8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): July 29, 2010

Commission file number 000-04689

Pentair, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	41-0907434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification number)
5500 Wayzata Blvd, Suite 800, Golden Valley, Minnesota	55416
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (763) 545-1730

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 Results of Operations and Financial Condition

On July 29, 2010, Pentair, Inc. (the “Company”) issued a press release announcing its earnings for the second quarter of 2010 and a conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

This press release refers to certain non-GAAP financial measures (adjusted operating income, adjusted operating margins, adjusted earnings per share and free cash flow) and a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in the Company’s financial statements prepared in accordance with generally accepted accounting principles.

Adjusted operating income, adjusted operating margins and adjusted earnings per share eliminate certain expenses incurred in 2009 to restructure certain operations of the Company by reducing headcount as a result of the significant continuing downturn in the global economy. Management utilizes these adjusted financial measures to assess the run-rate of its continuing operations against those of comparable periods without the distortion of these factors. The Company believes that these non-GAAP financial measures will be useful to investors as well to assess the continuing strength of the Company’s underlying operations in light of the downturn in the residential end markets.

The Company uses free cash flow to assess its cash flow performance. The Company believes free cash flow is an important measure of operating performance because it provides the Company and its investors a measurement of cash generated from operations that is available to pay dividends and repay debt. In addition, free cash flow is used as a criterion to measure and pay incentive-based compensation. The Company’s measure of free cash flow may not be comparable to similarly titled measures reported by other companies.

The information contained in this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 Financial Statements and Exhibits

(a)	Financial Statements of Businesses Acquired
	Not applicable.
(b)	Pro Forma Financial Information
	Not applicable.
(c)	Shell Company Transactions
	Not applicable
(d)	Exhibits
	The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:

Exhibit	Description
99.1	Pentair, Inc. press release dated July 29, 2010 announcing the earnings results for the second quarter 2010.

SIGNATURE

Pursuant to the requirements 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 July 29, 2010.

PENTAIR, INC. Registrant
By	/s/ John L. Stauch
	John L. Stauch Executive Vice President and Chief Financial Officer

PENTAIR, INC.

Exhibit Index to Current Report on Form 8-K
Dated July 29, 2010

Exhibit
Number	Description
99.1	Pentair, Inc. press release dated July 29, 2010 announcing the earnings results for the second quarter 2010.

EX-99.1

Exhibit 99.1

Pentair, Inc.
5500 Wayzata Blvd., Suite 800
MInneapolis, MN 55416
763 545 1730 Tel
763 656 5400 Fax

News Release

Pentair Reports Second Quarter Sales Growth of 15 Percent and
Net Income Per Share from Continuing Operations of $0.61

• Reports second quarter sales up 15 percent year-over-year to $796 million, with double digit growth in both Water and Technical Products

• Operating margins improved year-over-year to 12.6 percent

• Diluted earnings per share from continuing operations (EPS) of $0.61 up 85 percent year-over-year on GAAP basis; up 61 percent when compared to adjusted second quarter 2009 EPS

• Delivered strong free cash flow of $150 million in the second quarter

• Updated full-year 2010 EPS guidance to a range of $1.86 to $1.96 from previous guidance of $1.75 to $1.90 per share

All financial information and period-to-period references are on a continuing operations basis unless otherwise noted. Reconciliations to discontinued operations as well as GAAP and Non-GAAP reconciliations are in the attached financial tables.

MINNEAPOLIS, Minn. — July 29, 2010 — Pentair, Inc. (NYSE: PNR) today reported second quarter 2010 revenue of $796 million and net income from continuing operations attributable to Pentair, Inc. of $60 million, or $0.61 per share. This represents an increase of 85 percent as compared to the $0.33 of EPS in the second quarter last year. Adjusting second quarter 2009 for restructuring items, year-over-year adjusted EPS increased 61 percent.

Total company sales increased 15 percent to $796 million, compared with $694 million in the second quarter of 2009. Both Water and Technical Products posted double-digit sales gains, and growth was broad-based across end-markets served. The company delivered second quarter operating income of $100 million, up 58 percent year-over-year or up 51 percent compared to adjusted second quarter 2009 operating income. Overall, operating margins for the second quarter increased 300 basis points to 12.6 percent when compared to adjusted second quarter 2009 operating margins, driven by revenue growth and operational productivity.

The company generated strong free cash flow of $150 million for the quarter, with year-to-date free cash flow performance of $128 million, which is $29 million greater than the first half of 2009. The company said it is on track to achieve free cash flow of greater than $225 million for full year 2010.

“I am pleased with our second quarter performance, as strong execution of growth and productivity initiatives, along with improvement in market trends, enabled us to deliver double digit revenue gains and robust earnings growth. Pentair’s strong market execution, innovation and growth in the U.S., Europe and China led the way in both Water and Technical Products,” said Randall J. Hogan, Pentair chairman and chief executive officer.

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“Our lean cost structure and continued productivity efforts enabled us to significantly expand operating margins, while making continued incremental growth investments in product and market innovation,” Hogan continued. “Our strong second quarter performance underscores the strength of our brands, channels and geographies, as well as our focused execution.”

Second Quarter Business Highlights

Water delivered $549 million in sales, a 13 percent increase year-over-year. Foreign exchange was neutral to revenue in the quarter.

• Residential Flow sales were up 4 percent versus the year-ago quarter, reflecting share gains in the professional pump channel and strength in the agricultural business.

• Residential Filtration sales were up 7 percent as fast growth regions increased double digits, while the U.S. market continued its modest recovery.

• Pool sales were up 31 percent as the business continued to gain share with an expanded dealer base and healthy demand for energy-efficient Eco-Select products.

• Engineered Flow sales were up 14 percent driven by strong municipal sales, while North American commercial water systems remained down, reflecting a weak commercial construction market.

• Filtration Solutions sales were up 8 percent led by strong sales in Food Service along with growth in global systems in China and India, which helped offset timing delays of larger municipal project sales.

Water’s second quarter reported operating income totaled $76 million, up 53 percent as compared to $50 million in the same period last year. When compared to second quarter 2009 adjusted operating income of $51 million, second quarter 2010 operating margins increased by 330 basis points to 13.8 percent. The benefits from higher volumes, modest pricing and strong productivity more than offset increased costs related to material inflation, reinstated employee benefits and growth investments.

Technical Products delivered second quarter 2010 sales of $247 million, an increase of 19 percent versus the year-earlier period. Sales grew 20 percent, excluding the impact of foreign exchange, driven by solid demand across all key markets and increased pricing of approximately 1 percentage point.

• Industrial, general electronics, energy and infrastructure all posted strong double digit sales, with modest growth in communications and commercial markets.

• The U.S. and Western European geographies grew in the mid-teens, while emerging markets were up over 36 percent in total, led by robust growth in China.

Technical Products’ second quarter reported operating income totaled $38 million, up 61 percent compared to $24 million in the same quarter last year. When compared to second quarter 2009 adjusted operating income of $25 million, second quarter 2010 operating margins increased 340 basis points to 15.4 percent. Higher volumes, increased pricing and continued productivity more than offset the negative impact from inflation, reinstated employee benefits, costs related to the completion of all previously announced plant closures, and growth investments.

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Outlook

The company provided its third quarter 2010 EPS guidance of $0.49 to $0.52, an increase of 17 to 24 percent year-over-year when compared to adjusted third quarter 2009 earnings. The company expects third quarter sales to be up over 10 percent compared to the same period last year.

The company updated its full year 2010 EPS guidance to a range of $1.86 to $1.96, an increase of 27 to 33 percent versus full year 2009 adjusted EPS. Full year 2010 sales are expected to be around $2.95 billion and full year free cash flow is expected to be greater than $225 million.

“Our raised full year 2010 guidance reflects our strong first half performance and a balanced market view for the remainder of the year,” said Hogan. “We have a strong portfolio of products and systems today, along with an aligned global business structure with prioritized growth and productivity initiatives that we believe are yielding positive results and positioning us for accelerating performance in our served markets,” he added.

Earnings Conference Call

Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the company’s performance and second quarter 2010 results and 2010 outlook on a two-way conference call with investors and a live audio webcast at 9 a.m. Eastern today. Reconciliation of non-GAAP financial measures are set forth in the attachments to this second quarter 2010 earnings release and the second quarter 2010 earnings conference call presentation, both of which can be found at Pentair’s web site (www.pentair.com). Related financial charts and certain other information to be discussed on the conference call will be available on the company’s website shortly before the conference call. The webcast and presentation will be archived at the same site following the conclusion of the conference call.

Caution concerning forward-looking statements

Any statements made about the company’s anticipated financial results are forward-looking statements subject to risks and uncertainties such as the magnitude, timing and scope of recovery from the global economic downturn; the strength of housing and related markets; the risk that expected benefits from our recent restructuring and other cost reduction plans may not be fully realized, or may take longer to realize than expected; foreign currency effects; material inflation outpacing our productivity and pricing actions; retail, commercial and industrial demand; product introductions; and pricing and other competitive pressures, as well as other risk factors set forth in our SEC filings. Forward-looking statements included herein are made as of the date hereof, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.

About Pentair, Inc.

Pentair (www.pentair.com) is a global diversified industrial company headquartered in Minneapolis, Minnesota. Its Water Group is a global leader in providing innovative products and systems used worldwide in the movement, treatment, storage and enjoyment of water. Pentair’s Technical Products Group is a leader in the global enclosures and thermal management markets, designing and manufacturing thermal management products and standard, modified, and custom enclosures that protect sensitive electronics and the people that use them. With 2009 revenues of $2.7 billion, Pentair employs approximately 13,500 people worldwide.

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Pentair Contacts:
Sara Zawoyski
Vice President, Investor Relations
Tel.: (763) 656-5575
E-mail: sara.zawoyski@pentair.com

Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)

	Three months ended						Six months ended
	July 3,			June 27,			July 3,			June 27,
In thousands, except per-share data	2010			2009			2010			2009
Net sales	$	796,167		$	693,712		$	1,503,180		$	1,327,552
Cost of goods sold		547,999			497,233			1,041,310			961,841
Gross profit		248,168			196,479			461,870			365,711
% of net sales		31.2	%		28.3	%		30.7	%		27.6	%
Selling, general and administrative		131,043			119,104			263,933			236,379
% of net sales		16.5	%		17.1	%		17.6	%		17.8	%
Research and development		16,999			13,815			34,210			28,558
% of net sales		2.1	%		2.0	%		2.2	%		2.2	%
Operating income		100,126			63,560			163,727			100,774
% of net sales		12.6	%		9.2	%		10.9	%		7.6	%
Other (income) expense:
Equity (income) losses of unconsolidated subsidiaries		(1,375	)		279			(1,459	)		556
Loss on early extinguishment of debt		—			4,804			—			4,804
Net interest expense		8,569			9,833			18,096			21,617
% of net sales		1.1	%		1.4	%		1.2	%		1.6	%
Income from continuing operations before income taxes and noncontrolling interest		92,932			48,644			147,090			73,797
Provision for income taxes		31,320			16,217			49,449			23,649
effective tax rate		33.7	%		33.3	%		33.6	%		32.0	%
Income from continuing operations		61,612			32,427			97,641			50,148
Gain (loss) on disposal of discontinued operations, net of tax		593			(78	)		1,117			(68	)
Net income before noncontrolling interest		62,205			32,349			98,758			50,080
Noncontrolling interest		1,124			421			2,356			887
Net income attributable to Pentair, Inc.	$	61,081		$	31,928		$	96,402		$	49,193
Net income from continuing operations attributable to Pentair, Inc.	$	60,488		$	32,006		$	95,285		$	49,261
Earnings per common share attributable to Pentair, Inc.
Basic
Continuing operations	$	0.61		$	0.33		$	0.96		$	0.51
Discontinued operations		0.01			—			0.01			—
Basic earnings per common share	$	0.62		$	0.33		$	0.97		$	0.51
Diluted
Continuing operations	$	0.61		$	0.33		$	0.96		$	0.50
Discontinued operations		—			—			0.01			—
Diluted earnings per common share	$	0.61		$	0.33		$	0.97		$	0.50
Weighted average common shares outstanding
Basic		98,208			97,507			98,081			97,445
Diluted		99,638			98,422			99,435			98,145
Cash dividends declared per common share	$	0.19		$	0.18		$	0.38		$	0.36

Pentair, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

	July 3,		December 31,		June 27,
In thousands	2010		2009		2009
Assets
Current assets
Cash and cash equivalents	$	38,580	$	33,396	$	38,118
Accounts and notes receivable, net		475,679		455,090		462,106
Inventories		389,428		360,627		362,743
Deferred tax assets		49,058		49,609		51,465
Prepaid expenses and other current assets		42,878		47,576		50,111
Total current assets		995,623		946,298		964,543
Property, plant and equipment, net		318,124		333,688		340,884
Other assets
Goodwill		2,033,064		2,088,797		2,106,026
Intangibles, net		451,806		486,407		504,674
Other		54,083		56,144		61,118
Total other assets		2,538,953		2,631,348		2,671,818
Total assets	$	3,852,700	$	3,911,334	$	3,977,245
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	2,320	$	2,205	$	6,143
Current maturities of long-term debt		163		81		122
Accounts payable		248,679		207,661		212,973
Employee compensation and benefits		86,471		74,254		71,674
Current pension and post-retirement benefits		8,948		8,948		8,890
Accrued product claims and warranties		42,981		34,288		36,780
Income taxes		23,252		5,659		14,668
Accrued rebates and sales incentives		34,418		27,554		26,286
Other current liabilities		78,496		85,629		84,491
Total current liabilities		525,728		446,279		462,027
Other liabilities
Long-term debt		734,472		803,351		883,281
Pension and other retirement compensation		213,142		234,948		270,588
Post-retirement medical and other benefits		29,819		31,790		32,847
Long-term income taxes payable		24,821		26,936		26,906
Deferred tax liabilities		139,977		146,630		150,167
Other non-current liabilities		92,926		95,060		96,016
Total liabilities		1,760,885		1,784,994		1,921,832
Shareholders’ equity		2,091,815		2,126,340		2,055,413
Total liabilities and shareholders’ equity	$	3,852,700	$	3,911,334	$	3,977,245
Days sales in accounts receivable (13 month moving average)		60		62		61
Days inventory on hand (13 month moving average)		83		90		89
Days in accounts payable (13 month moving average)		69		66		62

Pentair, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six months ended
	July 3,			June 27,
In thousands	2010			2009
Operating activities
Net income before noncontrolling interest	$	98,758		$	50,080
Adjustments to reconcile net income to net cash provided by (used for) operating activities
(Gain) loss on disposal of discontinued operations		(1,117	)		68
Equity (income) losses of unconsolidated subsidiaries		(1,459	)		556
Depreciation		28,876			29,634
Amortization		13,357			14,601
Deferred income taxes		2,396			464
Stock compensation		12,365			9,087
Excess tax benefits from stock-based compensation		(1,322	)		(582	)
Gain on sale of assets		(57	)		(286	)
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(33,438	)		1,556
Inventories		(38,651	)		55,703
Prepaid expenses and other current assets		1,877			13,532
Accounts payable		46,938			(3,436	)
Employee compensation and benefits		11,275			(21,821	)
Accrued product claims and warranties		9,196			(4,792	)
Income taxes		18,872			9,066
Other current liabilities		1,043			(23,234	)
Pension and post-retirement benefits		(12,943	)		(1,433	)
Other assets and liabilities		448			(2,205	)
Net cash provided by (used for) continuing operations		156,414			126,558
Net cash provided by (used for) operating activities of discontinued operations		—			(1,408	)
Net cash provided by (used for) operating activities		156,414			125,150
Investing activities
Capital expenditures		(28,937	)		(28,850	)
Proceeds from sale of property and equipment		243			563
Divestitures		—			920
Other		(1,286	)		(10	)
Net cash provided by (used for) investing activities		(29,980	)		(27,377	)
Financing activities
Net short-term borrowings		115			6,024
Proceeds from long-term debt		335,021			400,000
Repayment of long-term debt		(403,742	)		(470,187	)
Debt issuance costs		(50	)		(50	)
Excess tax benefits from stock-based compensation		1,322			582
Stock issued to employees, net of shares withheld		(817	)		996
Dividends paid		(37,700	)		(35,433	)
Net cash provided by (used for) financing activities		(105,851	)		(98,068	)
Effect of exchange rate changes on cash and cash equivalents		(15,399	)		(931	)
Change in cash and cash equivalents		5,184			(1,226	)
Cash and cash equivalents, beginning of period		33,396			39,344
Cash and cash equivalents, end of period	$	38,580		$	38,118
Free cash flow
Net cash provided by (used for) continuing operations	$	156,414		$	126,558
Capital expenditures		(28,937	)		(28,850	)
Proceeds from sale of property and equipment		243			563
Free cash flow	$	127,720		$	98,271

Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment (Unaudited)

	First Qtr			Second Qtr			Six Months			First Qtr			Second Qtr			Six Months
In thousands	2010			2010			2010			2009			2009			2009
Net sales to external customers
Water Group	$	478,038		$	549,318		$	1,027,356		$	423,932		$	486,990		$	910,922
Technical Products Group		228,975			246,849			475,824			209,908			206,722			416,630
Consolidated	$	707,013		$	796,167		$	1,503,180		$	633,840		$	693,712		$	1,327,552
Intersegment sales
Water Group	$	517		$	427		$	944		$	289		$	198		$	487
Technical Products Group		703			1,047			1,750			233			600			833
Intercompany sales eliminations		(1,220	)		(1,474	)		(2,694	)		(522	)		(798	)		(1,320	)
Consolidated	$	—		$	—		$	—		$	—		$	—		$	—
Operating income (loss)
Water Group	$	42,138		$	75,954		$	118,092		$	26,976		$	49,781		$	76,757
Technical Products Group		33,098			37,990			71,088			20,462			23,578			44,040
Unallocated corporate expenses and intercompany eliminations		(11,635	)		(13,818	)		(25,453	)		(10,224	)		(9,799	)		(20,023	)
Consolidated	$	63,601		$	100,126		$	163,727		$	37,214		$	63,560		$	100,774
Operating income as a percent of net sales
Water		8.8	%		13.8	%		11.5	%		6.4	%		10.2	%		8.4	%
Technical Products		14.5	%		15.4	%		14.9	%		9.7	%		11.4	%		10.6	%
Consolidated		9.0	%		12.6	%		10.9	%		5.9	%		9.2	%		7.6	%

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
In thousands, except per-share data	2009			2009			2009			2009			2009
Net sales	$	633,840		$	693,712		$	662,665		$	702,251		$	2,692,468
Operating income — as reported		37,214			63,560			66,682			52,492			219,948
% of net sales		5.9	%		9.2	%		10.1	%		7.5	%		8.2	%
Adjustments:
Restructuring and asset impairment		2,824			2,944			7,295			24,881			37,944
Operating income — as adjusted		40,038			66,504			73,977			77,373			257,892
% of net sales		6.3	%		9.6	%		11.2	%		11.0	%		9.6	%
Net income from continuing operations attributable to Pentair, Inc. — as reported		17,255			32,006			37,033			29,218			115,512
Adjustments — tax affected
Restructuring and asset impairment, net of minority interest		1,864			1,943			4,815			17,549			26,171
Bond tender		—			3,171			—			—			3,171
Net income from continuing operations attributable to Pentair, Inc. — as adjusted		19,119			37,120			41,848			46,767			144,854
Continuing earnings per common share attributable to Pentair, Inc. — diluted
Diluted earnings per common share — as reported	$	0.18		$	0.33		$	0.38		$	0.29		$	1.17
Adjustments		0.02			0.05			0.04			0.18			0.30
Diluted earnings per common share — as adjusted	$	0.20		$	0.38		$	0.42		$	0.47		$	1.47
Weighted average common shares outstanding — Diluted		97,966			98,422			98,641			99,226			98,522

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ending December 31, 2009 to the “Adjusted” non-GAAP
excluding the effect of 2009 adjustments (Unaudited)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
In thousands	2009			2009			2009			2009			2009
Water
Net sales	$	423,932		$	486,990		$	461,570		$	475,272		$	1,847,764
Operating income — as reported		26,976			49,781			53,085			33,903			163,745
% of net sales		6.4	%		10.2	%		11.5	%		7.1	%		8.9	%
Adjustments — restructuring and asset impairment		1,464			1,460			2,639			21,336			26,899
Operating income — as adjusted		28,440			51,241			55,724			55,239			190,644
% of net sales		6.7	%		10.5	%		12.1	%		11.6	%		10.3	%
Technical Products
Net sales	$	209,908		$	206,722		$	201,095		$	226,979		$	844,704
Operating income — as reported		20,462			23,578			24,356			31,959			100,355
% of net sales		9.7	%		11.4	%		12.1	%		14.1	%		11.9	%
Adjustments — restructuring and asset impairment		792			1,139			4,557			2,729			9,217
Operating income — as adjusted		21,254			24,717			28,913			34,688			109,572
% of net sales		10.1	%		12.0	%		14.4	%		15.3	%		13.0	%