarizes the fair values of the assets acquired and liabilities assumed in the Merger as originally reported in the Company's Form 10-K for the year ended December 31, 2012 and as revised for adjustments made during 2013:

In millions	As Originally Reported			As Revised
Cash and cash equivalents	$	691.7		$	691.7
Accounts and notes receivable	771.6			753.5
Inventories	1,046.2			999.7
Other current assets	98.2			94.1
Property, plant and equipment	822.0			785.7
Goodwill	2,520.1			2,741.8
Intangibles	1,425.1			1,441.9
Other non-current assets	275.1			241.1
Current liabilities	(856.3		)	(881.4		)
Long-term debt	(914.5		)	(914.5		)
Income taxes, including current and deferred	(364.6		)	(304.0		)
Other liabilities and redeemable noncontrolling interest	(591.5		)	(633.5		)
Total purchase price	$	4,923.1		$	5,016.1

The fair value of the business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of purchase price over tangible net assets and identified intangible assets acquired was allocated to goodwill in the amount of $2,741.8 million. Goodwill was allocated to our reporting segments as follows: $1,511.6 million to Valves & Controls, $30.1 million to Process Technologies, $318.5 million to Flow Technologies, and $881.6 million to Technical Solutions. None of the goodwill recognized from the Merger is expected to be deductible for income tax purposes. Goodwill recognized from the Merger reflects the current value of the expected future income resulting from synergies of our combined operations. Identifiable intangible assets acquired as part of the Merger were $1,441.9 million and include $362.3 million of indefinite life trade name intangibles and the following definite-lived intangibles: $920.0 million of customer relationships with a weighted average useful life of 14.2 years, $115.9 million of proprietary technology with a weighted average useful life of 13.7 years and $43.7 million of customer backlog with a weighted average useful life of less than one year.

In May 2011, we acquired, as part of Process Technologies, the Clean Process Technologies (“CPT”) division of privately held Norit Holding B.V. for $715.3 million (€502.7 million translated at the May 12, 2011 exchange rate). CPT’s results of operations have been included in our consolidated financial statements since the date of acquisition. CPT is a global leader in membrane solutions and clean process technologies in the high growth water and beverage filtration and separation segments. CPT provides sustainable purification systems and solutions for desalination, water reuse, industrial applications and beverage segments that effectively address the increasing challenges of clean water scarcity, rising energy costs and pollution. CPT’s product offerings include innovative ultrafiltration and nanofiltration membrane technologies, aseptic valves, CO2 recovery and control systems and specialty pumping equipment. Based in the Netherlands, CPT has broad sales diversity with the majority of revenues generated in European Union and Asia-Pacific countries.

The fair value of the CPT business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value acquired over the identifiable assets acquired and liabilities assumed is reflected as goodwill. Goodwill recorded as part of the purchase price allocation was $451.8 million, none of which is tax deductible. Identifiable intangible assets acquired as part of the acquisition were $197.2 million, including definite-lived intangibles, such as customer relationships and proprietary technology with a weighted average amortization period of approximately 10 years.

Pro forma results of material acquisitions

The following unaudited pro forma condensed consolidated financial results of operations are presented as if the Merger had been completed on January 1, 2011 and as though the CPT acquisition had been completed on January 1, 2010:

	Years ended December 31
In millions, except per-share data	2012		2011
Pro forma net sales	$	7,409.9	$	7,326.4
Pro forma net income (loss) attributable to Pentair Ltd.	157.5		(47.4		)
Diluted earnings (loss) per common share attributable to Pentair Ltd.	0.75		(0.23		)

The 2011 unaudited pro forma net income includes the impact of $262.0 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog, $21.8 million of change of control costs and $8.7 million of transaction costs associated with the Merger. The 2011 unaudited pro forma net income excludes the impact of $12.9 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog and $8.0 million, respectively, of transaction costs associated with the CPT acquisition.

The 2012 unaudited pro forma net income excludes the impact of $57.3 million of transaction related costs, $21.8 million of change of control costs and $178.1 million of non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog associated with the Merger.

The pro forma consolidated financial information was prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may have differed materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of Flow Control. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the business combination occurred at the beginning of the period presented or of future results of the consolidated entities.

Other acquisitions

On January 30, 2014, we acquired, as part of Process Technologies, the remaining 19.9 percent ownership interest in two entities, a U.S. entity and an international entity (collectively, Pentair Residential Filtration or “PRF”), from GE Water & Process Technologies (a unit of General Electric Company) (“GE”) for $134.3 million in cash. Prior to the acquisition, we held a 80.1 percent ownership equity interest in PRF, representing our and GE's respective global water softener and residential water filtration businesses. There was no pro forma impact from this acquisition as the results of PRF were consolidated into our financial statements prior to acquiring the remaining interest.

On October 4, 2012, we acquired, as part of Valves & Controls, the remaining 25 percent equity interest in Pentair Middle East Holding S.a.r.l. (“KEF”), a privately held company, for $100.0 million in cash. Prior to the acquisition, we held a 75 percent equity interest in KEF, a vertically integrated valve manufacturer in the Middle East. There was no pro forma impact from this acquisition as the results of KEF were consolidated into Flow Control’s financial statements prior to acquiring the remaining 25 percent interest in KEF.

Additionally, during the year ended December 31, 2012, we completed other small acquisitions as part of Process Technologies with purchase prices totaling $121.2 million in cash, net of cash acquired. Total goodwill recorded as part of the purchase price allocations was $80.9 million, $67.1 million of which is tax deductible.

During the year ended December 31, 2011, we completed other small acquisitions as part of Process Technologies with purchase prices totaling $21.6 million, consisting of $17.8 million in cash and $3.8 million as notes payable. Total goodwill recorded as part of the purchase price allocations was $14.4 million, none of which is tax deductible. The pro forma impact of these acquisitions was not material.

Total transaction costs related to acquisition activities in 2013, 2012, and 2011 were $8.2 million, $57.3 million and $8.2 million, respectively, and were expensed as incurred and recorded in Selling, general and administrative in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Divestitures

During 2013, we sold businesses that were part of Technical Solutions and Flow Technologies for a cash purchase price of $30.1 million and $13.4 million, respectively, net of transaction costs, resulting in a net gain of $16.8 million and $2.9 million, respectively. Goodwill of $5.3 million and $5.7 million was included in the assets of the business sold for Technical Solutions and Flow Technologies, respectively.

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Supplemental Balance Sheet Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Inventories
Raw materials and supplies	$ 557.2	$ 615.1
Work-in-process	166.5	207.6
Finished goods	519.6	511.2
Total inventories	1,243.3	1,333.9
Other current assets
Cost in excess of billings	100.8	124.4
Prepaid expenses	103.9	89.0
Deferred income taxes	162.0	82.6
Other current assets	22.7	38.5
Total other current assets	389.4	334.5
Property, plant and equipment, net
Land and land improvements	251.3	248.6
Buildings and leasehold improvements	516.8	474.4
Machinery and equipment	1,208.0	1,073.0
Construction in progress	72.6	102.9
Total property, plant and equipment	2,048.7	1,898.9
Accumulated depreciation and amortization	878.7	710.7
Total property, plant and equipment, net	1,170.0	1,188.2	387.5
Other non-current assets
Asbestos-related insurance receivable	119.6	131.0
Deferred income taxes	93.6	68.7
Other non-current assets	217.7	252.6
Total other non-current assets	430.9	452.3
Other current liabilities
Deferred revenue and customer deposits	92.4	127.2
Dividends payable	98.7	95.0
Billings in excess of cost	38.1	61.1
Accrued warranty	56.6	54.3
Other current liabilities	378.2	440.7
Total other current liabilities	664.0	778.3
Other non-current liabilities
Asbestos-related liabilities	254.7	278.9
Taxes payable	48.9	50.5
Other non-current liabilities	153.8	165.7
Total other non-current liabilities	$ 457.4	$ 495.1

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2013

Financial Information by Reportable Business Segment

Financial information by reportable segment is included in the following summary:

	2013			2012			2011			2013			2012			2011
In millions	Net sales									Operating income (loss)
Valves & Controls	$	2,469.2		$	548.6		$	—		$	161.4		$	(76.8	)	$	—
Process Technologies	1,765.9			1,521.1			1,345.9			243.2			132.5			(40.2		)
Flow Technologies	1,618.5			1,136.7			1,042.7			149.7			35.5			97.9
Technical Solutions	1,663.4			1,236.4			1,086.8			285.0			165.0			185.8
Other	(37.3		)	(26.7		)	(18.7		)	(65.3		)	(299.3		)	(143.3		)
Consolidated	$	7,479.7		$	4,416.1		$	3,456.7		$	774.0		$	(43.1	)	$	100.2
	Identifiable assets (1)									Depreciation
Valves & Controls	$	4,204.0		$	4,369.6		$	—		$	64.0		$	15.1		$	—
Process Technologies	2,707.7			2,670.2			2,476.2			29.2			29.2			27.1
Flow Technologies	2,050.4			2,112.4			1,316.0			22.1			16.6			15.5
Technical Solutions	2,093.4			2,154.2			651.7			23.6			18.9			17.7
Other	687.8			576.3			142.4			10.0			8.0			5.9
Consolidated	$	11,743.3		$	11,882.7		$	4,586.3		$	148.9		$	87.8		$	66.2
	Amortization									Capital expenditures
Valves & Controls	$	69.3		$	21.7		$	—		$	67.2		$	21.9		$	—
Process Technologies	26.0			24.4			21.8			45.2			31.2			30.6
Flow Technologies	16.7			13.6			17.8			26.2			18.7			18.8
Technical Solutions	25.2			16.2			2.3			16.2			13.5			15.6
Other	—			0.1			—			15.2			9.2			8.3
Consolidated	$	137.2		$	76.0		$	41.9		$	170.0		$	94.5		$	73.3

(1) All cash and cash equivalents are included in “Other.”

Geographic Information

The following tables present certain geographic information:

	2013		2012		2011		2013		2012		2011
In millions	Net sales						Long-lived assets
U.S.	$	3,431.3	$	2,624.3	$	2,336.8	$	365.4	$	372.8	$	195.6
Europe	1,912.0		912.6		701.9		462.4		394.2		140.3
Australia	761.2		213.2		52.3		145.7		170.5		0.5
Asia and other	1,375.2		666.0		365.7		196.5		250.7		51.1
Consolidated	$	7,479.7	$	4,416.1	$	3,456.7	$	1,170.0	$	1,188.2	$	387.5

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Basis of Presentation

Basis of presentation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both the U.S. and non-U.S, which we control. Intercompany accounts and transactions have been eliminated. Investments in companies of which we own 20% to 50% of the voting stock or have the ability to exercise significant influence over operating and financial policies of the investee are accounted for using the equity method of accounting and as a result, our share of the earnings or losses of such equity affiliates is included in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The consolidated financial statements have been prepared in United States dollars (“USD”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information described under Article 663-663h of the Swiss Code of Obligations has been presented in the Company’s Swiss statutory financial statements for the year ended December 31, 2013.

Fiscal Year

Fiscal year

Our fiscal year ends on December 31. We report our interim quarterly periods on a 13-week basis ending on a Saturday.

Use of Estimates

Use of estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include our accounting for valuation of long-lived assets, including goodwill and indefinite lived intangible assets, percentage of completion revenue recognition, assets acquired and liabilities assumed in acquisitions, contingent liabilities, income taxes and pension and other post-retirement benefits. Actual results could differ from our estimates.

Revenue Recognition

Revenue recognition

We recognize revenue when it is realized or realizable and has been earned. Revenue is recognized when persuasive evidence of an arrangement exists; shipment or delivery has occurred (depending on the terms of the sale); our price to the buyer is fixed or determinable; and collectability is reasonably assured.

Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until substantially all obligations were satisfied.

Percentage of completion

Revenue from certain long-term contracts is recognized over the contractual period under the percentage of completion method of accounting. Under this method, sales and gross profit are recognized as work is performed either based on the relationship between the actual costs incurred and the total estimated costs at completion (“the cost-to-cost method”) or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. These reviews have not resulted in adjustments that were significant to our results of operations. Estimated losses are recorded when identified. Claims against customers are recognized as revenue upon settlement.

We record costs and earnings in excess of billings on uncompleted contracts within Other current assets and billings in excess of costs and earnings on uncompleted contracts within Other current liabilities in the Consolidated Balance Sheets. Amounts included in Other current assets related to these contracts were $100.8 million and $124.4 million at December 31, 2013 and 2012, respectively. Amounts included in Other current liabilities related to these contracts were $38.1 million and $61.1 million at December 31, 2013 and 2012, respectively.

Sales returns

The right of return may exist explicitly or implicitly with our customers. Generally, our return policy allows for customer returns only upon our authorization. Goods returned must be product we continue to market and must be in salable condition. Returns of custom or modified goods are normally not allowed. At the time of sale, we reduce revenue for the estimated effect of returns. Estimated sales returns include consideration of historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future.

Pricing and sales incentives

We record estimated reductions to revenue for customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives at the later of the date revenue is recognized or the incentive is offered. Sales incentives given to our customers are recorded as a reduction of revenue unless we (1) receive an identifiable benefit for the goods or services in exchange for the consideration and (2) we can reasonably estimate the fair value of the benefit received.

Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. However, one of our businesses allows customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying original equipment manufacturer customer. At the time of sale, we estimate the anticipated refund to be paid based on historical experience and reduce sales for the probable cost of the discount. The cost of these refunds is recorded as a reduction in gross sales.

Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, we reforecast the anticipated rebate to be paid based on forecasted sales levels. These forecasts are updated at least quarterly for each customer and sales are reduced for the anticipated cost of the rebate. If the forecasted sales for a customer changes, the accrual for rebates is adjusted to reflect the new amount of rebates expected to be earned by the customer.

Shipping and Handling Costs

Shipping and handling costs

Amounts billed to customers for shipping and handling are recorded in Net sales in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Shipping and handling costs incurred by Pentair for the delivery of goods to customers are included in Cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Research and Development

Research and development

We conduct research and development (“R&D”) activities in our own facilities, which consist primarily of the development of new products, product applications and manufacturing processes. We expense R&D costs as incurred. R&D expenditures during 2013, 2012 and 2011 were $125.8 million, $93.6 million and $78.2 million, respectively.

Cash Equivalents

Cash equivalents

We consider highly liquid investments with original maturities of three months or less to be cash equivalents.

Trade Receivables and Concentration of Credit Risk

Trade receivables and concentration of credit risk

We record an allowance for doubtful accounts, reducing our receivables balance to an amount we estimate is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on current trends, aging of accounts receivable, periodic credit evaluations of our customers’ financial condition, and historical collection experience. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2013 or December 31, 2012.

Inventories

Inventories

Inventories are stated at the lower of cost or market with substantially all inventories recorded using the first-in, first-out (“FIFO”) cost method and with an insignificant amount of inventories located outside the United States recorded using a moving average cost method which approximates FIFO.

Property, Plant and Equipment, Net

Property, plant and equipment, net

Property, plant and equipment is stated at historical cost. We compute depreciation by the straight-line method based on the following estimated useful lives:

	Years
Land improvements	5 to 20
Buildings and leasehold improvements	5 to 50
Machinery and equipment	3 to 15

Significant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. There was no material impairment charge recorded related to long-lived assets.

Goodwill and identifiable intangible assets

Goodwill and identifiable intangible assets

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit there is an indication that goodwill impairment exists and a second step must be completed in order to determine the amount of the goodwill impairment, if any that should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital, are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions are determined over a six year long-term planning period. The six year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2019 are projected to grow at a perpetual growth rate of 3.0%.

Discount rate assumptions for each reporting unit take into consideration our assessment of risks inherent in the future cash flows of the respective reporting unit and our weighted-average cost of capital. We utilized discount rates ranging from 11.5% to 12.5% in determining the discounted cash flows in our fair value analysis.

In estimating fair value using the market approach, we identify a group of comparable publicly-traded companies for each reporting unit that are similar in terms of size and product offering. These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of earnings before interest, taxes, depreciation and amortization ("EBITDA"). We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.

Impairment charge

We completed step one of our annual goodwill impairment evaluation during the fourth quarter of 2013 and 2012 with each reporting unit’s fair value exceeding its carrying value. Accordingly, step two of the impairment analysis was not required for 2013 or 2012.

For the year ended December 31, 2011, we recorded a pre-tax non-cash impairment charge of $200.5 million in Process Technologies as a result of our annual goodwill impairment test. The impairment charge resulted from changes in our forecasts in light of economic conditions and continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include: customer relationships, trade names, proprietary technology, backlog and patents. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We completed our annual impairment test during the fourth quarter for those identifiable assets not subject to amortization. Impairment charges of $11.0 million and $60.7 million were recorded in 2013 and 2012, respectively, related to trade names. These charges were recorded in Impairment of trade names and goodwill in our Consolidated Statements of Operations and Comprehensive Income (Loss). There was no impairment charge recorded in 2011 for identifiable intangible assets.

The impairment test consists of a comparison of the fair value of the trade name with its carrying value. Fair value is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below. The impairment charges recorded in 2013 and 2012 were the result of rebranding strategies implemented in the fourth quarters of 2013 and 2012, respectively.

At December 31, 2013 our goodwill and intangible assets were $6,910.3 million and represented 59% of our total assets. If we experience future declines in sales and operating profit or do not meet our operating forecasts, we may be subject to future impairments. Additionally, changes in assumptions regarding the future performance of our businesses, increases in the discount rate used to determine the discounted cash flows of our businesses or significant declines in our share price or the market as a whole could result in additional impairment indicators. Because of the significance of our goodwill and intangible assets, any future impairment of these assets could have a material adverse effect on our financial results.

Equity and Cost Method Investments

Equity and cost method investments

We have investments that are accounted for using the equity method. Our proportionate share of income or losses from investments accounted for under the equity method is recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). We write down or write off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. This requires significant judgment, including assessment of the investees’ financial condition and in certain cases the possibility of subsequent rounds of financing, as well as the investees’ historical and projected results of operations and cash flows. If the actual outcomes for the investees are significantly different from projections, we may incur future charges for the impairment of these investments. Our investment in and loans to equity method investees was $12.2 million and $10.3 million at December 31, 2013 and December 31, 2012, respectively, net of our proportionate share of the results of their operations.

Investments for which we do not have significant influence are accounted for under the cost method. The aggregate balance of these investments was $8.3 million and $6.9 million at December 31, 2013 and December 31, 2012.

Income Taxes

Income taxes

We use the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Pension and other post-retirement plans

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. The pension and other post-retirement benefit costs for company-sponsored benefit plans are determined from actuarial assumptions and methodologies, including discount rates, expected returns on plan assets and health care cost trend rates. These assumptions are updated annually and are disclosed in Note 12.

We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year ("mark-to-market adjustment") and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change, as they may each year. The remaining components of pension expense, primarily service and interest costs and estimated return on plan assets, are recorded on a quarterly basis.

Environmental

Environmental

We recognize environmental clean-up liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Such liabilities generally are not subject to insurance coverage. The cost of each environmental clean-up is estimated by engineering, financial and legal specialists based on current law. Such estimates are based primarily upon the estimated cost of investigation and remediation required and the likelihood that, where applicable, other potentially responsible parties (“PRPs”) will be able to fulfill their commitments at the sites where Pentair may be jointly and severally liable. The process of estimating environmental clean-up liabilities is complex and dependent primarily on the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, the uncertainty as to what remedy and technology will be required and the outcome of discussions with regulatory agencies and other PRPs at multi-party sites. In future periods, new laws or regulations, advances in clean-up technologies and additional information about the ultimate clean-up remedy that is used could significantly change our estimates. Accruals for environmental liabilities are included in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.

Asbestos Matters

Asbestos Matters

We recognize asbestos-related liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Certain of these liabilities are subject to insurance coverage. Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. The process of estimating asbestos-related liabilities and the corresponding insurance recoveries receivable is complex and dependent primarily on our historical claim experience, estimates of potential future claims, our legal strategy for resolving these claims, the availability of insurance coverage, and the solvency and creditworthiness of insurers. On an annual basis, we review, and update as appropriate, such estimated asbestos liabilities and assets and the underlying assumptions.

Accruals for asbestos-related liabilities are included in Other non-current liabilities and the estimated receivable for insurance recoveries are recorded in Other non-current assets in the Consolidated Balance Sheets.

Insurance Subsidiary

Insurance subsidiary

We insure certain general and product liability, property, workers’ compensation and automobile liability risks through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses. As of December 31, 2013 and 2012, reserves for policy claims were $51.1 million ($13.2 million included in Other current liabilities and $37.9 million included in Other non-current liabilities) and $42.9 million ($13.3 million included in Other current liabilities and $29.6 million included in Other non-current liabilities), respectively.

Share-Based Compensation

Share-based compensation

We account for share-based compensation awards on a fair value basis. The estimated grant date fair value of each option award is recognized in income on an accelerated basis over the requisite service period (generally the vesting period). The estimated fair value of each option award is calculated using the Black-Scholes option-pricing model. From time to time, we have elected to modify the terms of the original grant. These modified grants are accounted for as a new award and measured using the fair value method, resulting in the inclusion of additional compensation expense in our Consolidated Statements of Operations and Comprehensive Income (Loss). Restricted share awards and units are recorded as compensation cost on an accelerated basis over the requisite service periods based on the market value on the date of grant.

Earnings (Loss) Per Common Share

Earnings (loss) per common share

Basic earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding including the dilutive effects of common share equivalents.

Derivative Financial Instruments

Derivative financial instruments

We recognize all derivatives, including those embedded in other contracts, as either assets or liabilities at fair value in our Consolidated Balance Sheets. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in Accumulated other comprehensive income (loss) (“AOCI”) as a separate component of equity in the Consolidated Balance Sheets and are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings. If the underlying hedged transaction ceases to exist or if the hedge becomes ineffective, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. For a derivative that is not designated as or does not qualify as a hedge, changes in fair value are reported in earnings immediately.

We use derivative instruments for the purpose of hedging interest rate and currency exposures, which exist as part of ongoing business operations. We do not hold or issue derivative financial instruments for trading or speculative purposes. All other contracts that contain provisions meeting the definition of a derivative also meet the requirements of and have been designated as, normal purchases or sales. Our policy is not to enter into contracts with terms that cannot be designated as normal purchases or sales. From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks.

Fair Value Measurements

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level 1: Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

Foreign Currency Translation

Foreign currency translation

The financial statements of subsidiaries located outside of the U.S. are measured using the local currency as the functional currency, except for certain corporate entities outside of the U.S. which are measured using USD. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in AOCI, a separate component of equity.

New accounting standards

New accounting standards

In February 2013, the Financial Accounting Standards Board issued authoritative guidance surrounding the presentation of items reclassified from AOCI to net income. This guidance requires entities to disclose, either in the notes to the consolidated financial statements or parenthetically on the face of the statement that reports comprehensive income, items reclassified out of AOCI and into net income in their entirety and the effect of the reclassification on each affected net income line item. In addition, for AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required disclosures is required. This guidance was effective for fiscal years and interim periods beginning after December 15, 2012. The adoption of this guidance on January 1, 2013 did not impact our financial condition or results of operations. The reclassifications out of AOCI and into net income were not material for the year ended December 31, 2013.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2013

Schedule II - Valuation and Qualifying Accounts

Schedule II — Valuation and Qualifying Accounts

Pentair Ltd. and Subsidiaries

In millions	Beginning balance		Additions charged to costs and expenses		Deductions (1)		Other changes (2)			Ending balance
Allowances for doubtful accounts
Year ended December 31, 2013	$	14.0	$	51.8	$	2.4	$	(2.6	)	$	60.8
Year ended December 31, 2012	$	16.0	$	1.6	$	4.0	$	0.4		$	14.0
Year ended December 31, 2011	$	17.1	$	4.4	$	4.7	$	(0.8	)	$	16.0

(1) Uncollectible accounts written off, net of recoveries

(2) Result of foreign currency effects

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Segment Information - Additional Information (Detail) (Customer Concentration Risk)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Customer Concentration Risk
Revenue, Major Customer [Line Items]
Number of significant customers	0	0	0

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Restructuring - Costs Included in Selling, General & Administrative expenses on Consolidated Statements of Income (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 113.5	$ 66.9	$ 13.0
Severance and related costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	87.3	61.6	11.5
Other
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 26.2	$ 5.3	$ 1.5

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2013

Net rental expense

Net rental expense under operating leases was as follows:

	Years ended December 31
In millions	2013			2012			2011
Gross rental expense	$	78.7		$	45.3		$	39.9
Sublease rental income	(0.9		)	(0.5		)	(0.5		)
Net rental expense	$	77.8		$	44.8		$	39.4

Net future minimum lease commitments

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, machinery, equipment and vehicles as of December 31, 2013 were as follows:

In millions	2014			2015			2016			2017			2018			Thereafter			Total
Minimum lease payments	$	55.5		$	40.7		$	30.1		$	21.5		$	13.5		$	23.5		$	184.8
Minimum sublease rentals	(1.0		)	(0.9		)	(0.7		)	(0.1		)	(0.1		)	(0.1		)	(2.9		)
Net future minimum lease commitments	$	54.5		$	39.8		$	29.4		$	21.4		$	13.4		$	23.4		$	181.9

Changes in Carrying Amount of Service and Product Warranties

The changes in the carrying amount of service and product warranties for the years ended December 31, 2013 and 2012 were as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	54.3		$	29.4
Service and product warranty provision	63.4			55.7
Payments	(61.2		)	(53.3		)
Acquired	—			22.1
Translation	0.1			0.4
Ending balance	$	56.6		$	54.3

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Estimated Useful Lives of Property and Equipment

We compute depreciation by the straight-line method based on the following estimated useful lives:

	Years
Land improvements	5 to 20
Buildings and leasehold improvements	5 to 50
Machinery and equipment	3 to 15

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Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2013

Purchase Price of Common Stock and Outstanding Common Stock

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)	119.8
Cash paid to Tyco in settlement of the working capital and net indebtedness adjustment (3)	84.4
Cash paid to Tyco shareholders in lieu of fractional common shares (4)	0.5
Total purchase price	$	5,016.1

(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) In June 2013, cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment.

(4) 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 Liabilites Assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed in the Merger as originally reported in the Company's Form 10-K for the year ended December 31, 2012 and as revised for adjustments made during 2013:

In millions	As Originally Reported			As Revised
Cash and cash equivalents	$	691.7		$	691.7
Accounts and notes receivable	771.6			753.5
Inventories	1,046.2			999.7
Other current assets	98.2			94.1
Property, plant and equipment	822.0			785.7
Goodwill	2,520.1			2,741.8
Intangibles	1,425.1			1,441.9
Other non-current assets	275.1			241.1
Current liabilities	(856.3		)	(881.4		)
Long-term debt	(914.5		)	(914.5		)
Income taxes, including current and deferred	(364.6		)	(304.0		)
Other liabilities and redeemable noncontrolling interest	(591.5		)	(633.5		)
Total purchase price	$	4,923.1		$	5,016.1

Pro Forma Consolidated Condensed 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 and as though the CPT acquisition had been completed on January 1, 2010:

	Years ended December 31
In millions, except per-share data	2012		2011
Pro forma net sales	$	7,409.9	$	7,326.4
Pro forma net income (loss) attributable to Pentair Ltd.	157.5		(47.4		)
Diluted earnings (loss) per common share attributable to Pentair Ltd.	0.75		(0.23		)

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Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Business

Pentair Ltd. and its consolidated subsidiaries ("the Company” or “Pentair") is a focused diversified industrial manufacturing company comprising four reporting segments: Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions. During the fourth quarter of 2013, we reorganized our business segments to reflect a new operating structure and management of our Global Business Units, resulting in a change from three reporting segments to four. All prior period amounts related to the segment change have been retrospectively reclassified throughout this Annual Report on Form 10-K to conform to the new presentation. For additional information on the Company’s segments, see Note 15.

Basis of presentation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both the U.S. and non-U.S, which we control. Intercompany accounts and transactions have been eliminated. Investments in companies of which we own 20% to 50% of the voting stock or have the ability to exercise significant influence over operating and financial policies of the investee are accounted for using the equity method of accounting and as a result, our share of the earnings or losses of such equity affiliates is included in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The consolidated financial statements have been prepared in United States dollars (“USD”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information described under Article 663-663h of the Swiss Code of Obligations has been presented in the Company’s Swiss statutory financial statements for the year ended December 31, 2013.

Fiscal year

Our fiscal year ends on December 31. We report our interim quarterly periods on a 13-week basis ending on a Saturday.

Use of estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include our accounting for valuation of long-lived assets, including goodwill and indefinite lived intangible assets, percentage of completion revenue recognition, assets acquired and liabilities assumed in acquisitions, contingent liabilities, income taxes and pension and other post-retirement benefits. Actual results could differ from our estimates.

Revenue recognition

We recognize revenue when it is realized or realizable and has been earned. Revenue is recognized when persuasive evidence of an arrangement exists; shipment or delivery has occurred (depending on the terms of the sale); our price to the buyer is fixed or determinable; and collectability is reasonably assured.

Generally, there is no post-shipment obligation on product sold other than warranty obligations in the normal and ordinary course of business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until substantially all obligations were satisfied.

Percentage of completion

Revenue from certain long-term contracts is recognized over the contractual period under the percentage of completion method of accounting. Under this method, sales and gross profit are recognized as work is performed either based on the relationship between the actual costs incurred and the total estimated costs at completion (“the cost-to-cost method”) or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Changes to the original estimates may be required during the life of the contract and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. These reviews have not resulted in adjustments that were significant to our results of operations. Estimated losses are recorded when identified. Claims against customers are recognized as revenue upon settlement.

We record costs and earnings in excess of billings on uncompleted contracts within Other current assets and billings in excess of costs and earnings on uncompleted contracts within Other current liabilities in the Consolidated Balance Sheets. Amounts included in Other current assets related to these contracts were $100.8 million and $124.4 million at December 31, 2013 and 2012, respectively. Amounts included in Other current liabilities related to these contracts were $38.1 million and $61.1 million at December 31, 2013 and 2012, respectively.

Sales returns

The right of return may exist explicitly or implicitly with our customers. Generally, our return policy allows for customer returns only upon our authorization. Goods returned must be product we continue to market and must be in salable condition. Returns of custom or modified goods are normally not allowed. At the time of sale, we reduce revenue for the estimated effect of returns. Estimated sales returns include consideration of historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future.

Pricing and sales incentives

We record estimated reductions to revenue for customer programs and incentive offerings including pricing arrangements, promotions and other volume-based incentives at the later of the date revenue is recognized or the incentive is offered. Sales incentives given to our customers are recorded as a reduction of revenue unless we (1) receive an identifiable benefit for the goods or services in exchange for the consideration and (2) we can reasonably estimate the fair value of the benefit received.

Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price. However, one of our businesses allows customers to apply for a refund of a percentage of the original purchase price if they can demonstrate sales to a qualifying original equipment manufacturer customer. At the time of sale, we estimate the anticipated refund to be paid based on historical experience and reduce sales for the probable cost of the discount. The cost of these refunds is recorded as a reduction in gross sales.

Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, we reforecast the anticipated rebate to be paid based on forecasted sales levels. These forecasts are updated at least quarterly for each customer and sales are reduced for the anticipated cost of the rebate. If the forecasted sales for a customer changes, the accrual for rebates is adjusted to reflect the new amount of rebates expected to be earned by the customer.

Shipping and handling costs

Amounts billed to customers for shipping and handling are recorded in Net sales in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Shipping and handling costs incurred by Pentair for the delivery of goods to customers are included in Cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Research and development

We conduct research and development (“R&D”) activities in our own facilities, which consist primarily of the development of new products, product applications and manufacturing processes. We expense R&D costs as incurred. R&D expenditures during 2013, 2012 and 2011 were $125.8 million, $93.6 million and $78.2 million, respectively.

Cash equivalents

We consider highly liquid investments with original maturities of three months or less to be cash equivalents.

Trade receivables and concentration of credit risk

We record an allowance for doubtful accounts, reducing our receivables balance to an amount we estimate is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on current trends, aging of accounts receivable, periodic credit evaluations of our customers’ financial condition, and historical collection experience. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2013 or December 31, 2012.

Inventories

Inventories are stated at the lower of cost or market with substantially all inventories recorded using the first-in, first-out (“FIFO”) cost method and with an insignificant amount of inventories located outside the United States recorded using a moving average cost method which approximates FIFO.

Property, plant and equipment, net

Property, plant and equipment is stated at historical cost. We compute depreciation by the straight-line method based on the following estimated useful lives:

	Years
Land improvements	5 to 20
Buildings and leasehold improvements	5 to 50
Machinery and equipment	3 to 15

Significant improvements that add to productive capacity or extend the lives of properties are capitalized. Costs for repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed of, the recorded cost of the assets and their related accumulated depreciation are removed from the Consolidated Balance Sheets and any related gains or losses are included in income.

We review the recoverability of long-lived assets to be held and used, such as property, plant and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. There was no material impairment charge recorded related to long-lived assets.

Goodwill and identifiable intangible assets

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit there is an indication that goodwill impairment exists and a second step must be completed in order to determine the amount of the goodwill impairment, if any that should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

In developing our discounted cash flow analysis, assumptions about future revenues and expenses, capital expenditures and changes in working capital, are based on our annual operating plan and long-term business plan for each of our reporting units. These plans take into consideration numerous factors including historical experience, anticipated future economic conditions, changes in raw material prices and growth expectations for the industries and end markets we participate in. These assumptions are determined over a six year long-term planning period. The six year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2019 are projected to grow at a perpetual growth rate of 3.0%.

Discount rate assumptions for each reporting unit take into consideration our assessment of risks inherent in the future cash flows of the respective reporting unit and our weighted-average cost of capital. We utilized discount rates ranging from 11.5% to 12.5% in determining the discounted cash flows in our fair value analysis.

In estimating fair value using the market approach, we identify a group of comparable publicly-traded companies for each reporting unit that are similar in terms of size and product offering. These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of earnings before interest, taxes, depreciation and amortization ("EBITDA"). We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.

Impairment charge

We completed step one of our annual goodwill impairment evaluation during the fourth quarter of 2013 and 2012 with each reporting unit’s fair value exceeding its carrying value. Accordingly, step two of the impairment analysis was not required for 2013 or 2012.

For the year ended December 31, 2011, we recorded a pre-tax non-cash impairment charge of $200.5 million in Process Technologies as a result of our annual goodwill impairment test. The impairment charge resulted from changes in our forecasts in light of economic conditions and continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include: customer relationships, trade names, proprietary technology, backlog and patents. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. We completed our annual impairment test during the fourth quarter for those identifiable assets not subject to amortization. Impairment charges of $11.0 million and $60.7 million were recorded in 2013 and 2012, respectively, related to trade names. These charges were recorded in Impairment of trade names and goodwill in our Consolidated Statements of Operations and Comprehensive Income (Loss). There was no impairment charge recorded in 2011 for identifiable intangible assets.

The impairment test consists of a comparison of the fair value of the trade name with its carrying value. Fair value is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital. The non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below. The impairment charges recorded in 2013 and 2012 were the result of rebranding strategies implemented in the fourth quarters of 2013 and 2012, respectively.

At December 31, 2013 our goodwill and intangible assets were $6,910.3 million and represented 59% of our total assets. If we experience future declines in sales and operating profit or do not meet our operating forecasts, we may be subject to future impairments. Additionally, changes in assumptions regarding the future performance of our businesses, increases in the discount rate used to determine the discounted cash flows of our businesses or significant declines in our share price or the market as a whole could result in additional impairment indicators. Because of the significance of our goodwill and intangible assets, any future impairment of these assets could have a material adverse effect on our financial results.

Equity and cost method investments

We have investments that are accounted for using the equity method. Our proportionate share of income or losses from investments accounted for under the equity method is recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). We write down or write off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. This requires significant judgment, including assessment of the investees’ financial condition and in certain cases the possibility of subsequent rounds of financing, as well as the investees’ historical and projected results of operations and cash flows. If the actual outcomes for the investees are significantly different from projections, we may incur future charges for the impairment of these investments. Our investment in and loans to equity method investees was $12.2 million and $10.3 million at December 31, 2013 and December 31, 2012, respectively, net of our proportionate share of the results of their operations.

Investments for which we do not have significant influence are accounted for under the cost method. The aggregate balance of these investments was $8.3 million and $6.9 million at December 31, 2013 and December 31, 2012.

Income taxes

We use the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. The pension and other post-retirement benefit costs for company-sponsored benefit plans are determined from actuarial assumptions and methodologies, including discount rates, expected returns on plan assets and health care cost trend rates. These assumptions are updated annually and are disclosed in Note 12.

We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year ("mark-to-market adjustment") and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change, as they may each year. The remaining components of pension expense, primarily service and interest costs and estimated return on plan assets, are recorded on a quarterly basis.

Environmental

We recognize environmental clean-up liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Such liabilities generally are not subject to insurance coverage. The cost of each environmental clean-up is estimated by engineering, financial and legal specialists based on current law. Such estimates are based primarily upon the estimated cost of investigation and remediation required and the likelihood that, where applicable, other potentially responsible parties (“PRPs”) will be able to fulfill their commitments at the sites where Pentair may be jointly and severally liable. The process of estimating environmental clean-up liabilities is complex and dependent primarily on the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, the uncertainty as to what remedy and technology will be required and the outcome of discussions with regulatory agencies and other PRPs at multi-party sites. In future periods, new laws or regulations, advances in clean-up technologies and additional information about the ultimate clean-up remedy that is used could significantly change our estimates. Accruals for environmental liabilities are included in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.

Asbestos Matters

We recognize asbestos-related liabilities on an undiscounted basis when a loss is probable and can be reasonably estimated. Certain of these liabilities are subject to insurance coverage. Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. The process of estimating asbestos-related liabilities and the corresponding insurance recoveries receivable is complex and dependent primarily on our historical claim experience, estimates of potential future claims, our legal strategy for resolving these claims, the availability of insurance coverage, and the solvency and creditworthiness of insurers. On an annual basis, we review, and update as appropriate, such estimated asbestos liabilities and assets and the underlying assumptions.

Accruals for asbestos-related liabilities are included in Other non-current liabilities and the estimated receivable for insurance recoveries are recorded in Other non-current assets in the Consolidated Balance Sheets.

Insurance subsidiary

We insure certain general and product liability, property, workers’ compensation and automobile liability risks through our regulated wholly-owned captive insurance subsidiary, Penwald Insurance Company (“Penwald”). Reserves for policy claims are established based on actuarial projections of ultimate losses. As of December 31, 2013 and 2012, reserves for policy claims were $51.1 million ($13.2 million included in Other current liabilities and $37.9 million included in Other non-current liabilities) and $42.9 million ($13.3 million included in Other current liabilities and $29.6 million included in Other non-current liabilities), respectively.

Share-based compensation

We account for share-based compensation awards on a fair value basis. The estimated grant date fair value of each option award is recognized in income on an accelerated basis over the requisite service period (generally the vesting period). The estimated fair value of each option award is calculated using the Black-Scholes option-pricing model. From time to time, we have elected to modify the terms of the original grant. These modified grants are accounted for as a new award and measured using the fair value method, resulting in the inclusion of additional compensation expense in our Consolidated Statements of Operations and Comprehensive Income (Loss). Restricted share awards and units are recorded as compensation cost on an accelerated basis over the requisite service periods based on the market value on the date of grant.

Earnings (loss) per common share

Basic earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share are computed by dividing net income (loss) attributable to Pentair Ltd. by the weighted-average number of common shares outstanding including the dilutive effects of common share equivalents.

Derivative financial instruments

We recognize all derivatives, including those embedded in other contracts, as either assets or liabilities at fair value in our Consolidated Balance Sheets. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in Accumulated other comprehensive income (loss) (“AOCI”) as a separate component of equity in the Consolidated Balance Sheets and are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affects earnings. If the underlying hedged transaction ceases to exist or if the hedge becomes ineffective, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. For a derivative that is not designated as or does not qualify as a hedge, changes in fair value are reported in earnings immediately.

We use derivative instruments for the purpose of hedging interest rate and currency exposures, which exist as part of ongoing business operations. We do not hold or issue derivative financial instruments for trading or speculative purposes. All other contracts that contain provisions meeting the definition of a derivative also meet the requirements of and have been designated as, normal purchases or sales. Our policy is not to enter into contracts with terms that cannot be designated as normal purchases or sales. From time to time, we may enter into short duration foreign currency contracts to hedge foreign currency risks.

Fair value measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level 1: Valuation is based on observable inputs such as quoted market prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Valuation is based on inputs such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

Foreign currency translation

The financial statements of subsidiaries located outside of the U.S. are measured using the local currency as the functional currency, except for certain corporate entities outside of the U.S. which are measured using USD. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resultant translation adjustments are included in AOCI, a separate component of equity.

New accounting standards

In February 2013, the Financial Accounting Standards Board issued authoritative guidance surrounding the presentation of items reclassified from AOCI to net income. This guidance requires entities to disclose, either in the notes to the consolidated financial statements or parenthetically on the face of the statement that reports comprehensive income, items reclassified out of AOCI and into net income in their entirety and the effect of the reclassification on each affected net income line item. In addition, for AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required disclosures is required. This guidance was effective for fiscal years and interim periods beginning after December 15, 2012. The adoption of this guidance on January 1, 2013 did not impact our financial condition or results of operations. The reclassifications out of AOCI and into net income were not material for the year ended December 31, 2013.

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Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Basic and Diluted Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows:

	Years ended December 31
In millions, except per share data	2013		2012			2011
Net income (loss) attributable to Pentair Ltd.	$	536.8	$	(107.2	)	$	(7.5	)
Weighted average common shares outstanding
Basic	201.1		127.4			98.2
Dilutive impact of stock options and restricted stock awards	3.5		—			—
Diluted	204.6		127.4			98.2
Earnings (loss) per common share attributable to Pentair Ltd.
Basic earnings (loss) per common share	$	2.67	$	(0.84	)	$	(0.08	)
Diluted earnings (loss) per common share	$	2.62	$	(0.84	)	$	(0.08	)
Anti-dilutive stock options excluded from the calculation of diluted earnings per share	0.2		16.0			8.4

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Benefit Plans - Pension Plans with Accumulated Benefit Obligation or Projected Benefit Obligation in Excess of Plan Assets (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
U.S. Pension Plans
Pension plans with a projected benefit obligation in excess of plan assets:
Projected benefit obligation	$ 76.3	$ 158.1
Fair value of plan assets	14.5	85.3
Pension plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation	76.3	87.1
Fair value of plan assets	14.5	15.5
Accumulated benefit obligation	73.1	77.2
Non-US Pension Plans
Pension plans with a projected benefit obligation in excess of plan assets:
Projected benefit obligation	438.2	436.7
Fair value of plan assets	259.0	222.4
Pension plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation	420.4	431.3
Fair value of plan assets	244.5	217.2
Accumulated benefit obligation	$ 411.5	$ 420.0

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income (loss) before income taxes and noncontrolling interest

Income (loss) before income taxes and noncontrolling interest consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Federal (1)	$	328.7	$	39.2		$	(31.5	)
International	397.7		(223.2		)	74.7
Income (loss) before income taxes and noncontrolling interest	$	726.4	$	(184.0	)	$	43.2

(1) As a result of the Merger, “Federal” reflects income (loss) before income taxes and noncontrolling interest for Switzerland in 2013 and 2012 and for the U.S. in 2011.

Provision for Income Taxes

The provision (benefit) for income taxes consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Currently payable
Federal (1)	$	17.4	$	6.5		$	51.2
State	—		—			7.0
International (2)	111.2		61.0			23.9
Total current taxes	128.6		67.5			82.1
Deferred
Federal (1)	18.9		1.3			(26.2		)
International (2)	36.3		(148.2		)	(9.5		)
Total deferred taxes	55.2		(146.9		)	(35.7		)
Total provision (benefit) for income taxes	$	183.8	$	(79.4	)	$	46.4

(1) As a result of the Merger, “Federal” represents Swiss taxes for 2013 and 2012 and U.S. taxes for 2011.

(2) As a result of the Merger, "International" represents non-Swiss taxes for 2013 and 2012 and non-U.S. taxes for 2011

Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate

Reconciliations of the federal statutory income tax rate to our effective tax rate were as follows:

	Years ended December 31
Percentages	2013	2012		2011
Federal statutory income tax rate (1)	7.8	7.8		35.0
Tax effect of international operations (2)	10.5	23.6		(25.3	)
Change in valuation allowances	5.5	—		—
Withholding taxes	1.0	—		—
Interest limitations	0.5	—		—
Non-deductible transaction costs	—	(4.7	)	—
Impact of debt-financing	—	10.8		—
Resolution of tax audits	—	5.6		—
Goodwill	—	—		104.4
Domestic manufacturing deduction	—	—		(8.4	)
State income taxes, net of federal tax benefit	—	—		4.3
All other, net	—	—		(2.7	)
Effective tax rate	25.3	43.1		107.3

(1) As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, the statutory rate reflects the U.S. statutory rate of 35 percent.

(2) As a result of the Merger, the tax effect of international operations for 2013 and 2012 consists of non-Swiss jurisdictions. For 2011, the tax effect of international operations consists of non-U.S. jurisdictions.

Reconciliations of Gross Unrecognized Tax Benefits

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:

	Years ended December 31
In millions	2013			2012			2011
Beginning balance	$	53.4		$	26.5		$	24.3
Gross increases for tax positions in prior periods	12.2			2.2			2.1
Gross decreases for tax positions in prior periods	(0.6		)	(0.6		)	(0.2		)
Gross increases based on tax positions related to the current year	2.7			13.6			3.2
Gross decreases related to settlements with taxing authorities	(5.1		)	(13.2		)	(2.5		)
Reductions due to statute expiration	(1.8		)	(0.4		)	(0.4		)
Gross increases due to acquisitions	—			25.3			—
Ending balance	$	60.8		$	53.4		$	26.5

Deferred Taxes

Deferred taxes were recorded in the Consolidated Balance Sheets as follows:

	December 31
In millions	2013		2012
Other current assets	$	162.0	$	82.6
Other non-current assets	93.6		68.7
Deferred tax liabilities	580.6		421.9
Net deferred tax liabilities	$	325.0	$	270.6

Tax Effects of Major Items Recorded as Deferred Tax Assets and Liabilities

The tax effects of the major items recorded as deferred tax assets and liabilities were as follows:

	December 31
In millions	2013		2012
Deferred tax assets
Accrued liabilities and reserves	$	194.8	$	172.8
Pension and other post-retirement benefits	77.3		73.7
Employee compensation & benefits	84.4		94.5
Tax loss and credit carryforwards	355.0		377.8
Other	—		9.4
Total deferred tax assets	711.5		728.2
Valuation allowance	237.4		174.4
Deferred tax assets, net of valuation allowance	474.1		553.8
Deferred tax liabilities
Property, plant and equipment	60.4		80.3
Goodwill and other intangibles	708.8		744.1
Other liabilities	29.9		—
Total deferred tax liabilities	799.1		824.4
Net deferred tax liabilities	$	325.0	$	270.6

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Acquisitions and Divestitures - Pro Forma Consolidated FInancial Results of Operations (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition [Line Items]
Pro forma net sales	$ 7,409.9	$ 7,326.4
Pro forma net income (loss) attributable to Pentair Ltd.	$ 157.5	$ (47.4)
Diluted earnings (loss) per common share attributable to Pentair Ltd.	$ 0.75	$ (0.23)

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Income Taxes - Income (Loss) Before Income Taxes and Noncontrolling Interest (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Income Taxes [Line Items]
Federal	$ 328.7	[1]	$ 39.2	[1]	$ (31.5)	[1]
International	397.7		(223.2)		74.7
Income (loss) before income taxes and noncontrolling interest	$ 726.4		$ (184.0)		$ 43.2

[1] As a result of the Merger, “Federal” reflects income (loss) before income taxes and noncontrolling interest for Switzerland in 2013 and 2012 and for the U.S. in 2011.

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Net sales	$ 7,479.7		$ 4,416.1		$ 3,456.7
Cost of goods sold	5,006.8		3,146.5		2,383.0
Gross profit	2,472.9		1,269.6		1,073.7
Selling, general and administrative	1,562.1		1,158.4		694.8
Research and development	125.8		93.6		78.2
Impairment of trade names and goodwill	11.0		60.7		200.5
Operating income (loss)	774.0		(43.1)		100.2
Other (income) expense
Gain on sale of businesses, net	(19.7)		0		0
Loss on early extinguishment of debt	0		75.4		0
Equity income of unconsolidated subsidiaries	(1.8)		(2.1)		(1.9)
Interest income	(7.6)		(2.9)		(1.4)
Interest expense	76.7		70.5		60.3
Income (loss) before income taxes and noncontrolling interest	726.4		(184.0)		43.2
Provision (benefit) for income taxes	183.8		(79.4)		46.4
Net income (loss) before noncontrolling interest	542.6		(104.6)		(3.2)
Noncontrolling interest	5.8		2.6		4.3
Net income (loss) attributable to Pentair Ltd.	536.8		(107.2)		(7.5)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	542.6		(104.6)		(3.2)
Changes in cumulative translation adjustment	(29.1)		31.4		(93.7)
Amortization of pension and other post-retirement prior service cost, net of $0.2, $0.2 and $0 tax, respectively	(0.4)		(0.3)		0
Changes in market value of derivative financial instruments, net of $0.7, $3.7 and $2.9 tax, respectively	(0.3)		(3.6)		4.4
Total comprehensive income (loss)	512.8		(77.1)		(92.5)
Less: Comprehensive income (loss) attributable to noncontrolling interest	8.0		4.0		2.2
Comprehensive income (loss) attributable to Pentair Ltd.	$ 504.8		$ (81.1)		$ (94.7)
Earnings (loss) per common share attributable to Pentair Ltd.
Basic	$ 2.67	[1]	$ (0.84)	[1]	$ (0.08)
Diluted	$ 2.62	[1]	$ (0.84)	[1]	$ (0.08)
Weighted average common shares outstanding
Basic (shares)	201.1		127.4		98.2
Diluted (shares)	204.6		127.4		98.2

[1] Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period

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Selected Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information

The following table presents 2013 and 2012 quarterly financial information:

	2013
In millions, except per-share data	First		Second		Third		Fourth		Year
Net sales	$	1,774.5	$	1,963.7	$	1,824.8	$	1,916.7	$	7,479.7
Gross profit	523.8		667.4		637.6		644.1		2,472.9
Operating income	74.3		225.9		240.0		233.8		774.0
Net income before noncontrolling interest	53.3		155.4		174.2		159.7		542.6
Net income attributable to Pentair Ltd.	51.7		154.1		172.8		158.2		536.8
Earnings per common share attributable to Pentair Ltd. (1)
Basic	$	0.25	$	0.76	$	0.87	$	0.80	$	2.67
Diluted	0.25		0.75		0.85		0.78		2.62

	2012
In millions, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	858.2	$	941.5	$	865.5	$	1,750.9		$	4,416.1
Gross profit	280.7		312.1		278.1		398.7			1,269.6
Operating income (loss)	86.5		119.3		55.2		(304.1		)	(43.1		)
Net income (loss) before noncontrolling interest	63.1		74.4		32.6		(274.7		)	(104.6		)
Net income (loss) attributable to Pentair Ltd.	61.7		72.8		31.4		(273.1		)	(107.2		)
Earnings (loss) per common share attributable to Pentair Ltd. (1)
Basic	$	0.63	$	0.73	$	0.31	$	(1.31	)	$	(0.84	)
Diluted	0.62		0.72		0.31		(1.31		)	(0.84		)

(1) Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.

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Share Plans - Stock Option Fair Value Assumptions (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.69%	0.96%	1.51%
Expected dividend yield	2.01%	2.48%	2.32%
Expected share price volatility	36.00%	36.50%	35.50%
Expected term (years)	5 years 8 months 12 days	5 years 8 months 12 days	5 years 6 months
Tyco Flow Control International, Ltd
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield		2.12%
Expected share price volatility		33.00%
Tyco Flow Control International, Ltd | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate		0.02%
Expected term (years)		1 month 6 days
Tyco Flow Control International, Ltd | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate		0.68%
Expected term (years)		5 years 1 month 6 days

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Consolidated Statements Of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities
Net income (loss) before noncontrolling interest	$ 542.6	$ (104.6)	$ (3.2)
Adjustments to reconcile net income (loss) before noncontrolling interest to net cash provided by (used for) operating activities
Equity income of unconsolidated subsidiaries	(1.8)	(2.1)	(1.9)
Depreciation	148.9	87.8	66.2
Amortization	137.2	76.0	41.9
Gain on sale of businesses, net	(19.7)	0	0
Deferred income taxes	55.2	(146.9)	(5.6)
Share-based compensation	31.1	35.8	19.5
Impairment of trade names and goodwill	11.0	60.7	200.5
Loss on early extinguishment of debt	0	75.4	0
Excess tax benefits from share-based compensation	(16.8)	(5.0)	(3.3)
Pension and other post-retirement expense (income)	(31.3)	167.5	84.3
Pension and other post-retirement contributions	(34.0)	(238.0)	(40.3)
Loss (gain) on sale of assets	3.4	(2.3)	0.9
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable	(91.1)	55.7	1.3
Inventories	67.7	125.1	18.3
Other current assets	(5.4)	(6.7)	10.0
Accounts payable	36.4	(62.0)	(24.3)
Employee compensation and benefits	56.7	(81.3)	(20.5)
Other current liabilities	(13.3)	27.2	(8.0)
Other non-current assets and liabilities	38.5	5.7	(15.6)
Net cash provided by (used for) operating activities	915.3	68.0	320.2
Investing activities
Capital expenditures	(170.0)	(94.5)	(73.3)
Proceeds from sale of property and equipment	6.0	5.5	1.3
Proceeds from sale of businesses, net	43.5	0	0
Acquisitions, net of cash acquired	(92.4)	470.5	(733.1)
Other	1.7	(5.9)	(3.0)
Net cash provided by (used for) investing activities	(211.2)	375.6	(808.1)
Financing activities
Net receipts (repayments) of short-term borrowings	0	(3.7)	(1.2)
Net receipts of commercial paper and revolving long-term debt	104.2	253.8	74.5
Proceeds from long-term debt	0.7	594.3	515.3
Repayment of long-term debt	(7.4)	(617.2)	(0.3)
Debt issuance costs	(1.4)	(9.7)	(9.0)
Debt extinguishment costs	0	(74.8)	0
Excess tax benefits from share-based compensation	16.8	5.0	3.3
Shares issued to employees, net of shares withheld	80.0	68.2	13.3
Repurchases of common shares	(715.8)	(334.2)	(12.8)
Dividends paid	(194.2)	(112.4)	(79.5)
Distribution to noncontrolling interest	(2.0)	(1.6)	0
Net cash provided by (used for) financing activities	(719.1)	(232.3)	503.6
Effect of exchange rate changes on cash and cash equivalents	18.8	(0.1)	(11.7)
Change in cash and cash equivalents	3.8	211.2	4.0
Cash and cash equivalents, beginning of year	261.3	50.1	46.1
Cash and cash equivalents, end of year	$ 265.1	$ 261.3	$ 50.1

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Share Plans - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended															12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Stock Options	Dec. 31, 2012 Stock Options	Dec. 31, 2011 Stock Options	Dec. 31, 2013 Restricted Stock Units	Dec. 31, 2012 Restricted Stock Units	Dec. 31, 2011 Restricted Stock Units	Dec. 31, 2013 Stock Appreciation Rights (SARs)	Dec. 31, 2013 Maximum Restricted Stock Units	Dec. 31, 2013 Minimum Restricted Stock Units	Sep. 29, 2012 2012 Stock and Incentive Plan	Sep. 29, 2012 2012 Stock and Incentive Plan Active Employees	Sep. 29, 2012 2012 Stock and Incentive Plan Non Employees	Dec. 31, 2012 Tyco Flow Control International, Ltd
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				3 years						3 years	4 years	3 years
Expiration period				10 years
Share-based compensation expense
Share-based compensation	$ 31.1	$ 35.8	$ 19.5	$ 10.9	$ 11.6	$ 8.9	$ 20.2	$ 24.2	$ 10.6							$ 13.5
Share Incentive Plans
Number of shares authorized for issuance													9.0
Replacement equity-based awards issued													109.0	39.8	69.2
Fair value of options granted
Weighted average grant date fair value of options granted	$ 13.96	$ 9.63	$ 9.98													$ 11.76
Total intrinsic value of options exercised	68.9	41.6	10.9
Unrecognized compensation cost related to stock options	5.3
Cash received from option exercises	102.3	91.6	14.7
Tax benefit realized for tax deductions from option exercises	23.5	12.2	4.1
Restricted shares and restricted stock units
Unrecognized compensation cost related to restricted stock units	25.3
Total fair value of shares vested	23.4	58.0	10.2
Tax benefit realized for tax deductions from option exercises							$ 7.2	$ 18.8	$ 3.6
Weighted average period to recognize compensation cost				1 year 4 months 25 days			2 years 1 month 6 days

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Goodwill and Other Identifiable Intangible Assets - Changes in Carrying Amount of Goodwill by Segment (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Goodwill [Roll Forward]
Beginning Balance	$ 5,111.0	$ 2,273.9
Acquisitions/ divestitures	(3.4)	2,822.7
Foreign currency translation/other	26.6	14.4
Ending Balance	5,134.2	5,111.0
Valves & Controls
Goodwill [Roll Forward]
Beginning Balance	1,511.6	0
Acquisitions/ divestitures	0	1,511.6
Foreign currency translation/other	0	0
Ending Balance	1,511.6	1,511.6
Process Technologies
Goodwill [Roll Forward]
Beginning Balance	1,500.4	1,396.9
Acquisitions/ divestitures	7.6	111.0
Foreign currency translation/other	16.5	(7.5)
Ending Balance	1,524.5	1,500.4
Flow Technologies
Goodwill [Roll Forward]
Beginning Balance	937.3	597.9
Acquisitions/ divestitures	(5.7)	318.5
Foreign currency translation/other	8.5	20.9
Ending Balance	940.1	937.3
Technical Solutions
Goodwill [Roll Forward]
Beginning Balance	1,161.7	279.1
Acquisitions/ divestitures	(5.3)	881.6
Foreign currency translation/other	1.6	1.0
Ending Balance	$ 1,158.0	$ 1,161.7

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Segment Information - Geographic Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Geographic Information [Line Items]
Net sales	$ 1,916.7	$ 1,824.8	$ 1,963.7	$ 1,774.5	$ 1,750.9	$ 865.5	$ 941.5	$ 858.2	$ 7,479.7	$ 4,416.1	$ 3,456.7
Long-lived assets	1,170.0				1,188.2				1,170.0	1,188.2	387.5
U.S.
Geographic Information [Line Items]
Net sales									3,431.3	2,624.3	2,336.8
Long-lived assets	365.4				372.8				365.4	372.8	195.6
Europe
Geographic Information [Line Items]
Net sales									1,912.0	912.6	701.9
Long-lived assets	462.4				394.2				462.4	394.2	140.3
Australia
Geographic Information [Line Items]
Net sales									761.2	213.2	52.3
Long-lived assets	145.7				170.5				145.7	170.5	0.5
Asia and other
Geographic Information [Line Items]
Net sales									1,375.2	666.0	365.7
Long-lived assets	$ 196.5				$ 250.7				$ 196.5	$ 250.7	$ 51.1

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Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2013

Supplemental Balance Sheet Information

	December 31
In millions	2013		2012
Inventories
Raw materials and supplies	$	557.2	$	615.1
Work-in-process	166.5		207.6
Finished goods	519.6		511.2
Total inventories	$	1,243.3	$	1,333.9
Other current assets
Cost in excess of billings	$	100.8	$	124.4
Prepaid expenses	103.9		89.0
Deferred income taxes	162.0		82.6
Other current assets	22.7		38.5
Total other current assets	$	389.4	$	334.5
Property, plant and equipment, net
Land and land improvements	$	251.3	$	248.6
Buildings and leasehold improvements	516.8		474.4
Machinery and equipment	1,208.0		1,073.0
Construction in progress	72.6		102.9
Total property, plant and equipment	2,048.7		1,898.9
Accumulated depreciation and amortization	878.7		710.7
Total property, plant and equipment, net	$	1,170.0	$	1,188.2
Other non-current assets
Asbestos-related insurance receivable	$	119.6	$	131.0
Deferred income taxes	93.6		68.7
Other non-current assets	217.7		252.6
Total other non-current assets	$	430.9	$	452.3
Other current liabilities
Deferred revenue and customer deposits	$	92.4	$	127.2
Dividends payable	98.7		95.0
Billings in excess of cost	38.1		61.1
Accrued warranty	56.6		54.3
Other current liabilities	378.2		440.7
Total other current liabilities	$	664.0	$	778.3
Other non-current liabilities
Asbestos-related liabilities	$	254.7	$	278.9
Taxes payable	48.9		50.5
Other non-current liabilities	153.8		165.7
Total other non-current liabilities	$	457.4	$	495.1

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Debt - Additional Information (Detail) (USD $)	12 Months Ended				1 Months Ended			1 Months Ended					12 Months Ended	1 Months Ended		1 Months Ended												1 Months Ended					12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Sep. 29, 2012	Oct. 04, 2012 Pentair Middle East Holding S.a.r.l.	Dec. 31, 2013 CPT	Dec. 31, 2012 CPT	Sep. 29, 2012 Credit Facility	Dec. 31, 2013 Credit Facility	Apr. 30, 2011 Credit Facility	Dec. 31, 2013 Other Credit Facilities	Dec. 31, 2013 Minimum	Dec. 31, 2013 Maximum	Oct. 30, 2012 Senior Notes	Oct. 31, 2012 Senior Notes	Dec. 31, 2012 Senior Notes, 5.000% Due 2021	Dec. 31, 2013 Senior Notes, 5.000% Due 2021	May 31, 2011 Senior Notes, 5.000% Due 2021	Dec. 31, 2013 Senior Notes, 5.000% Due 2021 Fixed Rate	Nov. 30, 2012 Senior Notes 3.50% due 2015	Dec. 31, 2013 Senior Notes 3.50% due 2015 Fixed Rate	Nov. 30, 2012 Senior Notes 2.650% due 2019	Dec. 31, 2013 Senior Notes 2.650% due 2019 Fixed Rate	Oct. 31, 2012 Senior Notes 5.65% Fixed Rate	Oct. 31, 2012 Senior Notes 5.65% Fixed Rate Minimum	Oct. 31, 2012 Senior Notes 5.65% Fixed Rate Maximum	Oct. 31, 2012 Senior Notes 1.05% Due 2013 Floating Rate	Oct. 30, 2012 Senior Notes 1.05% Due 2013 Senior Notes	Sep. 29, 2012 Senior Notes 3.150% due 2022	Dec. 31, 2013 Senior Notes 3.150% due 2022 Fixed Rate	Sep. 29, 2012 Senior Notes 1.875 % due 2017	Dec. 31, 2013 Senior Notes 1.875 % due 2017 Fixed Rate	Dec. 31, 2013 Subsidiary Issuer	Dec. 31, 2012 Subsidiary Issuer	Dec. 31, 2013 Subsidiary Issuer Senior Notes, 5.000% Due 2021	Dec. 31, 2013 Subsidiary Issuer Senior Notes 3.50% due 2015	Dec. 31, 2013 Subsidiary Issuer Senior Notes 2.650% due 2019	Dec. 31, 2013 Subsidiary Issuer Senior Notes 3.150% due 2022	Dec. 31, 2013 Subsidiary Issuer Senior Notes 1.875 % due 2017
Debt Disclosure [Line Items]
Ownership percentage																																	100.00%
Aggregate principal amount																	$ 373,000,000	$ 500,000,000		$ 350,000,000		$ 250,000,000							$ 550,000,000		$ 350,000,000
Debt, interest rate																	5.00%			1.35%		2.65%		5.65%					3.15%		1.875%				5.00%	1.35%	2.65%	3.15%	1.875%
Debt, maturity year																	2021	2021	2021	2015	2015	2019	2019		2013	2017	2013		2022	2022	2017	2017			2021	2015	2019	2022	2017
Debt transaction cost paid	0	74,800,000	0													5,600,000																		0
Aggregate principal amount																	127,000,000
Outstanding aggregate principal																								400,000,000
Floating rate notes																											1.05%
Redemption value																												100,000,000
Whole premium amount															65,800,000
Terminate related interest rate swaps														3,400,000
Unamortized deferred financing costs															600,000
Debt instrument proceeds used to repay amounts of other debt				435,000,000						105,000,000
Credit facility maximum borrowing capacity								1,450,000,000		700,000,000	86,700,000
Previous revolving credit facility								700,000,000
Credit facility expiration date								Sep. 30, 2017
Facility Fees, minimum								0.0010
Facility Fees, maximum								0.0030
Credit facility interest rate, before the addition of LIBOR										1.75%
Commercial paper outstanding	528,900,000	424,700,000
Remaining availability under Credit Facility									921,100,000
Percentage Of Ownership Interest Acquired					25.00%
Cash paid					100,000,000
Cost and expenses incurred in connection with acquisition	8,200,000	57,300,000	8,200,000										40,000,000
Debt agreement financial covenant, leverage ratio												3.50	3.00
Compliance with debt agreement financial covenants	we were in compliance with all financial covenants in our debt agreements.
Line of credit facility, amount outstanding									0		0
Capital lease obligation cost						41,700,000	40,500,000
Accumulated amortization						7,600,000	6,000,000
Future minimum lease payments	23,300,000
Imputed interest	$ 1,800,000

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Segment Information

12 Months Ended

Dec. 31, 2013

Segment Information

Segment Information

We classify our operations into the following business segments based primarily on types of products offered and markets served:

• Valves & Controls — The Valves & Controls segment designs, manufactures, markets and services valves, fittings, automation and controls and actuators for the energy and industrial verticals and operates as a stand-alone Global Business Unit ("GBU").

• Process Technologies — The Process Technologies segment designs, manufactures, markets and services innovative water system products and solutions to meet filtration, separation and fluid process management challenges in food and beverage, water, wastewater, swimming pools and aquaculture applications. The Filtration & Process and Aquatic Systems GBUs comprise this segment.

• Flow Technologies — The Flow Technologies segment designs, manufactures and markets products and services designed for the transfer and flow of clean water, wastewater and a variety of industrial applications. The Flow Technologies segment operates as a stand-alone GBU.

• Technical Solutions — The Technical Solutions segment designs, manufactures, markets and services products that guard and protect some of the world’s most sensitive electronics and electronic equipment, as well as heat management solutions designed to provide thermal protection to temperature sensitive fluid applications. The Technical Solutions segment operates as a stand-alone GBU.

• Other — Other is primarily composed of unallocated corporate expenses, our captive insurance subsidiary, intermediate finance companies, merger-related costs and divested operations.

The accounting policies of our reporting segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on the sales and operating income of the segments and use a variety of ratios to measure performance. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

Financial information by reportable segment is included in the following summary:

	2013			2012			2011			2013			2012			2011
In millions	Net sales									Operating income (loss)
Valves & Controls	$	2,469.2		$	548.6		$	—		$	161.4		$	(76.8	)	$	—
Process Technologies	1,765.9			1,521.1			1,345.9			243.2			132.5			(40.2		)
Flow Technologies	1,618.5			1,136.7			1,042.7			149.7			35.5			97.9
Technical Solutions	1,663.4			1,236.4			1,086.8			285.0			165.0			185.8
Other	(37.3		)	(26.7		)	(18.7		)	(65.3		)	(299.3		)	(143.3		)
Consolidated	$	7,479.7		$	4,416.1		$	3,456.7		$	774.0		$	(43.1	)	$	100.2
	Identifiable assets (1)									Depreciation
Valves & Controls	$	4,204.0		$	4,369.6		$	—		$	64.0		$	15.1		$	—
Process Technologies	2,707.7			2,670.2			2,476.2			29.2			29.2			27.1
Flow Technologies	2,050.4			2,112.4			1,316.0			22.1			16.6			15.5
Technical Solutions	2,093.4			2,154.2			651.7			23.6			18.9			17.7
Other	687.8			576.3			142.4			10.0			8.0			5.9
Consolidated	$	11,743.3		$	11,882.7		$	4,586.3		$	148.9		$	87.8		$	66.2
	Amortization									Capital expenditures
Valves & Controls	$	69.3		$	21.7		$	—		$	67.2		$	21.9		$	—
Process Technologies	26.0			24.4			21.8			45.2			31.2			30.6
Flow Technologies	16.7			13.6			17.8			26.2			18.7			18.8
Technical Solutions	25.2			16.2			2.3			16.2			13.5			15.6
Other	—			0.1			—			15.2			9.2			8.3
Consolidated	$	137.2		$	76.0		$	41.9		$	170.0		$	94.5		$	73.3

(1) All cash and cash equivalents are included in “Other.”

The following tables present certain geographic information:

	2013		2012		2011		2013		2012		2011
In millions	Net sales						Long-lived assets
U.S.	$	3,431.3	$	2,624.3	$	2,336.8	$	365.4	$	372.8	$	195.6
Europe	1,912.0		912.6		701.9		462.4		394.2		140.3
Australia	761.2		213.2		52.3		145.7		170.5		0.5
Asia and other	1,375.2		666.0		365.7		196.5		250.7		51.1
Consolidated	$	7,479.7	$	4,416.1	$	3,456.7	$	1,170.0	$	1,188.2	$	387.5

Net sales are based on the location in which the sale originated. Long-lived assets represent property, plant and equipment, net of related depreciation.

We offer a broad array of products and systems to multiple markets and customers for which we do not have the information systems to track revenues by primary product category. However, our net sales by segment are representative of our sales by major product category. We sell our products through various distribution channels including wholesale and retail distributors, original equipment manufacturers and home centers. No customer accounted for more than 10% of net sales in 2013, 2012, or 2011.

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2013

Supplemental Disclosure of Cash Flow Information

The following table summarizes supplemental cash flow information:

	Years ended December 31
In millions	2013		2012		2011
Cash paid for interest, net	$	69.4	$	66.7	$	54.5
Cash paid for income taxes, net	92.9		82.2		64.4

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Segment Information - Financial Information By Reportable Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended										12 Months Ended
	Dec. 31, 2013		Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012		Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Segment Reporting Information [Line Items]
Net sales	$ 1,916.7		$ 1,824.8	$ 1,963.7	$ 1,774.5	$ 1,750.9		$ 865.5	$ 941.5	$ 858.2	$ 7,479.7		$ 4,416.1		$ 3,456.7
Operating income (loss)	233.8		240.0	225.9	74.3	(304.1)		55.2	119.3	86.5	774.0		(43.1)		100.2
Identifiable assets (1)	11,743.3	[1]				11,882.7	[1]				11,743.3	[1]	11,882.7	[1]	4,586.3	[1]
Depreciation											148.9		87.8		66.2
Amortization											137.2		76.0		41.9
Capital expenditures											170.0		94.5		73.3
Valves & Controls
Segment Reporting Information [Line Items]
Net sales											2,469.2		548.6		0
Operating income (loss)											161.4		(76.8)		0
Identifiable assets (1)	4,204.0	[1]				4,369.6	[1]				4,204.0	[1]	4,369.6	[1]	0	[1]
Depreciation											64.0		15.1		0
Amortization											69.3		21.7		0
Capital expenditures											67.2		21.9		0
Process Technologies
Segment Reporting Information [Line Items]
Net sales											1,765.9		1,521.1		1,345.9
Operating income (loss)											243.2		132.5		(40.2)
Identifiable assets (1)	2,707.7	[1]				2,670.2	[1]				2,707.7	[1]	2,670.2	[1]	2,476.2	[1]
Depreciation											29.2		29.2		27.1
Amortization											26.0		24.4		21.8
Capital expenditures											45.2		31.2		30.6
Flow Technologies
Segment Reporting Information [Line Items]
Net sales											1,618.5		1,136.7		1,042.7
Operating income (loss)											149.7		35.5		97.9
Identifiable assets (1)	2,050.4	[1]				2,112.4	[1]				2,050.4	[1]	2,112.4	[1]	1,316.0	[1]
Depreciation											22.1		16.6		15.5
Amortization											16.7		13.6		17.8
Capital expenditures											26.2		18.7		18.8
Technical Solutions
Segment Reporting Information [Line Items]
Net sales											1,663.4		1,236.4		1,086.8
Operating income (loss)											285.0		165.0		185.8
Identifiable assets (1)	2,093.4	[1]				2,154.2	[1]				2,093.4	[1]	2,154.2	[1]	651.7	[1]
Depreciation											23.6		18.9		17.7
Amortization											25.2		16.2		2.3
Capital expenditures											16.2		13.5		15.6
All Other Segments
Segment Reporting Information [Line Items]
Net sales											(37.3)		(26.7)		(18.7)
Operating income (loss)											(65.3)		(299.3)		(143.3)
Identifiable assets (1)	687.8	[1]				576.3	[1]				687.8	[1]	576.3	[1]	142.4	[1]
Depreciation											10.0		8.0		5.9
Amortization											0		0.1		0
Capital expenditures											$ 15.2		$ 9.2		$ 8.3

[1] All cash and cash equivalents are included in “Other.”

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Selected Quarterly Data

12 Months Ended

Dec. 31, 2013

Selected Quarterly Data

Selected Quarterly Data (Unaudited)

The following table presents 2013 and 2012 quarterly financial information:

	2013
In millions, except per-share data	First		Second		Third		Fourth		Year
Net sales	$	1,774.5	$	1,963.7	$	1,824.8	$	1,916.7	$	7,479.7
Gross profit	523.8		667.4		637.6		644.1		2,472.9
Operating income	74.3		225.9		240.0		233.8		774.0
Net income before noncontrolling interest	53.3		155.4		174.2		159.7		542.6
Net income attributable to Pentair Ltd.	51.7		154.1		172.8		158.2		536.8
Earnings per common share attributable to Pentair Ltd. (1)
Basic	$	0.25	$	0.76	$	0.87	$	0.80	$	2.67
Diluted	0.25		0.75		0.85		0.78		2.62

	2012
In millions, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	858.2	$	941.5	$	865.5	$	1,750.9		$	4,416.1
Gross profit	280.7		312.1		278.1		398.7			1,269.6
Operating income (loss)	86.5		119.3		55.2		(304.1		)	(43.1		)
Net income (loss) before noncontrolling interest	63.1		74.4		32.6		(274.7		)	(104.6		)
Net income (loss) attributable to Pentair Ltd.	61.7		72.8		31.4		(273.1		)	(107.2		)
Earnings (loss) per common share attributable to Pentair Ltd. (1)
Basic	$	0.63	$	0.73	$	0.31	$	(1.31	)	$	(0.84	)
Diluted	0.62		0.72		0.31		(1.31		)	(0.84		)

(1) Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.

Fourth quarter 2013 includes an increase in operating income of $63.2 million related to "mark-to-market" actuarial gains on pension and other post-retirement benefit plans for 2013. Fourth quarter 2013 also includes decreases in operating income due to restructuring costs of $61.6 million and impairment charges of $11.0 million related to trade name intangibles.

First quarter 2013 includes a decrease in operating income of $76.8 million due to inventory step-up and customer backlog related to the Merger and restructuring costs of $27.4 million.

Third quarter 2012 includes a decrease in operating income of $52.7 million due to costs and expenses related to the Merger.

Fourth quarter 2012 includes the results of the operations acquired in the Merger. Flow Control’s net sales and net loss for the period from the acquisition date to December 31, 2012 were $886.5 million and $117.0 million, respectively. Fourth quarter 2012 also includes decreases in operating income related to "mark-to-market" actuarial losses on pension and other post-retirement benefit plans of $146.3 million, inventory step-up and customer backlog related to the Merger of $179.6 million, loss on early extinguishment of debt of $75.4 million, impairment charges of $60.7 million related to trade name intangibles, restructuring costs of $55.3 million and acquisition costs and expenses of $12.0 million.

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Derivatives and Financial Instruments - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Apr. 30, 2011 Interest Rate Swap	Dec. 31, 2013 Interest Rate Swap	Dec. 31, 2012 Interest Rate Swap	Aug. 31, 2007 August 2007 Interest Rate Swap Agreement	Sep. 30, 2005 September 2005 Interest Rate Swap Agreement	Dec. 31, 2013 September 2005 Interest Rate Swap Agreement	Dec. 31, 2012 September 2005 Interest Rate Swap Agreement
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Outstanding interest rate swap arrangements	$ 0	$ 0	$ 0
Notional amount of interest rate swap agreement					400,000,000				100,000,000
Effective date of the fixed rate swap									Apr. 25, 2006
Fixed interest rate paid									4.68%
Swap agreement expiration								2012-05	2013-07
Effective fixed rate paid on debt									5.28%
Interest rate spread over LIBOR									0.60%
Loss on early extinguishment of debt	75,400,000	0	75,400,000	0						3,300,000
Location of the swap on the consolidated balance sheets		Derivative gains and losses included in AOCI								Other non-current liabilities	Other non-current liabilities
Incremental expense resulting from interest rate swaps		5,300,000	9,300,000
Average swap interest rate					3.65%
Cost of expiration (termination)					11,000,000
Derivative instrument contractual life					10 years
Unrealized net loss						8,100,000	9,200,000
Outstanding foreign currency derivative contract	$ 163,700,000	$ 143,000,000	$ 163,700,000

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Financial Statements of Parent Company Guarantor - Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Condensed Financial Statements, Captions [Line Items]
Net sales	$ 1,916.7	$ 1,824.8	$ 1,963.7	$ 1,774.5	$ 1,750.9	$ 865.5	$ 941.5	$ 858.2	$ 7,479.7	$ 4,416.1	$ 3,456.7
Cost of goods sold									5,006.8	3,146.5	2,383.0
Gross profit	644.1	637.6	667.4	523.8	398.7	278.1	312.1	280.7	2,472.9	1,269.6	1,073.7
Selling, general and administrative									1,562.1	1,158.4	694.8
Research and development									125.8	93.6	78.2
Impairment of trade names and goodwill									11.0	60.7	200.5
Operating income (loss)	233.8	240.0	225.9	74.3	(304.1)	55.2	119.3	86.5	774.0	(43.1)	100.2
Loss (earnings) from investment in subsidiaries									0	0
Gain on sale of businesses, net									(19.7)	0	0
Other (income) expense:
Loss on early extinguishment of debt					75.4				0	75.4	0
Equity income of unconsolidated subsidiaries									(1.8)	(2.1)	(1.9)
Interest income									(7.6)	(2.9)
Interest expense									76.7	70.5	60.3
Income (loss) before income taxes and noncontrolling interest									726.4	(184.0)	43.2
Provision (benefit) for income taxes									183.8	(79.4)	46.4
Net income (loss) before noncontrolling interest	159.7	174.2	155.4	53.3	(274.7)	32.6	74.4	63.1	542.6	(104.6)	(3.2)
Noncontrolling interest									5.8	2.6	4.3
Net income (loss) attributable to Pentair Ltd.	158.2	172.8	154.1	51.7	(273.1)	31.4	72.8	61.7	536.8	(107.2)	(7.5)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest									542.6	(104.6)
Changes in cumulative translation adjustment									(29.1)	31.4	(93.7)
Amortization of pension and other post-retirement prior service cost									(0.4)	(0.3)	0
Changes in market value of derivative financial instruments									(0.3)	(3.6)	4.4
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest									512.8	(77.1)	(92.5)
Less: Comprehensive income (loss) attributable to noncontrolling interest									8.0	4.0	2.2
Comprehensive income (loss) attributable to Pentair Ltd.									504.8	(81.1)	(94.7)
Pentair Ltd.
Condensed Financial Statements, Captions [Line Items]
Net sales									0	0
Cost of goods sold									0	0
Gross profit									0	0
Selling, general and administrative									21.0	5.0
Research and development									0	0
Impairment of trade names and goodwill									0	0
Operating income (loss)									(21.0)	(5.0)
Loss (earnings) from investment in subsidiaries									(564.1)	101.4
Gain on sale of businesses, net									0
Other (income) expense:
Loss on early extinguishment of debt										0
Equity income of unconsolidated subsidiaries									0	0
Interest income									0	0
Interest expense									5.6	0.1
Income (loss) before income taxes and noncontrolling interest									537.5	(106.5)
Provision (benefit) for income taxes									0.7	0.7
Net income (loss) before noncontrolling interest									536.8	(107.2)
Noncontrolling interest									0	0
Net income (loss) attributable to Pentair Ltd.									536.8	(107.2)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest									536.8	(107.2)
Changes in cumulative translation adjustment									(31.3)	30.0
Amortization of pension and other post-retirement prior service cost									(0.4)	(0.3)
Changes in market value of derivative financial instruments									(0.3)	(3.6)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest									504.8	(81.1)
Less: Comprehensive income (loss) attributable to noncontrolling interest									0	0
Comprehensive income (loss) attributable to Pentair Ltd.									504.8	(81.1)
Subsidiary Issuer
Condensed Financial Statements, Captions [Line Items]
Net sales									0	0
Cost of goods sold									0	0
Gross profit									0	0
Selling, general and administrative									13.3	(3.8)
Research and development									0	0
Impairment of trade names and goodwill									0	0
Operating income (loss)									(13.3)	3.8
Loss (earnings) from investment in subsidiaries									(533.7)	102.3
Gain on sale of businesses, net									0
Other (income) expense:
Loss on early extinguishment of debt										0
Equity income of unconsolidated subsidiaries									0	0
Interest income									(99.2)	(9.2)
Interest expense									106.0	10.2
Income (loss) before income taxes and noncontrolling interest									513.6	(99.5)
Provision (benefit) for income taxes									1.4	1.1
Net income (loss) before noncontrolling interest									512.2	(100.6)
Noncontrolling interest									0	0
Net income (loss) attributable to Pentair Ltd.									512.2	(100.6)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest									512.2	(100.6)
Changes in cumulative translation adjustment									(31.3)	30.0
Amortization of pension and other post-retirement prior service cost									(0.4)	(0.3)
Changes in market value of derivative financial instruments									(0.3)	(3.6)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest									480.2	(74.5)
Less: Comprehensive income (loss) attributable to noncontrolling interest									0	0
Comprehensive income (loss) attributable to Pentair Ltd.									480.2	(74.5)
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net sales									7,479.7	4,416.1
Cost of goods sold									5,006.8	3,146.5
Gross profit									2,472.9	1,269.6
Selling, general and administrative									1,527.8	1,157.2
Research and development									125.8	93.6
Impairment of trade names and goodwill									11.0	60.7
Operating income (loss)									808.3	(41.9)
Loss (earnings) from investment in subsidiaries									0	0
Gain on sale of businesses, net									(19.7)
Other (income) expense:
Loss on early extinguishment of debt										75.4
Equity income of unconsolidated subsidiaries									(1.8)	(2.1)
Interest income									(56.6)	(2.9)
Interest expense									113.3	69.4
Income (loss) before income taxes and noncontrolling interest									773.1	(181.7)
Provision (benefit) for income taxes									181.7	(81.2)
Net income (loss) before noncontrolling interest									591.4	(100.5)
Noncontrolling interest									5.8	2.6
Net income (loss) attributable to Pentair Ltd.									585.6	(103.1)
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest									591.4	(100.5)
Changes in cumulative translation adjustment									(29.1)	31.4
Amortization of pension and other post-retirement prior service cost									(0.4)	(0.3)
Changes in market value of derivative financial instruments									(0.3)	(3.6)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest									561.6	(73.0)
Less: Comprehensive income (loss) attributable to noncontrolling interest									8.0	4.0
Comprehensive income (loss) attributable to Pentair Ltd.									553.6	(77.0)
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net sales									0	0
Cost of goods sold									0	0
Gross profit									0	0
Selling, general and administrative									0	0
Research and development									0	0
Impairment of trade names and goodwill									0	0
Operating income (loss)									0	0
Loss (earnings) from investment in subsidiaries									1,097.8	(203.7)
Gain on sale of businesses, net									0
Other (income) expense:
Loss on early extinguishment of debt										0
Equity income of unconsolidated subsidiaries									0	0
Interest income									148.2	9.2
Interest expense									(148.2)	(9.2)
Income (loss) before income taxes and noncontrolling interest									(1,097.8)	203.7
Provision (benefit) for income taxes									0	0
Net income (loss) before noncontrolling interest									(1,097.8)	203.7
Noncontrolling interest									0	0
Net income (loss) attributable to Pentair Ltd.									(1,097.8)	203.7
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest									(1,097.8)	203.7
Changes in cumulative translation adjustment									62.6	(60.0)
Amortization of pension and other post-retirement prior service cost									0.8	0.6
Changes in market value of derivative financial instruments									0.6	7.2
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest									(1,033.8)	151.5
Less: Comprehensive income (loss) attributable to noncontrolling interest									0	0
Comprehensive income (loss) attributable to Pentair Ltd.									$ (1,033.8)	$ 151.5

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Consolidated Statements Of Changes In Equity (USD $) In Millions	Total	Common shares	Treasury shares	Capital contribution reserve	Retained earnings	Accumulated other comprehensive income (loss)	Total Pentair Ltd.	Noncontrolling interest
Balance at Dec. 31, 2010	$ 2,205.0	$ 47.4	$ 0	$ 443.5	$ 1,552.8	$ 49.5	$ 2,093.2	$ 111.8
Balance (in shares) at Dec. 31, 2010		98.4	0
Net income (loss)	(3.2)				(7.5)		(7.5)	4.3
Other comprehensive income (loss), net of tax	(89.3)					(87.2)	(87.2)	(2.1)
Tax benefit of share-based compensation	3.9			3.9			3.9
Dividends declared	(79.5)				(79.5)		(79.5)
Share repurchase (in shares)		(0.4)
Share repurchase	(12.8)	(0.2)		(12.6)			(12.8)
Exercise of options, net of shares tendered for payment (in shares)		0.7
Exercise of options, net of shares tendered for payment	14.7	0.3		14.4			14.7
Issuance of restricted shares, net of cancellations (in shares)		0
Issuance of restricted shares, net of cancellations	1.5	0		1.5			1.5
Shares surrendered by employees to pay taxes (in shares)		(0.1)
Shares surrendered by employees to pay taxes	(2.8)	0		(2.8)			(2.8)
Share-based compensation	9.9			9.9			9.9
Balance at Dec. 31, 2011	2,047.4	47.5	0	457.8	1,465.8	(37.7)	1,933.4	114.0
Balance (in shares) at Dec. 31, 2011		98.6	0
Net income (loss)	(104.6)				(107.2)		(107.2)	2.6
Other comprehensive income (loss), net of tax	27.5					26.1	26.1	1.4
Tax benefit of share-based compensation	5.6			5.6			5.6
Dividends declared	(207.4)			(141.1)	(66.3)		(207.4)
Distribution to noncontrolling interest	(1.6)							(1.6)
Issuance of shares related to the Merger (in shares)		113.6	(2.7)
Issuance of shares related to the Merger	4,931.7	65.5	(119.6)	4,985.8			4,931.7
Share repurchase (in shares)			(7.3)
Share repurchase	(334.2)		(334.2)	0			(334.2)
Exercise of options, net of shares tendered for payment (in shares)		0.7	2.3
Exercise of options, net of shares tendered for payment	90.2	0.4	97.6	(7.8)			90.2
Issuance of restricted shares, net of cancellations (in shares)		0.2	1.2
Issuance of restricted shares, net of cancellations	19.0	0.1	59.8	(40.9)			19.0
Shares surrendered by employees to pay taxes (in shares)		(0.1)	(0.4)
Shares surrendered by employees to pay taxes	(21.9)	0	(19.1)	(2.8)			(21.9)
Share-based compensation	35.8			35.8			35.8
Balance at Dec. 31, 2012	6,487.5	113.5	(315.5)	5,292.4	1,292.3	(11.6)	6,371.1	116.4
Balance (in shares) at Dec. 31, 2012		213.0	(6.9)
Net income (loss)	542.6				536.8		536.8	5.8
Other comprehensive income (loss), net of tax	(29.8)					(32.0)	(32.0)	2.2
Tax benefit of share-based compensation	22.6			22.6			22.6
Dividends declared	(198.5)			(198.5)			(198.5)
Distribution to noncontrolling interest	(2.0)							(2.0)
Share repurchase (in shares)			(12.3)
Share repurchase	(715.8)		(715.8)				(715.8)
Exercise of options, net of shares tendered for payment (in shares)	2.9		3.0
Exercise of options, net of shares tendered for payment	96.2		131.8	(35.6)			96.2
Issuance of restricted shares, net of cancellations (in shares)			0.9
Issuance of restricted shares, net of cancellations	0		37.0	(37.0)			0
Shares surrendered by employees to pay taxes (in shares)			(0.3)
Shares surrendered by employees to pay taxes	(16.2)		(12.6)	(3.6)			(16.2)
Share-based compensation	31.1			31.1			31.1
Balance at Dec. 31, 2013	$ 6,217.7	$ 113.5	$ (875.1)	$ 5,071.4	$ 1,829.1	$ (43.6)	$ 6,095.3	$ 122.4
Balance (in shares) at Dec. 31, 2013		213.0	(15.6)

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Amortization of pension and other post-retirement prior service cost, tax	$ 0.2	$ 0.2	$ 0
Changes in market value of derivative financial instruments, tax	$ 0.7	$ 3.7	$ 2.9

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Derivatives and Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivatives and Financial Instruments

Derivatives and Financial Instruments

Derivative financial instruments

We are exposed to market risk related to changes in foreign currency exchange rates and interest rates on our floating rate indebtedness. To manage the volatility related to these exposures, we periodically enter into a variety of derivative financial instruments. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency rates and interest rates. The derivative contracts contain credit risk to the extent that our bank counterparties may be unable to meet the terms of the agreements. The amount of such credit risk is generally limited to the unrealized gains, if any, in such contracts. Such risk is minimized by limiting those counterparties to major financial institutions of high credit quality.

Interest rate swaps

During 2012 and 2011, we used floating to fixed rate interest rate swaps to mitigate our exposure to future changes in interest rates related to our floating rate indebtedness. We designated these interest rate swap arrangements as cash flow hedges. As a result, changes in the fair value of the interest rate swaps were recorded in AOCI on the Consolidated Balance Sheets throughout the contractual term of each of the interest rate swap arrangements.

During the year ended December 31, 2012, all of our interest rate swaps expired or were terminated and, as a result, we had no outstanding interest rate swap arrangements at December 31, 2012 or December 31, 2013.

In September 2005, we entered into a $100.0 million interest rate swap agreement with several major financial institutions to exchange variable rate interest payment obligations for fixed rate obligations without the exchange of the underlying principal amounts in order to manage interest rate exposures. The effective date of the fixed rate swap was April 25, 2006. The swap agreement has a fixed interest rate of 4.68% and was set to expire in July 2013. The fixed interest rate of 4.68% plus the 0.60% interest rate spread over LIBOR results in an effective fixed interest rate of 5.28%. This swap was terminated in October 2012. A loss of $3.3 million was recognized upon termination and was recorded in Loss on early extinguishment of debt in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012.

Derivative gains and losses included in AOCI were reclassified into earnings at the time the related interest expense was recognized or the settlement of the related commitment occurred. Interest expense from swaps was $5.3 million and $9.3 million in 2012 and 2011, respectively, and was recorded in Interest expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In April 2011, as part of our planned debt issuance to fund the CPT acquisition, we entered into interest rate swap contracts to hedge movement in interest rates through the expected date of closing for a portion of the expected fixed rate debt offering. The swaps had a notional amount of $400.0 million with an average interest rate of 3.65%. In May 2011, upon the sale of the 2021 Notes, the swaps were terminated at a cost of $11.0 million. Because we used the contracts to hedge future interest payments, this was recorded in AOCI in the Consolidated Balance Sheets and will be amortized as interest expense over the 10 year life of the 2021 Notes. The ending unrealized net loss in AOCI at December 31, 2013 and 2012 was $8.1 million and $9.2 million, respectively.

Foreign currency contracts

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative financial instruments. Our objective in holding these derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates. The majority of our foreign currency contracts have an original maturity date of less than one year. At December 31, 2013 and 2012, we had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $143.0 million and $163.7 million, respectively. The impact of these contracts on the Consolidated Statements of Operations and Comprehensive Income (Loss) is not material for any period presented.

Gains or losses on foreign currency contracts designated as hedges are reclassified out of AOCI and into Selling, general and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) upon settlement. Such reclassifications during 2013, 2012 and 2011 were not material.

Fair value of financial instruments

The following methods were used to estimate the fair values of each class of financial instrument:

• short-term financial instruments (cash and cash equivalents, accounts and notes receivable, accounts and notes payable and variable-rate debt) — recorded amount approximates fair value because of the short maturity period;

• long-term fixed-rate debt, including current maturities — fair value is based on market quotes available for issuance of debt with similar terms, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance; and

• interest rate swaps and foreign currency contract agreements — fair values are determined through the use of models that consider various assumptions, including time value, yield curves, as well as other relevant economic measures, which are inputs that are classified as Level 2 in the valuation hierarchy defined by the accounting guidance.

The recorded amounts and estimated fair values of total debt at December 31 were as follows:

	2013				2012
In millions	Recorded Amount		Fair Value		Recorded Amount		Fair Value
Variable rate debt	$	528.9	$	528.9	$	427.7	$	427.7
Fixed rate debt	2,026.2		2,002.2		2,029.7		2,081.3
Total debt	$	2,555.1	$	2,531.1	$	2,457.4	$	2,509.0

Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows:

Recurring fair value measurements	December 31, 2013
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	3.6		$	—	$	3.6
Foreign currency contract liabilities	—		(0.9		)	—		(0.9		)
Deferred compensation plan assets (1)	32.1		—			—		32.1
Total recurring fair value measurements	$	32.1	$	2.7		$	—	$	34.8
Nonrecurring fair value measurements(2)

Recurring fair value measurements	December 31, 2012
In millions	Level 1		Level 2			Level 3		Total
Foreign currency contract assets	$	—	$	2.9		$	—	$	2.9
Foreign currency contract liabilities	—		(0.5		)	—		(0.5		)
Deferred compensation plan assets (1)	22.4		—			—		22.4
Total recurring fair value measurements	$	22.4	$	2.4		$	—	$	24.8
Nonrecurring fair value measurements
Trade name intangibles (2)	$	—	$	—		$	63.7	$	63.7

(1) Deferred compensation plan assets include mutual funds and cash equivalents for payment of certain non-qualified benefits for retired, terminated and active employees. The fair value of these assets was based on quoted market prices in active markets.

(2) In the fourth quarter of 2013 and 2012, we completed our annual intangible assets impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $11.0 million and $60.7 million for trade names intangibles in 2013 and 2012, respectively. The impairment charge in 2013 reduced the fair value of the impacted trade name intangibles to $0. The fair value of trade names is measured using the relief-from-royalty method. This method assumes the trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.

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Commitments and Contingencies - Future Minimum Lease Commitments Under Non-Cancelable Operating Leases (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Operating Leased Assets [Line Items]
2014	$ 54.5
2015	39.8
2016	29.4
2017	21.4
2018	13.4
Thereafter	23.4
Total	181.9
Minimum lease payments
Operating Leased Assets [Line Items]
2014	55.5
2015	40.7
2016	30.1
2017	21.5
2018	13.5
Thereafter	23.5
Total	184.8
Minimum sublease rentals
Operating Leased Assets [Line Items]
2014	(1.0)
2015	(0.9)
2016	(0.7)
2017	(0.1)
2018	(0.1)
Thereafter	(0.1)
Total	$ (2.9)

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Shareholder's Equity - Additional Information (Detail)	12 Months Ended												12 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2013 CHF	Dec. 31, 2012 CHF	Dec. 31, 2013 Exercise of Warrants and Conversion of Notes	Dec. 31, 2013 Stockholder Rights Plan	Jun. 28, 2014 Dividends payable per share USD ($)	Mar. 29, 2014 Dividends payable per share USD ($)	Dec. 31, 2013 Dividends payable per share USD ($)	Sep. 28, 2013 Dividends payable per share USD ($)	Apr. 29, 2013 Dividends payable per share USD ($)	Dec. 31, 2013 December 2011 Share Repurchase Program USD ($)	Dec. 31, 2013 September 2012 Share Repurchase Program USD ($)	Dec. 31, 2013 2012 Share Repurchase Programs [Member] USD ($)	Dec. 31, 2013 October 2012 Share Repurchase Program USD ($)	Dec. 31, 2013 December 2013 Share Repurchase Program USD ($)
Shareholders Equity
Common stock, shares authorized	213,000,000	213,000,000
Common stock, par value (CHF per share)				0.50	0.50
Maximum authorized share increase	106,500,000.0					81,500,000.0	25,000,000.0
Authorized amount to repurchase shares of common stock													$ 25,000,000	$ 400,000,000	$ 1,200,000,000	$ 800,000,000	$ 1,000,000,000
Common stock shares repurchased, shares															(19,600,000)
Common stock amount repurchased													0		(1,050,000,000)		0
Remaining authorized repurchase amount															150,000,000
Authorization expiry date													Sep. 28, 2012			Dec. 31, 2015	Dec. 31, 2016
Dividends payable amount per share								$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 1.00
Dividends payable	$ 98,700,000	$ 95,000,000
Dividends paid per common share	$ 0.96	$ 0.88	$ 0.80

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Benefit Plans - Reconciliation of Level 3 Assets (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Reconciliation of Level 3 Assets [Roll Forward]
Beginning balance	$ 18.3	$ 20.0
Net realized and unrealized gains (losses)	1.9	1.1
Net issuances and settlements	(1.2)	(2.8)
Net transfers into (out of) level 3	0	0
Ending balance	19.0	18.3
Other Investments
Reconciliation of Level 3 Assets [Roll Forward]
Beginning balance	18.3	19.0
Net realized and unrealized gains (losses)	1.9	1.1
Net issuances and settlements	(1.2)	(1.8)
Net transfers into (out of) level 3	0	0
Ending balance	19.0	18.3
Fixed Income Investments
Reconciliation of Level 3 Assets [Roll Forward]
Beginning balance		1.0
Net realized and unrealized gains (losses)		0
Net issuances and settlements		(1.0)
Net transfers into (out of) level 3		0
Ending balance		$ 0

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Jun. 29, 2013
Document Information [Line Items]
Entity Registrant Name	PENTAIR LTD
Entity Central Index Key	0000077360
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Amendment Flag	false
Trading Symbol	PNR
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Common Stock, Shares Outstanding	197,356,157
Entity Public Float		$ 11,254,968,822

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes

Income Taxes

Income (loss) before income taxes and noncontrolling interest consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Federal (1)	$	328.7	$	39.2		$	(31.5	)
International	397.7		(223.2		)	74.7
Income (loss) before income taxes and noncontrolling interest	$	726.4	$	(184.0	)	$	43.2

(1) As a result of the Merger, “Federal” reflects income (loss) before income taxes and noncontrolling interest for Switzerland in 2013 and 2012 and for the U.S. in 2011.

The provision (benefit) for income taxes consisted of the following:

	Years ended December 31
In millions	2013		2012			2011
Currently payable
Federal (1)	$	17.4	$	6.5		$	51.2
State	—		—			7.0
International (2)	111.2		61.0			23.9
Total current taxes	128.6		67.5			82.1
Deferred
Federal (1)	18.9		1.3			(26.2		)
International (2)	36.3		(148.2		)	(9.5		)
Total deferred taxes	55.2		(146.9		)	(35.7		)
Total provision (benefit) for income taxes	$	183.8	$	(79.4	)	$	46.4

(1) As a result of the Merger, “Federal” represents Swiss taxes for 2013 and 2012 and U.S. taxes for 2011.

(2) As a result of the Merger, "International" represents non-Swiss taxes for 2013 and 2012 and non-U.S. taxes for 2011.

Reconciliations of the federal statutory income tax rate to our effective tax rate were as follows:

	Years ended December 31
Percentages	2013	2012		2011
Federal statutory income tax rate (1)	7.8	7.8		35.0
Tax effect of international operations (2)	10.5	23.6		(25.3	)
Change in valuation allowances	5.5	—		—
Withholding taxes	1.0	—		—
Interest limitations	0.5	—		—
Non-deductible transaction costs	—	(4.7	)	—
Impact of debt-financing	—	10.8		—
Resolution of tax audits	—	5.6		—
Goodwill	—	—		104.4
Domestic manufacturing deduction	—	—		(8.4	)
State income taxes, net of federal tax benefit	—	—		4.3
All other, net	—	—		(2.7	)
Effective tax rate	25.3	43.1		107.3

(1) As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, the statutory rate reflects the U.S. statutory rate of 35 percent.

(2) As a result of the Merger, the tax effect of international operations for 2013 and 2012 consists of non-Swiss jurisdictions. For 2011, the tax effect of international operations consists of non-U.S. jurisdictions.

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:

	Years ended December 31
In millions	2013			2012			2011
Beginning balance	$	53.4		$	26.5		$	24.3
Gross increases for tax positions in prior periods	12.2			2.2			2.1
Gross decreases for tax positions in prior periods	(0.6		)	(0.6		)	(0.2		)
Gross increases based on tax positions related to the current year	2.7			13.6			3.2
Gross decreases related to settlements with taxing authorities	(5.1		)	(13.2		)	(2.5		)
Reductions due to statute expiration	(1.8		)	(0.4		)	(0.4		)
Gross increases due to acquisitions	—			25.3			—
Ending balance	$	60.8		$	53.4		$	26.5

Included in the $60.8 million of total gross unrecognized tax benefits as of December 31, 2013 was $58.5 million of tax benefits that, if recognized, would impact the effective tax rate. It is reasonably possible that the gross unrecognized tax benefits as of December 31, 2013 may decrease by a range of $0 to $32.6 million during 2014, primarily as a result of the resolution of non-Swiss examinations, including U.S. federal and state examinations, and the expiration of various statutes of limitations.

The determination of annual income tax expense takes into consideration amounts which may be needed to cover exposures for open tax years. The Internal Revenue Service (“IRS”) has examined the Pentair, Inc. U.S. federal income tax returns through 2010 with no material adjustments. A number of tax periods from 2003 to present are under audit by tax authorities in various jurisdictions, including France, Germany, India and Italy. We anticipate that several of these audits may be concluded in the foreseeable future. We are also subject to the 2012 Tax Sharing Agreement, discussed below, which generally applies to pre-Distribution Tyco tax periods beginning in 1997 which remain subject to audit by the IRS.

We record penalties and interest related to unrecognized tax benefits in Provision (benefit) for income taxes and Interest expense, respectively. As of December 31, 2013 and 2012, we have liabilities of $0.9 million and $1.3 million, respectively, for the possible payment of penalties and $8.9 million and $8.2 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated Balance Sheets.

Deferred taxes in the amount of $16.2 million have been provided on undistributed earnings of certain subsidiaries. Taxes have not been provided on undistributed earnings of subsidiaries where it is our intention to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. It is not practicable to estimate the amount of tax that might be payable if such earnings were to be remitted.

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which we received a tax deduction but the tax impact has not yet been recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss)).

Deferred taxes were recorded in the Consolidated Balance Sheets as follows:

	December 31
In millions	2013		2012
Other current assets	$	162.0	$	82.6
Other non-current assets	93.6		68.7
Deferred tax liabilities	580.6		421.9
Net deferred tax liabilities	$	325.0	$	270.6

The tax effects of the major items recorded as deferred tax assets and liabilities were as follows:

	December 31
In millions	2013		2012
Deferred tax assets
Accrued liabilities and reserves	$	194.8	$	172.8
Pension and other post-retirement benefits	77.3		73.7
Employee compensation & benefits	84.4		94.5
Tax loss and credit carryforwards	355.0		377.8
Other	—		9.4
Total deferred tax assets	711.5		728.2
Valuation allowance	237.4		174.4
Deferred tax assets, net of valuation allowance	474.1		553.8
Deferred tax liabilities
Property, plant and equipment	60.4		80.3
Goodwill and other intangibles	708.8		744.1
Other liabilities	29.9		—
Total deferred tax liabilities	799.1		824.4
Net deferred tax liabilities	$	325.0	$	270.6

As of December 31, 2013, tax loss carryforwards of $1,258.1 million were available to offset future income. A valuation allowance of $208.1 million exists for deferred income tax benefits related to the tax loss carryforwards which may not be realized. We believe sufficient taxable income will be generated in the respective jurisdictions to allow us to fully recover the remainder of the tax losses. The tax losses relate to Non-U.S. carryforwards of $979.3 million which are subject to varying expiration periods and will begin to expire in 2014. In addition, there were $144.9 million of U.S. federal and $133.9 million of state tax loss carryforwards as of December 31, 2013, which will expire in future years through 2033.

On September 13, 2013, the U.S. Treasury and the IRS issued final regulations regarding the deduction and capitalization of expenditures related to tangible property. The final regulations under Internal Revenue Code Sections 162, 167 and 263(a) apply to amounts paid to acquire, produce, or improve tangible property as well as dispositions of such property and are generally effective for tax years beginning on or after January 1, 2014. We have evaluated these regulations and determined they will not have a material impact on our consolidated results of operations, cash flows or financial position.

Tax sharing agreement and other income tax matters

In connection with the Distribution, we entered into a tax sharing agreement (the “2012 Tax Sharing Agreement”) with Tyco and The ADT Corporation (“ADT”), which governs the rights and obligations of Tyco, ADT and us for certain pre-Distribution tax liabilities, including Tyco’s obligations under a separate tax sharing agreement (the “2007 Tax Sharing Agreement”) that Tyco, Covidien Ltd. (“Covidien”) and TE Connectivity Ltd. (“TE Connectivity”) entered into in connection with the 2007 distributions of Covidien and TE Connectivity by Tyco (the “2007 Separation”). The 2007 Tax Sharing Agreement governs the rights and obligations of Tyco, Covidien and TE Connectivity with respect to certain pre-2007 Separation tax liabilities and certain tax liabilities arising in connection with the 2007 Separation. More specifically, Tyco, Covidien and TE Connectivity share 27%, 42% and 31%, respectively, of income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and TE Connectivity's U.S. and certain non-U.S. 2007 and prior income tax returns.

The 2012 Tax Sharing Agreement provides that we, Tyco and ADT will share (i) certain pre-Distribution income tax liabilities that arise from adjustments made by tax authorities to our, Tyco’s and ADT’s U.S. income tax returns, and (ii) payments required to be made by Tyco in respect to the 2007 Tax Sharing Agreement (collectively, “Shared Tax Liabilities”). Tyco is responsible for the first $500 million of Shared Tax Liabilities. We and ADT will share 42% and 58%, respectively, of the next $225 million of Shared Tax Liabilities. We, ADT and Tyco will share 20%, 27.5% and 52.5%, respectively, of Shared Tax Liabilities above $725 million. Under these tax sharing agreements, the amount ultimately assessed would have to be in excess of $1.85 billion before we would be required to pay any of the amounts assessed.

In the event the Distribution, the spin-off of ADT, or certain internal transactions undertaken in connection therewith were determined to be taxable as a result of actions taken after the Distribution by us, ADT or Tyco, the party responsible for such failure would be responsible for all taxes imposed on us, ADT or Tyco as a result thereof. Taxes resulting from the determination that the Distribution, the spin-off of ADT, or any internal transaction is taxable are referred to herein as “Distribution Taxes.” If such failure is not the result of actions taken after the Distribution by us, ADT or Tyco, then we, ADT and Tyco would be responsible for any Distribution Taxes imposed on us, ADT or Tyco as a result of such determination in the same manner and in the same proportions as the Shared Tax Liabilities. ADT will have sole responsibility for any income tax liability arising as a result of Tyco’s acquisition of Brink’s Home Security Holdings, Inc. (“BHS”) in May 2010, including any liability of BHS under the tax sharing agreement between BHS and The Brink’s Company dated October 31, 2008 (collectively, the “BHS Tax Liabilities”). Costs and expenses associated with the management of Shared Tax Liabilities, Distribution Taxes and BHS Tax Liabilities will generally be shared 20% by us, 27.5% by ADT and 52.5% by Tyco. We are responsible for all of our own taxes that are not shared pursuant to the 2012 Tax Sharing Agreement’s sharing formulae. In addition, Tyco and ADT are responsible for their tax liabilities that are not subject to the 2012 Tax Sharing Agreement’s sharing formula.

The 2012 Tax Sharing Agreement also provides that, if any party were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party’s fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the 2012 Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, we could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, we may be obligated to pay amounts in excess of our agreed-upon share of our, Tyco’s and ADT’s tax liabilities.

On July 1, 2013, Tyco announced that the Internal Revenue Service (“IRS”) issued Notices of Deficiency (“Tyco IRS Notices”) to Tyco asserting that several of Tyco's former U.S. subsidiaries collectively owe additional taxes in the aggregate amount of $883.3 million plus penalties of $154 million based on audits of the 1997 through 2000 tax years of Tyco and its subsidiaries as they existed at that time. These amounts exclude interest and do not reflect the impact on subsequent periods if the IRS challenge to Tyco's tax filings as described below is ultimately successful. If the IRS should successfully assert its position, our share of the collective liability, if any, would be determined pursuant to the 2007 Tax Sharing Agreement and the 2012 Tax Sharing Agreement. Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments.

As we have previously disclosed, in connection with U.S. federal tax audits of Tyco and its subsidiaries, the IRS has previously raised issues and proposed tax adjustments for periods beginning with the 1997 tax year. The adjustments now asserted by the IRS under the Tyco IRS Notices primarily relate to the treatment of certain intercompany debt transactions. The IRS has asserted in the Tyco IRS Notices that substantially all of the intercompany debt originated during the 1997 - 2000 period should not be treated as debt for U.S. federal income tax purposes, and has therefore disallowed interest and related deductions recognized associated with that intercompany debt on the U.S. income tax returns for those periods totaling approximately $2.9 billion. If the IRS is successful in asserting its claim, it would have an adverse impact on interest deductions related to the same Tyco intercompany debt in subsequent time periods, totaling approximately $6.6 billion, which Tyco has advised us that it expects the IRS to disallow. Under the 2012 Tax Sharing Agreement, Tyco has the right to administer, control, and settle all U.S. income tax audits for periods prior to and including the Distribution. As mentioned above, Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments. Tyco has advised us that it strongly disagrees with the IRS position and believes (i) it has meritorious defenses for the respective tax filings, (ii) the IRS positions with regard to these matters are inconsistent with applicable tax laws and Treasury regulations, and (iii) the previously reported taxes for the years in question are appropriate.

No payments with respect to these matters would be required until the dispute is resolved in the U.S. Tax Court, which Tyco has advised us, based on the experience of other companies, could take several years. However, the ultimate resolution of these matters is uncertain, and to the extent we are responsible for any Shared Tax Liability or Distribution Tax, including if the IRS were to prevail with respect to the matter set forth above, there could be a material adverse impact on our financial condition, results of operations, or cash flows in future reporting periods.

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Benefit Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Pension and other post-retirement plans
Pension plan contribution	$ 30.8	$ 235.2
Obligations and funded status
Defined accumulated benefit obligation plans	772.2	804.2
Expected rate of return on plan assets	3.75%	7.50%	8.00%
Pension plan assets yielded returns	(9.90%)	10.80%	7.80%
Pension plans assets
Asset allocation	92.00%
Savings plan
401(k) plan description	Under the 401(k) plan, eligible U.S. employees may voluntarily contribute a percentage of their eligible compensation. We match contributions made by employees who meet certain eligibility and service requirements. Our matching contribution is 100% of eligible employee contributions for the first 1% of eligible compensation and 50% of the next 5% of eligible compensation.
Annual eligible compensation percentage	1.50%
Participants are 100% vested in employer match	ter 3 years of service.On December 31, 2013, the Flow 401(k) plan merged into the 401(k) plan and all employees covered by the Flow 401(k) plan became fully vested in their Flow 401(k) plan employer matching contributions and all future employer matching contributions will be made under the 401(k) plan matching contribution formula.
Other retirement compensation
Other accrued retirement compensation	53.3	52.6
Maximum
Pension plans assets
Expected contribution	37.0
Minimum
Pension plans assets
Expected contribution	32.0
Pension benefits
Pension and other post-retirement plans
Benefits paid	331.0
U.S. Pension Plans
Pension and other post-retirement plans
Benefits paid	20.4	358.9
Pension plan contribution	190.0
Obligations and funded status
Discount rate	4.51%	3.67%	5.05%
Non-US Pension Plans
Pension and other post-retirement plans
Benefits paid	18.2	6.2
Non-US Pension Plans | Maximum
Obligations and funded status
Discount rate	0.50%	0.50%	0.75%
Expected rate of return on plan assets	6.50%	4.60%	5.20%
Non-US Pension Plans | Minimum
Obligations and funded status
Discount rate	5.00%	4.50%	5.00%
Expected rate of return on plan assets	1.00%	1.00%	0.25%
First 1%
Savings plan
Matching contribution to eligible employee contributions	100.00%
Percent of eligible compensation	1.00%
Next 5%
Savings plan
Matching contribution to eligible employee contributions	50.00%
Percent of eligible compensation	5.00%
Flow 401(K) Plan
Savings plan
Matching contribution to eligible employee contributions	500.00%
Percent of eligible compensation	1.00%
Years of service	3 years
Matching contribution to eligible employee contributions	100.00%
401(k) plan and ESOP combined expenese	$ 26.8	$ 19.7	$ 15.8
An Additional 1% Match on Flow 401(K) Plan
Savings plan
Additional matching contribution to eligible employee contributions	1.00%
An Additional 1% Match on Flow 401(K) Plan | Maximum
Savings plan
Years of service	19 years
An Additional 1% Match on Flow 401(K) Plan | Minimum
Savings plan
Years of service	10 years
An Additional 2% Match on Flow 401(K) Plan
Savings plan
Additional matching contribution to eligible employee contributions	2.00%
An Additional 2% Match on Flow 401(K) Plan | Maximum
Savings plan
Years of service	24 years
An Additional 2% Match on Flow 401(K) Plan | Minimum
Savings plan
Years of service	20 years
An Additional 3% Match on Flow 401(K) Plan
Savings plan
Additional matching contribution to eligible employee contributions	3.00%
An Additional 3% Match on Flow 401(K) Plan | Maximum
Savings plan
Years of service	29 years
An Additional 3% Match on Flow 401(K) Plan | Minimum
Savings plan
Years of service	25 years
An Additional 4% Match on Flow 401(K) Plan
Savings plan
Additional matching contribution to eligible employee contributions	4.00%
An Additional 4% Match on Flow 401(K) Plan | Minimum
Savings plan
Years of service	30 years

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Benefit Plans - Plan Assets Using Fair Value Methodologies (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 572.3	$ 575.2
Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7.7	27.4
Fixed income | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	262.2	164.3
Fixed income | US Treasury Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	75.5	69.4
Fixed income | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	8.7	23.4
Fixed income | Other securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	34.1	28.1
Equity securities | U S Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7.3	6.7
Equity securities | U S Large Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	43.5	89.0
Equity securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	101.9	89.8
Equity securities | US Long/Short Equity Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0.6	47.6
Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	30.8	29.5
Fair Value, Inputs, Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1.8	6.2
Fair Value, Inputs, Level 1 | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1.8	6.2
Fair Value, Inputs, Level 1 | Equity securities | U S Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		0
Fair Value, Inputs, Level 1 | Equity securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		0
Fair Value, Inputs, Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	551.5	550.7
Fair Value, Inputs, Level 2 | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	5.9	21.2
Fair Value, Inputs, Level 2 | Fixed income | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	262.2	164.3
Fair Value, Inputs, Level 2 | Fixed income | US Treasury Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	75.5	69.4
Fair Value, Inputs, Level 2 | Fixed income | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	8.7	23.4
Fair Value, Inputs, Level 2 | Fixed income | Other securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	34.1	28.1
Fair Value, Inputs, Level 2 | Equity securities | U S Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7.3	6.7
Fair Value, Inputs, Level 2 | Equity securities | U S Large Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	43.5	89.0
Fair Value, Inputs, Level 2 | Equity securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	101.9	89.8
Fair Value, Inputs, Level 2 | Equity securities | US Long/Short Equity Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0.6	47.6
Fair Value, Inputs, Level 2 | Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11.8	11.2
Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	19.0	18.3
Fair Value, Inputs, Level 3 | Fixed income | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		0
Fair Value, Inputs, Level 3 | Fixed income | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		0
Fair Value, Inputs, Level 3 | Fixed income | Other securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		0
Fair Value, Inputs, Level 3 | Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 19.0	$ 18.3

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Dec. 31, 2013		Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 265.1		$ 261.3
Accounts and notes receivable, net of allowances of $115.1 and $37.5, respectively	1,334.3		1,274.6
Inventories	1,243.3		1,333.9
Other current assets	389.4		334.5
Total current assets	3,232.1		3,204.3
Property, plant and equipment, net	1,170.0		1,188.2
Other assets
Goodwill	5,134.2		5,111.0
Intangibles, net	1,776.1		1,926.9
Other non-current assets	430.9		452.3
Total other assets	7,341.2		7,490.2
Total assets	11,743.3	[1]	11,882.7	[1]
Current liabilities
Current maturities of long-term debt and short-term borrowings	2.5		3.1
Accounts payable	596.6		567.0
Employee compensation and benefits	347.1		296.7
Other current liabilities	664.0		778.3
Total current liabilities	1,610.2		1,645.1
Other liabilities
Long-term debt	2,552.6		2,454.3
Pension and other post-retirement compensation and benefits	324.8		378.8
Deferred tax liabilities	580.6		421.9
Other non-current liabilities	457.4		495.1
Total liabilities	5,525.6		5,395.2
Equity
Common shares CHF 0.50 par value, 213.0 authorized and issued at December 31, 2013 and December 31,2012, respectively	113.5		113.5
Common shares held in treasury, 15.6 and 6.9 shares at December 31, 2013 and December 31, 2012, respectively	(875.1)		(315.5)
Capital contribution reserve	5,071.4		5,292.4
Retained earnings	1,829.1		1,292.3
Accumulated other comprehensive income (loss)	(43.6)		(11.6)
Shareholders’ equity attributable to Pentair Ltd.	6,095.3		6,371.1
Noncontrolling interest	122.4		116.4
Total equity	6,217.7		6,487.5
Total liabilities and equity	$ 11,743.3		$ 11,882.7

[1] All cash and cash equivalents are included in “Other.”

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Goodwill and Other Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Other Identifiable Intangible Assets

Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the year ended December 31, 2013 and December 31, 2012 by reportable segment were as follows:

In millions	December 31, 2012		Acquisitions/ divestitures			Foreign currency translation/other		December 31, 2013
Valves & Controls	$	1,511.6	$	—		$	—	$	1,511.6
Process Technologies	1,500.4		7.6			16.5		1,524.5
Flow Technologies	937.3		(5.7		)	8.5		940.1
Technical Solutions	1,161.7		(5.3		)	1.6		1,158.0
Total goodwill	$	5,111.0	$	(3.4	)	$	26.6	$	5,134.2

In millions	December 31, 2011		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2012
Valves & Controls	$	—	$	1,511.6	$	—		$	1,511.6
Process Technologies	1,396.9		111.0		(7.5		)	1,500.4
Flow Technologies	597.9		318.5		20.9			937.3
Technical Solutions	279.1		881.6		1.0			1,161.7
Total goodwill	$	2,273.9	$	2,822.7	$	14.4		$	5,111.0

In 2011, we recorded an impairment charge of $200.5 million in Process Technologies. Accumulated goodwill impairment losses were $200.5 million as of December 31, 2013 and December 31, 2012.

Identifiable intangible assets consisted of the following at December 31:

	2013							2012
In millions	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net
Finite-life intangibles
Customer relationships	$	1,286.8	$	(243.8	)	$	1,043.0	$	1,291.5	$	(152.8	)	$	1,138.7
Trade names	2.1		(0.9		)	1.2		1.5		(0.7		)	0.8
Proprietary technology and patents	264.6		(80.1		)	184.5		263.7		(57.7		)	206.0
Backlog	2.6		(1.2		)	1.4		43.7		(18.2		)	25.5
Total finite-life intangibles	1,556.1		(326.0		)	1,230.1		1,600.4		(229.4		)	1,371.0
Indefinite-life intangibles
Trade names	546.0		—			546.0		555.9		—			555.9
Total intangibles	$	2,102.1	$	(326.0	)	$	1,776.1	$	2,156.3	$	(229.4	)	$	1,926.9

Identifiable intangible asset amortization expense in 2013, 2012 and 2011 was $137.2 million, $76.0 million and $41.9 million, respectively.

In 2013 we recorded an impairment charge for trade name intangible assets of $11.0 million in Technical Solutions. In 2012 we recorded an impairment charge for trade name intangible assets of $23.2 million, $25.9 million and $11.6 million in Process Technologies, Flow Technologies and Technical Solutions, respectively.

Estimated future amortization expense for identifiable intangible assets during the next five years is as follows:

In millions	2014		2015		2016		2017		2018
Estimated amortization expense	$	115.9	$	115.5	$	114.4	$	112.9	$	110.2

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Restructuring

12 Months Ended

Dec. 31, 2013

Restructuring

Restructuring

During 2013, 2012 and 2011, we initiated certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. The 2013 initiatives included the reduction in hourly and salaried headcount of approximately 1,150 employees, which included 500 in Valves & Controls, 150 in Process Technologies, 200 in Flow Technologies and 300 in Technical Solutions. The 2012 initiatives included the reduction in hourly and salaried headcount of approximately 1,000 employees, which included 300 in Valves & Controls, 200 in Process Technologies, 300 in Flow Technologies and 200 in Technical Solutions. The 2011 initiatives included the reduction in hourly and salaried headcount of approximately 210 employees, which included 60 in Process Technologies, 100 in Flow Technologies and 50 in Technical Solutions.

Restructuring related costs included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss) included costs for severance and other restructuring costs as follows:

	Years ended December 31
In millions	2013		2012		2011
Severance and related costs	$	87.3	$	61.6	$	11.5
Other	26.2		5.3		1.5
Total restructuring costs	$	113.5	$	66.9	$	13.0

Other restructuring costs primarily consist of asset impairment and various contract termination costs.

Total restructuring costs related to Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions were $51.0 million, $8.8 million, $24.3 million and $19.4 million, respectively, for the year ended December 31, 2013. In addition, $10.0 million of restructuring costs were incurred during 2013 related to corporate restructuring initiatives. Total restructuring costs related to Valves & Controls, Process Technologies, Flow Technologies and Technical Solutions were $5.1 million, $23.9 million, $25.2 million and $12.7 million, respectively, for the year ended December 31, 2012. Total restructuring costs related to Process Technologies, Flow Technologies and Technical Solutions were $3.9 million, $7.1 million and $2.0 million, respectively, for the year ended December 31, 2011.

We assumed $20.1 million of restructuring accruals in 2012 from actions initiated by Flow Control prior to the Merger relating to employee severance, facility exit and other restructuring costs. Activity in the restructuring accrual recorded in Other current liabilities and Employee compensation and benefits in the Consolidated Balance Sheets is summarized as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	59.6		$	12.8
Acquired	—			20.1
Costs incurred	87.3			61.6
Cash payments and other	(68.3		)	(34.9		)
Ending balance	$	78.6		$	59.6

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies

Commitments and Contingencies

Operating lease commitments

Net rental expense under operating leases was as follows:

	Years ended December 31
In millions	2013			2012			2011
Gross rental expense	$	78.7		$	45.3		$	39.9
Sublease rental income	(0.9		)	(0.5		)	(0.5		)
Net rental expense	$	77.8		$	44.8		$	39.4

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, machinery, equipment and vehicles as of December 31, 2013 were as follows:

In millions	2014			2015			2016			2017			2018			Thereafter			Total
Minimum lease payments	$	55.5		$	40.7		$	30.1		$	21.5		$	13.5		$	23.5		$	184.8
Minimum sublease rentals	(1.0		)	(0.9		)	(0.7		)	(0.1		)	(0.1		)	(0.1		)	(2.9		)
Net future minimum lease commitments	$	54.5		$	39.8		$	29.4		$	21.4		$	13.4		$	23.4		$	181.9

Asbestos Matters

Our subsidiaries and numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While we have observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. Our historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, we cannot predict the extent to which we will be successful in resolving lawsuits in the future.

As of December 31, 2013, there were approximately 2,000 lawsuits pending against our subsidiaries. A lawsuit might include several claims, and we have approximately 2,200 claims outstanding as of December 31, 2013. This amount is not adjusted for claims that are not actively being prosecuted, identified incorrect defendants, or duplicated other actions, which would ultimately reflect our current estimate of the number of viable claims made against us, our affiliates, or entities for which we assumed responsibility in connection with acquisitions or divestitures. In addition, the amount does not include certain claims pending against third parties for which we have been provided an indemnification.

Periodically, we perform an analysis with the assistance of outside counsel and other experts to update our estimated asbestos-related assets and liabilities. Our estimate of the liability and corresponding insurance recovery for pending and future claims and defense costs is based on our historical claim experience and estimates of the number and resolution cost of potential future claims that may be filed. Our legal strategy for resolving claims also impacts these estimates.

Our estimate of asbestos-related insurance recoveries represents estimated amounts due to us for previously paid and settled claims and the probable reimbursements relating to our estimated liability for pending and future claims. In determining the amount of insurance recoverable, we consider a number of factors, including available insurance, allocation methodologies and the solvency and creditworthiness of insurers.

Our estimated liability for asbestos-related claims was $254.7 million and $278.9 million as of December 31, 2013 and 2012, respectively, and was recorded in Other non-current liabilities in the Consolidated Balance Sheets for pending and future claims and related defense costs. Our estimated receivable for insurance recoveries was $119.6 million and $131.0 million, respectively, at December 31, 2013 and 2012 and was recorded in Other non-current assets in the Consolidated Balance Sheets.

The amounts recorded by us for asbestos-related liabilities and insurance-related assets are based on our strategies for resolving our asbestos claims and currently available information as well as estimates and assumptions. Key variables and assumptions include the number and type of new claims filed each year, the average cost of resolution of claims, the resolution of coverage issues with insurance carriers, the amounts of insurance and the related solvency risk with respect to our insurance carriers, and the indemnifications we have provided to third parties. Furthermore, predictions with respect to these variables are subject to greater uncertainty in the latter portion of the projection period. Other factors that may affect our liability and cash payments for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries. As a result, actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in our calculations vary significantly from actual results.

Environmental Matters

We are involved in or have retained responsibility and potential liability for environmental obligations and legal proceedings related to our current business and, including pursuant to certain indemnification obligations, related to certain formerly owned businesses. We are responsible, or alleged to be responsible, for ongoing environmental investigation and/or remediation of sites in several countries. These sites are in various stages of investigation and/or remediation and at some of these sites our liability is considered de minimis. We received notification from the U.S. Environmental Protection Agency and from similar state and non-U.S. environmental agencies, that several sites formerly or currently owned and/or operated by us, and other properties or water supplies that may be or may have been impacted from those operations, contain disposed or recycled materials or waste and require environmental investigation and/or remediation. Those sites include instances where we have been identified as a potentially responsible party under U.S. federal, state and/or non-U.S. environmental laws and regulations. For several formerly owned businesses, we have also received claims for indemnification from purchasers of these businesses.

Our accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. It can be difficult to estimate reliably the final costs of investigation and remediation due to various factors. In our opinion, the amounts accrued are appropriate based on facts and circumstances as currently known. Based upon our experience, current information regarding known contingencies and applicable laws, we have recorded reserves for these environmental matters of $39.3 million and $49.2 million as of December 31, 2013 and 2012, respectively. We do not anticipate these environmental conditions will have a material adverse effect on our financial position, results of operations or cash flows. However, unknown conditions, new details about existing conditions or changes in environmental requirements may give rise to environmental liabilities that will exceed the amount of our current reserves and could have a material adverse effect in the future.

Compliance Matters

Prior to the Merger, the Flow Control business was subject to investigations by the U.S. Department of Justice (“DOJ”) and the SEC related to allegations that improper payments were made by the Flow Control business and other Tyco subsidiaries and third-party intermediaries in recent years in violation of the Foreign Corrupt Practices Act. Tyco reported to the DOJ and the SEC the remedial measures that it had taken in response to the allegations and Tyco’s own internal investigations. As a result of discussions with the DOJ and SEC aimed at resolving these matters, on September 24, 2012, Tyco entered into a settlement with the SEC and a non-prosecution agreement with the DOJ, pursuant to which the Flow Control business is for a three year period subject to yearly reporting to the DOJ concerning its continuing compliance efforts.

Other Matters

In addition to the matters described above, from time to time, we are subject to disputes, administrative proceedings and other claims arising out of the normal conduct of our business. These matters generally relate to disputes arising out of the use or installation of our products, product liability litigation, personal injury claims, commercial and contract disputes and employment related matters. On the basis of information currently available to it, management does not believe that existing proceedings and claims will have a material impact on our Consolidated Financial Statements. However, litigation is unpredictable, and we could incur judgments or enter into settlements for current or future claims that could adversely affect our financial statements.

Warranties and guarantees

In connection with the disposition of our businesses or product lines, we may agree to indemnify purchasers for various potential liabilities relating to the sold business, such as pre-closing tax, product liability, warranty, environmental, or other obligations. The subject matter, amounts and duration of any such indemnification obligations vary for each type of liability indemnified and may vary widely from transaction to transaction.

Generally, the maximum obligation under such indemnifications is not explicitly stated and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial condition or results of operations.

We recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.

We provide service and warranty policies on our products. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant.

The changes in the carrying amount of service and product warranties for the years ended December 31, 2013 and 2012 were as follows:

	Years ended December 31
In millions	2013			2012
Beginning balance	$	54.3		$	29.4
Service and product warranty provision	63.4			55.7
Payments	(61.2		)	(53.3		)
Acquired	—			22.1
Translation	0.1			0.4
Ending balance	$	56.6		$	54.3

Stand-by Letters of Credit, Bank Guarantees and Bonds

In certain situations, Tyco guaranteed Flow Control’s performance to third parties or provided financial guarantees for financial commitments of Flow Control. In situations where Flow Control and Tyco were unable to obtain a release from these guarantees in connection with the spin-off of Flow Control from Tyco, we will indemnify Tyco for any losses it suffers as a result of such guarantees.

In disposing of assets or businesses, we often provide representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to reasonably estimate the potential liability due to the inchoate and unknown nature of these potential liabilities. However, we have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows.

In the ordinary course of business, we are required to commit to bonds, letters of credit and bank guarantees that require payments to our customers for any non-performance. The outstanding face value of these instruments fluctuates with the value of our projects in process and in our backlog. In addition, we issue financial stand-by letters of credit primarily to secure our performance to third parties under self-insurance programs.

As of December 31, 2013 and 2012, the outstanding value of bonds, letters of credit and bank guarantees totaled $484.0 million and $493.2 million, respectively.

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Benefit Plans

12 Months Ended

Dec. 31, 2013

Benefit Plans

Benefit Plans

Pension and other post-retirement plans

We sponsor U.S. and Non-U.S. defined-benefit pension and other post-retirement plans. Pension benefits are based principally on an employee’s years of service and/or compensation levels near retirement. In addition, we provide certain post-retirement health care and life insurance benefits. Generally, the post-retirement health care and life insurance plans require contributions from retirees. In December 2007, we announced that we will be freezing certain U.S. pension plans as of December 31, 2017. Since the announcement, we have pursued a strategy of gradually shifting our U.S. pension asset allocations towards liability hedging assets such as fixed income instruments and away from equity securities. During the last quarter of 2012 we made significant progress in reducing the risk and volatility of our U.S. pension plans by taking the following steps:

• We paid $331.0 million to settle pension obligations through a combination of lump sum payments to deferred vested participants and through the purchase of an annuity contract to settle obligations to plan participants in retiree status.

• We made a special contribution of $190.0 million to fund our U.S. pension plans.

• We accelerated our transition to increase the allocations of investments to liability hedging assets.

Obligations and funded status

The following tables present reconciliations of plan benefit obligations, fair value of plan assets and the funded status of pension plans and other post-retirement plans as of and for the years ended December 31, 2013 and 2012:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
In millions	2013			2012			2013			2012			2013			2012
Change in benefit obligations
Benefit obligation beginning of year	$	394.3		$	572.1		$	460.8		$	89.5		$	59.3		$	35.1
Service cost	15.6			12.9			8.4			3.3			0.3			0.2
Interest cost	14.3			28.2			17.9			7.5			1.9			1.9
Amendments	—			0.4			—			—			—			—
Benefit obligations assumed in Merger	—			10.8			—			338.6			—			16.7
Actuarial (gain) loss	(56.9		)	128.8			(16.6		)	26.6			(15.9		)	8.2
Translation loss	—			—			9.7			1.5			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Benefit obligation end of year	$	346.9		$	394.3		$	462.0		$	460.8		$	42.4		$	59.3
Change in plan assets
Fair value of plan assets beginning of year	$	326.2		$	408.8		$	249.0		$	10.9		$	—		$	—
Actual return on plan assets	(28.9		)	43.9			28.6			6.4			—			—
Plan assets acquired in Merger	—			7.6			—			227.3			—			—
Company contributions	8.9			224.8			21.9			10.4			3.2			2.8
Translation gain	—			—			5.2			0.2			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Fair value of plan assets end of year	$	285.8		$	326.2		$	286.5		$	249.0		$	—		$	—
Funded status
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

Amounts recorded in the Consolidated Balance Sheets were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post- retirement plans
In millions	2013			2012			2013			2012			2013			2012
Other non-current assets	$	0.7		$	—		$	3.7		$	—		$	—		$	—
Current liabilities	(3.9		)	(3.5		)	(4.7		)	(4.9		)	(3.7		)	(4.5		)
Non-current liabilities	(57.9		)	(64.6		)	(174.5		)	(207.0		)	(38.7		)	(54.8		)
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

The accumulated benefit obligation for all defined benefit plans was $772.2 million and $804.2 million at December 31, 2013 and 2012, respectively.

Information for pension plans with an accumulated benefit obligation or projected benefit obligation in excess of plan assets as of December 31 are as follows:

	Projected benefit obligation exceeds the fair value of plan assets				Accumulated benefit  obligation exceeds the fair value of plan assets
In millions	2013		2012		2013		2012
U.S. pension plans
Projected benefit obligation	$	76.3	$	158.1	$	76.3	$	87.1
Fair value of plan assets	14.5		85.3		14.5		15.5
Accumulated benefit obligation	N/A		N/A		73.1		77.2
Non-U.S. pension plans
Projected benefit obligation	$	438.2	$	436.7	$	420.4	$	431.3
Fair value of plan assets	259.0		222.4		244.5		217.2
Accumulated benefit obligation	N/A		N/A		411.5		420.0

Components of net periodic benefit expense (income) for our pension plans for the years ended December 31 were as follows:

	U. S. pension plans									Non-U.S. pension plans
In millions	2013			2012			2011			2013			2012			2011
Service cost	$	15.6		$	12.9		$	10.3		$	8.4		$	3.3		$	2.2
Interest cost	14.3			28.2			28.6			17.9			7.5			4.1
Expected return on plan assets	(9.7		)	(29.4		)	(27.9		)	(15.2		)	(3.9		)	(0.5		)
Amortization of prior year service cost (benefit)	0.4			—			—			(0.2		)	—			—
Net actuarial (gain) loss	(18.3		)	114.3			59.0			(30.0		)	24.2			4.2
Net periodic benefit expense (income)	$	2.3		$	126.0		$	70.0		$	(19.1	)	$	31.1		$	10.0

Components of net periodic benefit expense (income) for our other post-retirement plans for the years ended December 31 were as follows:

	Other post-retirement plans
In millions	2013			2012		2011
Service cost	$	0.3		$	0.2	$	0.2
Interest cost	1.9			1.9		1.9
Amortization of prior year service benefit	(0.8		)	—		—
Net actuarial (gain) loss	(15.9		)	8.1		2.4
Net periodic benefit (income) expense	$	(14.5	)	$	10.2	$	4.5

Assumptions

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	4.51	%	3.67	%	5.05	%	4.13	%	3.85	%	4.82	%	4.35	%	3.40	%	5.05	%
Rate of compensation increase	4.00	%	4.37	%	4.00	%	3.02	%	3.02	%	2.98	%	—		—		—

Weighted-average assumptions used to determine net periodic benefit expense (income) for years ended December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	3.67	%	5.05	%	5.90	%	3.85	%	4.82	%	5.13	%	3.40	%	5.05	%	5.90	%
Expected long-term return on plan assets	3.75	%	7.50	%	8.00	%	5.98	%	4.09	%	4.50	%	—		—		—
Rate of compensation increase	4.37	%	4.21	%	4.00	%	3.02	%	2.98	%	2.98	%	—		—		—

Uncertainty in the securities markets and U.S. economy could result in investment returns less than those assumed. Should the securities markets decline or medical and prescription drug costs increase at a rate greater than assumed, we would expect increasing annual combined net pension and other post-retirement costs for the next several years. Should actual experience differ from actuarial assumptions, the projected pension benefit obligation and net pension cost and accumulated other post-retirement benefit obligation and other post-retirement benefit cost would be affected in future years.

Discount rates

The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year based on our December 31 measurement date. The discount rate was determined by matching our expected benefit payments to payments from a stream of bonds rated AA or higher available in the marketplace, adjusted to eliminate the effects of call provisions. This produced a weighted-average discount rate for our U.S. pension plans of 4.51%, 3.67% and 5.05% in 2013, 2012 and 2011, respectively. The discount rates on our non-U.S. pension plans ranged from 0.50% to 5.00%, 0.50% to 4.50% and 0.75% to 5.00% in 2013, 2012 and 2011, respectively. There are no known or anticipated changes in our discount rate assumptions that will impact our pension expense in 2014.

Expected rates of return

Our expected rates of return on U.S. pension plan assets were 3.75%, 7.50% and 8.00% for 2013, 2012 and 2011, respectively. The expected rates of return on non-U.S. pension plan assets ranged from 1.00% to 6.50%, 1.00% to 4.60% and 0.25% to 5.20% in 2013, 2012 and 2011, respectively. The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns. In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecasted economic conditions, our asset allocations, input from external consultants and broader longer-term market indices. U.S. pension plan assets yielded returns of (9.90)%, 10.80% and 7.80% in 2013, 2012 and 2011, respectively. As a result of our de-risking strategy to reduce U.S. pension plan liability, we anticipate the expected rate of return on our U.S. funded pension plans will continue to be consistent with the discount rate utilized. Any difference in the expected rate and actual returns will be included with the actuarial gain or loss recorded in the fourth quarter when our plans are remeasured.

Healthcare cost trend rates

The assumed healthcare cost trend rates for other post-retirement plans as of December 31 were as follows:

	2013		2012
Healthcare cost trend rate assumed for following year	7.0	%	7.4	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.5	%	4.5	%
Year the cost trend rate reaches the ultimate trend rate	2027		2027

The assumed healthcare cost trend rates can have a significant effect on the amounts reported for healthcare plans. A one-percentage-point change in the assumed healthcare cost trend rates would have the following effects as of and for the year ended December 31, 2013:

	One Percentage Point
In millions	Increase		Decrease
Increase (decrease) in annual service and interest cost	$	0.1	$	(0.1	)
Increase (decrease) in other post-retirement benefit obligations	1.2		(1.0		)

Pension plans assets

Objective

The primary objective of our investment strategy is to meet the pension obligation to our employees at a reasonable cost to us. This is primarily accomplished through growth of capital and safety of the funds invested.

During 2012, we adopted an investment strategy for our U.S. pension plans with a primary objective of preserving the funded status of the U.S. plans. This is achieved through investments in fixed interest instruments with interest rate sensitivity characteristics closely reflecting the interest rate sensitivity of our benefit obligations. Shifting of allocations away from equities to liability hedging fixed income investments, by reinvesting in fixed income instruments as equity investments were redeemed, was completed during 2013. As of December 31, 2013, the U.S. pension plans have an approximately 92 percent allocation to fixed income investments.

Asset allocation

Our actual overall asset allocation for our U.S. and non-U.S. pension plans as compared to our investment policy goals as of December 31 was as follows:

	U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	—	%	32	%	—		—
Fixed income	92	%	56	%	100	%	100	%
Alternative	7	%	7	%	—		—
Cash	1	%	5	%	—		—

	Non-U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	54	%	51	%	56	%	55	%
Fixed income	41	%	42	%	44	%	45	%
Alternative	3	%	3	%	—		—
Cash	2	%	4	%	—		—

While the target allocations do not have a percentage allocated to cash, the plan assets will always include some cash due to cash flow requirements.

Fair value measurement

The fair values of our pension plan assets and their respective levels in the fair value hierarchy as of December 31, 2013 and December 31, 2012 were as follows:

	December 31, 2013
In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1.8	$	5.9	$	—	$	7.7
Fixed income:
Corporate and non U.S. government	—		262.2		—		262.2
U.S. treasuries	—		75.5		—		75.5
Mortgage-backed securities	—		8.7		—		8.7
Other	—		34.1		—		34.1
Global equity securities:
Mid cap equity	—		7.3		—		7.3
Large cap equity	—		43.5		—		43.5
International equity	—		101.9		—		101.9
Long/short equity	—		0.6		—		0.6
Other investments	—		11.8		19.0		30.8
Total fair value of plan assets	$	1.8	$	551.5	$	19.0	$	572.3

	December 31, 2012
In millions	Level 1		Level 2		Level 3		Total
Cash equivalents	$	6.2	$	21.2	$	—	$	27.4
Fixed income:
Corporate and non U.S. government	—		164.3		—		164.3
U.S. treasuries	—		69.4		—		69.4
Mortgage-backed securities	—		23.4		—		23.4
Other	—		28.1		—		28.1
Global equity securities:
Mid cap equity	—		6.7		—		6.7
Large cap equity	—		89.0		—		89.0
International equity	—		89.8		—		89.8
Long/short equity	—		47.6		—		47.6
Other investments	—		11.2		18.3		29.5
Total fair value of plan assets	$	6.2	$	550.7	$	18.3	$	575.2

Valuation methodologies used for investments measured at fair value were as follows:

• Cash and cash equivalents: Cash consists of cash held in bank accounts and was classified as Level 1. Cash equivalents consist of investments in commingled funds valued based on observable market data. Such investments were classified as Level 2.

• Fixed income: Investments in corporate bonds, government securities, mortgages and asset backed securities were value based upon quoted market prices for similar securities and other observable market data. Investments in commingled funds were generally valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service. Such investments were classified as Level 2.

• Global equity securities: Investments in commingled funds were valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service. Such investments were classified as Level 2.

• Other investments: Other investments include investments in commingled funds with diversified investment strategies. Investments in commingled funds that were valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices or by a pricing service were classified as Level 2. Investments in commingled funds that were valued based on unobservable inputs due to liquidation restrictions were classified as Level 3.

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2013 and 2012, respectively:

In millions	January 1, 2013		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2013
Other investments	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0
Total	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0

In millions	January 1, 2012		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2012
Other investments	$	19.0	$	1.1	$	(1.8	)	$	—	$	18.3
Fixed income investments	1.0		—		(1.0		)	—		—
Total	$	20.0	$	1.1	$	(2.8	)	$	—	$	18.3

Cash flows

Contributions

Pension contributions totaled $30.8 million and $235.2 million in 2013 and 2012, respectively. Our 2014 pension contributions are expected to be approximately $32.0 million to $37.0 million. The 2014 expected contributions will equal or exceed our minimum funding requirements.

Estimated future benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans for the years ended December 31 as follows:

In millions	U.S. pension plans		Non-U.S. pension plans		Other post- retirement plans
2014	$	8.6	$	18.6	$	3.7
2015	9.8		16.2		3.5
2016	12.3		17.2		3.4
2017	13.7		18.5		3.4
2018	16.2		19.8		3.3
2019-2023	103.8		113.1		14.9

Savings plan

We have a 401(k) plan (“the 401(k) plan”) with an employee share ownership (“ESOP”) bonus component, which covers certain union and all non-union U.S. employees who meet certain age requirements. Under the 401(k) plan, eligible U.S. employees may voluntarily contribute a percentage of their eligible compensation. We match contributions made by employees who meet certain eligibility and service requirements. Our matching contribution is 100% of eligible employee contributions for the first 1% of eligible compensation and 50% of the next 5% of eligible compensation.

In addition to the matching contribution, all employees who meet certain service requirements receive a discretionary ESOP contribution equal to 1.5% of annual eligible compensation.

Additionally, we have a 401(k) plan acquired as part of the Merger (“the Flow 401(k) plan”) which covers certain union and all non-union U.S. employees who meet certain age requirements. Under the Flow 401(k) plan, eligible U.S. employees may voluntarily contribute a percentage of their eligible compensation. We match contributions made by employees who meet certain eligibility and service requirements. Our matching contribution is 500% of eligible employee contributions for the first 1% of eligible compensation. Additional company match is based on years of service, as follows: an additional 1% match at 10 – 19 years of service, an additional 2% match at 20 – 24 years, an additional 3% match at 25 – 29 years and an additional 4% match at 30+ years. Participants are 100% vested in the employer match after 3 years of service.

On December 31, 2013, the Flow 401(k) plan merged into the 401(k) plan and all employees covered by the Flow 401(k) plan became fully vested in their Flow 401(k) plan employer matching contributions and all future employer matching contributions will be made under the 401(k) plan matching contribution formula.

Our combined expense for the 401(k) plan, the Flow 401(k) plan and the ESOP was $26.8 million, $19.7 million and $15.8 million in 2013, 2012 and 2011, respectively.

Other retirement compensation

Total other accrued retirement compensation, primarily related to deferred compensation and supplemental retirement plans, was $53.3 million and $52.6 million as of December 31, 2013 and 2012, respectively, and is included in Pension and other post-retirement compensation and benefits in the Consolidated Balance Sheets.

Multi-employer defined benefit plans

We participate in a number of multi-employer defined benefit plans on behalf of certain employees. Pension expense related to multi-employer plans was not material in 2013, 2012 and 2011.

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Benefit Plans - Components of Net Periodic Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Defined Benefit Plan Disclosure [Line Items]
Service cost		$ 0.2
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	15.6	12.9	10.3
Interest cost	14.3	28.2	28.6
Expected return on plan assets	(9.7)	(29.4)	(27.9)
Amortization of prior year service cost (benefit)	0.4	0	0
Net actuarial (gain) loss	(18.3)	114.3	59.0
Net periodic benefit expense (income)	2.3	126.0	70.0
Non-US Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	8.4	3.3	2.2
Interest cost	17.9	7.5	4.1
Expected return on plan assets	(15.2)	(3.9)	(0.5)
Amortization of prior year service cost (benefit)	(0.2)	0	0
Net actuarial (gain) loss	(30.0)	24.2	4.2
Net periodic benefit expense (income)	(19.1)	31.1	10.0
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Service cost	0.3	0.2	0.2
Interest cost	1.9	1.9	1.9
Amortization of prior year service cost (benefit)	(0.8)	0	0
Net actuarial (gain) loss	(15.9)	8.1	2.4
Net periodic benefit expense (income)	$ (14.5)	$ 10.2	$ 4.5

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2013

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Components of AOCI consist of the following:

	December 31
In millions	2013			2012
Unrecognized pension and other post-retirement benefit costs, net of tax	$	—		$	0.4
Cumulative translation adjustments	(34.7		)	(3.4		)
Market value of derivative financial instruments, net of tax	(8.9		)	(8.6		)
Accumulated other comprehensive income (loss)	$	(43.6	)	$	(11.6	)

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Goodwill and Other Identifiable Intangible Assets - Identifiable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Acquired Intangible Assets by Major Class [Line Items]
Finite-life intangibles, cost	$ 1,556.1	$ 1,600.4
Accumulated amortization	(326.0)	(229.4)
Finite-life intangibles, net	1,230.1	1,371.0
Indefinite-life intangibles	546.0	555.9
Total intangibles, cost	2,102.1	2,156.3
Total intangibles, net	1,776.1	1,926.9
Customer relationships
Acquired Intangible Assets by Major Class [Line Items]
Finite-life intangibles, cost	1,286.8	1,291.5
Accumulated amortization	(243.8)	(152.8)
Finite-life intangibles, net	1,043.0	1,138.7
Trade names
Acquired Intangible Assets by Major Class [Line Items]
Finite-life intangibles, cost	2.1	1.5
Accumulated amortization	(0.9)	(0.7)
Finite-life intangibles, net	1.2	0.8
Proprietary technology and patents
Acquired Intangible Assets by Major Class [Line Items]
Finite-life intangibles, cost	264.6	263.7
Accumulated amortization	(80.1)	(57.7)
Finite-life intangibles, net	184.5	206.0
Backlog
Acquired Intangible Assets by Major Class [Line Items]
Finite-life intangibles, cost	2.6	43.7
Accumulated amortization	(1.2)	(18.2)
Finite-life intangibles, net	$ 1.4	$ 25.5

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Financial Statements of Parent Company Guarantor - Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities
Net cash provided by (used for) operating activities	$ 915.3	$ 68.0	$ 320.2
Investing activities
Capital expenditures	(170.0)	(94.5)	(73.3)
Proceeds from sale of property and equipment	6.0	5.5	1.3
Proceeds from sale of businesses, net	43.5	0	0
Acquisitions, net of cash acquired	(92.4)	470.5	(733.1)
Other	1.7	(5.9)	(3.0)
Net cash provided by (used for) investing activities	(211.2)	375.6	(808.1)
Financing activities
Net receipts (repayments) of short-term borrowings	0	(3.7)	(1.2)
Net receipts of commercial paper and revolving long-term debt	104.2	253.8	74.5
Proceeds from long-term debt	0.7	594.3	515.3
Repayment of long-term debt	(7.4)	(617.2)	(0.3)
Debt issuance costs	(1.4)	(9.7)	(9.0)
Debt extinguishment costs	0	(74.8)	0
Net change in advances to subsidiaries	0	0
Excess tax benefits from share-based compensation	16.8	5.0	3.3
Shares issued to employees, net of shares withheld	80.0	68.2	13.3
Repurchases of common shares	(715.8)	(334.2)	(12.8)
Dividends paid	(194.2)	(112.4)	(79.5)
Distributions to noncontrolling interest	(2.0)	(1.6)	0
Net cash provided by (used for) financing activities	(719.1)	(232.3)	503.6
Effect of exchange rate changes on cash and cash equivalents	18.8	(0.1)	(11.7)
Change in cash and cash equivalents	3.8	211.2	4.0
Cash and cash equivalents, beginning of year	261.3	50.1	46.1
Cash and cash equivalents, end of year	265.1	261.3	50.1
Pentair Ltd.
Operating activities
Net cash provided by (used for) operating activities	534.2	(109.0)
Investing activities
Capital expenditures	0	0
Proceeds from sale of property and equipment	0	0
Proceeds from sale of businesses, net	0
Acquisitions, net of cash acquired	0	0
Other	0	0
Net cash provided by (used for) investing activities	0	0
Financing activities
Net receipts (repayments) of short-term borrowings		0
Net receipts of commercial paper and revolving long-term debt	0	0
Proceeds from long-term debt	0	0
Repayment of long-term debt	0	0
Debt issuance costs	0	0
Debt extinguishment costs		0
Net change in advances to subsidiaries	(339.5)	157.0
Excess tax benefits from share-based compensation	0	0
Shares issued to employees, net of shares withheld	0	0
Repurchases of common shares	0	0
Dividends paid	(194.2)	(48.0)
Distributions to noncontrolling interest	0	0
Net cash provided by (used for) financing activities	(533.7)	109.0
Effect of exchange rate changes on cash and cash equivalents	0	0
Change in cash and cash equivalents	0.5	0
Cash and cash equivalents, beginning of year	0	0
Cash and cash equivalents, end of year	0.5	0
Subsidiary Issuer
Operating activities
Net cash provided by (used for) operating activities	514.0	(88.2)
Investing activities
Capital expenditures	0	0
Proceeds from sale of property and equipment	0	0
Proceeds from sale of businesses, net	0
Acquisitions, net of cash acquired	0	300.1
Other	0	0
Net cash provided by (used for) investing activities	0	300.1
Financing activities
Net receipts (repayments) of short-term borrowings		0
Net receipts of commercial paper and revolving long-term debt	104.2	424.7
Proceeds from long-term debt	0	594.3
Repayment of long-term debt	0	0
Debt issuance costs	(1.4)	(8.7)
Debt extinguishment costs		0
Net change in advances to subsidiaries	(569.8)	(1,222.2)
Excess tax benefits from share-based compensation	0	0
Shares issued to employees, net of shares withheld	0	0
Repurchases of common shares	0	0
Dividends paid	0	0
Distributions to noncontrolling interest	0	0
Net cash provided by (used for) financing activities	(467.0)	(211.9)
Effect of exchange rate changes on cash and cash equivalents	0	0
Change in cash and cash equivalents	47.0	0
Cash and cash equivalents, beginning of year	0	0
Cash and cash equivalents, end of year	47.0	0
Non-Guarantor Subsidiaries
Operating activities
Net cash provided by (used for) operating activities	964.9	61.5
Investing activities
Capital expenditures	(170.0)	(94.5)
Proceeds from sale of property and equipment	6.0	5.5
Proceeds from sale of businesses, net	43.5
Acquisitions, net of cash acquired	(92.4)	170.4
Other	1.7	(5.9)
Net cash provided by (used for) investing activities	(211.2)	75.5
Financing activities
Net receipts (repayments) of short-term borrowings		(3.7)
Net receipts of commercial paper and revolving long-term debt	0	(170.9)
Proceeds from long-term debt	0.7	0
Repayment of long-term debt	(7.4)	(617.2)
Debt issuance costs	0	(1.0)
Debt extinguishment costs		(74.8)
Net change in advances to subsidiaries	(188.5)	1,268.9
Excess tax benefits from share-based compensation	16.8	5.0
Shares issued to employees, net of shares withheld	80.0	68.2
Repurchases of common shares	(715.8)	(334.2)
Dividends paid	0	(64.4)
Distributions to noncontrolling interest	(2.0)	(1.6)
Net cash provided by (used for) financing activities	(816.2)	74.3
Effect of exchange rate changes on cash and cash equivalents	18.8	(0.1)
Change in cash and cash equivalents	(43.7)	211.2
Cash and cash equivalents, beginning of year	261.3	50.1
Cash and cash equivalents, end of year	217.6	261.3
Eliminations
Operating activities
Net cash provided by (used for) operating activities	(1,097.8)	203.7
Investing activities
Capital expenditures	0	0
Proceeds from sale of property and equipment	0	0
Proceeds from sale of businesses, net	0
Acquisitions, net of cash acquired	0	0
Other	0	0
Net cash provided by (used for) investing activities	0	0
Financing activities
Net receipts (repayments) of short-term borrowings		0
Net receipts of commercial paper and revolving long-term debt	0	0
Proceeds from long-term debt	0	0
Repayment of long-term debt	0	0
Debt issuance costs	0	0
Debt extinguishment costs		0
Net change in advances to subsidiaries	1,097.8	(203.7)
Excess tax benefits from share-based compensation	0	0
Shares issued to employees, net of shares withheld	0	0
Repurchases of common shares	0	0
Dividends paid	0	0
Distributions to noncontrolling interest	0	0
Net cash provided by (used for) financing activities	1,097.8	(203.7)
Effect of exchange rate changes on cash and cash equivalents	0	0
Change in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of year	0	0
Cash and cash equivalents, end of year	$ 0	$ 0

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Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2013

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

	December 31
In millions	2013		2012
Inventories
Raw materials and supplies	$	557.2	$	615.1
Work-in-process	166.5		207.6
Finished goods	519.6		511.2
Total inventories	$	1,243.3	$	1,333.9
Other current assets
Cost in excess of billings	$	100.8	$	124.4
Prepaid expenses	103.9		89.0
Deferred income taxes	162.0		82.6
Other current assets	22.7		38.5
Total other current assets	$	389.4	$	334.5
Property, plant and equipment, net
Land and land improvements	$	251.3	$	248.6
Buildings and leasehold improvements	516.8		474.4
Machinery and equipment	1,208.0		1,073.0
Construction in progress	72.6		102.9
Total property, plant and equipment	2,048.7		1,898.9
Accumulated depreciation and amortization	878.7		710.7
Total property, plant and equipment, net	$	1,170.0	$	1,188.2
Other non-current assets
Asbestos-related insurance receivable	$	119.6	$	131.0
Deferred income taxes	93.6		68.7
Other non-current assets	217.7		252.6
Total other non-current assets	$	430.9	$	452.3
Other current liabilities
Deferred revenue and customer deposits	$	92.4	$	127.2
Dividends payable	98.7		95.0
Billings in excess of cost	38.1		61.1
Accrued warranty	56.6		54.3
Other current liabilities	378.2		440.7
Total other current liabilities	$	664.0	$	778.3
Other non-current liabilities
Asbestos-related liabilities	$	254.7	$	278.9
Taxes payable	48.9		50.5
Other non-current liabilities	153.8		165.7
Total other non-current liabilities	$	457.4	$	495.1

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2013

Supplemental Cash Flow Information

Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information:

	Years ended December 31
In millions	2013		2012		2011
Cash paid for interest, net	$	69.4	$	66.7	$	54.5
Cash paid for income taxes, net	92.9		82.2		64.4

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Debt

12 Months Ended

Dec. 31, 2013

Debt

Debt

Debt and the average interest rates on debt outstanding were as follows:

In millions	Average interest rate at December 31, 2013	Maturity year	December 31
			2013			2012
Commercial paper	0.522%	2017	$	528.9		$	424.7
Senior notes - fixed rate	1.350%	2015	350.0			350.0
Senior notes - fixed rate	1.875%	2017	350.0			350.0
Senior notes - fixed rate	2.650%	2019	250.0			250.0
Senior notes - fixed rate	5.000%	2021	500.0			500.0
Senior notes - fixed rate	3.150%	2022	550.0			550.0
Other	0.017%	2015-2030	4.7			8.9
Capital lease obligations	4.086%	2014-2025	21.5			23.8
Total debt			2,555.1			2,457.4
Less: Current maturities and short-term borrowings			(2.5		)	(3.1		)
Long-term debt			$	2,552.6		$	2,454.3

The 2015 Notes, 2017 Notes, 2019 Notes, New 2021 Notes and 2022 Notes (as defined below and, collectively, the “Notes”) were all issued in transactions exempt from the registration requirements of the Securities Act of 1933, as amended. In March 2013, Pentair Ltd. and our 100 percent-owned subsidiary, Pentair Finance S.A. (“PFSA”), filed a Registration Statement with the SEC offering to exchange the Notes for new, registered Notes. The exchange offer expired on April 19, 2013 and did not impact the aggregate principle amount or the terms of the Notes outstanding. The new, registered Notes issued in such exchange offer are guaranteed as to payment by Pentair Ltd.

In December 2012, PFSA completed an exchange offer (the “Exchange Offer”) pursuant to which it exchanged $373.0 million in aggregate principal amount of 5.00% Senior Notes due 2021 of Pentair, Inc., a wholly-owned, indirect subsidiary of the Company (the “2021 Notes”) for a like amount of new 5.00% Senior Notes due 2021 of PFSA (the “New 2021 Notes”) plus $5.6 million in transaction-related costs. Upon completion of the Exchange Offer, $127.0 million in aggregate principal amount of 2021 Notes remained outstanding. The remaining 2021 Notes and New 2021 Notes are guaranteed as to payment by Pentair Ltd.

In November 2012, PFSA completed a private offering of $350.0 million aggregate principal amount of 1.35% Senior Notes due 2015 (the “2015 Notes”) and $250.0 million aggregate principal amount of 2.65% Senior Notes due 2019 (the “2019 Notes” and, collectively, the “2015/2019 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances, PFSA may be required to pay additional interest on the 2015/2019 Notes. We used the net proceeds from the sale of the 2015/2019 Notes to repay commercial paper and for general corporate purposes.

In October 2012, we redeemed the remaining outstanding aggregate principal of our 5.65% fixed rate senior notes due 2013-2017 totaling $400.0 million and our 1.05% floating rate senior notes due 2013 totaling $100.0 million (the “Fixed/Floating Rate Notes”). The redemptions included make-whole premiums of $65.8 million. Concurrent with the redemption of the Fixed/Floating Rate Notes, we terminated a related interest rate swap that was designated as a cash flow hedge, which resulted in the reclassification of $3.4 million of previously unrecognized variable to fixed swap losses from AOCI to earnings in October 2012. All costs associated with the redemption were recorded as a Loss on the early extinguishment of debt including $0.6 million of unamortized deferred financing costs.

In September 2012, PFSA, completed a private offering of $550.0 million aggregate principal amount of 3.15% Senior Notes due 2022 (the “2022 Notes”) and $350 million aggregate principal amount of 1.875% Senior Notes due 2017 (the “2017 Notes” and, collectively, the “2017/2022 Notes”), which are guaranteed as to payment by Pentair Ltd. In certain circumstances, PFSA may be required to pay additional interest on the 2017/2022 Notes. The 2017/2022 Notes remained outstanding after the Merger. A portion of the net proceeds from the 2017/2022 Notes offering were used to repay $435.0 million to Tyco in conjunction with the Distribution and the Merger.

In September 2012, Pentair, Inc. entered into a credit agreement providing for an unsecured, committed revolving credit facility (the “Credit Facility”) with initial maximum aggregate availability of up to $1,450.0 million. The Credit Facility replaced Pentair, Inc.’s $700.0 million Former Credit Facility (as defined below). The Credit Facility matures in September 2017. Upon the completion of the Merger, Pentair Ltd. became the guarantor under the Credit Facility and PFSA and certain other of our subsidiaries became affiliate borrowers under the Credit Facility. Borrowings under the Credit Facility generally bear interest at a variable rate equal to the London Interbank Offered Rate (“LIBOR”) plus a specified margin based upon PFSA’s credit ratings. PFSA must also pay a facility fee ranging from 10.0 to 30.0 basis points per annum (based upon PFSA’s credit ratings) on the amount of each lender’s commitment.

In May 2011, Pentair, Inc. completed a public offering of $500.0 million aggregate principal amount of the 2021 Notes. Pentair, Inc. used the net proceeds from the offering of the 2021 Notes to finance in part the CPT acquisition in 2011. The 2021 Notes which remain outstanding subsequent to the Exchange Offer are guaranteed as to payment by Pentair Ltd.

In April 2011, Pentair, Inc. entered into a Fourth Amended and Restated Credit Agreement that provided for an unsecured, committed revolving credit facility (the “Former Credit Facility”) of up to $700.0 million, with multi-currency sub-facilities to support investments outside the U.S. Borrowings under the Former Credit Facility bore interest at the rate of LIBOR plus 1.75%. We used borrowings under the Former Credit Facility to fund a portion of the CPT acquisition in 2011 and to repay $105.0 million of matured senior notes in May 2012. The Former Credit Facility was terminated in September 2012 in connection with the Merger and replaced by the Credit Facility, at which time the subsidiary guarantees in place under the Former Credit Facility ceased to exist.

PFSA is authorized to sell short-term commercial paper notes to the extent availability exists under the Credit Facility. PFSA uses the Credit Facility as back-up liquidity to support 100% of commercial paper outstanding. As of December 31, 2013 and 2012, we had $528.9 million and $424.7 million, respectively, of commercial paper outstanding, all of which was classified as long-term as we have the intent and the ability to refinance such obligations on a long-term basis under the Credit Facility.

We used borrowings under the Credit Facility and proceeds from the 2017/2022 Notes offering, to repay the Former Credit Facility and to pay other fees and expenses in connection with the Merger. Total availability under the Credit Facility was $921.1 million, of which none was outstanding as of December 31, 2013, which was not limited by any covenants contained in the Credit Facility’s credit agreement. Subsequent to the Merger, we used the remaining proceeds from the 2017/2022 Notes offering and issuances of commercial paper to redeem the Fixed/Floating Rate Notes as discussed above, to repurchase shares in conjunction with our share repurchase as discussed in Note 13 and to purchase the remaining 25 percent interest in KEF for $100.0 million as discussed in Note 2.

Our debt agreements contain certain financial covenants, the most restrictive of which are in the Credit Facility, including that we may not permit (i) the ratio of our consolidated debt plus synthetic lease obligations to our consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization, non-cash share-based compensation expense, and up to $40.0 million of costs and expenses incurred in connection with the Merger ("EBITDA") for the four consecutive fiscal quarters then ended (the “Leverage Ratio”) to exceed 3.50 to 1.00 on the last day of each fiscal quarter, and (ii) the ratio of our EBITDA for the four consecutive fiscal quarters then ended to our consolidated interest expense, including consolidated yield or discount accrued as to outstanding securitization obligations (if any), for the same period to be less than 3.00 to 1.00 as of the end of each fiscal quarter. For purposes of the Leverage Ratio, the Credit Facility provides for the calculation of EBITDA giving pro forma effect to the Merger and certain acquisitions, divestitures and liquidations during the period to which such calculation relates. As of December 31, 2013, we were in compliance with all financial covenants in our debt agreements.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $86.7 million, of which none was outstanding at December 31, 2013. Borrowings under these credit facilities bear interest at variable rates.

Debt outstanding at December 31, 2013 matures on a calendar year basis as follows:

In millions	2014		2015		2016		2017		2018		Thereafter		Total
Contractual debt obligation maturities	$	—	$	350.0	$	—	$	878.9	$	—	$	1,304.7	$	2,533.6
Capital lease obligations	2.5		5.5		0.5		0.5		0.5		12.0		21.5
Total maturities	$	2.5	$	355.5	$	0.5	$	879.4	$	0.5	$	1,316.7	$	2,555.1

As part of the Merger and CPT acquisition, we assumed capital lease obligations related primarily to land and buildings. As of December 31, 2013 and 2012, the recorded values of the assets acquired under those capital leases were $41.7 million and $40.5 million, respectively, less accumulated amortization of $7.6 million and $6.0 million, respectively, all of which were included in Property, plant and equipment, net on the Consolidated Balance Sheets.

Capital lease obligations consist of total future minimum lease payments of $23.3 million less the imputed interest of $1.8 million as of December 31, 2013.

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Accumulated Other Comprehensive Income (Loss) - Components of AOCI (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrecognized pension and other post-retirement benefit costs, net of tax	$ 0	$ 0.4
Cumulative translation adjustments	(34.7)	(3.4)
Market value of derivative financial instruments, net of tax	(8.9)	(8.6)
Accumulated other comprehensive income (loss)	$ (43.6)	$ (11.6)

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Benefit Plans - Weighted-Average Assumptions Used to Determine Domestic Benefit Obligations (Detail) (Defined Benefit Plan Benefit Obligations)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.51%	3.67%	5.05%
Rate of compensation increase	4.00%	4.37%	4.00%
Non-US Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.13%	3.85%	4.82%
Rate of compensation increase	3.02%	3.02%	2.98%
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.35%	3.40%	5.05%
Rate of compensation increase	0.00%	0.00%	0.00%

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Debt - Debt Outstanding and Average Interest Rates (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Commercial Paper	Dec. 31, 2012 Commercial Paper	Nov. 30, 2012 Senior Notes 3.50% due 2015	Dec. 31, 2013 Senior Notes 3.50% due 2015 Fixed Rate	Dec. 31, 2012 Senior Notes 3.50% due 2015 Fixed Rate	Sep. 29, 2012 Senior Notes 1.875 % due 2017	Dec. 31, 2013 Senior Notes 1.875 % due 2017 Fixed Rate	Dec. 31, 2012 Senior Notes 1.875 % due 2017 Fixed Rate	Nov. 30, 2012 Senior Notes 2.650% due 2019	Dec. 31, 2013 Senior Notes 2.650% due 2019 Fixed Rate	Dec. 31, 2012 Senior Notes 2.650% due 2019 Fixed Rate	Dec. 31, 2013 Senior Notes, 5.000% Due 2021	May 31, 2011 Senior Notes, 5.000% Due 2021	Dec. 31, 2013 Senior Notes, 5.000% Due 2021 Fixed Rate	Dec. 31, 2012 Senior Notes, 5.000% Due 2021 Fixed Rate	Sep. 29, 2012 Senior Notes 3.150% due 2022	Dec. 31, 2013 Senior Notes 3.150% due 2022 Fixed Rate	Dec. 31, 2012 Senior Notes 3.150% due 2022 Fixed Rate	Dec. 31, 2013 Other	Dec. 31, 2012 Other	Dec. 31, 2013 Other Maximum	Dec. 31, 2013 Other Fixed Rate Minimum	Dec. 31, 2013 Capital Lease Obligations	Dec. 31, 2012 Capital Lease Obligations	Dec. 31, 2013 Capital Lease Obligations Minimum	Dec. 31, 2013 Capital Lease Obligations Maximum
Debt Disclosure [Line Items]
Debt, average interest rate			0.522%			1.35%			1.875%			2.65%				5.00%			3.15%		0.017%				4.086%
Maturity (Year)			2017		2015	2015		2017	2017		2019	2019		2021	2021	2021		2022	2022				2030	2015			2014	2025
Total debt	$ 2,555.1	$ 2,457.4	$ 528.9	$ 424.7		$ 350.0	$ 350.0		$ 350.0	$ 350.0		$ 250.0	$ 250.0			$ 500.0	$ 500.0		$ 550.0	$ 550.0	$ 4.7	$ 8.9			$ 21.5	$ 23.8
Less: Current maturities and short-term borrowings	(2.5)	(3.1)
Long-term debt	$ 2,552.6	$ 2,454.3

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Commitments and Contingencies - Net Rental Expense Under Operating Leases (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating Leased Assets [Line Items]
Gross rental expense	$ 78.7	$ 45.3	$ 39.9
Sublease rental income	(0.9)	(0.5)	(0.5)
Net rental expense	$ 77.8	$ 44.8	$ 39.4

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Supplemental Cash Flow Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Schedule of Cash Flow, Supplemental [Line Items]
Cash paid for interest, net	$ 69.4	$ 66.7	$ 54.5
Cash paid for income taxes, net	$ 92.9	$ 82.2	$ 64.4

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Benefit Plans - Expected Future Services to Be Paid by Plans (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
2014	$ 8.6
2015	9.8
2016	12.3
2017	13.7
2018	16.2
2019-2023	103.8
Non-US Pension Plans
Defined Benefit Plan Disclosure [Line Items]
2014	18.6
2015	16.2
2016	17.2
2017	18.5
2018	19.8
2019-2023	113.1
Other Postretirement Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
2014	3.7
2015	3.5
2016	3.4
2017	3.4
2018	3.3
2019-2023	$ 14.9

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Goodwill and Other Identifiable Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Changes in Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill for the year ended December 31, 2013 and December 31, 2012 by reportable segment were as follows:

In millions	December 31, 2012		Acquisitions/ divestitures			Foreign currency translation/other		December 31, 2013
Valves & Controls	$	1,511.6	$	—		$	—	$	1,511.6
Process Technologies	1,500.4		7.6			16.5		1,524.5
Flow Technologies	937.3		(5.7		)	8.5		940.1
Technical Solutions	1,161.7		(5.3		)	1.6		1,158.0
Total goodwill	$	5,111.0	$	(3.4	)	$	26.6	$	5,134.2

In millions	December 31, 2011		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2012
Valves & Controls	$	—	$	1,511.6	$	—		$	1,511.6
Process Technologies	1,396.9		111.0		(7.5		)	1,500.4
Flow Technologies	597.9		318.5		20.9			937.3
Technical Solutions	279.1		881.6		1.0			1,161.7
Total goodwill	$	2,273.9	$	2,822.7	$	14.4		$	5,111.0

Identifiable Intangible Assets

Identifiable intangible assets consisted of the following at December 31:

	2013							2012
In millions	Cost		Accumulated amortization			Net		Cost		Accumulated amortization			Net
Finite-life intangibles
Customer relationships	$	1,286.8	$	(243.8	)	$	1,043.0	$	1,291.5	$	(152.8	)	$	1,138.7
Trade names	2.1		(0.9		)	1.2		1.5		(0.7		)	0.8
Proprietary technology and patents	264.6		(80.1		)	184.5		263.7		(57.7		)	206.0
Backlog	2.6		(1.2		)	1.4		43.7		(18.2		)	25.5
Total finite-life intangibles	1,556.1		(326.0		)	1,230.1		1,600.4		(229.4		)	1,371.0
Indefinite-life intangibles
Trade names	546.0		—			546.0		555.9		—			555.9
Total intangibles	$	2,102.1	$	(326.0	)	$	1,776.1	$	2,156.3	$	(229.4	)	$	1,926.9

Estimated Future Amortization Expense for Identifiable Intangible Assets

Estimated future amortization expense for identifiable intangible assets during the next five years is as follows:

In millions	2014		2015		2016		2017		2018
Estimated amortization expense	$	115.9	$	115.5	$	114.4	$	112.9	$	110.2

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Acquisitions and Divestitures - Purchase Price of Common Stock and Outstanding Common Stock (Parenthetical) (Detail) (USD $)	1 Months Ended
	Sep. 28, 2012
Business Combination Allocation of Purchase Price [Line Items]
Price per share	$ 43.39
Whole Common Shares [Member]
Business Combination Allocation of Purchase Price [Line Items]
Common shares issued to Tyco shareholders	110,900,000.0
Fractional Shares [Member] | Maximum
Business Combination Allocation of Purchase Price [Line Items]
Common shares issued to Tyco shareholders	100,000

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Share Plans

12 Months Ended

Dec. 31, 2013

Share Plans

Share Plans

Share-based compensation expense

Total share-based compensation expense for 2013, 2012 and 2011 was $31.1 million, $35.8 million and $19.5 million, respectively. The expense for 2012 included $13.5 million of expense due to the Merger triggering change of control provisions of Pentair, Inc. share-based compensation plans resulting in immediate vesting of certain outstanding awards.

Share Incentive Plans

Prior to the Merger, our board of directors approved, and Tyco as our sole shareholder approved, the Pentair Ltd. 2012 Stock and Incentive Plan (the “2012 Plan”). The 2012 Plan became effective on September 28, 2012 and authorizes the issuance of 9.0 million of our common shares. The shares may be issued as new shares or from shares held in treasury. Our practice is to settle equity-based awards from shares held in treasury. The 2012 Plan terminates in September 2022. The 2012 Plan allows for the granting to our officers, directors, employees and consultants of nonqualified stock options, incentive stock options, stock appreciation rights, performance shares, performance units, restricted shares, restricted stock units, deferred stock rights, annual incentive awards, dividend equivalent units and other equity-based awards.

The 2012 Plan is administered by our compensation committee (the “Committee”), which is made up of independent members of our board of directors. Employees eligible to receive awards under the 2012 Plan are managerial, administrative or other key employees who are in a position to make a material contribution to the continued profitable growth and long-term success of our company. The Committee has the authority to select the recipients of awards, determine the type and size of awards, establish certain terms and conditions of award grants and take certain other actions as permitted under the 2012 Plan. The 2012 Plan prohibits the Committee from re-pricing awards or cancelling and reissuing awards at lower prices.

In connection with the Distribution, we issued a total of $109.0 million like-kind equity-based awards under the 2012 Plan to former Tyco equity-based award holders in replacement of a portion of their Tyco equity-based awards. Such awards do not deplete the 9.0 million of our common shares reserved for issuance under the 2012 Plan. Of the total issued, $39.8 million in like-kind equity-based awards were issued to former holders who are active employees of our company, and $69.2 million like-kind equity-based awards were issued to former holders who are not employees of our company. As no change of control provisions related to Tyco equity-based awards were triggered by the Distribution or the Merger, the original vesting and exercise term provisions remain in effect for all such replacement equity-based awards.

The 2008 Omnibus Stock Incentive Plan as Amended and Restated (the “2008 Plan”) terminated upon the completion of the Merger. Prior grants of restricted stock units and stock options made under the 2008 Plan and earlier stock incentive plans outstanding at completion of the Merger were converted into equity-based awards with respect to our common shares and were assumed by us on the terms in effect at the time of grant and are outstanding under the 2012 Plan.

Non-qualified and incentive stock options

Under the 2012 Plan, we may grant stock options to any eligible employee with an exercise price equal to the market value of the shares on the dates the options were granted. Options generally vest over a three-year period commencing on the grant date and expire ten years after the grant date. Annual expense for the fair value of stock options was $10.9 million in 2013, $11.6 million in 2012 and $8.9 million in 2011.

Restricted shares and restricted stock units

Under the 2012 Plan, eligible employees may be awarded restricted shares or restricted stock units of our common stock. Restricted shares and restricted stock units generally vest three to four years after issuance, subject to continuous employment and certain other conditions. Restricted shares and restricted stock units are valued at market value on the date of grant and are expensed over the vesting period. Annual expense for the fair value of restricted shares and restricted stock units was $20.2 million in 2013, $24.2 million in 2012 and $10.6 million in 2011.

Stock appreciation rights, performance shares and performance units

Under the 2012 Plan, the Committee is permitted to issue these awards which are generally earned over a three-year vesting period and tied to specific financial metrics.

Stock options

The following table summarizes stock option activity under all plans for the year ended December 31, 2013:

Shares and intrinsic value in millions	Number of shares		Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value
Outstanding as of January 1, 2013	8.4		$	32.13
Granted	1.0		50.83
Exercised	(2.9	)	30.84
Forfeited	(0.2	)	37.25
Expired	(0.1	)	28.82
Outstanding as of December 31, 2013	6.2		$	35.53	5.6	$	255.3
Options exercisable as of December 31, 2013	4.7		$	32.78	4.7	$	205.8
Options expected to vest as of December 31, 2013	1.5		$	44.27	8.5	$	48.0

Fair value of options granted

The weighted average grant date fair value of options granted under Pentair plans in 2013, 2012 and 2011 was estimated to be $13.96, $9.63 and $9.98 per share, respectively. The weighted-average grant date fair value of options assumed in the Merger was estimated to be $11.76. The total intrinsic value of options that were exercised during 2013, 2012 and 2011 was $68.9 million, $41.6 million and $10.9 million, respectively. At December 31, 2013, the total unrecognized compensation cost related to stock options was $5.3 million. This cost is expected to be recognized over a weighted average period of 1.4 years.

We estimated the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model, modified for dividends and using the following weighted average assumptions:

	December 31
	2013		2012				2011
	Granted by Pentair plans		Assumed in Merger		Granted by Pentair plans		Granted by Pentair plans
Risk-free interest rate	0.69	%	0.02 - 0.68%		0.96	%	1.51	%
Expected dividend yield	2.01	%	2.12	%	2.48	%	2.32	%
Expected share price volatility	36.0	%	33.0	%	36.5	%	35.5	%
Expected term (years)	5.7		0.1 - 5.1		5.7		5.5

These estimates require us to make assumptions based on historical results, observance of trends in our share price, changes in option exercise behavior, future expectations and other relevant factors. If other assumptions had been used, share-based compensation expense, as calculated and recorded under the accounting guidance, could have been affected.

We based the expected life assumption on historical experience as well as the terms and vesting periods of the options granted. For purposes of determining expected volatility, we considered a rolling average of historical volatility measured over a period approximately equal to the expected option term. The risk-free rate for periods that coincide with the expected life of the options is based on the U.S. Treasury Department yield curve in effect at the time of grant.

Cash received from option exercises for the years ended December 31, 2013, 2012 and 2011 was $102.3 million, $91.6 million and $14.7 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $23.5 million, $12.2 million and $4.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Restricted stock units

The following table summarizes restricted stock unit activity under all plans for the year ended December 31, 2013:

Shares in millions	Number of shares		Weighted average grant date fair value
Outstanding as of January 1, 2013	1.6		$	38.97
Granted	0.4		50.80
Vested	(0.5	)	34.49
Forfeited	(0.2	)	41.48
Outstanding as of December 31, 2013	1.3		$	43.25

As of December 31, 2013, there was $25.3 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2012 Plan and previous plans. That cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the years ended December 31, 2013, 2012 and 2011, was $23.4 million, $58.0 million and $10.2 million, respectively. The actual tax benefits realized related to restricted share compensation arrangements totaled $7.2 million, $18.8 million and $3.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.

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Disclosures Required by Swiss Law

12 Months Ended

Dec. 31, 2013

Disclosures Required by Swiss Law

Disclosures Required by Swiss Law

We are subject to statutory reporting requirements in Switzerland. The following disclosures are presented in accordance with, and are based on definitions contained in, the Swiss Code of Obligations.

Personnel expenses

Total personnel expenses were $2,114.3 million and $1,233.7 million in 2013 and 2012, respectively.

Fire insurance value

The fire insurance values of property, plant, and equipment was $4,913.3 million at December 31, 2013.

Risk assessment

Our board of directors is responsible for assessing our major risks and overseeing that appropriate risk management and control procedures are in place. The audit committee of the board meets to review and discuss, as determined to be appropriate, our major financial and accounting risk exposures and related policies and practices with management, the internal auditors and the independent registered public accountants to assess and control such exposures and assist the board in fulfilling its oversight responsibilities regarding our policies and guidelines with respect to risk assessment and risk management. Our risk assessment process was in place during fiscal 2013 and 2012 and followed by the board of directors.

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Share Plans - Stock Option Activity (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Shares
Beginning balance	8.4
Granted	1.0
Exercised	(2.9)
Forfeited	(0.2)
Expired	(0.1)
Ending balance	6.2
Options exercisable	4.7
Options expected to vest at end of period	1.5
Weighted Average Exercise Price
Beginning balance (USD per share)	$ 32.13
Granted (USD per share)	$ 50.83
Exercised (USD per share)	$ 30.84
Forfeited (USD per share)	$ 37.25
Expired (USD per share)	$ 28.82
Ending Balance (USD per share)	$ 35.53
Options exercisable at end of period (USD per share)	$ 32.78
Options expected to vest at end of period (USD per share)	$ 44.27
Weighted Average Remaining Contractual Life
Ending balance	5 years 7 months
Options exercisable at end of period	4 years 8 months 10 days
Options expected to vest at end of period	8 years 6 months
Aggregate Intrinsic value
Balance at end of period	$ 255.3
Options exercisable at end of period	205.8
Options expected to vest at end of period	$ 48.0

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Acquisitions and Divestitures - Additional Information (Detail) In Millions, except Share data, unless otherwise specified	12 Months Ended						12 Months Ended		1 Months Ended		12 Months Ended						1 Months Ended		12 Months Ended	1 Months Ended	12 Months Ended						0 Months Ended			1 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2013 Maximum USD ($)	Dec. 31, 2012 Process Technologies USD ($)	Dec. 31, 2011 Process Technologies USD ($)	Dec. 31, 2013 Flow Technologies USD ($)	Dec. 31, 2013 Technical Solutions USD ($)	Sep. 28, 2012 Tyco Flow Control International, Ltd USD ($)		Dec. 31, 2012 Tyco Flow Control International, Ltd USD ($)	Dec. 31, 2011 Tyco Flow Control International, Ltd USD ($)	Sep. 28, 2012 Tyco Flow Control International, Ltd Valves & Controls USD ($)	Sep. 28, 2012 Tyco Flow Control International, Ltd Process Technologies USD ($)	Sep. 28, 2012 Tyco Flow Control International, Ltd Flow Technologies USD ($)	Sep. 28, 2012 Tyco Flow Control International, Ltd Technical Solutions USD ($)	May 12, 2011 CPT USD ($)	May 12, 2011 CPT EUR (€)	Dec. 31, 2011 CPT USD ($)	Oct. 04, 2012 Pentair Middle East Holding S.a.r.l. USD ($)	Dec. 31, 2013 Pentair Ltd. USD ($)	Dec. 31, 2012 Change In Control Of Company Tyco Flow Control International, Ltd USD ($)	Dec. 31, 2011 Change In Control Of Company Tyco Flow Control International, Ltd USD ($)	Dec. 31, 2012 Transaction Costs Tyco Flow Control International, Ltd USD ($)	Dec. 31, 2011 Transaction Costs Tyco Flow Control International, Ltd USD ($)	Dec. 31, 2011 Transaction Costs CPT USD ($)	Jan. 30, 2014 Subsequent Event Pentair Residential Filtration [Member] USD ($)	Sep. 28, 2012 Trade names intangibles Tyco Flow Control International, Ltd USD ($)	Sep. 28, 2012 Customer Backlog Tyco Flow Control International, Ltd USD ($)	Sep. 28, 2012 Customer Backlog Tyco Flow Control International, Ltd Maximum	Sep. 28, 2012 Proprietary technology Tyco Flow Control International, Ltd USD ($)	Sep. 28, 2012 Customer Relationship Tyco Flow Control International, Ltd USD ($)
Material acquisitions
Percentage of ownership									100.00%
Shares issued for stock acquisition									110,900,000
Goodwill					$ 80.9	$ 14.4			$ 2,741.8				$ 1,511.6	$ 30.1	$ 318.5	$ 881.6	$ 451.8
Intangibles									1,441.9																			362.3	43.7		115.9	920.0
Weighted average useful life																														1 year	13 years 8 months 12 days	14 years 2 months 12 days
Other material acquisitions
Purchase Price					121.2	21.6			5,016.1								715.3	502.7
Intangibles																	197.2
Weighted average useful life																	10 years	10 years
Pro forma results of material acquisitions
Acquired Inventory											178.1	262.0							12.9
Acquisition related costs																						21.8	21.8	57.3	8.7	8.0
Percentage Of Ownership Interest Acquired																				25.00%							19.90%
Other acquisitions
Cash paid						17.8			84.4	[1]										100.0							134.3
Percentage of ownership interests before acquisition																				75.00%							80.10%
Liabilities incurred						3.8
Expected tax deductible goodwill					67.1	0
Cost and expenses incurred in connection with acquisition	8.2	57.3	8.2	40.0
Divestitures
Proceeds from divestiture	43.5	0	0				13.4	30.1													0
Gain on sale of business	19.7	0	0				2.9	16.8													0
Goodwill write-off							$ 5.7	$ 5.3

[1] In June 2013, cash was paid to Tyco in settlement of the working capital and net indebtedness adjustment.

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Selected Quarterly Data - Quarterly Financial Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2013		Sep. 28, 2013		Jun. 29, 2013		Mar. 30, 2013		Dec. 31, 2012		Sep. 29, 2012		Jun. 30, 2012		Mar. 31, 2012		Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Quarterly Financial Information [Line Items]
Net sales	$ 1,916.7		$ 1,824.8		$ 1,963.7		$ 1,774.5		$ 1,750.9		$ 865.5		$ 941.5		$ 858.2		$ 7,479.7		$ 4,416.1		$ 3,456.7
Gross profit	644.1		637.6		667.4		523.8		398.7		278.1		312.1		280.7		2,472.9		1,269.6		1,073.7
Operating income (loss)	233.8		240.0		225.9		74.3		(304.1)		55.2		119.3		86.5		774.0		(43.1)		100.2
Net income (loss) before noncontrolling interest	159.7		174.2		155.4		53.3		(274.7)		32.6		74.4		63.1		542.6		(104.6)		(3.2)
Net income (loss) attributable to Pentair Ltd.	$ 158.2		$ 172.8		$ 154.1		$ 51.7		$ (273.1)		$ 31.4		$ 72.8		$ 61.7		$ 536.8		$ (107.2)		$ (7.5)
Earnings (loss) per common share attributable to Pentair Ltd.
Basic	$ 0.80	[1]	$ 0.87	[1]	$ 0.76	[1]	$ 0.25	[1]	$ (1.31)	[1]	$ 0.31	[1]	$ 0.73	[1]	$ 0.63	[1]	$ 2.67	[1]	$ (0.84)	[1]	$ (0.08)
Diluted	$ 0.78	[1]	$ 0.85	[1]	$ 0.75	[1]	$ 0.25	[1]	$ (1.31)	[1]	$ 0.31	[1]	$ 0.72	[1]	$ 0.62	[1]	$ 2.62	[1]	$ (0.84)	[1]	$ (0.08)

[1] Amounts may not total to annual earnings because each quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period

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Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2013

Reconciliations of Benefit Obligations, Plan Assets of Pension Plans and Funded Status of Plans

The following tables present reconciliations of plan benefit obligations, fair value of plan assets and the funded status of pension plans and other post-retirement plans as of and for the years ended December 31, 2013 and 2012:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
In millions	2013			2012			2013			2012			2013			2012
Change in benefit obligations
Benefit obligation beginning of year	$	394.3		$	572.1		$	460.8		$	89.5		$	59.3		$	35.1
Service cost	15.6			12.9			8.4			3.3			0.3			0.2
Interest cost	14.3			28.2			17.9			7.5			1.9			1.9
Amendments	—			0.4			—			—			—			—
Benefit obligations assumed in Merger	—			10.8			—			338.6			—			16.7
Actuarial (gain) loss	(56.9		)	128.8			(16.6		)	26.6			(15.9		)	8.2
Translation loss	—			—			9.7			1.5			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Benefit obligation end of year	$	346.9		$	394.3		$	462.0		$	460.8		$	42.4		$	59.3
Change in plan assets
Fair value of plan assets beginning of year	$	326.2		$	408.8		$	249.0		$	10.9		$	—		$	—
Actual return on plan assets	(28.9		)	43.9			28.6			6.4			—			—
Plan assets acquired in Merger	—			7.6			—			227.3			—			—
Company contributions	8.9			224.8			21.9			10.4			3.2			2.8
Translation gain	—			—			5.2			0.2			—			—
Benefits paid	(20.4		)	(358.9		)	(18.2		)	(6.2		)	(3.2		)	(2.8		)
Fair value of plan assets end of year	$	285.8		$	326.2		$	286.5		$	249.0		$	—		$	—
Funded status
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

Amounts Recognized in Consolidated Balance Sheets

Amounts recorded in the Consolidated Balance Sheets were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post- retirement plans
In millions	2013			2012			2013			2012			2013			2012
Other non-current assets	$	0.7		$	—		$	3.7		$	—		$	—		$	—
Current liabilities	(3.9		)	(3.5		)	(4.7		)	(4.9		)	(3.7		)	(4.5		)
Non-current liabilities	(57.9		)	(64.6		)	(174.5		)	(207.0		)	(38.7		)	(54.8		)
Benefit obligations in excess of the fair value of plan assets	$	(61.1	)	$	(68.1	)	$	(175.5	)	$	(211.9	)	$	(42.4	)	$	(59.3	)

Pension Plans with an Accumulated Benefit Obligation or Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation or projected benefit obligation in excess of plan assets as of December 31 are as follows:

	Projected benefit obligation exceeds the fair value of plan assets				Accumulated benefit  obligation exceeds the fair value of plan assets
In millions	2013		2012		2013		2012
U.S. pension plans
Projected benefit obligation	$	76.3	$	158.1	$	76.3	$	87.1
Fair value of plan assets	14.5		85.3		14.5		15.5
Accumulated benefit obligation	N/A		N/A		73.1		77.2
Non-U.S. pension plans
Projected benefit obligation	$	438.2	$	436.7	$	420.4	$	431.3
Fair value of plan assets	259.0		222.4		244.5		217.2
Accumulated benefit obligation	N/A		N/A		411.5		420.0

Assumed Health Care Cost Trend Rates

The assumed healthcare cost trend rates for other post-retirement plans as of December 31 were as follows:

	2013		2012
Healthcare cost trend rate assumed for following year	7.0	%	7.4	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.5	%	4.5	%
Year the cost trend rate reaches the ultimate trend rate	2027		2027

Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

A one-percentage-point change in the assumed healthcare cost trend rates would have the following effects as of and for the year ended December 31, 2013:

	One Percentage Point
In millions	Increase		Decrease
Increase (decrease) in annual service and interest cost	$	0.1	$	(0.1	)
Increase (decrease) in other post-retirement benefit obligations	1.2		(1.0		)

Actual Overall Asset Allocation for U.S. And Non-U.S. Plans as Compared to Investment Policy Goals

Our actual overall asset allocation for our U.S. and non-U.S. pension plans as compared to our investment policy goals as of December 31 was as follows:

	U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	—	%	32	%	—		—
Fixed income	92	%	56	%	100	%	100	%
Alternative	7	%	7	%	—		—
Cash	1	%	5	%	—		—

	Non-U.S. pension plans
	Actual				Target
Percentages	2013		2012		2013		2012
Equity securities	54	%	51	%	56	%	55	%
Fixed income	41	%	42	%	44	%	45	%
Alternative	3	%	3	%	—		—
Cash	2	%	4	%	—		—

Plan Assets Using Fair Value Hierarchy

The fair values of our pension plan assets and their respective levels in the fair value hierarchy as of December 31, 2013 and December 31, 2012 were as follows:

	December 31, 2013
In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1.8	$	5.9	$	—	$	7.7
Fixed income:
Corporate and non U.S. government	—		262.2		—		262.2
U.S. treasuries	—		75.5		—		75.5
Mortgage-backed securities	—		8.7		—		8.7
Other	—		34.1		—		34.1
Global equity securities:
Mid cap equity	—		7.3		—		7.3
Large cap equity	—		43.5		—		43.5
International equity	—		101.9		—		101.9
Long/short equity	—		0.6		—		0.6
Other investments	—		11.8		19.0		30.8
Total fair value of plan assets	$	1.8	$	551.5	$	19.0	$	572.3

	December 31, 2012
In millions	Level 1		Level 2		Level 3		Total
Cash equivalents	$	6.2	$	21.2	$	—	$	27.4
Fixed income:
Corporate and non U.S. government	—		164.3		—		164.3
U.S. treasuries	—		69.4		—		69.4
Mortgage-backed securities	—		23.4		—		23.4
Other	—		28.1		—		28.1
Global equity securities:
Mid cap equity	—		6.7		—		6.7
Large cap equity	—		89.0		—		89.0
International equity	—		89.8		—		89.8
Long/short equity	—		47.6		—		47.6
Other investments	—		11.2		18.3		29.5
Total fair value of plan assets	$	6.2	$	550.7	$	18.3	$	575.2

Reconciliation of Level 3 Assets

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2013 and 2012, respectively:

In millions	January 1, 2013		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2013
Other investments	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0
Total	$	18.3	$	1.9	$	(1.2	)	$	—	$	19.0

In millions	January 1, 2012		Net realized and unrealized gains (losses)		Net issuances and settlements			Net transfers into (out of) level 3		December 31, 2012
Other investments	$	19.0	$	1.1	$	(1.8	)	$	—	$	18.3
Fixed income investments	1.0		—		(1.0		)	—		—
Total	$	20.0	$	1.1	$	(2.8	)	$	—	$	18.3

Expected Future Service to Be Paid by Plans

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans for the years ended December 31 as follows:

In millions	U.S. pension plans		Non-U.S. pension plans		Other post- retirement plans
2014	$	8.6	$	18.6	$	3.7
2015	9.8		16.2		3.5
2016	12.3		17.2		3.4
2017	13.7		18.5		3.4
2018	16.2		19.8		3.3
2019-2023	103.8		113.1		14.9

Pension benefits

Components of Net Periodic Benefit Cost

Components of net periodic benefit expense (income) for our pension plans for the years ended December 31 were as follows:

	U. S. pension plans									Non-U.S. pension plans
In millions	2013			2012			2011			2013			2012			2011
Service cost	$	15.6		$	12.9		$	10.3		$	8.4		$	3.3		$	2.2
Interest cost	14.3			28.2			28.6			17.9			7.5			4.1
Expected return on plan assets	(9.7		)	(29.4		)	(27.9		)	(15.2		)	(3.9		)	(0.5		)
Amortization of prior year service cost (benefit)	0.4			—			—			(0.2		)	—			—
Net actuarial (gain) loss	(18.3		)	114.3			59.0			(30.0		)	24.2			4.2
Net periodic benefit expense (income)	$	2.3		$	126.0		$	70.0		$	(19.1	)	$	31.1		$	10.0

Post-retirement

Components of Net Periodic Benefit Cost

Components of net periodic benefit expense (income) for our other post-retirement plans for the years ended December 31 were as follows:

	Other post-retirement plans
In millions	2013			2012		2011
Service cost	$	0.3		$	0.2	$	0.2
Interest cost	1.9			1.9		1.9
Amortization of prior year service benefit	(0.8		)	—		—
Net actuarial (gain) loss	(15.9		)	8.1		2.4
Net periodic benefit (income) expense	$	(14.5	)	$	10.2	$	4.5

Benefit Obligations

Weighted-Average Assumptions used to Determine Domestic Benefit Obligations and Domestic Net Periodic Benefit Cost

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	4.51	%	3.67	%	5.05	%	4.13	%	3.85	%	4.82	%	4.35	%	3.40	%	5.05	%
Rate of compensation increase	4.00	%	4.37	%	4.00	%	3.02	%	3.02	%	2.98	%	—		—		—

Net Periodic Benefit Cost

Weighted-Average Assumptions used to Determine Domestic Benefit Obligations and Domestic Net Periodic Benefit Cost

Weighted-average assumptions used to determine net periodic benefit expense (income) for years ended December 31 were as follows:

	U.S. pension plans						Non-U.S. pension plans						Other post-retirement plans
Percentages	2013		2012		2011		2013		2012		2011		2013		2012		2011
Discount rate	3.67	%	5.05	%	5.90	%	3.85	%	4.82	%	5.13	%	3.40	%	5.05	%	5.90	%
Expected long-term return on plan assets	3.75	%	7.50	%	8.00	%	5.98	%	4.09	%	4.50	%	—		—		—
Rate of compensation increase	4.37	%	4.21	%	4.00	%	3.02	%	2.98	%	2.98	%	—		—		—

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Financial Statements of Parent Company Guarantor - Additional Information (Detail)							12 Months Ended
	Nov. 30, 2012 Senior Notes 3.50% due 2015	Sep. 29, 2012 Senior Notes 1.875 % due 2017	Nov. 30, 2012 Senior Notes 2.650% due 2019	Dec. 31, 2013 Senior Notes, 5.000% Due 2021	May 31, 2011 Senior Notes, 5.000% Due 2021	Sep. 29, 2012 Senior Notes 3.150% due 2022	Dec. 31, 2013 Subsidiary Issuer	Dec. 31, 2013 Subsidiary Issuer Senior Notes 3.50% due 2015	Dec. 31, 2013 Subsidiary Issuer Senior Notes 1.875 % due 2017	Dec. 31, 2013 Subsidiary Issuer Senior Notes 2.650% due 2019	Dec. 31, 2013 Subsidiary Issuer Senior Notes, 5.000% Due 2021	Dec. 31, 2013 Subsidiary Issuer Senior Notes 3.150% due 2022
Condensed Financial Statements, Captions [Line Items]
Debt, interest rate	1.35%	1.875%	2.65%	5.00%		3.15%		1.35%	1.875%	2.65%	5.00%	3.15%
Debt, maturity year	2015	2017	2019	2021	2021	2022		2015	2017	2019	2021	2022
Ownership percentage							100.00%

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Consolidated Balance Sheets (Parenthetical) In Millions, except Share data, unless otherwise specified	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CHF	Dec. 31, 2012 USD ($)	Dec. 31, 2012 CHF
Accounts and notes receivable, allowances	$ 115.1		$ 37.5
Common stock, par value (CHF per share)		0.50		0.50
Common stock, shares authorized	213,000,000	213,000,000	213,000,000	213,000,000
Common stock, shares issued	213,000,000	213,000,000	213,000,000	213,000,000
Treasury stock, shares	15,600,000	15,600,000	6,900,000	6,900,000

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Benefit Plans - Effect of One-Percentage-Point Change in Assumed Healthcare Cost Trend Rates (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
Effect on total annual service and interest cost	$ 0.1
Effect on other post-retirement benefit obligations	1.2
Effect on total annual service and interest cost	(0.1)
Effect on other post-retirement benefit obligations	$ (1.0)

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Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2013

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share were calculated as follows:

	Years ended December 31
In millions, except per share data	2013		2012			2011
Net income (loss) attributable to Pentair Ltd.	$	536.8	$	(107.2	)	$	(7.5	)
Weighted average common shares outstanding
Basic	201.1		127.4			98.2
Dilutive impact of stock options and restricted stock awards	3.5		—			—
Diluted	204.6		127.4			98.2
Earnings (loss) per common share attributable to Pentair Ltd.
Basic earnings (loss) per common share	$	2.67	$	(0.84	)	$	(0.08	)
Diluted earnings (loss) per common share	$	2.62	$	(0.84	)	$	(0.08	)
Anti-dilutive stock options excluded from the calculation of diluted earnings per share	0.2		16.0			8.4

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Goodwill and Other Identifiable Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Amortization and Impairment
Accumulated goodwill impairment losses	$ 200.5	$ 200.5	$ 200.5	$ 200.5
Amortization			137.2	76.0	41.9
Impairment charges, related to trade names	11.0	60.7	11.0	60.7	0
Process Technologies
Amortization and Impairment
Impairment charge					200.5
Impairment charges, related to trade names				23.2
Flow Technologies
Amortization and Impairment
Impairment charges, related to trade names				25.9
Technical Solutions
Amortization and Impairment
Impairment charges, related to trade names			$ 11.0	$ 11.6

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Benefit Plans - Amounts Recorded in Consolidated Balance Sheets (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Non-current liabilities	$ (324.8)	$ (378.8)
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement Defined Benefit Plans, Assets, Noncurrent	0.7
Current liabilities	(3.9)	(3.5)
Non-current liabilities	(57.9)	(64.6)
Benefit obligations in excess of the fair value of plan assets	(61.1)	(68.1)
Non-US Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Pension and Other Postretirement Defined Benefit Plans, Assets, Noncurrent	3.7
Current liabilities	(4.7)	(4.9)
Non-current liabilities	(174.5)	(207.0)
Benefit obligations in excess of the fair value of plan assets	(175.5)	(211.9)
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	(3.7)	(4.5)
Non-current liabilities	(38.7)	(54.8)
Benefit obligations in excess of the fair value of plan assets	$ (42.4)	$ (59.3)

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Selected Quarterly Data - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Mar. 30, 2013	Dec. 31, 2012	Sep. 29, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Effect of Fourth Quarter Events [Line Items]
Net sales	$ 1,916.7	$ 1,824.8	$ 1,963.7	$ 1,774.5	$ 1,750.9	$ 865.5	$ 941.5	$ 858.2	$ 7,479.7	$ 4,416.1	$ 3,456.7
Merger related costs and expenses						52.7
Mark-to-market actuarial gains (losses) on pension and post-retirement benefit plans	63.2				146.3
Inventory fair value step-up and customer backlog				76.8	179.6
Loss on early extinguishment of debt					75.4				0	75.4	0
Restructuring cost	61.6			27.4	55.3
Impairment charges, related to trade names	11.0				60.7				11.0	60.7	0
Expense related to merger					12.0
Flow Control
Effect of Fourth Quarter Events [Line Items]
Net sales					886.5
Income (loss) from continuing operations					$ (117.0)

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Derivatives and Financial Instruments - Recorded Amounts and Estimated Fair Values of Long-term Debt and Derivative Financial Instruments (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Derivative [Line Items]
Total debt	$ 2,555.1	$ 2,457.4
Carrying (Reported) Amount, Fair Value Disclosure
Derivative [Line Items]
Variable rate debt	528.9	427.7
Fixed rate debt	2,026.2	2,029.7
Total debt	2,555.1	2,457.4
Estimate of Fair Value, Fair Value Disclosure
Derivative [Line Items]
Variable rate debt	528.9	427.7
Fixed rate debt	2,002.2	2,081.3
Total debt	$ 2,531.1	$ 2,509.0

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Proposed Redomicile

12 Months Ended

Dec. 31, 2013

Business Acquisition [Line Items]

Proposed Redomicile

Proposed Redomicile

On December 10, 2013, Pentair Ltd. entered into a Merger Agreement (the “Merger Agreement”) with Pentair plc, a newly-formed Irish public limited company and subsidiary of Pentair (“Pentair-Ireland”). Under the Merger Agreement, and subject to the conditions set forth in the Merger Agreement, Pentair will merge with and into Pentair-Ireland, with Pentair-Ireland being the surviving company (the “Redomicile”), thereby changing the jurisdiction of organization of the publicly-traded parent company from Switzerland to Ireland. Pentair shareholders will receive one ordinary share of Pentair-Ireland for each common share of Pentair held immediately prior to the Redomicile.

Upon completion of the Redomicile, Pentair-Ireland intends to manage its affairs so that it is centrally managed and controlled in the United Kingdom (the “U.K.”) and therefore have its tax residency in the U.K. Pentair-Ireland will continue to own and conduct the same businesses as Pentair owned and conducted prior to the Merger, except that Pentair-Ireland will replace Pentair as the publicly-traded parent company. Pentair-Ireland will remain subject to U.S. Securities and Exchange Commission reporting requirements and the applicable corporate governance rules of the New York Stock Exchange.

The Redomicile is subject to Pentair shareholder approval of the Merger Agreement and certain other conditions. Pentair’s shareholders will be asked to vote to approve the Merger Agreement at an extraordinary general meeting of shareholders, which Pentair expects to be held during the second quarter of 2014.

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Income Taxes - Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Income Taxes [Line Items]
Federal statutory income tax rate	7.80%	[1]	7.80%	[1]	35.00%	[1]
Tax effect of international operations	10.50%	[2]	23.60%	[2]	(25.30%)	[2]
Change in valuation allowances	5.50%
Withholding taxes	1.00%
Interest limitations	0.50%
Non-deductible transaction costs			(4.70%)
Impact of debt-financing			10.80%
Resolution of tax audits			5.60%
Goodwill					104.40%
Domestic manufacturing deduction					(8.40%)
State income taxes, net of federal tax benefit					4.30%
All other, net					(2.70%)
Effective tax rate	25.30%		43.10%		107.30%

[1] As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, the statutory rate reflects the U.S. statutory rate of 35 percent.

[2] As a result of the Merger, the tax effect of international operations for 2013 and 2012 consists of non-Swiss jurisdictions. For 2011, the tax effect of international operations consists of non-U.S. jurisdictions.

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Debt (Tables)

12 Months Ended

Dec. 31, 2013

Debt and Average Interest Rates on Debt Outstanding

Debt and the average interest rates on debt outstanding were as follows:

In millions	Average interest rate at December 31, 2013	Maturity year	December 31
			2013			2012
Commercial paper	0.522%	2017	$	528.9		$	424.7
Senior notes - fixed rate	1.350%	2015	350.0			350.0
Senior notes - fixed rate	1.875%	2017	350.0			350.0
Senior notes - fixed rate	2.650%	2019	250.0			250.0
Senior notes - fixed rate	5.000%	2021	500.0			500.0
Senior notes - fixed rate	3.150%	2022	550.0			550.0
Other	0.017%	2015-2030	4.7			8.9
Capital lease obligations	4.086%	2014-2025	21.5			23.8
Total debt			2,555.1			2,457.4
Less: Current maturities and short-term borrowings			(2.5		)	(3.1		)
Long-term debt			$	2,552.6		$	2,454.3

Debt Outstanding Matures on Calendar Year Basis

Debt outstanding at December 31, 2013 matures on a calendar year basis as follows:

In millions	2014		2015		2016		2017		2018		Thereafter		Total
Contractual debt obligation maturities	$	—	$	350.0	$	—	$	878.9	$	—	$	1,304.7	$	2,533.6
Capital lease obligations	2.5		5.5		0.5		0.5		0.5		12.0		21.5
Total maturities	$	2.5	$	355.5	$	0.5	$	879.4	$	0.5	$	1,316.7	$	2,555.1

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Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Shareholders' Equity

Shareholders’ Equity

Authorized shares

Our authorized share capital consists of 213.0 million common shares with a par value of 0.50 Swiss francs per share. The board of directors is authorized to increase the total share capital until September 14, 2014 by a maximum amount of 106.5 million shares. In addition, our share capital may be increased by:

• a maximum of 81.5 million shares upon the exercise of conversion, option, exchange, warrant or similar rights for the subscription of shares granted to third parties or shareholders in connection with bonds, notes, options, warrants or other securities issued by us in national or international capital markets or pursuant to our existing and future contractual obligations (“Rights Bearing Obligations”); and/or

• a maximum of 25.0 million shares upon the exercise of rights related to Rights-Bearing Obligations granted to members of the board of directors, members of the executive management, employees, contractors, consultants or other persons providing services for our benefit.

Share repurchases

In December 2011, the Board of Directors authorized the repurchase of our common shares up to a maximum dollar limit of $25.0 million. No repurchases were made under this authorization in 2012, and the authorization expired on September 28, 2012 in connection with the closing of the Merger.

Prior to the closing of the Merger, our board of directors, and Tyco as our sole shareholder, authorized the repurchase of our common shares with a maximum aggregate value of $400.0 million following the closing of the Merger. This authorization does not have an expiration date. On October 1, 2012, our board of directors authorized the repurchase of our common shares with a maximum aggregate value of $800.0 million. This authorization expires on December 31, 2015 and is in addition to the $400.0 million share repurchase authorization. As of December 31, 2013, we had repurchased 19.6 million of our common shares for $1.05 billion pursuant to these authorizations and had $150.0 million remaining available for repurchases under these authorizations.

In December 2013, the Board of Directors authorized the repurchase of our common shares up to a maximum dollar limit of $1.0 billion. This authorization is in addition to the combined $1.2 billion prior share repurchase authorization. The authorization expires on December 31, 2016. No repurchases were made under this authorization in 2013.

Dividends payable

At our 2013 annual meeting of shareholders held on April 29, 2013, our shareholders approved a proposal to pay quarterly cash dividends through the second quarter of 2014. The authorization provides that dividends of $1.00 per share will be made out of our Capital contribution reserve equity position in our statutory accounts to our shareholders in quarterly installments of $0.25 for each of the third and fourth quarters of 2013 and first and second quarters of 2014. As a result, the balance of dividends payable included in Other current liabilities on our Consolidated Balance Sheets was $98.7 million at December 31, 2013. Dividends paid per common share were $0.96, $0.88 and $0.80 for the years ended December 31, 2013, 2012 and 2011, respectively.

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 LegalMatter	Dec. 31, 2012
Loss Contingencies [Line Items]
Number Of Lawsuits	2,000
Number Of Claims In Lawsuit	2,200
Liability For claims and contingencies	$ 254.7	$ 278.9
Liability reserve for insurance claims	119.6	131.0
Environmental Reserve	39.3	49.2
Outstanding Value Of Letters Of Credit	$ 484.0	$ 493.2
Compliance Settlement Period	3 years