Financial Statements of Parent Company Guarantor (Tables)

3 Months Ended

Mar. 29, 2014

Dec. 31, 2013

Mar. 30, 2013

Schedule of Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three months ended March 29, 2014

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	1,725.2		$	—		$	1,725.2
Cost of goods sold	—			—			1,146.9			—			1,146.9
Gross profit	—			—			578.3			—			578.3
Selling, general and administrative	(0.3		)	3.3			365.4			—			368.4
Research and development	—			—			30.0			—			30.0
Operating income (loss)	0.3			(3.3		)	182.9			—			179.9
Loss (earnings) from investment in subsidiaries	(118.6		)	(127.1		)	—			245.7			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			(0.4		)	—			(0.4		)
Loss on sale of business	—			—			8.0			—			8.0
Net interest expense	0.3			0.9			14.5			—			15.7
Income (loss) before income taxes	118.6			122.9			160.8			(245.7		)	156.6
Provision for income taxes	—			—			38.0			—			38.0
Net income (loss) attributable to Pentair Ltd.	$	118.6		$	122.9		$	122.8		$	(245.7	)	$	118.6
Comprehensive income (loss), net of tax
Net income (loss) attributable to Pentair Ltd.	$	118.6		$	122.9		$	122.8		$	(245.7	)	$	118.6
Changes in cumulative translation adjustment	(27.9		)	(27.9		)	(27.9		)	55.8			(27.9		)
Changes in market value of derivative financial instruments	0.2			0.2			0.2			(0.4		)	0.2
Comprehensive income (loss) attributable to Pentair Ltd.	$	90.9		$	95.2		$	95.1		$	(190.3	)	$	90.9

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three months ended March 30, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	1,774.5		$	—		$	1,774.5
Cost of goods sold	—			—			1,250.7			—			1,250.7
Gross profit	—			—			523.8			—			523.8
Selling, general and administrative	(1.0		)	3.6			413.4			—			416.0
Research and development	—			—			33.5			—			33.5
Operating income (loss)	1.0			(3.6		)	76.9			—			74.3
Loss (earnings) from investment in subsidiaries	(50.7		)	(54.9		)	—			105.6			—
Other (income) expense:
Equity income of unconsolidated subsidiaries	—			—			(0.2		)	—			(0.2		)
Gain on sale of business	—			—			(16.7		)	—			(16.7		)
Net interest expense	0.3			2.6			14.1			—			17.0
Income (loss) before income taxes and noncontrolling interest	51.4			48.7			79.7			(105.6		)	74.2
Provision (benefit) for income taxes	(0.3		)	—			21.2			—			20.9
Net income (loss) before noncontrolling interest	51.7			48.7			58.5			(105.6		)	53.3
Noncontrolling interest	—			—			1.6			—			1.6
Net income (loss) attributable to Pentair Ltd.	$	51.7		$	48.7		$	56.9		$	(105.6	)	$	51.7
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	51.7		$	48.7		$	58.5		$	(105.6	)	$	53.3
Changes in cumulative translation adjustment	(76.0		)	(76.0		)	(76.9		)	152.0			(76.9		)
Changes in market value of derivative financial instruments	0.7			0.7			0.7			(1.4		)	0.7
Total comprehensive income (loss)	(23.6		)	(26.6		)	(17.7		)	45.0			(22.9		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			0.7			—			0.7
Comprehensive income (loss) attributable to Pentair Ltd.	$	(23.6	)	$	(26.6	)	$	(18.4	)	$	45.0		$	(23.6	)

Schedule of Condensed Consolidating Balance Sheet

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

March 29, 2014

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	0.2	$	0.4	$	210.5	$	—		$	211.1
Accounts and notes receivable, net	14.7		10.2		1,522.1		(136.3		)	1,410.7
Inventories	—		—		1,271.6		—			1,271.6
Other current assets	0.9		1.2		409.8		—			411.9
Total current assets	15.8		11.8		3,414.0		(136.3		)	3,305.3
Property, plant and equipment, net	—		—		1,162.0		—			1,162.0
Other assets
Investments in subsidiaries	6,064.8		8,105.1		—		(14,169.9		)	—
Goodwill	—		—		5,098.9		—			5,098.9
Intangibles, net	—		—		1,747.7		—			1,747.7
Other non-current assets	31.6		1,700.8		415.3		(1,695.1		)	452.6
Total other assets	6,096.4		9,805.9		7,261.9		(15,865.0		)	7,299.2
Total assets	$	6,112.2	$	9,817.7	$	11,837.9	$	(16,001.3	)	$	11,766.5
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	2.8	$	—		$	2.8
Accounts payable	108.5		2.9		600.3		(136.3		)	575.4
Employee compensation and benefits	0.1		—		294.5		—			294.6
Other current liabilities	49.7		13.9		591.7		—			655.3
Total current liabilities	158.3		16.8		1,489.3		(136.3		)	1,528.1
Other liabilities
Long-term debt	—		2,769.3		1,859.6		(1,695.1		)	2,933.8
Pension and other post-retirement compensation and benefits	—		—		318.6		—			318.6
Deferred tax liabilities	—		2.9		596.6		—			599.5
Other non-current liabilities	17.6		—		432.6		—			450.2
Total liabilities	175.9		2,789.0		4,696.7		(1,831.4		)	5,830.2
Equity	5,936.3		7,028.7		7,141.2		(14,169.9		)	5,936.3
Total liabilities and equity	$	6,112.2	$	9,817.7	$	11,837.9	$	(16,001.3	)	$	11,766.5

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

Schedule of Condensed Consolidating Statement of Cash Flows

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Three months endedMarch 29, 2014

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	$	118.0		$	125.6		$	2.7		$	(245.7	)	$	0.6
Investing activities
Capital expenditures	—			—			(27.2		)	—			(27.2		)
Proceeds from sale of property and equipment	—			—			0.4			—			0.4
Other	—			—			(0.5		)	—			(0.5		)
Net cash provided by (used for) investing activities	—			—			(27.3		)	—			(27.3		)
Financing activities
Net receipts (repayments) of short-term borrowings	—			—			0.3			—			0.3
Net receipts (repayments) of commercial paper and revolving long-term debt	—			367.4			14.5			—			381.9
Repayments of long-term debt	—			—			(0.9		)	—			(0.9		)
Net change in advances to subsidiaries	(69.1		)	(539.6		)	363.0			245.7			—
Excess tax benefits from share-based compensation	—			—			6.1			—			6.1
Shares issued to employees, net of shares withheld	—			—			24.0			—			24.0
Repurchases of common shares	—			—			(252.2		)	—			(252.2		)
Dividends paid	(49.2		)	—			—			—			(49.2		)
Purchase of noncontrolling interest	—			—			(134.7		)	—			(134.7		)
Net cash provided by (used for) financing activities	(118.3		)	(172.2		)	20.1			245.7			(24.7		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2.6		)	—			(2.6		)
Change in cash and cash equivalents	(0.3		)	(46.6		)	(7.1		)	—			(54.0		)
Cash and cash equivalents, beginning of period	0.5			47.0			217.6			—			265.1
Cash and cash equivalents, end of period	$	0.2		$	0.4		$	210.5		$	—		$	211.1

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Three months ended March 30, 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	$	95.1		$	50.9		$	(20.1	)	$	(106.0	)	$	19.9
Investing activities
Capital expenditures	—			—			(49.7		)	—			(49.7		)
Proceeds from sale of property and equipment	—			—			0.9			—			0.9
Proceeds from sale of businesses, net	—			—			30.0			—			30.0
Other	—			—			0.3			—			0.3
Net cash provided by (used for) investing activities	—			—			(18.5		)	—			(18.5		)
Financing activities
Net receipts (repayments) of short-term borrowings	—			—			2.9			—			2.9
Net receipts (repayments) of commercial paper and revolving long-term debt	—			102.6			37.0			—			139.6
Repayments of long-term debt	—			—			(1.7		)	—			(1.7		)
Debt issuance costs	—			(1.1		)	(0.2		)	—			(1.3		)
Net change in advances to subsidiaries	(47.9		)	(152.4		)	94.3			106.0			—
Shares issued to employees, net of shares withheld	—			—			11.8			—			11.8
Repurchases of common shares	—			—			(140.3		)	—			(140.3		)
Dividends paid	(47.2		)	—			—			—			(47.2		)
Distributions to noncontrolling interest	—			—			(2.0		)	—			(2.0		)
Net cash provided by (used for) financing activities	(95.1		)	(50.9		)	1.8			106.0			(38.2		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(10.0		)	—			(10.0		)
Change in cash and cash equivalents	—			—			(46.8		)	—			(46.8		)
Cash and cash equivalents, beginning of period	—			—			261.3			—			261.3
Cash and cash equivalents, end of period	$	—		$	—		$	214.5		$	—		$	214.5