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): February 6, 2007

Commission file number 1-11625

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 February 6, 2007, Pentair, Inc. issued a press release announcing its earnings for the fourth quarter and fiscal year 2006 and a conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

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 exhibits are 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 February 6, 2007 announcing the earnings results for the fourth quarter and fiscal year 2006.
99.2	Pentair, Inc. reconciliation of GAAP “As Reported” year ended December 31, 2006 to the “Adjusted” non-GAAP excluding the effect of third quarter 2006 one-time charges.

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 February 6, 2007.

PENTAIR, INC. Registrant
By	/s/ Randall J. Hogan
	Randall J. Hogan
	Chairman and Chief Executive Officer

PENTAIR, INC.

Exhibit Index to Current Report on Form 8-K
Dated February 6, 2007

Exhibit
Number	Description
99.1	Pentair, Inc. press release dated February 6, 2007 announcing the earnings results for the fourth quarter and fiscal year 2006.
99.2	Pentair, Inc. reconciliation of GAAP “As Reported” year ended December 31, 2006 to the “Adjusted” non-GAAP excluding the effect of third quarter 2006 one-time charges.

EX-99.1

EXHIBIT 99.1

Pentair, Inc.
5500 Wayzata Blvd., Suite 800
Golden Valley, MN 55416
763 545 1730 Tel
763 656 5204 Fax

News Release

Pentair Reports Earnings Per Share of $1.81 for Fiscal Year 2006 on 7% Sales Gain

GOLDEN VALLEY, Minn. — February 6, 2007 — Pentair, Inc. (NYSE: PNR) announced today results for the fourth quarter and year ended December 31, 2006. Fiscal year 2006 earnings per share (EPS) from continuing operations were $1.81 compared with $1.80 for fiscal year 2005. Sales for 2006 reached $3.15 billion compared to sales of $2.95 billion for 2005, an increase of 7 percent. Free cash flow for the year of $181 million was slightly better than anticipated, with free cash flow conversion as a percentage of net income in line with the Company’s goal of 100 percent.

For the fourth quarter, EPS from continuing operations was $0.39, an increase of 3 percent, on sales of $743.0 million as compared to $732.1 million in the same period in 2005. Fourth quarter sales reflect growth in the North American commercial and industrial markets; growth in the European and Asian markets; and, as anticipated, declines in pool sales linked to slowing pool starts and an inventory drawdown by distribution customers.

According to Pentair Chairman and Chief Executive Officer, Randall J. Hogan, “Overall, our fourth quarter results were in line with our expectations. Earnings per share were higher than anticipated, driven by tax benefits and operating improvements in Filtration and Technical Products. Sales grew despite softness in some markets, reflecting the value of the diversity in Pentair’s end markets.

“Last year was challenging and our 2006 performance produced mixed results. We faced economic headwinds yet strengthened our organization, invested in growth, and enhanced our product lines to respond to the accelerating technological needs of our customers. Looking ahead, we are focused on improving Water margins and maintaining Technical Products solid margins through continued implementation of Pentair’s Integrated Management System in all of our businesses, and by re-establishing solid growth,” Hogan said.

Water Group Fourth Quarter 2006 Comments

• The Water Group’s fourth quarter sales of $500.8 million were down 3 percent over the same period last year. Excluding the impact of favorable foreign exchange, sales declined approximately 4 percent. Excluding the pool and spa businesses, Water sales grew nearly 4 percent in the quarter.

• Growth in emerging markets in Asia-Pacific, successful market penetration in Europe and the Middle East, and strength in the North American commercial and industrial markets were offset by a significant decline in the pool and spa businesses and softness in retail and residential pumps.

• Emerging markets in Asia-Pacific drove significant sales growth reflecting the Company’s successful sales into desalination projects with the Codeline product. Continued commercial market penetration in China also contributed to the region’s impressive growth.

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• Market growth in Europe and penetration into the Middle East drove strong sales with filtration and pump contributing growth in the mid-teens.

• Sales in North American Filtration markets grew in the low single digits. Commercial filtration and Everpure residential filtration grew though slowing residential and marine markets did offset some of this growth.

• Sales in North American Pump markets were essentially flat for the quarter with strong sales in commercial and industrial pump markets offset by slowing residential and retail sales. Municipal market orders and backlog reached record levels in the quarter though sales were down due to timing of shipments.

• As expected, sales in North American pool and spa markets experienced a decline of almost 20 percent in the quarter. Decreases reflect the inventory drawdown by pool distribution customers as they positioned themselves for a softer overall market. Fourth quarter 2006 early buy orders were better than projected; however, the additional early buy orders are scheduled to be shipped in the first quarter of 2007 and could take the place of higher margin standard orders.

• Water’s fourth quarter operating income totaled $36.5 million, down 34 percent as compared to $55.5 million in the same period in 2005.

• Water’s fourth quarter operating margin was 7.3 percent, down 340 basis points as compared to the same period last year.

• The most significant factor in the year-over-year operating margin comparison was lower volume, resulting in a 160 basis point operating margin decline. Other factors affecting operating margin included a mix shift to lower margin products, which resulted in an 80 basis point decline, and an excess inventory reserve established for pump motors the Company no longer expects to need, which resulted in an additional 80 basis point decline.

• The impact of these negative factors was moderated by price increases implemented to offset inflationary cost increases; significant savings from supply management initiatives; and lower growth-related investment spending.

Technical Products Group Fourth Quarter Comments

• For the quarter, sales of $242.2 million reflect a 13 percent gain compared to the same period last year. Excluding the impact of acquisitions and favorable foreign exchange, sales grew approximately 1 percent.

• Growth in Asian markets was about 30%, reflecting new customer wins as well as the transition of OEM programs from North America. Even excluding the effect of favorable foreign exchange, growth was strong.

• In European markets, sales grew in the low teens with solid growth in general electronics markets, particularly the test and measurement and defense markets. Excluding the effect of favorable foreign exchange, growth was in the mid single digits.

• Excluding acquisitions, North American sales were down slightly. Continued strong growth in industrial and commercial markets was more than offset by severe declines in sales due to telecommunication market weakness and data-communication projects, which transitioned to Pentair’s Asia operations or ended.

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• Technical Products operating income of $34.5 million was 15 percent higher than the same period last year. This performance resulted from supply management savings, productivity improvements, acquisitive growth, and pricing that together more than offset raw material inflation and the impact of lower telecommunication sales.

• Technical Products operating margin was 14.2 percent for the quarter, up 20 basis points over the year-earlier period. These results reflect the 17^th consecutive quarter of year-over-year operating margin improvement for Technical Products.

• The Thermal Management businesses acquired in December 2005 exceeded sales, operating income and margin expectations in 2006.

Future Outlook and Comment
The Company sees continued opportunities among its diverse end markets in 2007 and coming years, and affirms projected EPS guidance for the full year 2007 of between $2.00 and $2.15. The Company is also initiating EPS guidance for the first quarter 2007 of between $0.37 and $0.41, including a $0.02 to $0.03 negative impact in the quarter for the Jung Pumpen acquisition (announced December 11, 2006). The Jung Pumpen acquisition is expected to be EPS neutral for the full year 2007.

Earnings Conference Call
As previously announced, Pentair will discuss the Company’s results, strategy and outlook on a conference call with investors at 12:00 p.m. Eastern today. The Company will host a live webcast of this call from the Financial Information page of the Company’s website (http://www.pentair.com), and the webcast will be archived at the same site.

About Pentair, Inc.
Pentair (www.pentair.com) is a diversified operating company headquartered in 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 house and protect sensitive electronics and electrical components. With 2006 revenues of $3.15 billion, Pentair employs approximately 15,000 people worldwide.

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 continued economic growth, including the strength of housing and related markets; the ability to successfully limit any judgment arising out of the Horizon litigation; foreign currency effects; retail and industrial demand; product introductions; and pricing and other competitive pressures. 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.

Pentair Contact:
Rachael Jarosh, Communications and Investor Relations
Telephone: (763) 656-5280
E-mail: rachael.jarosh@pentair.com

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

	Three months ended						Year ended
	December 31			December 31			December 31			December 31
In thousands, except per-share data	2006			2005			2006			2005
Net sales	$	743,038		$	732,113		$	3,154,469		$	2,946,579
Cost of goods sold		534,472			524,304			2,248,219			2,098,558
Gross profit		208,566			207,809			906,250			848,021
% of net sales		28.1	%		28.4	%		28.7	%		28.8	%
Selling, general and administrative		134,366			128,002			541,209			478,907
% of net sales		18.1	%		17.5	%		17.2	%		16.2	%
Research and development		14,038			12,935			58,055			46,042
% of net sales		1.9	%		1.8	%		1.8	%		1.6	%
Operating income		60,162			66,872			306,986			323,072
% of net sales		8.1	%		9.1	%		9.7	%		11.0	%
Gain on sale of assets, net		197			236			364			5,435
Net interest expense		13,020			11,263			51,881			44,989
% of net sales		1.7	%		1.5	%		1.6	%		1.5	%
Income from continuing operations before income taxes		47,339			55,845			255,469			283,518
% of net sales		6.4	%		7.6	%		8.1	%		9.6	%
Provision for income taxes		8,717			16,889			71,702			98,469
Effective tax rate		18.4	%		30.2	%		28.1	%		34.7	%
Income from continuing operations		38,622			38,956			183,767			185,049
Gain (loss) on disposal of discontinued operations, net of tax		15			—			(36	)		—
Net income	$	38,637		$	38,956		$	183,731		$	185,049
Earnings per common share
Basic
Continuing operations	$	0.39		$	0.39		$	1.84		$	1.84
Discontinued operations		—			—			—			—
Basic earnings per common share	$	0.39		$	0.39		$	1.84		$	1.84
Diluted
Continuing operations	$	0.39		$	0.38		$	1.81		$	1.80
Discontinued operations		—			—			—			—
Diluted earnings per common share	$	0.39		$	0.38		$	1.81		$	1.80
Weighted average common shares outstanding
Basic		98,747			100,605			99,784			100,665
Diluted		100,233			102,314			101,371			102,618
Cash dividends declared per common share	$	0.14		$	0.13		$	0.56		$	0.52

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

	December 31			December 31
In thousands	2006			2005
Assets
Current assets
Cash and cash equivalents	$	54,820		$	48,500
Accounts and notes receivable, net		422,134			423,847
Inventories		398,857			349,312
Deferred tax assets		50,578			48,971
Prepaid expenses and other current assets		31,239			24,394
Total current assets		957,628			895,024
Property, plant and equipment, net		330,372			311,839
Other assets
Goodwill		1,718,771			1,718,207
Intangibles, net		287,011			266,533
Other		71,197			62,152
Total other assets		2,076,979			2,046,892
Total assets	$	3,364,979		$	3,253,755
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	14,563		$	—
Current maturities of long-term debt		7,625			4,137
Accounts payable		206,286			207,320
Employee compensation and benefits		88,882			95,552
Current pension and post-retirement benefits		7,918			—
Accrued product claims and warranties		44,093			43,551
Current liabilities of discontinued operations		—			192
Income taxes		22,493			17,518
Accrued rebates and sales incentives		39,419			45,374
Other current liabilities		90,003			111,026
Total current liabilities		521,282			524,670
Other liabilities
Long-term debt		721,873			748,477
Pension and other retirement compensation		207,676			152,780
Post-retirement medical and other benefits		47,842			73,949
Deferred tax liabilities		109,781			125,785
Other non-current liabilities		86,526			70,455
Non-current liabilities of discontinued operations		—			2,029
Total liabilities		1,694,980			1,698,145
Shareholders’ equity		1,669,999			1,555,610
Total liabilities and shareholders’ equity	$	3,364,979		$	3,253,755
Days sales in accounts receivable (13 month moving average)		54			54
Days inventory on hand (13 month moving average)		76			70
Days in accounts payable (13 month moving average)		56			56
Debt/total capital		30.8	%		32.6	%

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

	Year ended
	December 31			December 31
In thousands	2006			2005
Operating activities
Net income	$	183,731		$	185,049
Adjustments to reconcile net income to net cash provided by operating activities
Loss on disposal of discontinued operations		36			—
Depreciation		56,899			56,565
Amortization		18,197			15,995
Deferred income taxes		(11,085	)		5,898
Stock compensation		25,377			24,186
Excess tax benefits from stock-based compensation		(3,043	)		(8,676	)
Gain on sale of assets, net		(364	)		(5,435	)
Changes in assets and liabilities, net of effects of business acquisitions
Accounts and notes receivable		15,873			(20,946	)
Inventories		(39,354	)		(19,201	)
Prepaid expenses and other current assets		(5,052	)		(120	)
Accounts payable		(18,935	)		6,629
Employee compensation and benefits		(13,229	)		(21,394	)
Accrued product claims and warranties		456			(1,099	)
Income taxes		9,556			10,357
Other current liabilities		(13,784	)		4,609
Pension and post-retirement benefits		19,398			16,512
Other assets and liabilities		6,886			(439	)
Net cash provided by continuing operations		231,563			248,490
Net cash provided by (used for) operating activities of discontinued operations		48			(632	)
Net cash provided by operating activities		231,611			247,858
Investing activities
Capital expenditures		(51,078	)		(62,471	)
Proceeds from sale of property and equipment		684			17,111
Acquisitions, net of cash acquired		(29,286	)		(150,534	)
Divestitures		(24,007	)		(10,155	)
Proceeds from sale of investment		1,153			23,835
Other		(7,523	)		(2,071	)
Net cash used for investing activities		(110,057	)		(184,285	)
Financing activities
Net short-term borrowings		13,831			—
Proceeds from long-term debt		608,975			413,279
Repayment of long-term debt		(631,755	)		(395,978	)
Excess tax benefits from stock-based compensation		3,043			8,676
Proceeds from exercise of stock options		4,066			8,380
Repurchases of common stock		(59,359	)		(25,000	)
Dividends paid		(56,583	)		(53,134	)
Net cash used for financing activities		(117,782	)		(43,777	)
Effect of exchange rate changes on cash		2,548			(2,791	)
Change in cash and cash equivalents		6,320			17,005
Cash and cash equivalents, beginning of period		48,500			31,495
Cash and cash equivalents, end of period	$	54,820		$	48,500
Free cash flow
Net cash provided by operating activities	$	231,611		$	247,858
Less capital expenditures		(51,078	)		(62,471	)
Proceeds from sale of property and equipment		684			17,111
Free cash flow	$	181,217		$	202,498

Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment for 2006 (Unaudited)

	First Qtr			Second Qtr			Third Qtr			Fourth Qtr			Year
In thousands	2006			2006			2006			2006			2006
Net sales to external customers
Water	$	517,169		$	605,516		$	531,703		$	500,837		$	2,155,225
Technical Products		254,220			256,506			246,317			242,201			999,244
Consolidated	$	771,389		$	862,022		$	778,020		$	743,038		$	3,154,469
Intersegment sales
Water	$	50		$	55		$	140		$	214		$	459
Technical Products		889			1,312			1,133			623			3,957
Other		(939	)		(1,367	)		(1,273	)		(837	)		(4,416	)
Consolidated	$	—		$	—		$	—		$	—		$	—
Operating income (loss)
Water	$	55,587		$	84,191		$	36,226		$	36,494		$	212,498
Technical Products		37,704			39,678			37,050			34,473			148,905
Other		(14,735	)		(15,894	)		(12,983	)		(10,805	)		(54,417	)
Consolidated	$	78,556		$	107,975		$	60,293		$	60,162		$	306,986
Operating income as a percent of net sales
Water		10.7	%		13.9	%		6.8	%		7.3	%		9.9	%
Technical Products		14.8	%		15.5	%		15.0	%		14.2	%		14.9	%
Consolidated		10.2	%		12.5	%		7.7	%		8.1	%		9.7	%

Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment for 2005 (Unaudited)

	First Qtr			Second Qtr			Third Qtr			Fourth Qtr			Year
In thousands	2005			2005			2005			2005			2005
Net sales to external customers
Water	$	512,088		$	585,657		$	515,945		$	517,815		$	2,131,505
Technical Products		197,547			202,866			200,363			214,298			815,074
Consolidated	$	709,635		$	788,523		$	716,308		$	732,113		$	2,946,579
Intersegment sales
Water	$	22		$	187		$	280		$	(341	)	$	148
Technical Products		402			630			407			770			2,209
Other		(424	)		(817	)		(687	)		(429	)		(2,357	)
Consolidated	$	—		$	—		$	—		$	—		$	—
Operating income (loss)
Water	$	60,489		$	92,167		$	58,964		$	55,520		$	267,140
Technical Products		25,172			26,325			27,778			29,954			109,229
Other		(13,575	)		(11,258	)		(9,862	)		(18,602	)		(53,297	)
Consolidated	$	72,086		$	107,234		$	76,880		$	66,872		$	323,072
Operating income as a percent of net sales
Water		11.8	%		15.7	%		11.4	%		10.7	%		12.5	%
Technical Products		12.7	%		13.0	%		13.9	%		14.0	%		13.4	%
Consolidated		10.2	%		13.6	%		10.7	%		9.1	%		11.0	%

EX-99.2

EXHIBIT 99.2

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2006 to the “Adjusted” non-GAAP
excluding the effect of third quarter 2006 one-times charges (Unaudited)

In our quarterly conference call on February 6, 2007 for the fourth quarter ended December 31, 2006, we referred to a $17 million charge we took against earnings in the third quarter of 2006 in recognition of the weaker markets for our Pool and Spa businesses. We also compared the impact of that charge on the following accounting measures for the year ended December 31, 2006:

Pentair earnings per share (from continuing operations)
Pentair gross margin (gross profit percent)
Pentair S, G & A (selling, general and administrative)
Pentair operating margin (operating income as a percent of net sales)
Pentair Water segment operating margin (operating income as a percent of net sales)

The following tables reconcile the measures listed above, as adjusted to exclude this charge, to the as-reported GAAP measures for the year ended December 31, 2006. We believe these measures provide investors with a clearer understanding both of the impact of this charge and the underlying performance of Pentair or its Water segment before taking this charge into account.

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2006 to the “Adjusted” non-GAAP
excluding the effect of third quarter 2006 one-time charges (Unaudited)

	Year Ended
	As Reported			Third Quarter			Adjusted			As Reported
	December 31			One-Time			December 31			December 31
In thousands, except per-share data	2006			Adjustments			2006			2005
Net sales	$	3,154,469		$	—		$	3,154,469		$	2,946,579
Cost of goods sold		2,248,219			(9,211	)		2,239,008			2,098,558
Gross profit		906,250			9,211			915,461			848,021
% of net sales		28.7	%		n/a			29.0	%		28.8	%
Selling, general and administrative		541,209			(7,738	)		533,471			478,907
% of net sales		17.2	%		n/a			16.9	%		16.2	%
Research and development		58,055			—			58,055			46,042
% of net sales		1.8	%		n/a			1.8	%		1.6	%
Operating income		306,986			16,949			323,935			323,072
% of net sales		9.7	%		n/a			10.3	%		11.0	%
Gain on sale of investment		364			—			364			5,435
Net interest expense		51,881			—			51,881			44,989
% of net sales		1.6	%		n/a			1.6	%		1.5	%
Income from continuing operations before income taxes		255,469			16,949			272,418			283,518
% of net sales		8.1	%		n/a			8.6	%		9.6	%
Provision for income taxes		71,702			6,102			77,804			98,469
Effective tax rate		28.1	%		36.0	%		28.6	%		34.7	%
Income from continuing operations		183,767			10,847			194,614			185,049
Gain on disposal of discontinued operations, net of tax		(36	)		—			(36	)		—
Net income	$	183,731		$	10,847		$	194,578		$	185,049
Earnings per common share
Basic
Continuing operations	$	1.84		$	0.11		$	1.95		$	1.84
Discontinued operations		—			—			—			—
Basic earnings per common share	$	1.84		$	0.11		$	1.95		$	1.84
Diluted
Continuing operations	$	1.81		$	0.11		$	1.92		$	1.80
Discontinued operations		—			—			—			—
Diluted earnings per common share	$	1.81		$	0.11		$	1.92		$	1.80
Weighted average common shares outstanding
Basic		99,784			99,784			99,784			100,665
Diluted		101,371			101,371			101,371			102,618
Cash dividends declared per common share	$	0.56					$	0.56		$	0.52

Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP “As Reported” year ended December 31, 2006 to the “Adjusted” non-GAAP
excluding the effect of third quarter 2006 one-time charges (Unaudited)

	Year Ended
	As Reported			Third Quarter		Adjusted			As Reported
	Year			One-Time		Year			Year
In thousands	2006			Adjustments		2006			2005
Net sales to external customers
Water	$	2,155,225		$	—	$	2,155,225		$	2,131,505
Operating income
Water	$	212,498		$	14,906	$	227,404		$	267,140
Operating income as a percent of net sales
Water		9.9	%				10.6	%		12.5	%