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, 2011

OR

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

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 Boulevard, Suite 800, Golden Valley, Minnesota	55416-1259
(Address of principal executive offices)	(Zip code)

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

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

Title of each class	Name of each exchange on which registered
Common Shares, $0.16 2/3 par value	New York Stock Exchange
Preferred Share Purchase Rights	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 ¨	Non-accelerated filer ¨	Smaller reporting company ¨
	(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 $41.27 per share as reported on the New York Stock Exchange on July 2, 2011 (the last business day of Registrant’s most recently completed second quarter): $3,886,388,296

The number of shares outstanding of Registrant’s only class of common stock on December 31, 2011 was 98,622,564.

DOCUMENTS INCORPORATED BY REFERENCE

Parts of the Registrant’s definitive proxy statement for its annual meeting to be held on April 25, 2012, are incorporated by reference in this Form 10-K in response to Part III, ITEM 10, 11, 12, 13 and 14.

Pentair, Inc.

Annual Report on Form 10-K

For the Year Ended December 31, 2011

		Page (s)
	PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	5
ITEM 1B.	Unresolved Staff Comments	11
ITEM 2.	Properties	11
ITEM 3.	Legal Proceedings	11
ITEM 4.	Mine Safety Disclosures	12
	PART II
ITEM 5.	Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
ITEM 6.	Selected Financial Data	17
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	36
ITEM 8.	Financial Statements and Supplementary Data	37
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	86
ITEM 9A.	Controls and Procedures	86
ITEM 9B.	Other Information	86
	PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	87
ITEM 11.	Executive Compensation	87
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	87
ITEM 13.	Certain Relationships and Related Transactions and Director Independence	88
ITEM 14.	Principal Accountant Fees and Services	88
	PART IV
ITEM 15.	Exhibits and Financial Statement Schedule	89
.	Signatures	90

PART I

ITEM 1. BUSINESS

GENERAL

Pentair, Inc. is a focused diversified industrial manufacturing company comprised of two operating segments: Water & Fluid Solutions and Technical Products. Water & Fluid Solutions is a global leader in providing innovative products and systems used worldwide in the movement, storage, treatment and enjoyment of water. Technical Products is a leader in the global enclosures and thermal management markets, designing and manufacturing standard, modified and custom enclosures that house and protect sensitive electronics and electrical components and protect the people that use them.

Pentair Strategy

Our strategy is to drive sustainable, profitable growth and Return on Invested Capital (“ROIC”) improvements through:

• building operational excellence through the Pentair Integrated Management System (“PIMS”) consisting of strategy deployment, lean enterprise and Rapid Growth Process, which is our process to drive organic growth;

• 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 international;

• 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, Inc. and its subsidiaries. Pentair is a Minnesota corporation that was incorporated in 1966.

BUSINESS AND PRODUCTS

Business 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.

WATER & FLUID SOLUTIONS

Pentair Water & Fluid Solutions is a leading provider of innovative water management and fluid processing products and solutions. Our comprehensive product suite addresses a broad array of fluid handling needs, with products ranging from energy-efficient pumps and point-of-use filtration to engineered pumps and fluid processing systems. Water & Fluid Solutions’ products have a wide range of residential, industrial, commercial, municipal and agricultural applications.

Water & Fluid Solutions comprises the three platforms shown below:

Flow

In our Flow platform, we manufacture and sell products ranging from light duty diaphragm pumps to high-flow turbine pumps and solid handling pumps while serving the global residential, municipal, commercial, industrial and agricultural end-markets. Our pumps are used in a range of applications, including use in residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, engine cooling, fluid delivery, circulation and transfer, fire suppression, flood control, agricultural irrigation and crop spray. The Flow platform is a combination of the former Residential Flow and Engineered Flow global business units.

Brand names for Flow include Aurora^®, Berkeley^®, Fairbanks Morse™, Flotec^®, Hydromatic^®, Hypro^®, JUNG PUMPEN^®, Myers^®, Nijhuis™, Onga™ and STA-RITE^®.

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Treatment & Process

In our Treatment & Process platform, we manufacture and sell water and fluid treatment products and systems, including pressure tanks and vessels, control valves, activated carbon products, conventional filtration products, point-of-entry and point-of-use systems, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration and separation systems into the global residential, industrial, commercial, and municipal end-markets. These products are used in a range of applications, including use in fluid filtration, ion exchange, desalination, food and beverage, food service, separation technologies for the oil and gas industry, medical and hydraulic, marine and recreational vehicles. The Treatment & Process platform is a combination of the former Residential Filtration and Filtration Solutions global business units.

Brand names for Treatment & Process include Aquamatic^®, Autotrol^®, CodeLine^®, Everpure^®, Fleck^®, Haffmans™, OMNIFILTER^®, Pentair^®, SHURflo^®, Structural™ and X-Flow^®.

Aquatic Systems

In our Aquatic Systems platform, we manufacture and sell a complete line of energy-efficient residential and commercial pool equipment and accessories including pumps, filters, heaters and heat pumps, lights, automatic controls, automatic cleaners, maintenance equipment and pool accessories. Applications for our Aquatic Systems products include residential and commercial pool maintenance, pool repair, renovation, service and construction and aquaculture solutions. The Aquatic Systems platform is the former Pool global business unit.

Brand names for Aquatic Systems include Kreepy Krauly^®, Onga™, Pentair^®, Pentair Pool Products^®, Pentair Water Pool and Spa^® and STA-RITE^®.

Customers

Water & Fluid Solutions distributes its products through wholesale distributors, retail distributors, original equipment manufacturers, home centers, home and pool builders and directly to customers and end-users. Information regarding significant customers in Water & Fluid Solutions is contained in ITEM 8, Note 15 of the Notes to Consolidated Financial Statements, included in this Form 10-K.

Seasonality

We experience seasonal demand in a number of markets within Water & Fluid Solutions. 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). Demand for residential and agricultural water systems is also impacted by weather patterns, particularly by heavy flooding and droughts.

Competition

Water & Fluid Solutions faces numerous domestic and international competitors, some of which have substantially greater resources directed to the markets in which we compete. Consolidation and globalization are continuing trends in the water industry. Competition in commercial and residential flow technologies markets 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, competition focuses on performance to meet required specifications, service and price. Competition in fluid treatment, filtration and processing focuses on product performance and design, quality, delivery and price. For pool equipment, 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 contribute to our continuing market penetration.

TECHNICAL PRODUCTS

Pentair Technical Products is a leading provider of products that guard and protect some of the world’s most sensitive electronics and electronic equipment, ensuring their safe, secure and reliable performance. Our

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innovative product offering includes mild steel, stainless steel, aluminum and non-metallic enclosures, cabinets, cases, subracks, backplanes and associated thermal management systems. Our products serve a range of end-markets, including use in industrial, communications (including telecommunications and data communications), networking, general electronics, energy, commercial infrastructure, security and defense and medical.

Brand names for Technical Products include Hoffman^®, McLean^® and Schroff^®.

Customers

Technical Products distributes its products through electrical and data contractors, electrical and electronic components distributors and original equipment manufacturers. Information regarding significant customers in Technical Products is contained in ITEM 8, Note 15 of the Notes to Consolidated Financial Statements, included in this Form 10-K.

Seasonality

Technical Products is not significantly affected by seasonal demand fluctuations.

Competition

Competition in the technical products markets can be intense, particularly in the Communications market, where product design, prototyping, global supply, price competition and customer service are significant factors. Technical Products has continued to focus on cost control and improving profitability. Recent sales increases in Technical Products are the result of growth from initiatives focused on product development, continued channel penetration, growth in targeted market segments, geographic expansion and price increases. Consolidation, globalization and outsourcing are visible trends in the technical products marketplace and typically play to the strengths of a large and globally positioned supplier. We believe Technical Products has the global manufacturing capability and broad product portfolio to support the globalization and outsourcing trends.

RECENT DEVELOPMENTS

On May 12, 2011, we acquired as part of Water & Fluid Solutions, 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 2011 and 2010 revenues generated in European Union and Asia-Pacific countries.

INFORMATION REGARDING ALL BUSINESS SEGMENTS

Backlog

Our backlog of orders as of December 31 by segment was:

In thousands	2011		2010		$ change		% change
Water & Fluid Solutions	$	368,008	$	212,929	$	155,079		72.8	%
Technical Products		109,757		127,658		(17,901)		(14.0)	%
Total	$	477,765	$	340,587	$	137,178		40.3	%

The $155.1 million increase in Water & Fluid Solutions backlog was primarily due to increased backlog related to the May, 2011 acquisition of CPT. The $17.9 million decrease in Technical Products backlog reflected larger telecommunications project backlog at December 31, 2010. Due to the relatively short manufacturing cycle and

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general industry practice for the majority of our businesses, backlog, which typically represents less than 60 days of shipments, is not deemed to be a significant item. A substantial portion of our revenues result from orders received and product sold in the same month. We expect that most of our backlog at December 31, 2011 will be filled in 2012.

Research and development

We primarily conduct research and development activities in our own facilities. These efforts consist primarily of the development of new products, product applications and manufacturing processes. Research and development expenditures during 2011, 2010 and 2009 were $78.2 million, $67.2 million and $57.9 million, respectively.

Environmental

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

Raw materials

The principal materials used in the manufacturing of 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.

The materials used in the various manufacturing processes are purchased on the open market and the majority are available through multiple sources and 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 operations.

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, trade marks, 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, trade mark, 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, 2011, we employed approximately 15,300 people worldwide. Total employees in the United States were approximately 6,900, of whom approximately 440 are represented by four different trade unions having collective bargaining agreements. Generally, labor relations have been satisfactory.

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 foreign operations are established.

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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 Securities Exchange Act of 1934 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 Securities Exchange Act of 1934 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.

ITEM 1A. RISK FACTORS

You should carefully consider the following risk factors and warnings before making an investment decision. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. If any of the risks described below actually occur, our business, financial condition, results of operations or prospects could be materially adversely affected. In that case, the price of our securities could decline and you could lose all or part of your investment. You should also refer to other information set forth in this document. We assume no obligation, and disclaim any duty, to update risk factors in this report except as required by law.

General economic conditions, including difficult credit and residential construction markets, affect demand for our products.

We compete around the world in various geographic regions and product markets. Among these, the most significant are global industrial markets (for both Technical Products and Water & Fluid Solutions) and residential markets (for Water & Fluid Solutions). Important factors for our businesses 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 for our customers and end-users; and interest rates. New construction for housing and home improvement activity fell in 2007, 2008 and 2009, which reduced revenue growth in the residential business within Water & Fluid Solutions. While we saw some stabilization in 2010 and 2011, we believe that weakness in this market could negatively impact our revenues and margins in future periods. While we attempt to minimize our exposure to economic or market fluctuations by serving a balanced mix of end markets and geographic regions, we cannot assure you that a significant or sustained downturn in a specific end market or geographic region would not have a material adverse effect on us.

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

Sales outside of the United States, including export sales from our domestic businesses, accounted for approximately 40% of our net sales in 2011. Further, most of our businesses obtain some products, components and raw materials from foreign 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;

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

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

• 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 laws or rulings could have an adverse impact on our effective tax rate;

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

• changes in and required compliance with a variety of foreign laws and regulations.

As a result of our international operations and sales, we are subject to the Foreign Corrupt Practices Act, the United Kingdom Bribery Act and other laws that prohibit improper payments or offers of improper payments. Our international activities create risk under such laws because our employees, consultants, sales agents or distributors are not always subject to our direct control. Any violations or alleged violations of these laws could result in significant fines or settlements, criminal sanctions against us or our employees, reputational damage and prohibitions on the conduct of our business, including our business with the U.S. government.

Our business 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.

Our international operations are subject to foreign market and currency fluctuation risks and the European Union debt crisis could adversely affect our results.

We expect the percentage of our sales outside of the United States to continue to increase in the future. In some cases, foreign markets are susceptible to greater political, economic and social volatility than in our other markets. Furthermore, our increased foreign business operations expose us to currency fluctuations which could materially affect our financial results. The European Union currently accounts for the majority of our foreign sales and income. The current debt crisis in Europe could lead to the re-introduction of individual currencies in certain European Union countries or in the wholesale dissolution of the euro currency. The resulting impact on euro-denominated obligations and assets is impossible to predict, but it could adversely affect the value of such obligations and assets. Also, the effect of the debt crisis in Europe could have an adverse affect on the capital markets generally, specifically impacting the ability of our business and financial partners to finance their businesses on acceptable terms, if at all, the availability of materials and supplies and demand for our products.

Our inability to sustain organic growth could adversely affect our financial performance.

Over the past five years, our organic growth has been generated in part from expanding international sales, entering new distribution channels, introducing new products and price increases. To grow more rapidly than our end markets, we would have to continue to expand our geographic reach, further diversify our distribution channels, continue to introduce new products and increase sales of existing products to our customer base. Difficult economic and competitive factors may materially and adversely impact our financial performance. We have chosen to focus our growth initiatives in specific end markets and geographies. We cannot assure you that these growth initiatives will be sufficient to offset revenue declines in other markets.

We may not be able to expand through acquisitions and acquisitions we complete may adversely affect our financial performance.

We intend to continue to evaluate strategic acquisitions primarily in our current business segments, though we may consider acquisitions outside of these segments as well. Our ability to expand through acquisitions is subject to various risks, including the following:

• Limitations on pursuing acquisitions due to increased leverage;

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• Higher acquisition prices;

• Lack of suitable acquisition candidates in targeted product or market areas; and

• Increased competition for acquisitions, especially in the water industry.

We may not realize the anticipated benefits of acquisitions, any benefits may take longer to realize than we expect and acquisitions we complete may adversely affect our financial performance.

Any acquisition involves the integration of acquired operations with our existing operations and there are uncertainties inherent in such an integration. We will be required to devote significant management attention and resources to such an integration and delays or unexpected difficulties in the integration process could adversely affect our business, financial results and financial condition. Even if we are successful in integrating acquired operations, we may not achieve the full benefits of revenue synergies, cost savings and operational efficiencies that we expect or within the time we expect. Acquisitions we may undertake could have a material adverse effect on our operating results, particularly in the fiscal quarters immediately following the acquisitions, while we attempt to integrate operations of the acquired businesses into our operations. In addition, we may have not discovered during due diligence all facts and factors that could produce unintended or unexpected consequences for us, including financial liabilities, which could be material and result in us not achieving the expected benefits from the acquisition within our desired time frames, if at all.

As we continue our integration of CPT’s operations with our existing operations, uncertainties remain and we may not achieve the full expected benefits of that acquisition, including revenue synergies, cost savings and operational efficiencies, or within the time we expect.

Increased leverage may harm our financial condition and results of operations.

As of December 31, 2011, we had $1,309.1 million of total debt on a consolidated basis. Any future increase in our level of indebtedness will have several important effects on our future operations, including, without limitation:

• cash requirements to support the payment of interest on our outstanding indebtedness may increase;

• increases in our outstanding indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure;

• our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes may be reduced;

• our flexibility in planning for, or reacting to, changes in our business and our industry may be reduced; and

• our flexibility to make acquisitions and develop technology may be limited.

Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions and financial, business and other factors affecting our consolidated operations, many of which are beyond our control. If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other cash requirements, we may be required, among other things:

• to seek additional financing in the debt or equity markets;

• to refinance or restructure all or a portion of our indebtedness;

• to sell selected assets or businesses; or

• to reduce or delay planned capital or operating expenditures.

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Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms, if at all.

The availability and cost of capital could have a negative impact on our financial performance.

Our plans to vigorously compete in our chosen markets will require additional capital for future acquisitions, capital expenditures, growth of working capital and continued international and regional expansion. In the past, we have financed growth of our businesses primarily through cash from operations and debt financing. While we have availability under our primary credit agreements on what we believe to be favorable terms, future acquisitions or other uses of funds may require us to expand our debt financing resources or to issue equity securities. Our financial results may be adversely affected if new financing is not available on favorable terms or if interest costs under our debt financings are higher than the income generated by acquisitions or other internal growth. In addition, future share issuances could be dilutive to your equity investment if we sell shares into the market or issue additional stock as consideration in any acquisition. We cannot assure you that we will be able to issue equity securities or obtain future debt financing at favorable terms. Without sufficient financing, we will not be able to pursue our targeted growth strategy and our acquisition program, which may limit our revenue growth and future financial performance.

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. At December 31, 2011 our goodwill and intangible assets were approximately $2,866.2 million and represented approximately 62.5% 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 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5 million in the fourth quarter of 2011. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

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 assure you, 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.

Our businesses operate in highly competitive markets, so we may be forced to cut prices or to incur additional costs.

Our businesses generally face substantial competition in each of their respective markets. Competition may force us to cut prices or to incur additional costs to remain competitive. We compete on the basis of product design, quality, availability, performance, customer service and price. Present or future competitors may have greater

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financial, technical or other resources which could put us at a disadvantage in the affected business or businesses. We cannot assure you that these and other factors will not have a material adverse effect on our future results of operations.

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

We experience seasonal demand in a number of markets within Water & Fluid Solutions. End-user demand for pool equipment in our primary markets 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 or “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. We cannot assure you that seasonality and weather conditions will not have a material adverse effect on our results of operations.

Intellectual property challenges may hinder product development and marketing.

Patents, non-compete agreements, proprietary technologies, customer relationships, trade marks, 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

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 assure you that we will be able to maintain this insurance on acceptable terms or that this insurance will provide adequate protection against potential liabilities. In addition, we self-insure a portion of product liability claims. A series of successful claims against us for significant amounts could materially and adversely affect our product reputation, financial condition, results of operations and cash flows.

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

We are subject to federal, state, local and foreign 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 permits that we may require.

We have been named as defendants, targets or potentially responsible parties (“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.

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We cannot ensure you that environmental requirements will not change or become more stringent over time or that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

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 international initiatives under consideration could affect our international operations. These actions could 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 consolidated financial condition, results of operations or cash flows.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive office is in leased premises located in Golden Valley, Minnesota. We carry out our Water & Fluid Solutions manufacturing operations at 26 plants located throughout the United States and at 21 plants located in 12 other countries. In addition, Water & Fluid Solutions has 35 distribution facilities and 53 sales offices located in numerous countries throughout the world. We carry out our Technical Products manufacturing operations at 6 plants located throughout the United States and 10 plants located in 8 other countries. In addition, Technical Products has 9 distribution facilities and 25 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, 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 “Legal Proceedings” could change in the future.

Environmental

We have been named as defendants, targets or PRP in a small number of environmental clean-ups, in which our current or former business units have generally been given de minimis status. To date, none of these claims have resulted in clean-up costs, fines, penalties or damages in an amount material to our financial position or results of operations. We have disposed of a number of businesses in the past years and in certain cases, such as the disposition of the Cross Pointe Paper Corporation uncoated paper business in 1995, the disposition of the Federal Cartridge Company ammunition business in 1997, the disposition of Lincoln Industrial in 2001 and the disposition of the Tools Group in 2004, we have retained responsibility and potential liability for certain environmental obligations. We have received claims for indemnification from purchasers of these businesses and have established what we believe to be adequate accruals for potential liabilities arising out of retained responsibilities. We settled some of the claims in prior years; to date our recorded accruals have been adequate.

In addition, there are ongoing environmental issues at a limited number of sites relating to operations no longer carried out at the sites. We have established what we believe to be adequate accruals for remediation costs at these sites. We do not believe that projected response costs will result in a material liability. We have also made claims against third parties for indemnification against potential liabilities for environmental remediations or other obligations. We cannot assure you that we will be successful in obtaining indemnity or reimbursement for such costs.

We may be named as a PRP at other sites in the future, for both divested and acquired businesses. When the outcome of the matter is probable and it is possible to provide reasonable estimates of our liability with respect to

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environmental sites, provisions have been made in accordance with generally accepted accounting principles in the United States. As of December 31, 2011 and 2010, our undiscounted reserves for such environmental liabilities were approximately $1.5 million and $1.3 million, respectively. We cannot ensure that environmental requirements will not change or become more stringent over time or that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

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.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Current executive officers of Pentair, 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	56	Chief Executive Officer since January 2001 and Chairman of the Board effective May 1, 2002; President and Chief Operating Officer, December 1999 — December 2000; Executive Vice President and President of Pentair’s Electrical and Electronic Enclosures Group, March 1998 — December 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.
Michael V. Schrock	59	President and Chief Operating Officer since September 2006; President and Chief Operating Officer of Filtration and Technical Products, October 2005 — September 2006; President and Chief Operating Officer of Enclosures, October 2001 — September 2005; President, Pentair Water Technologies — Americas, January 2001 — October 2001; President, Pentair Pump and Pool Group, August 2000 — January 2001; President, Pentair Pump Group, January 1999 — August 2000; Vice President and General Manager, Aurora, Fairbanks Morse and Pentair Pump Group International, March 1998 — December 1998; Divisional Vice President and General Manager, Honeywell Inc., 1994 — 1998.
John L. Stauch	47	Executive Vice President and Chief Financial Officer since February 2007; Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc., July 2005 — February 2007; Vice President, Finance and Chief Financial Officer of the Sensing and Controls unit of Honeywell International Inc., January 2004 — July 2005; Vice President, Finance and Chief Financial Officer of the Automation & Control Products unit of Honeywell International Inc., July 2002 — January 2004; Chief Financial Officer and IT Director of PerkinElmer Optoelectronics, a unit of PerkinElmer, Inc., April 2000 — April 2002; Various executive, investor relations and managerial finance positions with Honeywell International Inc. and its predecessor AlliedSignal Inc., 1994 — 2000.
Frederick S. Koury	51	Senior Vice President, Human Resources, since August 2003; Vice President of Human Resources at Limited Brands, September 2000 — August 2003; PepsiCo, Inc., various executive positions, June 1985 — September 2000.
Angela D. Lageson	43	Senior Vice President, General Counsel and Secretary since February 2010; Assistant General Counsel, November 2002 — February 2010; Shareholder and Officer of the law firm of Henson & Efron, P.A., January 2000 — 2002; Associate Attorney in the law firm of Henson & Efron, P.A. October 1996 — January 2000 and in the law firm of Felhaber Larson Fenlon & Vogt, P.A. 1992 — 1996.
Michael G. Meyer	53	Vice President of Treasury and Tax since April 2004; Treasurer, January 2002 — March 2004; Assistant Treasurer, September 1994 — December 2001; Various executive positions with Federal-Hoffman, Inc. (former subsidiary of Pentair), August 1985 — August 1994.
Mark C. Borin	44	Corporate Controller and Chief Accounting Officer since March 2008; Partner in the audit practice of the public accounting firm KPMG LLP, June 2000 — March 2008; Various positions in the audit practice of KPMG LLP, September 1989 — June 2000.

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PART II

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

Our common stock is listed for trading on the New York Stock Exchange and trades under the symbol “PNR.” As of December 31, 2011, there were 3,631 shareholders of record.

The high, low and closing sales price for our common stock and the dividends declared for each of the quarterly periods for 2011 and 2010 were as follows:

	2011								2010
	First		Second		Third		Fourth		First		Second		Third		Fourth
High	$	38.97	$	41.38	$	42.43	$	38.62	$	36.40	$	39.32	$	35.68	$	37.22
Low	$	34.85	$	36.74	$	29.73	$	30.38	$	29.55	$	30.62	$	29.41	$	31.89
Close	$	38.00	$	41.27	$	32.01	$	33.29	$	36.08	$	31.57	$	33.57	$	36.51
Dividends declared	$	0.20	$	0.20	$	0.20	$	0.20	$	0.19	$	0.19	$	0.19	$	0.19

Pentair has paid 144 consecutive quarterly dividends and has increased dividends each year for 35 consecutive years.

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Stock Performance Graph

The following information under the caption “Stock 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 stock for the last five years, assuming the investment of $100 on December 31, 2006 and the reinvestment of all dividends since that date to December 31, 2011. The graph also contains for comparison purposes the S&P 500 Index and the S&P MidCap 400 Index, assuming the same investment level and reinvestment of dividends.

By virtue of our market capitalization, we are a component of the S&P MidCap 400 Index. On the basis of our size and diversity of businesses, we have not found a readily identifiable peer group for purposes of the following graph. We believe the S&P MidCap 400 Index is an appropriate comparison. We have evaluated other published indices, but have determined that the results are skewed by significantly larger companies included in the indices. We believe such a comparison would not be meaningful.

	Base Period December		INDEXED RETURNS
			Years Ending December 31:
Company / Index	2006		2007		2008		2009		2010		2011
PENTAIR INC		100		112.85		78.36		109.90		127.08		118.39
S&P 500 INDEX		100		105.49		66.46		84.05		96.71		98.76
S&P MIDCAP 400 INDEX		100		107.98		68.86		94.60		119.80		117.72

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Purchases of Equity Securities

The following table provides information with respect to purchases we made of our common stock during the fourth quarter of 2011:

	(a)		(b)		(c)		(d)
Period	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
October 2 — October 29, 2011		—	$	0.00		—	$	12,501,935
October 30 — November 26, 2011		163	$	36.69		—	$	12,501,935
November 27 — December 31, 2011		1,398	$	35.80		—	$	12,501,935
Total		1,561				—

(a) The purchases in this column includes 0 shares for the period October 2 – October 29, 2011, 163 shares for the period October 30 – November 26, 2011 and 1,398 shares for the period November 27 – December 31, 2011 deemed surrendered to us by participants in our Omnibus Stock Incentive Plan and the Outside Directors Nonqualified Stock Option Plan (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 deemed surrendered to us by participants in the Plans to satisfy the exercise price for 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 if any, represents the number of shares repurchased as part of our publicly announced plan to repurchase shares of our common stock up to a maximum dollar limit of $25 million.

(d) In December 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2011, we had repurchased 389,300 shares for $12.5 million pursuant to this authorization, which expired in December 2011. In December 2011, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. This authorization expires in December 2012.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth our selected historical financial data from continuing operations for the five years ended December 31, 2011.

	Years Ended December 31,
In thousands, except per-share data	2011		2010		2009		2008		2007
Statement of Operations Data:
Net sales	$	3,456,686	$	3,030,773	$	2,692,468	$	3,351,976	$	3,280,903
Operating income		168,517		334,155		219,948		324,685		379,049
Net income from continuing operations attributable to
Pentair, Inc.		34,222		198,454		115,512		256,363		212,118
Per Share Data:
Basic:
EPS from continuing operations attributable to
Pentair, Inc.	$	0.35	$	2.02	$	1.19	$	2.62	$	2.15
Weighted average shares		98,233		98,037		97,415		97,887		98,762
Diluted:
EPS from continuing operations attributable to
Pentair, Inc.	$	0.34	$	2.00	$	1.17	$	2.59	$	2.12
Weighted average shares		99,753		99,294		98,522		99,068		100,205
Cash dividends declared per common share	$	0.80	$	0.76	$	0.72	$	0.68	$	0.60
Balance Sheet Data:
Total assets	$	4,586,313	$	3,973,533	$	3,911,334	$	4,053,213	$	4,000,614
Total debt		1,309,087		707,472		805,637		954,092		1,060,586
Total shareholders equity		2,047,392		2,205,032		2,126,340		2,020,069		1,910,871

In February and April 2007, we acquired the outstanding shares of capital stock of Jung Pump and all of the capital interests of Porous Media, respectively, as part of Water & Fluid Solutions. In May 2007, we acquired as part of Technical Products, the assets of Calmark. In June 2008, we entered into a transaction with GE that was accounted for as an acquisition of an 80.1 percent ownership interest in GE’s global water softener and residential water filtration business in exchange for a 19.9 percent interest in our global water softener and residential water filtration business. This transaction resulted in a pre-tax non-cash gain of $109.6 million. In May 2011, we acquired as part of Water & Fluid Solutions, 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. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue,” or similar words or the negative thereof or variations thereon. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. Any or all of our forward-looking statements in this report and in any public statements we make are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Consequently, we cannot guarantee any forward-looking statements. Investors are cautioned not to place undue reliance on any forward-looking statements. The risks and uncertainties that may impact achievement of forward-looking statements include, but are not limited to:

• general economic and political conditions, such as political instability, credit market uncertainty, the rate of economic growth or decline in our principal geographic or product markets or fluctuations in exchange rates;

• changes in general economic and industry conditions in markets in which we participate, such as:

• magnitude, timing and scope of the global economic recovery or any potential future downturn;

• stabilization or strength of the North American housing markets;

• the strength of product demand and the markets we serve;

• the intensity of competition, including that from foreign competitors;

• pricing pressures;

• the financial condition of our customers;

• market acceptance of our new product introductions and enhancements;

• the introduction of new products and enhancements by competitors;

• our ability to maintain and expand relationships with large customers;

• our ability to source raw material commodities from our suppliers without interruption and at reasonable prices; and

• our ability to source components from third parties, in particular from foreign manufacturers, without interruption and at reasonable prices;

• increased risks associated with operating foreign businesses;

• risks associated with our level of indebtedness and leverage and the potential need for additional financing in the future;

• our ability to access capital markets and obtain anticipated financing under favorable terms;

• changes in our business strategies, including acquisition and divestiture activities;

• our ability to identify, complete and integrate acquisitions successfully and to realize expected synergies on our anticipated timetable;

• any impairment of goodwill and indefinite-lived intangible assets as a result of deterioration in our markets;

• domestic and foreign governmental and regulatory policies;

• changes in operating factors, such as continued improvement in manufacturing activities and the achievement of related efficiencies, cost reductions and inventory risks due to shifts in market demand and costs associated with moving production to lower-cost locations and faster growth;

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• our ability to generate savings from our excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices;

• unanticipated developments that could occur with respect to contingencies such as litigation, intellectual property matters, product liability exposures and environmental matters;

• our ability to accurately evaluate the effects of contingent liabilities such as tax, product liability, environmental and other claims; and

• those we identify under “Risk Factors” in Item 1A of this report.

The foregoing factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that would impact our business. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this report.

Overview

We are a focused diversified industrial manufacturing company comprised of two operating segments: Water & Fluid Solutions and Technical Products. Water & Fluid Solutions is a global leader in providing innovative products and systems used worldwide in the movement, storage, treatment and enjoyment of water. Technical Products is a leader in the global enclosures and thermal management markets, designing and manufacturing standard, modified and custom enclosures that house and protect sensitive electronics and electrical components and protect the people that use them. In 2011, Water & Fluid Solutions and Technical Products accounted for approximately 2/3 and 1/3 of total revenues, respectively.

Water & Fluid Solutions has progressively become a more important part of our business portfolio with sales increasing from approximately $125 million in 1995 to approximately $2.4 billion in 2011. We believe the water industry is structurally attractive as a result of a growing demand for clean water and the large global market size. Our vision is to be a leading global provider of innovative products and systems used in the movement, storage, treatment and enjoyment of water.

Technical Products operates in a large global market with significant potential for growth in industry segments such as industrial, energy, infrastructure and communications. We believe we have the largest industrial and commercial distribution network in North America for enclosures and the highest brand recognition in the industry in North America.

In May 2011, we acquired as part of Water & Fluid Solutions, the 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 2011 and 2010 revenues generated in European Union and Asia-Pacific countries.

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 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, proprietary technology and trade names with a weighted average amortization period of approximately 10 years.

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In January 2011 we acquired as part of Water & Fluid Solutions, all of the outstanding shares of capital stock of Hidro Filtros do Brasil (“Hidro Filtros”) for cash of $14.9 million and a note payable of $2.1 million. The Hidro Filtros results of operations have been included in our consolidated financial statements since the date of acquisition. Hidro Filtros is a leading manufacturer of water filters and filtering elements for residential and industrial applications operating in Brazil and neighboring countries. Goodwill recorded as part of the purchase price allocation was $10.1 million, none of which is tax deductible. Identified intangible assets acquired as part of the acquisition were $6.3 million including definite-lived intangibles, primarily customer relationships, of $5.5 million with an estimated life of 13 years.

Additionally, during 2011, we completed other small acquisitions with purchase prices totaling $4.6 million, consisting of $2.9 million in cash and $1.7 million as a note payable, adding to Water & Fluid Solutions. Total goodwill recorded as part of the purchase price allocation was $4.3 million, none of which is tax deductible.

In the fourth quarter of 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5 million in the fourth quarter of 2011. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

Key Trends and Uncertainties

Our sales revenue for the full year of 2011 was approximately $3.5 billion, increasing 14% from sales in the prior year. Water & Fluid Solutions sales increased 16% in the year to approximately $2.4 billion, compared to the same period in 2010. Technical Products sales increased 10% to approximately $1.1 billion as compared to the same period in 2010.

The following trends and uncertainties affected our financial performance in 2011 and will likely impact our results in the future:

• Most markets we serve slowed dramatically in late 2008 and throughout 2009 as a result of the global recession. In 2010 and 2011, most markets showed signs of improvement. Because our businesses are significantly affected by general economic trends, a lack of continued improvement in our most important markets addressed below would likely have an adverse impact on our results of operation for 2012 and beyond.

• We have also 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 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.

• After four years of new home building and new pool start contraction in the United States, these end markets stabilized in 2010 and 2011. Although stabilized, these end markets have not shown significant signs of improvement and continue at historically low levels. While we expect new product introductions, expanded distribution and channel penetration to result in volume increases for 2012, continued stagnation in new housing construction and new pool starts could negatively impact our ability to grow sales in the future. Overall, we believe approximately 35% of Pentair sales are used in global residential applications for replacement, refurbishment, remodeling, repair and new construction.

• Industrial markets slowed significantly in 2009. Order rates and sales improved in our industrial business in 2010 and 2011. We believe that the outlook for industrial markets is mixed. Any significant reduction in global capital spending could adversely impact our results in the future.

• Through 2010 and 2011, 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

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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.

• Primarily due to lower discount rates, our unfunded pension liabilities increased by $41 million to approximately $242 million as of the end of 2011. We anticipate that our 2012 pension expense will increase over 2011 levels.

• 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 continuing operating activities less capital expenditures plus proceeds from sale of property and equipment. Free cash flow for the full year 2011 was approximately $248 million, exceeding our goal of 100% net income conversion. We continue to expect to generate free cash flow in excess of net income from continuing operations in 2012. We are continuing to target reductions in working capital and particularly inventory, as a percentage of sales. See our discussion of Other financial measures under the caption “Liquidity and Capital Resources” in this report for a reconciliation of our free cash flow.

In 2012, our operating objectives include the following:

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

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

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

• Focusing on developing global talent in light of our increased global presence (39% of our 2011 net sales were generated outside the United States).

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

RESULTS OF OPERATIONS

Net sales

Consolidated net sales and the year-over-year changes were as follows:

In thousands	2011		2010		$ change		% change			2010		2009		$ change		% change
Net sales	$	3,456,686	$	3,030,773	$	425,913		14.1	%	$	3,030,773	$	2,692,468	$	338,305		12.6	%

Sales by segment and year-over-year changes were as follows:

							2011 vs. 2010					2010 vs. 2009
In thousands	2011		2010		2009		$ change		% change			$ change		% change
Water & Fluid Solutions	$	2,369,804	$	2,041,281	$	1,847,764	$	328,523		16.1	%	$	193,517		10.5	%
Technical Products		1,086,882		989,492		844,704		97,390		9.8	%		144,788		17.1	%
Total	$	3,456,686	$	3,030,773	$	2,692,468	$	425,913		14.1	%	$	338,305		12.6	%

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The components of the net sales change were as follows:

	2011 vs. 2010						2010 vs. 2009
Percentages	Water & Fluid Solutions		Technical Products		Total		Water & Fluid Solutions			Technical Products			Total
Volume		2.4		6.2		3.7		10.6			17.0			12.6
Acquisition		11.5		—		7.7		—			—			—
Price		1.0		1.9		1.3		(0.3	)		0.7			—
Currency		1.2		1.7		1.4		0.2			(0.6	)		—
Total		16.1		9.8		14.1		10.5			17.1			12.6

Consolidated net sales

The 14.1 percentage point increase in consolidated net sales in 2011 from 2010 was primarily the result of:

• higher sales volume related to the May 2011 acquisition of CPT;

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

• higher sales within the industrial, energy and general electronics vertical markets of Technical Products;

• favorable foreign currency effects; and

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

These increases were partially offset by:

• 2010 sales resulting from the Gulf Intracoastal Waterway Project which did not reoccur in 2011; and

• lower sales within the communications vertical market of Technical Products.

The 12.6 percentage point increase in consolidated net sales in 2010 from 2009 was primarily driven by:

• higher sales volume in Technical Products;

• higher sales of certain pump, pool and filtration products primarily related to the stabilization in the North American residential housing markets and other global markets following the global recession in 2009; and

• increased sales resulting from the Gulf Intracoastal Waterway Project.

Water & Fluid Solutions

The 16.1 percentage point increase in Water & Fluid Solutions sales in 2011 from 2010 was primarily the result of:

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

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

• favorable foreign currency effects; and

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

These increases were partially offset by:

• 2010 sales resulting from the Gulf Intracoastal Waterway Project which did not reoccur in 2011.

The 10.5 percentage point increase in Water & Fluid Solutions net sales in 2010 from 2009 was primarily driven by:

• organic sales growth of approximately 10.3 percent in 2010 (excluding foreign currency exchange) primarily due to higher sales of certain pump, pool and filtration products primarily related to the stabilization in the North American residential housing markets and other global markets following the global recession in 2009 primarily related to:

• increased sales resulting from the Gulf Intracoastal Waterway Project;

• continued sales growth in India, China and in other emerging markets in the Asia-Pacific region as well as Latin America; and

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

These increases were partially offset by:

• price concessions in the form of growth rebates.

Technical Products

The 9.8 percentage point increase in Technical Products sales in 2011 from 2010 was primarily the result of:

• an increase in sales in industrial, energy and general electronics vertical markets;

• favorable foreign currency effects; and

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

These increases were partially offset by:

• lower sales within the communications vertical market.

The 17.1 percentage point increase in Technical Products net sales in 2010 from 2009 was primarily driven by:

• organic sales growth of approximately 17.7 percent in 2010 (excluding foreign currency exchange) primarily related to:

• an increase in sales in industrial, general electronics, communications, energy and infrastructure vertical markets; and

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

These increases were partially offset by:

• unfavorable foreign currency effects in 2010 primarily related to the euro.

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Gross profit

In thousands	2011		% of sales			2010		% of sales			2009		% of sales
Gross Profit	$	1,073,722		31.1	%	$	930,640		30.7	%	$	785,135		29.2	%
Percentage point change				0.4  pts					1.5  pts

The 0.4 percentage point increase in gross profit as a percentage of sales in 2011 from 2010 was primarily the result of:

• higher sales volumes in Water & Fluid Solutions and Technical Products and higher fixed cost absorption resulting from that volume;

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

• selective increases in selling prices in Water & Fluid Solutions and Technical Products to mitigate inflationary cost increases.

These increases were partially offset by:

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

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

The 1.5 percentage point increase in gross profit as a percentage of sales in 2010 from 2009 was primarily the result of:

• higher sales volumes in Water & Fluid Solutions and Technical Products and higher fixed cost absorption resulting from that volume;

• cost savings from restructuring actions and other personnel reductions taken in response to the economic downturn and resulting volume decline in 2009; and

• savings generated from our PIMS initiatives including lean and supply management practices across both Water & Fluid Solutions and Technical Products.

These increases were partially offset by:

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

Selling, general and administrative (SG&A)

In thousands	2011		% of sales			2010		% of sales			2009		% of sales
*SG&A	$	827,047		23.9	%	$	529,329		17.5	%	$	507,303		18.8	%
Percentage point change				6.4  pts					(1.3	)  pts

* Includes goodwill impairment charge

The 6.4 percentage point increase in SG&A expense as a percentage of sales in 2011 from 2010 was primarily the result of:

• goodwill impairment charge of $200.5 million in Water & Fluid Solutions relating to our Residential Filtration reporting unit;

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

• incremental restructuring actions taken in 2011;

• insurance proceeds related to the Horizon litigation and other legal settlements received in 2010 which did not reoccur at the same levels in 2011;

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

• certain increases for labor and related costs.

These increases were partially offset by:

• higher sales volumes in both Water & Fluid Solutions and Technical Products, which resulted in increased leverage on the fixed operating expenses.

The 1.3 percentage point decrease in SG&A expense as a percentage of sales in 2010 from 2009 was primarily due to:

• higher sales volume in both Water & Fluid Solutions and Technical Products, which resulted in increased leverage on the fixed operating expenses;

• reduced costs related to restructuring actions taken throughout 2009 to consolidate facilities and streamline general and administrative costs;

• impairment charge of $11.3 million in 2009 for selected trade names resulting from volume declines; and

• insurance proceeds related to the Horizon litigation and other legal settlements received in 2010.

These decreases were partially offset by:

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

• certain increases for labor and related costs as well as reinstatement of certain employee benefits.

Research and development (R&D)

In thousands	2011		% of sales			2010		% of sales			2009		% of sales
R&D	$	78,158		2.3	%	$	67,156		2.2	%	$	57,884		2.2	%
Percentage point change				0.1 pts					- pts

The 0.1 percentage point increase in R&D expense as a percentage of sales in 2011 from 2010 was primarily the result of:

• higher costs associated with the May 2011 acquisition of CPT; and

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

These increases were partially offset by:

• higher sales volumes in both Water & Fluid Solutions and Technical Products, which resulted in increased leverage on the R&D expense spending.

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R&D expense as a percentage of sales in 2010 was flat compared to 2009 primarily as a result of:

• continued investments in the development of new products to generate growth in line with higher sales volume.

Operating income

Water & Fluid Solutions

In thousands	2011		% of sales			2010		% of sales			2009		% of sales
Operating income	$	58,311		2.5	%	$	231,588		11.3	%	$	163,745		8.9	%
Percentage point change				(8.8	) pts				2.4	pts

The 8.8 percentage point decrease in Water & Fluid Solutions operating income as a percentage of net sales in 2011 from 2010 was primarily the result of:

• goodwill impairment charge of $200.5 million in Water & Fluid Solutions relating to our Residential Filtration reporting unit;

• lower margin associated with the May 2011 acquisition of CPT, including the fair market value inventory step-up and customer backlog , intangible asset amortization and integration costs;

• cost increases for certain raw materials and labor;

• incremental restructuring actions taken in 2011;

• insurance proceeds related to the Horizon litigation and other legal settlements received in 2010 which did not reoccur at the same levels in 2011; and

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

These decreases were partially offset by:

• higher sales volume in Water & Fluid Solutions, which resulted in increased leverage of the 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.

The 2.4 percentage point increase in Water & Fluid Solutions operating income as a percentage of net sales in 2010 as compared to 2009 was primarily the result of:

• higher sales volume in Water & Fluid Solutions, which resulted in increased leverage of the fixed cost base;

• cost savings from restructuring actions and other personnel reductions taken throughout 2009 to consolidate and streamline operations;

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

• impairment change of $11.3 million in 2009 for selected trade names resulting from volume declines; and

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• insurance proceeds related to the Horizon litigation and other legal settlements received in 2010.

These increases were offset by:

• cost increases for certain raw materials and labor as well as reinstatement of certain employee benefits; and

• continued investment in future growth with emphasis on growth in international markets.

Operating income

Technical Products

In thousands	2011		% of sales			2010		% of sales			2009		% of sales
Operating income	$	185,240		17.0	%	$	151,533		15.3	%	$	100,355		11.9%
Percentage point change				1.7	pts				3.4	pts

The 1.7 percentage point increase in Technical Products operating income as a percentage of sales in 2011 from 2010 was primarily the result of:

• higher sales volume, which resulted in increased leverage of the 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, such as carbon steel, as well as labor; and

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

The 3.4 percentage point increase in Technical Products operating income as a percentage of sales in 2010 from 2009 was primarily the result of:

• higher gross margins due to higher sales volumes in Technical Products;

• cost savings from restructuring actions and other personnel reductions taken in response to the economic downturn and resulting volume decline in 2009;

• 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 as well as reinstatement of certain employee benefits; and

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

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Net interest expense

In thousands	2011		2010		$ change		% change			2010		2009		$ change			% change
Net interest expense	$	58,835	$	36,116	$	22,719		62.9	%	$	36,116	$	41,118	$	(5,002	)		(12.2)%

The 62.9 percentage point increase in interest expense in 2011 from 2010 was primarily the result of:

• the impact of higher debt levels following the May 2011 acquisition of CPT.

The 12.2 percentage point decrease in interest expense in 2010 from 2009 was primarily the result of:

• the favorable impact of lower debt levels in 2010 as compared to 2009 in addition to the redemption on April 15, 2009 of our 7.85% Senior Notes due 2009 (the “Notes”).

Loss on early extinguishment of debt

In March 2009, we announced the redemption of all of our remaining outstanding $133.9 million aggregate principal of our 7.85% Senior Notes due 2009. These notes were redeemed on April 15, 2009 at a redemption price of $1,035.88 per $1,000 of principal outstanding plus accrued interest thereon. As a result of this transaction, we recognized a loss of $4.8 million on early extinguishment of debt in the second quarter of 2009. The loss included the write off of $0.1 million in unamortized deferred financing fees in addition to recognition of $0.3 million in previously unrecognized swap gains and cash paid of $5.0 million related to the redemption and other costs associated with the purchase.

Provision for income taxes

In thousands	2011			2010			2009
Income from continuing operations before income taxes and noncontrolling interest	$	111,580		$	300,147		$	172,647
Provision for income taxes		73,059			97,200			56,428
Effective tax rate		65.5	%		32.4	%		32.7	%

The 33.1 percentage point increase in the tax rate in 2011 from 2010 was primarily the result of:

• the unfavorable tax impact of the $200.5 million goodwill impairment charge in Water & Fluid Solutions relating to our Residential Filtration reporting unit. Excluding this item our tax rate would have been 29.6% in 2011.

The increases were partially offset by:

• certain discrete items in 2011 that did not occur in 2010;

• the mix of global earnings, and;

• favorable benefits related to the May 2011 acquisition of CPT.

The 0.3 percentage point decrease in the effective tax rate in 2010 from 2009 was primarily the result of:

• the mix of global earnings.

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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 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 Water & Fluid Solutions. 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 $320.2 million in 2011 or $49.8 million higher than in 2010. The increase in cash provided by operating activities was due primarily to an increase in net income before non-cash items, partially offset by increased working capital necessary to support revenue growth.

Cash provided by operating activities was $270.4 million in 2010 or $12.0 million higher than in 2009. The increase in cash provided by operating activities was due primarily to a reduction in working capital, partially offset by an accelerated pension contribution of $25 million and lower income from continuing operations.

Investing activities

Capital expenditures in 2011, 2010 and 2009 were $73.3 million, $59.5 million and $54.1 million, respectively. We anticipate capital expenditures for fiscal 2012 to be approximately $75 to $85 million, primarily for capacity expansions in our low cost country manufacturing facilities, new product development and general maintenance capital.

In January 2011, we acquired as part of Water & Fluid Solutions, all of the outstanding shares of capital stock of Hidro Filtros for cash of $14.9 million and a note payable of $2.1 million.

In May 2011, we acquired as part of Water & Fluid Solutions, the CPT division from privately held Norit Holding for $715.3 million.

Additionally, during 2011, we completed other small acquisitions with purchase prices totaling $4.6 million, consisting of $2.9 million in cash and $1.7 million as a note payable, adding to Water & Fluid Solutions.

Financing activities

Net cash provided by financing activities was $503.6 million in 2011 and net cash used for financing activities was $190.6 million in 2010 and $209.1 in 2009. The increase in 2011 primarily related to borrowing utilized to fund the CPT acquisition. Additionally, financing activities included draw downs and repayments on our revolving credit facilities to fund our operations in the normal course of business, payments of dividends, cash received/used for stock issued to employees, repurchase of common stock and tax benefits related to stock-based compensation.

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In May 2011, we completed a public offering of $500 million aggregate principal amount of our 5.00% Senior Notes due 2021 (the “Notes”). The Notes are guaranteed by certain of our wholly-owned domestic subsidiaries that are also guarantors under our primary bank credit facility. We used the net proceeds from the offering of the Notes to finance in part the CPT acquisition.

In April 2011, we entered into a Fourth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility replaced our previous $800 million revolving credit facility. The Credit Facility creates an unsecured, committed credit facility of up to $700 million, with multi-currency sub facilities to support investments outside the U.S. The Credit Facility expires on April 28, 2016. Borrowings under the Credit Facility currently bear interest at the rate of London Interbank Offered Rate (“LIBOR”) plus 1.75%. Interest rates and fees on the Credit Facility will vary based on our credit ratings. We used borrowings under the Credit Facility to fund a portion of the CPT acquisition and to fund ongoing operations.

We are authorized to sell short-term commercial paper notes to the extent availability exists under the Credit Facility. We use the Credit Facility as back-up liquidity to support 100% of commercial paper outstanding. Our use of commercial paper as a funding vehicle depends upon the relative interest rates for our commercial paper compared to the cost of borrowing under our Credit Facility. As of December 31, 2011, we had $3.5 million of commercial paper outstanding.

Total availability under our existing Credit Facility was $528.0 million as of December 31, 2011, which was limited to $480.3 million by the leverage ratio financial covenant in the credit agreement.

Our debt agreements contain certain financial covenants, the most restrictive of which is a leverage ratio (total consolidated indebtedness, as defined, over consolidated net income before interest, taxes, depreciation, amortization and non-cash compensation expense, as defined) that may not exceed 3.5 to 1.0 as of the last date of each of our fiscal quarters. We were in compliance with all financial covenants in our debt agreements as of December 31, 2011.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $74.2 million, of which $14.1 million was outstanding at December 31, 2011. Borrowings under these credit facilities bear interest at variable rates. Additionally, as part of the CPT acquisition we assumed certain capital leases with an outstanding balance of $15.8 million at December 31, 2011.

We have $105 million of outstanding private placement debt maturing in May 2012. We classified this debt as long-term as of December 31, 2011 as we have the intent and ability to refinance such obligation on a long-term basis under the Credit Facility.

Our cost of and ability to obtain debt financing may be impacted by our credit ratings. Our long-term debt is rated at BBB- by Standard & Poor’s (“S&P”) with stable outlook and Baa3 by Moody’s with stable outlook.

We issue short-term commercial paper notes that are currently not rated by S&P or Moody’s. Even though our short-term commercial paper is unrated, we believe a downgrade in our credit rating could have a negative impact on our ability to continue to issue unrated commercial paper.

We do not expect that a one rating downgrade of our credit rating by either S&P or Moody’s would substantially affect our ability to access the long-term debt capital markets. However, depending upon market conditions, the amount, timing and pricing of new borrowings and interest rates under our Credit Facility could be adversely affected. If both of our credit ratings were downgraded to below BBB-/Baa3, our flexibility to access the term debt capital markets would be reduced.

A credit rating is a current opinion of the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations or a specific financial program. The credit rating takes into

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consideration the creditworthiness of guarantors, insurers or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated. The ratings outlook also highlights the potential direction of a short or long-term rating. It focuses on identifiable events and short-term trends that cause ratings to be placed under observation by the respective rating agencies. A change in rating outlook does not mean a rating change is inevitable.

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 annually. 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.

We paid dividends in 2011 of $79.5 million, compared with $75.5 million in 2010 and $70.9 million in 2009. We recently announced an increase in our dividend rate for 2012 from $0.80 per share in 2011 to $0.88 per share in 2012, which is the 36th consecutive year in which we have increased our dividend.

In July 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2010 we had repurchased 734,603 shares for $25 million pursuant to this plan. In December 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2011, we had repurchased 389,300 shares for $12.5 million pursuant to this authorization, which expired in December 2011. In December 2011, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. This authorization expires in December 2012.

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

	Payments Due by Period
In thousands	2012		2013		2014		2015		2016		More than 5 Years		Total
Long-term debt obligations	$	3,694	$	200,620	$	—	$	—	$	288,985	$	800,000	$	1,293,299
Capital lease obligations		1,168		1,168		1,168		1,168		1,168		9,948		15,788
Interest obligations on fixed-rate debt , including effects of derivative financial instruments		30,810		26,605		17,610		17,610		17,610		8,805		119,050
Operating lease obligations, net of sublease rentals		25,681		19,060		15,659		12,571		10,228		16,691		99,890
Pension and post retirement plan contributions		46,500		34,800		43,700		10,700		10,500		122,800		269,000
Total contractual cash obligations, net	$	107,853	$	282,253	$	78,137	$	42,049	$	328,491	$	958,244	$	1,797,027

In addition to the summary of significant contractual obligations, we will incur annual interest expense on outstanding variable rate debt. As of December 31, 2011, variable interest rate debt, including the effects of derivative financial instruments, was $202.0 million at a weighted average interest rate of 2.25%.

The estimated annual pension plan contribution amounts are intended to achieve fully funded status of our domestic qualified pension plan in accordance with the Pension Protection Act of 2006. Pension and post retirement plan contributions are based on an assumed discount rate of 5.05% for all periods and an expected rate of return on plan assets ranging from 5.05% to 7.50%.

The total gross liability for uncertain tax positions at December 31, 2011 is estimated to be approximately $26.5 million. We record penalties and interest related to unrecognized tax benefits in Provision for income taxes

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and Interest expense, respectively, which is consistent with our past practices. As of December 31, 2011, we had recorded approximately $0.9 million for the possible payment of penalties and $5.9 million related to the possible payment of interest.

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% conversion of net income from continuing operations. 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:

	Twelve Months Ended December 31
In thousands	2011			2010			2009
Net cash provided by (used for) continuing operations	$	320,226		$	270,376		$	259,900
Capital expenditures		(73,348	)		(59,523	)		(54,137)
Proceeds from sale of property and equipment		1,310			358			1,208
Free cash flow	$	248,188		$	211,211		$	206,971

Off-balance sheet arrangements

At December 31, 2011, we had no off-balance sheet financing arrangements.

COMMITMENTS AND CONTINGENCIES

Environmental

We have been named as defendants, targets or PRP in a small number of environmental clean-ups, in which our current or former business units have generally been given de minimis status. To date, none of these claims have resulted in clean-up costs, fines, penalties or damages in an amount material to our financial position or results of operations. We have disposed of a number of businesses in recent years and in certain cases, such as the disposition of the Cross Pointe Paper Corporation uncoated paper business in 1995, the disposition of the Federal Cartridge Company ammunition business in 1997, the disposition of Lincoln Industrial in 2001 and the disposition of the Tools Group in 2004, we have retained responsibility and potential liability for certain environmental obligations. We have received claims for indemnification from purchasers of these businesses and have established what we believe to be adequate accruals for potential liabilities arising out of retained responsibilities. We settled some of the claims in prior years; to date our recorded accruals have been adequate.

In addition, there are ongoing environmental issues at a limited number of sites relating to operations no longer carried out at the sites. We have established what we believe to be adequate accruals for remediation costs at these sites. We do not believe that projected response costs will result in a material liability.

We may be named as a PRP at other sites in the future, for both divested and acquired businesses. When the outcome of the matter is probable and it is possible to provide reasonable estimates of our liability with respect to environmental sites, provisions have been made in accordance with generally accepted accounting principles in the United States (“GAAP”). As of December 31, 2011 and 2010, our undiscounted reserves for such environmental liabilities were approximately $1.5 million and $1.3 million, respectively. We cannot ensure that environmental requirements will not change or become more stringent over time or that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

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Stand-by letters of credit and bonds

In the ordinary course of business, we are required to commit to bonds that require payments to our customers for any non-performance. The outstanding face value of the bonds 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 and certain legal matters. As of December 31, 2011 and 2010, the outstanding value of these instruments totaled $136.2 million and $116.5 million, respectively.

NEW ACCOUNTING STANDARDS

See ITEM 8, Note 1 of the Notes to Consolidated Financial Statements 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 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.

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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 five year long-term planning period. The five year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2018 are projected to grow at a perpetual growth rate between 3.0% and 3.5%.

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 a discount rate ranging from 12.6% to 14% 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 operating segment 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 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.

In connection with our annual impairment test, we determined that the fair value of one of our reporting units did not exceed its carrying value by a significant amount. Goodwill for this reporting unit was $799.9 million at December 31, 2011. If cash flow projections decreased by 6.7% or if the discount rate increased by 70 basis points (the discount rate used in the impairment analysis was 12.6%), this reporting unit would have failed the step one test and a step two analysis would have been required.

Impairment charge

In the fourth quarter of 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5 million. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include trade marks and trade names, patents, non-compete agreements, proprietary technology and customer relationships. 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. There was no impairment charge recorded in 2011 or 2010 for identifiable intangible assets. An impairment charge of $11.3 million was recorded in 2009, related to trade names. These charges were recorded in Selling, general and administrative in our Consolidated Statements of Income.

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 charge recorded in 2009 was the result of significant declines in sales volume.

At December 31, 2011 our goodwill and intangible assets were approximately $2,866.2 million and represented approximately 62.5% of our total assets. If we experience future declines in sales and operating profit or do not

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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 stock 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. There were no impairment charges recorded related to long-lived assets in 2011, 2010 or 2009.

Pension

We sponsor domestic and foreign 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. Changes to these assumptions will affect pension expense, pension contributions and the funded status of our pension plans.

We recognize the overfunded or underfunded status of our defined benefit and retiree medical plans as an asset or liability in our Consolidated Balance Sheets, with changes in the funded status recognized through comprehensive income in the year in which they occur.

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 AA or higher bonds available in the marketplace, adjusted to eliminate the effects of call provisions. This produced a discount rate for our U.S. plans of 5.05% in 2011, 5.90% in 2010 and 6.00% in 2009. The discount rates on our foreign plans ranged from 0.75% to 5.00% in 2011, 0.75% to 5.40% in 2010 and 2.00% to 6.00% in 2009. There are no other known or anticipated changes in our discount rate assumption that will impact our pension expense in 2012.

Expected rate of return

Our expected rate of return on plan assets was 8.0% for 2011 and 8.5% in 2010 and 2009. 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.

We base our determination of pension expense or income on a market-related valuation of assets which reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a five-year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets. Since the market-related value of assets recognizes gains or losses over a five-year-period, the future value of assets will be impacted as previously deferred gains or losses are recorded.

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

35

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. 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.

Failure of one or more of our swap counterparties would result in the loss of any benefit to us of the swap agreement. In this case, we would continue to be obligated to pay the variable interest payments per the underlying debt agreements which are at variable interest rates of 3 month LIBOR plus .50% for $105 million of debt and 3 month LIBOR plus ..60% for $100 million of debt. Additionally, failure of one or all of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

Interest rate risk

Our debt portfolio, excluding the impact of swap agreements, as of December 31, 2011, was comprised of debt predominantly denominated in U.S. dollars. This debt portfolio is comprised of 69% fixed-rate debt and 31% variable-rate debt, not considering the effects of our interest rate swaps. Taking into account the variable to fixed-rate swap agreements we entered into with an effective date of April 2006 and August 2007, our debt portfolio is comprised of 85% fixed-rate debt and 15% 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.

Based on the fixed-rate debt included in our debt portfolio, as of December 31, 2011, a 100 basis point increase or decrease in interest rates would result in a $53.0 million increase or $58.0 million decrease in fair value.

Based on the variable-rate debt included in our debt portfolio, including the interest rate swap agreements, as of December 31, 2011, a 100 basis point increase or decrease in interest rates would result in a $2.0 million increase or decrease in interest incurred.

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. 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 in to short duration foreign currency contracts to hedge foreign currency risks.

36

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Pentair, Inc. 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, 2011. In making this assessment, management used the criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2011, the Company’s internal control over financial reporting was effective based on those criteria.

Management has excluded from its assessment the internal control over financial reporting at Clean Process Technologies (“CPT”), which was acquired on May 12, 2011 and whose financial statements constitute approximately 19 percent of total assets and 7 percent of total revenues on the consolidated financial statements as of and for the year ended December 31, 2011.

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 year ended December 31, 2011. 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

37

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Pentair, Inc.

We have audited the internal control over financial reporting of Pentair, Inc. and subsidiaries (the “Company”) as of December 31, 2011 based on criteria established in Internal Control — Integrated Framework 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. As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Clean Process Technologies (“CPT”), which was acquired on May 12, 2011 and whose financial statements constitute approximately 19 percent of total assets and 7 percent of total revenues on the consolidated financial statements as of and for the year ended December 31, 2011. Accordingly, our audit did not include the internal control over financial reporting at CPT. 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, 2011, based on the criteria established in Internal Control — Integrated Framework 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, 2011 of the Company and our report dated February 21, 2012, expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

Minneapolis, Minnesota

February 21, 2012

38

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Pentair, Inc.

We have audited the accompanying consolidated balance sheets of Pentair, Inc. and subsidiaries (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2011. 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, Inc. and subsidiaries at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, 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, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2012 expressed an unqualified opinion on the Company's internal control over financial reporting.

Minneapolis, Minnesota

February 21, 2012

39

Pentair, Inc. and Subsidiaries

Consolidated Statements of Income

	Years Ended December 31
In thousands, except per-share data	2011			2010			2009
Net sales	$	3,456,686		$	3,030,773		$	2,692,468
Cost of goods sold		2,382,964			2,100,133			1,907,333
Gross profit		1,073,722			930,640			785,135
Selling, general and administrative		626,527			529,329			507,303
Research and development		78,158			67,156			57,884
Goodwill impairment		200,520			—			—
Operating income		168,517			334,155			219,948
Other (income) expense:
Equity (income) losses of unconsolidated subsidiaries		(1,898	)		(2,108	)		1,379
Loss on early extinguishment of debt		—			—			4,804
Interest income		(1,432	)		(1,263	)		(999)
Interest expense		60,267			37,379			42,117
Income from continuing operations before income taxes and noncontrolling interest		111,580			300,147			172,647
Provision for income taxes		73,059			97,200			56,428
Income from continuing operations		38,521			202,947			116,219
Loss on disposal of discontinued operations, net of tax		—			(626	)		(19)
Net income before noncontrolling interest		38,521			202,321			116,200
Noncontrolling interest		4,299			4,493			707
Net income attributable to Pentair, Inc.	$	34,222		$	197,828		$	115,493
Net income from continuing operations attributable to Pentair, Inc.	$	34,222		$	198,454		$	115,512
Earnings per common share attributable to Pentair, Inc.
Basic
Continuing operations	$	0.35		$	2.02		$	1.19
Discontinued operations		—			(0.01	)		—
Basic earnings per common share	$	0.35		$	2.01		$	1.19
Diluted
Continuing operations	$	0.34		$	2.00		$	1.17
Discontinued operations		—			(0.01	)		—
Diluted earnings per common share	$	0.34		$	1.99		$	1.17
Weighted average common shares outstanding
Basic		98,233			98,037			97,415
Diluted		99,753			99,294			98,522

See accompanying notes to consolidated financial statements.

40

Pentair, Inc. and Subsidiaries

Consolidated Balance Sheets

In thousands, except share and per-share data	December 31, 2011			December 31, 2010
Assets
Current assets
Cash and cash equivalents	$	50,077		$	46,056
Accounts and notes receivable, net of allowances of $39,111 and $36,343, respectively		569,204			516,905
Inventories		449,863			405,356
Deferred tax assets		60,899			56,349
Prepaid expenses and other current assets		107,792			44,631
Total current assets		1,237,835			1,069,297
Property, plant and equipment, net		387,525			329,435
Other assets
Goodwill		2,273,918			2,066,044
Intangibles, net		592,285			453,570
Other		94,750			55,187
Total other assets		2,960,953			2,574,801
Total assets	$	4,586,313		$	3,973,533
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	3,694		$	4,933
Current maturities of long-term debt		1,168			18
Accounts payable		294,858			262,357
Employee compensation and benefits		109,361			107,995
Current pension and post-retirement benefits		9,052			8,733
Accrued product claims and warranties		42,630			42,295
Income taxes		14,547			5,964
Accrued rebates and sales incentives		37,009			33,559
Other current liabilities		129,522			80,942
Total current liabilities		641,841			546,796
Other liabilities
Long-term debt		1,304,225			702,521
Pension and other retirement compensation		248,615			209,859
Post-retirement medical and other benefits		31,774			30,325
Long-term income taxes payable		26,470			23,507
Deferred tax liabilities		188,957			169,198
Other non-current liabilities		97,039			86,295
Total liabilities		2,538,921			1,768,501
Commitments and contingencies
Shareholders’ equity
Common shares par value $0.16 2/3; 98,622,564 and 98,409,192 shares issued and outstanding, respectively		16,437			16,401
Additional paid-in capital		488,843			474,489
Retained earnings		1,579,290			1,624,605
Accumulated other comprehensive income		(151,241	)		(22,342	)
Noncontrolling interest		114,063			111,879
Total shareholders’ equity		2,047,392			2,205,032
Total liabilities and shareholders’ equity	$	4,586,313		$	3,973,533

See accompanying notes to consolidated financial statements.

41

Pentair, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Year Ended
In thousands	December 31, 2011			December 31, 2010			December 31, 2009
Operating activities
Net income before noncontrolling interest	$	38,521		$	202,321		$	116,200
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss on disposal of discontinued operations		—			626			19
Equity (income) losses of unconsolidated subsidiaries		(1,898	)		(2,108	)		1,379
Depreciation		66,235			57,995			64,823
Amortization		41,897			26,184			40,657
Deferred income taxes		(5,583	)		29,453			30,616
Stock compensation		19,489			21,468			17,324
Goodwill impairment		200,520			—			—
Excess tax benefits from stock-based compensation		(3,310	)		(2,686	)		(1,746	)
Loss on sale of assets		933			466			985
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		1,348			(62,344	)		11,307
Inventories		18,263			(44,495	)		66,684
Prepaid expenses and other current assets		10,032			2,777			16,202
Accounts payable		(24,330	)		55,321			(13,822	)
Employee compensation and benefits		(20,486	)		27,252			(22,431	)
Accrued product claims and warranties		(1,984	)		8,068			(7,440	)
Income taxes		10,084			1,791			1,972
Other current liabilities		10,921			561			(21,081	)
Pension and post-retirement benefits		(24,596	)		(43,024	)		(39,607	)
Other assets and liabilities		(15,830	)		(9,250	)		(2,141	)
Net cash provided by (used for) continuing operations		320,226			270,376			259,900
Net cash provided by (used for) operating activities of discontinued operations		—			—			(1,531	)
Net cash provided by (used for) operating activities		320,226			270,376			258,369
Investing activities
Capital expenditures		(73,348	)		(59,523	)		(54,137	)
Proceeds from sale of property and equipment		1,310			358			1,208
Acquisitions, net of cash acquired		(733,105	)		—			—
Divestitures		—			—			1,567
Other		(2,943	)		(1,148	)		(3,224	)
Net cash provided by (used for) investing activities		(808,086	)		(60,313	)		(54,586	)
Financing activities
Net short-term borrowings		(1,239	)		2,728			2,205
Proceeds from long-term debt		1,421,602			703,641			580,000
Repayment of long-term debt		(832,147	)		(804,713	)		(730,304	)
Debt issuance costs		(8,973	)		(50	)		(50	)
Excess tax benefits from stock-based compensation		3,310			2,686			1,746
Stock issued to employees, net of shares withheld		13,322			9,941			8,247
Repurchases of common stock		(12,785	)		(24,712	)		—
Dividends paid		(79,537	)		(75,465	)		(70,927	)
Distribution to noncontrolling interest		—			(4,647	)		—
Net cash provided by (used for) financing activities		503,553			(190,591	)		(209,083	)
Effect of exchange rate changes on cash and cash equivalents		(11,672	)		(6,812	)		(648	)
Change in cash and cash equivalents		4,021			12,660			(5,948	)
Cash and cash equivalents, beginning of period		46,056			33,396			39,344
Cash and cash equivalents, end of period	$	50,077		$	46,056		$	33,396

See accompanying notes to consolidated financial statements.

42

Pentair, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

In thousands, except share and per-share data	Common shares						Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Total Pentair, Inc.			Noncontrolling interest						Comprehensive income (loss) attributable to Pentair, Inc.
	Number			Amount																		Total
Balance - December 31, 2008		98,276,919		$	16,379		$	451,241		$	1,457,676		$	(26,615	)	$	1,898,681		$	121,388		$	2,020,069
Net income											115,493						115,493			707			116,200		$	115,493
Change in cumulative translation adjustment														43,371			43,371			(7,843	)		35,528			43,371
Adjustment in retirement liability, net of $164 tax														256			256						256			256
Changes in market value of derivative financial instruments, net of ($2,323) tax														3,585			3,585						3,585			3,585
Comprehensive income (loss)																									$	162,705
Cash dividends - $0.72 per common share											(70,927	)					(70,927	)					(70,927	)
Tax benefit of stock compensation								1,025									1,025						1,025
Exercise of stock options, net of 124613 shares tendered for payment		433,533			72			7,639									7,711						7,711
Issuance of restricted shares, net of cancellations		24,531			4			516									520						520
Amortization of restricted shares								7,190									7,190						7,190
Shares surrendered by employees to pay taxes		(79,477	)		(13	)		(1,867	)								(1,880	)					(1,880	)
Stock compensation								7,063									7,063						7,063
Balance - December 31, 2009		98,655,506		$	16,442		$	472,807		$	1,502,242		$	20,597		$	2,012,088		$	114,252		$	2,126,340
Net income											197,828						197,828			4,493			202,321		$	197,828
Change in cumulative translation adjustment														(30,487	)		(30,487	)		(2,219	)		(32,706	)		(30,487	)
Adjustment in retirement liability, net of $(8,159) tax														(12,762	)		(12,762	)					(12,762	)		(12,762	)
Changes in market value of derivative financial instruments, net of $229 tax														310			310						310			310
Comprehensive income (loss)																									$	154,889
Cash dividends - $0.76 per common share											(75,465	)					(75,465	)					(75,465	)
Tax benefit of stock compensation								2,171									2,171						2,171
Distribution to noncontrolling interest																				(4,647	)		(4,647	)
Share repurchase		(726,777	)		(121	)		(24,591	)								(24,712	)					(24,712	)
Exercise of stock options, net of 27,177 shares tendered for payment		651,331			109			14,817									14,926						14,926
Issuance of restricted shares, net of cancellations		(4,122	)		(1	)		707									706						706
Amortization of restricted shares								3,538									3,538						3,538
Shares surrendered by employees to pay taxes		(166,746	)		(28	)		(5,663	)								(5,691	)					(5,691	)
Stock compensation								10,703									10,703						10,703
Balance - December 31, 2010		98,409,192		$	16,401		$	474,489		$	1,624,605		$	(22,342	)	$	2,093,153		$	111,879		$	2,205,032
Net income											34,222						34,222			4,299			38,521		$	34,222
Change in cumulative translation adjustment														(91,591	)		(91,591	)		(2,115	)		(93,706	)		(91,591	)
Adjustment in retirement liability, net of ($26,650) tax														(41,683	)		(41,683	)					(41,683	)		(41,683	)
Changes in market value of derivative financial instruments, net of $2,884 tax														4,375			4,375						4,375			4,375
Comprehensive income (loss)																									$	(94,677	)
Tax benefit of stock compensation								3,868									3,868						3,868
Cash dividends - $0.80 per common share											(79,537	)					(79,537	)					(79,537	)
Share repurchase		(397,126	)		(66	)		(12,719	)								(12,785	)					(12,785	)
Exercise of stock options, net of 182,270 shares tendered for payment		657,616			110			14,598									14,708						14,708
Issuance of restricted shares, net of cancellations		28,603			5			1,470									1,475						1,475
Amortization of restricted shares								1,006									1,006						1,006
Shares surrendered by employees to pay taxes		(75,721	)		(13	)		(2,785	)								(2,798	)					(2,798	)
Stock compensation								8,916									8,916						8,916
Balance - December 31, 2011		98,622,564		$	16,437		$	488,843		$	1,579,290		$	(151,241	)	$	1,933,329		$	114,063		$	2,047,392

43

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

1. Summary of Significant Accounting Policies

Fiscal year

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

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both U.S. and non-U.S., that 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 Income.

Use of estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that could differ from those estimates. The critical accounting policies that require our most significant estimates and judgments include:

• the assessment of recoverability of long-lived assets, including goodwill and indefinite-life intangibles; and

• accounting for pension benefits, because of the importance in making the estimates necessary to apply these policies.

Revenue recognition

Generally, 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 (POC) method of accounting. Under this method, sales and gross profit are recognized as work is performed based on the relationship between the actual costs incurred and the total estimated costs at completion. 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.

We record costs and earnings in excess of billings on uncompleted contracts within Prepaid expenses and other current assets and billings in excess of costs and earnings on uncompleted contracts within Other current

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Notes to consolidated financial statements

liabilities in the Consolidated Balance Sheets. Amounts included in Prepaid expenses and other current assets related to these contracts were $54.7 million and $0 at December 31, 2011 and 2010, respectively. Amounts included in Other current liabilities related to these contracts were $17.7 million and $0 at December 31, 2011 and 2010, 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. The following represents a description of our pricing arrangements, promotions and other volume-based incentives:

Pricing arrangements

Pricing is established up front 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 (“OEM”) 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.

Promotions

Our primary promotional activity is what we refer to as cooperative advertising. Under our cooperative advertising programs, we agree to pay the customer a fixed percentage of sales as an allowance that may be used to advertise and promote our products. The customer is generally not required to provide evidence of the advertisement or promotion. We recognize the cost of this cooperative advertising at the time of sale. The cost of this program is recorded as a reduction in gross sales.

Volume-based incentives

These incentives involve rebates that are negotiated up front 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 Income. 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 Income.

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Notes to consolidated financial statements

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 2011, 2010 and 2009 were $78.2 million, $67.2 million and $57.9 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 historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of our customers’ financial condition. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2011 and December 31, 2010.

Inventories

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

Property, plant and equipment

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 cost and related accumulated depreciation are removed from the accounts 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 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.

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Notes to consolidated financial statements

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. 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 five year long-term planning period. The five year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2018 are projected to grow at a perpetual growth rate between 3.0% and 3.5%.

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 12.6% to 14% 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 operating segment 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

In the fourth quarter of 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include trade marks and trade names, patents, non-compete agreements, proprietary technology and customer relationships. 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

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Notes to consolidated financial statements

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. There was no impairment charge recorded in 2011 or 2010 for identifiable intangible assets. An impairment charge of $11.3 million was recorded in 2009, related to trade names. These charges were recorded in Selling, general and administrative in our Consolidated Statements of Income.

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 their 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. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

At December 31, 2011 our goodwill and intangible assets were approximately $2,866 million and represented approximately 62.5% of our total assets. If we experience further 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 stock 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 Income. 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.

We have a 50% investment in FARADYNE Motors LLC (“FARADYNE”), a joint venture with Xylem, Inc. (fka ITT Water Technologies, Inc) that designs, develops and manufactures submersible pump motors. We do not consolidate the investment in our consolidated financial statements as we do not have a controlling interest over the investment. There were investments in and loans to FARADYNE of $6.0 million and $6.1 million at December 31, 2011 and December 31, 2010, respectively, which is 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. At December 31, 2011 and 2010 the aggregate balance of these investments was $6.9 million and $3.8 million, respectively.

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 basis 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

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Notes to consolidated financial statements

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.

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.

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, 2011 and 2010, reserves for policy claims were $44.3 million ($13.3 million included in Accrued product claims and warranties and $31.0 million included in Other non-current liabilities) and $49.0 million ($12.0 million included in Accrued product claims and warranties and $37.0 million included in Other non-current liabilities), respectively.

Stock-based compensation

We account for stock-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 Income. Restricted share awards and units are recorded as compensation cost on a straight-line basis over the requisite service periods based on the market value on the date of grant.

Earnings per common share

Basic earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding including the dilutive effects of common stock equivalents. The dilutive effects of stock options and restricted stock awards and units increased weighted average common shares outstanding by 1,519 thousand, 1,257 thousand and 1,107 thousand in 2011, 2010 and 2009, respectively.

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Notes to consolidated financial statements

Stock options excluded from the calculation of diluted earnings per share because the exercise price was greater than the average market price of the common shares were 2,140 thousand, 3,711 thousand and 5,283 thousand in 2011, 2010 and 2009, respectively.

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 as a fair-value hedge, the changes in the fair value of the derivative and the hedged item are recognized in earnings. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in other comprehensive income (“OCI”) and are recognized in the Consolidated Statements of Income 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 in to 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. 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 Accumulated other comprehensive income (loss) (“AOCI”), a separate component of shareholders’ equity.

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Notes to consolidated financial statements

New accounting standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to improve the consistency of fair value measurement and disclosure requirements between US GAAP and International Financial Reporting Standards. The provisions of this guidance change certain of the fair value principles related to the highest and best use premise, the consideration of blockage factors and other premiums and discounts, and the measurement of financial instruments held in a portfolio and instruments classified within shareholders' equity. Further, the guidance provides additional disclosure requirements surrounding Level 3 fair value measurements, the uses of nonfinancial assets in certain circumstances and identification of the level in the fair value hierarchy used for assets and liabilities which are not recorded at fair value, but where fair value is disclosed. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We are evaluating the potential impact of adoption.

In June 2011, the FASB issued authoritative guidance surrounding the presentation of comprehensive income, with an objective of increasing the prominence of items reported in OCI. This guidance provides entities with the option to present the total of comprehensive income, the components of net income and the components of OCI in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, entities must present on the face of the financial statement, items reclassified from OCI to net income in the section of the financial statement where the components of net income and OCI are presented, regardless of the option selected to present comprehensive income. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The FASB subsequently deferred the effective date of certain provisions of this standard pertaining to the reclassification of items out of accumulated other comprehensive income, pending the issuance of further guidance on that matter. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides entities an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

Subsequent events

In connection with preparing the audited consolidated financial statements for the year ended December 31, 2011, we have evaluated subsequent events for potential recognition and disclosure through the date of this filing.

2. Acquisitions

In May 2011, we acquired as part of Water & Fluid Solutions, the 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 2011 and 2010 revenues generated in European Union and Asia-Pacific countries.

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Notes to consolidated financial statements

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 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.

The total purchase price has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

(in thousands)
Accounts and notes receivable	$	70,038
Inventories		60,382
Deferred tax assets		4,926
Prepaid expenses and other current assets		40,252
Property, plant and equipment		69,010
Goodwill		451,809
Intangibles		197,231
Accounts payable		(41,061	)
Income taxes		(3,937	)
Other current liabilities		(59,229	)
Long-term debt		(17,041	)
Deferred tax liabilities		(57,069	)
Purchase price	$	715,311

CPT’s net sales and income from continuing operations for the period from the acquisition date to December 31, 2011 were $234.1 million and $2.4 million, respectively, and include $13.2 million of non-recurring expenses for acquisition date fair value adjustments related to inventory and customer backlog.

The following pro forma consolidated condensed financial results of operations are presented as if the acquisitions described above had been completed at the beginning of the comparable period:

	Years ended December 31
In thousands, except share and per-share data	2011		2010
Pro forma net sales	$	3,578,462	$	3,329,812
Pro forma income from continuing operations		49,363		177,867
Loss on disposal of discontinued operations, net of tax		—		(626	)
Pro forma net income from continuing operations attributable to Pentair, Inc.		45,064		173,375
Pro forma earnings per common share - continuing operations
Basic	$	0.46	$	1.77
Diluted	$	0.45	$	1.75
Weighted average common shares outstanding
Basic		98,233		98,037
Diluted		99,753		99,294

The 2010 unaudited pro forma net income was adjusted to include the impact of approximately $12.9 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog. The 2011 unaudited pro forma net income was adjusted to exclude the impact of these items. Acquisition-related transaction costs of approximately $8.0 million associated with the CPT acquisition were excluded from the pro forma net income in the 2011 period presented and included in the 2010 period presented.

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Notes to consolidated financial statements

These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as increased interest expense on acquisition debt. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of each period presented, or of future results of the consolidated entities.

In January 2011 we acquired as part of Water & Fluid Solutions, all of the outstanding shares of capital stock of Hidro Filtros do Brasil (“Hidro Filtros”) for cash of $14.9 million and a note payable of $2.1 million. The Hidro Filtros results of operations have been included in our consolidated financial statements since the date of acquisition. Hidro Filtros is a leading manufacturer of water filters and filtering elements for residential and industrial applications operating in Brazil and neighboring countries. Goodwill recorded as part of the purchase price allocation was $10.1 million, none of which is tax deductible. Identified intangible assets acquired as part of the acquisition were $6.3 million including definite-lived intangibles, primarily customer relationships of $5.5 million, with an estimated life of 13 years. The proforma impact of this acquisition was deemed to be not material.

Additionally, during 2011, we completed other small acquisitions with purchase prices totaling $4.6 million, consisting of $2.9 million in cash and $1.7 million as a note payable, adding to Water & Fluid Solutions. Total goodwill recorded as part of the purchase price allocation was $4.3 million, none of which is tax deductible. The proforma impact of these acquisitions was deemed to be not material.

Total transaction costs related to acquisition activities for the year ended December 31, 2011 were $8.2 million, which were expensed as incurred and recorded in Selling, general and administrative in our Consolidated Statements of Income.

3. Discontinued Operations

In 2010, we were notified of a product recall required by our former Tools Group (which was sold to Black and Decker Corporation in 2004 and treated as a discontinued operation). Under the terms of the sale agreement we are liable for a portion of the product recall costs. We recorded a liability of $3.2 million ($2.0 million net of tax) in 2010 representing our estimate of the potential cost for products sold prior to the date of sale of the Tools Group associated with this recall. In addition, we received the remaining escrow balances from our sale of Lincoln Industrial of approximately $0.5 million, and we reversed tax reserves of approximately $1.0 million due to the expiration of various statues of limitations.

4. Restructuring

During 2011, we announced and initiated certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. These initiatives included the reduction in hourly and salaried headcount of approximately 210 employees, which included 160 in Water & Fluid Solutions and 50 in Technical Products.

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Notes to consolidated financial statements

Restructuring related costs included in Selling, general and administrative expenses on the Consolidated Statements of Income include costs for severance and other restructuring costs as follows:

	Years Ended December 31
In thousands	2011		2010		2009
Severance and related costs	$	11,500	$	—	$	11,160
Contract termination costs		—		—		2,030
Asset impairment and other restructuring costs		1,500		—		4,050
Total restructuring costs	$	13,000	$	—	$	17,240

Total restructuring costs related to Water & Fluid Solutions and Technical Products were $11.0 million and $2.0 million, respectively, for year ended December 31, 2011.

Restructuring accrual activity recorded on the Consolidated Balance Sheets is summarized as follows:

	Years Ended December 31
In thousands	2011			2010
Beginning balance	$	3,994		$	14,509
Costs incurred		11,500			—
Cash payments and other		(2,689	)		(10,515	)
Ending balance	$	12,805		$	3,994

5. Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the year ended December 31, 2011 and December 31, 2010 by segment were as follows:

In thousands	December 31, 2010		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2011
Water & Fluid Solutions	$	1,784,100	$	466,182	$	(255,501	)	$	1,994,781
Technical Products		281,944		—		(2,807	)		279,137
Consolidated Total	$	2,066,044	$	466,182	$	(258,308	)	$	2,273,918

In thousands	December 31, 2009		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2010
Water & Fluid Solutions	$	1,802,913	$	—	$	(18,813	)	$	1,784,100
Technical Products		285,884		—		(3,940	)		281,944
Consolidated Total	$	2,088,797	$	—	$	(22,753	)	$	2,066,044

In 2011, the acquired goodwill in Water & Fluid Solutions is primarily related to the acquisition of CPT. In 2011, we recorded an impairment charge of $200.5 million in Water & Fluid Solutions which is included in “Foreign Currency Translation/Other” above. Accumulated goodwill impairment losses were $200.5 million and $0 as of December 31, 2011 and December 31, 2010, respectively.

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Notes to consolidated financial statements

The detail of intangible assets consisted of the following:

	2011							2010
In thousands	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Finite-life intangibles
Patents	$	5,896	$	(4,038	)	$	1,858	$	15,469	$	(12,695	)	$	2,774
Proprietary technology		128,841		(39,956	)		88,885		74,176		(29,862	)		44,314
Customer relationships		358,410		(109,887	)		248,523		282,479		(82,901	)		199,578
Trade names		1,515		(530	)		985		1,532		(383	)		1,149
Total finite-life intangibles	$	494,662	$	(154,411	)	$	340,251	$	373,656	$	(125,841	)	$	247,815
Indefinite-life intangibles
Trade names		252,034		—			252,034		205,755		—			205,755
Total intangibles, net	$	746,696	$	(154,411	)	$	592,285	$	579,411	$	(125,841	)	$	453,570

Intangible asset amortization expense in 2011, 2010 and 2009 was approximately $41.9 million, $24.5 million and $27.3 million, respectively.

In 2009 we recorded an impairment charge to write down trade name intangible assets of $11.3 million in Water & Fluid Solutions.

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

In thousands	2012		2013		2014		2015		2016
Estimated amortization expense	$	38,828	$	38,663	$	38,296	$	38,018	$	37,079

6. Supplemental Balance Sheet Information

In thousands	2011		2010
Inventories
Raw materials and supplies	$	219,487	$	223,482
Work-in-process		47,707		37,748
Finished goods		182,669		144,126
Total inventories	$	449,863	$	405,356
Property, plant and equipment
Land and land improvements	$	41,111	$	36,484
Buildings and leasehold improvements		244,246		212,168
Machinery and equipment		692,930		598,554
Construction in progress		40,251		33,841
Total property, plant and equipment		1,018,538		881,047
Less accumulated depreciation and amortization		631,013		551,612
Property, plant and equipment, net	$	387,525	$	329,435

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Notes to consolidated financial statements

7. Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information:

In thousands	2011		2010		2009
Interest payments	$	54,516	$	37,083	$	43,010
Income tax payments		64,389		55,991		8,719

8. Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) consists of the following:

In thousands	2011		2010
Retirement liability adjustments, net of tax	$	(112,893)	$	(71,210)
Cumulative translation adjustments		(33,407)		58,184
Market value of derivative financial instruments, net of tax		(4,941)		(9,316)
Accumulated other comprehensive income (loss)	$	(151,241)	$	(22,342)

9. Debt

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

	Average
	interest rate			Maturity		December 31,			December 31,
In thousands	December 31, 2011			(Year)		2011			2010
Commercial paper		1.26	%		2016	$	3,497		$	—
Revolving credit facilities		2.04	%		2016		168,500			97,500
Private placement - fixed rate		5.65	%		2013 - 2017		400,000			400,000
Private placement - floating rate		0.99	%		2012 - 2016		205,000			205,000
Public - fixed rate		5.00	%		2021		500,000			—
Capital lease obligations		3.72	%		2025		15,788			—
Other		3.04	%		2012 -2021		16,302			4,972
Total debt, including current portion							1,309,087			707,472
Less: Current maturities							(1,168	)		(18)
Short-term borrowings							(3,694	)		(4,933)
Long-term debt						$	1,304,225		$	702,521

In May 2011, we completed a public offering of $500 million aggregate principal amount of our 5.00% Senior Notes due 2021 (the “Notes”). The Notes are guaranteed by certain of our wholly-owned domestic subsidiaries that are also guarantors under our primary bank credit facility. We used the net proceeds from the offering of the Notes to finance in part the CPT acquisition.

In April 2011, we entered into a Fourth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility replaced our previous $800 million revolving credit facility. The Credit Facility creates an unsecured, committed credit facility of up to $700 million, with multi-currency sub facilities to support investments outside the U.S. The Credit Facility expires on April 28, 2016. Borrowings under the Credit Facility currently bear interest at the rate of London Interbank Offered Rate (“LIBOR”) plus 1.75%. Interest rates and fees on the Credit Facility will vary based on our credit ratings. We used borrowings under the Credit Facility to fund a portion of the CPT acquisition and to fund ongoing operations.

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Notes to consolidated financial statements

Total availability under our existing Credit Facility was $528.0 million as of December 31, 2011, which was limited to $480.3 million by the leverage ratio financial covenant in the credit agreement.

Our debt agreements contain certain financial covenants, the most restrictive of which is a leverage ratio (total consolidated indebtedness, as defined, over consolidated net income before interest, taxes, depreciation, amortization and non-cash compensation expense, as defined) that may not exceed 3.5 to 1.0 as of the last date of each of our fiscal quarters thereafter. We were in compliance with all financial covenants in our debt agreements as of December 31, 2011.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $74.2 million, of which $14.1 million was outstanding at December 31, 2011. Borrowings under these credit facilities bear interest at variable rates.

We have $105 million of outstanding private placement debt maturing in May 2012. We classified this debt as long-term as of December 31, 2011 as we have the intent and ability to refinance such obligation on a long-term basis under the Credit Facility.

In March 2009, we announced the redemption of all of our remaining outstanding $133.9 million aggregate principal of our 7.85% Senior Notes due 2009. These notes were redeemed on April 15, 2009 at a redemption price of $1,035.88 per $1,000 of principal outstanding plus accrued interest thereon. As a result of this transaction, we recognized a loss of $4.8 million on early extinguishment of debt in the second quarter of 2009. The loss included the write off of $0.1 million in unamortized deferred financing fees in addition to recognition of $0.3 million in previously unrecognized swap gains and cash paid of $5.0 million related to the redemption and other costs associated with the purchase.

Debt outstanding at December 31, 2011 matures on a calendar year basis as follows:

In thousands	2012		2013		2014		2015		2016		Thereafter		Total
Contractual debt obligation maturities	$	3,694	$	200,620	$	—	$	—	$	288,985	$	800,000	$	1,293,299
Capital lease obligations		1,168		1,168		1,168		1,168		1,168		9,948		15,788
Total maturities	$	4,862	$	201,788	$	1,168	$	1,168	$	290,153	$	809,948	$	1,309,087

As part of the CPT acquisition, we assumed a capital lease obligation related to land and buildings. As of December 31, 2011 we had a cost of $22.7 million, and accumulated amortization of $5.1 million, all of which are included in Property, plant and equipment on the Consolidated Balance Sheets.

The present value of future minimum lease payments is the total future minimum lease payments of $17.9 million less the imputed interest of $2.1 million.

10. Derivatives and Financial Instruments

Cash-flow hedges

In August 2007, we entered into a $105 million interest rate swap agreement with a major financial institution to exchange variable rate interest payment obligations for a fixed rate obligation without the exchange of the underlying principal amounts in order to manage interest rate exposures. The effective date of the swap was August 30, 2007. The swap agreement has a fixed interest rate of 4.89% and expires in May 2012. The fixed interest rate of 4.89% plus the .50% interest rate spread over LIBOR results in an effective fixed interest rate of 5.39%. The fair value of the swap was a liability of $1.7 million and $6.4 million at December 31, 2011 and December 31, 2010, respectively and was recorded in AOCI on the Consolidated Balance Sheets.

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Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

In September 2005, we entered into a $100 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 expires in July 2013. The fixed interest rate of 4.68% plus the .60% interest rate spread over LIBOR results in an effective fixed interest rate of 5.28%. The fair value of the swap was a liability of $6.3 million and $9.4 million at December 31, 2011 and December 31, 2010, respectively and was recorded in AOCI on the Consolidated Balance Sheets.

The variable to fixed interest rate swaps are designated as cash-flow hedges. The fair value of these swaps are recorded as assets or liabilities on the Consolidated Balance Sheets. Unrealized income/expense is included in AOCI and realized income/expense and amounts due to/from swap counterparties, are included in earnings. We realized incremental interest expense resulting from the swaps of $9.3 million and $9.2 million at December 31, 2011 and December 31, 2010, respectively.

The variable to fixed interest rate swaps are designated as and are effective as cash-flow hedges. The fair value of these swaps are recorded as assets or liabilities on the Consolidated Balance Sheets, with changes in their fair value included in OCI. Derivative gains and losses included in OCI are reclassified into earnings at the time the related interest expense is recognized or the settlement of the related commitment occurs.

Failure of one or more of our swap counterparties would result in the loss of any benefit to us of the swap agreement. In this case, we would continue to be obligated to pay the variable interest payments per the underlying debt agreements which are at variable interest rates of 3 month LIBOR plus .50% for $105 million of debt and 3 month LIBOR plus .60% for $100 million of debt. Additionally, failure of one or all of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

At December 31, 2011 and 2010, our interest rate swaps are carried at fair value measured on a recurring basis. 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.

Foreign currency contract

In March 2011, we entered into a foreign currency option contract to reduce our exposure to fluctuations in the euro related to the planned CPT acquisition. The contract had a notional amount of €286.0 million, a strike price of 1.4375 and a maturity date of May 13, 2011. In May 2011, we sold the foreign currency option contract for $1.0 million. The net cost of $2.1 million is recorded in Selling, general and administrative on the Consolidated Statements on Income.

At December 31, 2010 we had a euro to U.S. dollar contract that expired on January 7, 2011 with a notional amount of $132.5 million. The fair value of the contract was an asset of $1.2 million.

We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative instruments. Our objective in holding derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates.

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Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Fair value of financial instruments

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 million with an average interest rate of 3.65%. In May 2011, upon the sale of the Notes, the swaps were terminated at a cost of $11.0 million. Because we used the contracts to hedge future interest payments, this amount is recorded in Prepaid expenses and other current assets within the Consolidated Balance Sheets and will be amortized as interest exposure over the life of the Notes.

The recorded amounts and estimated fair values of long-term debt, excluding the effects of derivative financial instruments and the recorded amounts and estimated fair value of those derivative financial instruments were as follows:

	2011				2010
	Recorded		Fair		Recorded		Fair
In thousands	amount		value		amount		value
Total debt, including current portion
Variable rate	$	406,978	$	406,978	$	307,433	$	307,433
Fixed rate		902,109		954,053		400,039		438,492
Total	$	1,309,087	$	1,361,031	$	707,472	$	745,925

The following methods were used to estimate the fair values of each class of financial instrument measured on a recurring basis:

• 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.

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

	Fair value
In thousands	December 31, 2011			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(8,034	)	$	—	$	(8,034	)	$	—
Foreign currency contract		(99	)		—		(99	)		—
Deferred compensation plan (1)		22,987			22,987		—			—

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Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

	Fair value
In thousands	December 31, 2010			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(15,768	)	$	—	$	(15,768	)	$	—
Foreign currency contract		1,183			—		1,183			—
Deferred compensation plan (1)		24,126			24,126		—			—

(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.

11. Income Taxes

Income from continuing operations before income taxes and noncontrolling interest consisted of the following:

In thousands	2011		2010		2009
U.S.	$	36,832	$	217,213	$	111,530
International		74,748		82,934		61,117
Income from continuing operations before taxes and noncontrolling interest	$	111,580	$	300,147	$	172,647

The provision for income taxes for continuing operations consisted of the following:

In thousands	2011			2010		2009
Currently payable
Federal	$	51,158		$	44,766	$	10,502
State		6,980			6,591		2,456
International		24,005			17,877		13,947
Total current taxes		82,143			69,234		26,905
Deferred
Federal and state		419			26,445		26,733
International		(9,503	)		1,521		2,790
Total deferred taxes		(9,084	)		27,966		29,523
Total provision for income taxes	$	73,059		$	97,200	$	56,428

Reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations follows:

Percentages	2011			2010			2009
U.S. statutory income tax rate		35.0			35.0			35.0
State income taxes, net of federal tax benefit		3.3			2.1			2.6
Tax effect of stock-based compensation		0.4			0.2			0.2
Tax effect of international operations		(9.8	)		(3.8	)		(3.5)
Tax credits		(0.9	)		(0.3	)		(1.4)
Domestic manufacturing deduction		(3.3	)		(1.4	)		(0.4)
ESOP dividend benefit		(0.6	)		(0.2	)		(0.4)
Goodwill		40.4			—			—
All other, net		1.0			0.8			0.6
Effective tax rate on continuing operations		65.5			32.4			32.7

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Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Reconciliation of the beginning and ending gross unrecognized tax benefits follows:

In thousands	2011			2010			2009
Gross unrecognized tax benefits — beginning balance	$	24,260		$	29,962		$	28,139
Gross increases for tax positions in prior periods		2,042			286			3,191
Gross decreases for tax positions in prior periods		(192	)		(2,490	)		(2,433)
Gross increases based on tax positions related to the current year		3,201			1,431			1,789
Gross decreases related to settlements with taxing authorities		(2,465	)		(4,182	)		(209)
Reductions due to statute expiration		(377	)		(747	)		(515)
Gross unrecognized tax benefits at December 31	$	26,469		$	24,260		$	29,962

Included in the $26.5 million of total gross unrecognized tax benefits as of December 31, 2011 was $24.5 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, 2011 may decrease by a range of $0 to $18.7 million 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.

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 our U.S. federal income tax returns through 2003 with no material adjustments. The IRS has also completed a survey of our 2004 U.S. federal income tax return with no material findings. The IRS is currently examining our federal tax returns for years 2005 through 2009. No material adjustments have been proposed, however, actual settlements may differ from amounts accrued.

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, 2011, we had recorded approximately $0.9 million for the possible payment of penalties and $5.9 million related to the possible payment of interest expense.

U.S. income taxes have not been provided on undistributed earnings of international subsidiaries. It is our intention to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. As of December 31, 2011, approximately $261.1 million of unremitted earnings attributable to international subsidiaries were considered to be indefinitely invested. 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 Income).

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

In thousands	2011		2010
Deferred tax assets	$	60,899	$	56,349
Other noncurrent assets		—		1,647
Other current liabilities		—		(547)
Deferred tax liabilities		(188,957)		(169,198)
Net deferred tax liability	$	(128,058)	$	(111,749)

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Notes to consolidated financial statements

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

	2011				2010
	Deferred tax				Deferred tax
In thousands	Assets		Liabilities		Assets		Liabilities
Accounts receivable allowances	$	3,726	$	—	$	4,490	$	—
Inventory valuation		18,891		—		17,381		—
Accelerated depreciation/amortization		—		13,270		—		11,436
Accrued product claims and warranties		22,430		—		25,753		—
Employee benefit accruals		129,642		—		110,547		—
Goodwill and other intangibles		—		191,067		—		187,103
Other, net		—		98,410		—		71,381
Total deferred taxes	$	174,689	$	302,747	$	158,171	$	269,920
Net deferred tax liability			$	(128,058)			$	(111,749)

Included in Other, net in the table above are deferred tax assets of $3.3 million and $2.3 million as of December 31, 2011 and 2010, respectively, related to a foreign tax credit carryover from the tax period ended December 31, 2006 and related to state net operating losses. The foreign tax credit is eligible for carryforward until the tax period ending December 31, 2016.

Non-U.S. tax losses of $82.3 million and $49.6 million were available for carryforward at December 31, 2011 and 2010, respectively. A valuation allowance reflected above in Other, net of $11.7 million and $9.4 million exists for deferred income tax benefits related to the non-U.S. loss carryforwards available as of December 31, 2011 and 2010, respectively that may not be realized. We believe that sufficient taxable income will be generated in the respective countries to allow us to fully recover the remainder of the tax losses. The non-U.S. operating losses are subject to varying expiration periods and will begin to expire in 2012. State tax losses of $69.2 million and $69.3 million were available for carryforward at December 31, 2011 and 2010, respectively. A valuation allowance reflected above in Other, net of $1.5 million and $2.4 million exists for deferred income tax benefits related to the carryforwards available at December 31, 2011 and 2010, respectively. Certain state tax losses will expire in 2012, while others are subject to carryforward periods of up to twenty years.

12. Benefit Plans

Pension and post-retirement benefits

We sponsor domestic and foreign 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 also provide certain post-retirement health care and life insurance benefits. Generally, the post-retirement health care and life insurance plans require contributions from retirees. We use a December 31 measurement date each year. In December 2007, we announced that we will be freezing certain pension plans as of December 31, 2017.

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Notes to consolidated financial statements

Obligations and funded status

The following tables present reconciliations of the benefit obligation of the plans, the plan assets of the pension plans and the funded status of the plans:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Change in benefit obligation
Benefit obligation beginning of year	$	586,808		$	552,309		$	33,715		$	35,301
Service cost		12,466			11,588			180			200
Interest cost		32,768			31,671			1,889			2,013
Amendments		—			(281	)		—			—
Settlements		(257	)		(104	)		—			—
Actuarial (gain) loss		62,751			24,677			2,494			(647)
Translation (gain) loss		(2,477	)		(4,208	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Benefit obligation end of year	$	661,571		$	586,808		$	35,081		$	33,715
Change in plan assets
Fair value of plan assets beginning of year	$	385,483		$	329,188		$	—		$	—
Actual gain (loss) return on plan assets		27,971			35,495			—			—
Company contributions		37,097			49,840			3,197			3,152
Settlements		(257	)		(104	)		—			—
Translation gain (loss)		(35	)		(92	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Fair value of plan assets end of year	$	419,771		$	385,483		$	—		$	—
Funded status
Plan assets less than benefit obligation	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

Of the $241.8 million under funding at December 31, 2011, $137.9 million relates to foreign pension plans and our supplemental executive retirement plans which are not commonly funded.

Amounts recognized in the Consolidated Balance Sheets are as follows:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Current liabilities	$	(5,745	)	$	(5,343	)	$	(3,307	)	$	(3,390)
Noncurrent liabilities		(236,055	)		(195,982	)		(31,774	)		(30,325)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

The accumulated benefit obligation for all defined benefit plans was $625.9 million and $557.7 million at December 31, 2011 and 2010, respectively.

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Notes to consolidated financial statements

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

In thousands	2011		2010
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		625,884		557,712
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		661,571		586,808

Components of net periodic benefit cost are as follows:

	Pension benefits									Post-retirement
In thousands	2011			2010			2009			2011			2010			2009
Service cost	$	12,466		$	11,588		$	12,334		$	180		$	200		$	214
Interest cost		32,768			31,671			32,612			1,889			2,013			2,377
Expected return on plan assets		(31,849	)		(30,910	)		(30,286	)		—			—			—
Amortization of transition obligation		—			13			25			—			—			—
Amortization of prior year service cost (benefit)		—			7			23			(27	)		(27	)		(41)
Recognized net actuarial (gain) loss		3,887			1,674			82			(3,306	)		(3,295	)		(3,326)
Settlement gain		23			(8	)		(9	)		—			—			—
Net periodic benefit cost	$	17,295		$	14,035		$	14,781		$	(1,264	)	$	(1,109	)	$	(776)

Amounts not yet recognized in net periodic benefit cost and included in accumulated other comprehensive income (pre-tax):

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Prior service cost (benefit)		(171	)		(162	)		(850	)		(878)
Net actuarial (gain) loss		201,093			138,558			(14,982	)		(20,781)
Accumulated other comprehensive (income) loss	$	200,922		$	138,396		$	(15,832	)	$	(21,659)

The estimated amount that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2012 is as follows:

	Pension		Post-
In thousands	benefits		retirement
Prior service cost (benefit)	$	—	$	(27)
Net actuarial (gain) loss		10,308		(3,306)
Total estimated 2012 amortization	$	10,308	$	(3,333	)

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Notes to consolidated financial statements

Additional information

Change in accumulated other comprehensive income, net of tax:

In thousands	2011			2010
Beginning of the year	$	(71,210	)	$	(58,448)
Additional prior service cost incurred during the year		—			171
Actuarial gains (losses) incurred during the year		(42,139	)		(11,861)
Translation gains (losses) incurred during the year		118			(75)
Amortization during the year:
Transition obligation		—			8
Unrecognized prior service cost (benefit)		(16	)		(12)
Actuarial gains		354			(993)
End of the year	$	(112,893	)	$	(71,210)

Assumptions

Weighted-average assumptions used to determine domestic benefit obligations at December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.05		5.90		6.00		5.05		5.90		6.00
Rate of compensation increase		4.00		4.00		4.00

Weighted-average assumptions used to determine the domestic net periodic benefit cost for years ending December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.90		6.00		6.50		5.90		6.00		6.50
Expected long-term return on plan assets		8.00		8.50		8.50
Rate of compensation increase		4.00		4.00		4.00

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 AA or higher bonds available in the marketplace, adjusted to eliminate the effects of call provisions. This produced a discount rate for our U.S. plans of 5.05% in 2011, 5.90% in 2010 and 6.00% in 2009. The discount rates on our foreign plans ranged from 0.75% to 5.00% in 2011, 0.75% to 5.40% in 2010 and 2.00% to 6.00% in 2009. There are no other known or anticipated changes in our discount rate assumption that will impact our pension expense in 2012.

Expected rate of return

Our expected rate of return on plan assets was 8.0% for 2011 and 8.5%, 2010 and 2009. 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. In 2011, the pension plan assets yielded returns of 7.8% and returns of 11.2% and 19.5% in 2010 and 2009. Our expected rate of return on plan assets assumption is 7.5% for 2012.

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Notes to consolidated financial statements

We base our determination of pension expense or income on a market-related valuation of assets which reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a five- year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets. Since the market-related value of assets recognizes gains or losses over a five-year-period, the future value of assets will be impacted as previously deferred gains or losses are recorded.

Unrecognized pension and post-retirement losses

As of our December 31, 2011 measurement date, our plans have $186.1 million of cumulative unrecognized losses. To the extent the unrecognized losses, when adjusted for the difference between market and market related values of assets, exceeds 10% of the projected benefit obligation, it will be amortized into expense each year on a straight-line basis over the remaining expected future-working lifetime of active participants (currently approximating 12 years).

The assumed health care cost trend rates at December 31 are as follows:

	2011		2010
Health care cost trend rate assumed for next year		7.50 %		7.50 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.50 %		4.50 %
Year that the rate reaches the ultimate trend rate		2027		2027

The assumed health care cost trend rates can have a significant effect on the amounts reported for health care plans. A one-percentage-point change in the assumed health care cost trend rates would have the following effects:

In thousands	1-Percentage- point increase		1-Percentage- point decrease
Effect on total annual service and interest cost	$	45	$	(40	)
Effect on post-retirement benefit obligation		905		(801	)

Plan 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. The plans will therefore be actively invested to achieve real growth of capital over inflation through appreciation of securities held and through the accumulation and reinvestment of dividend and interest income.

Asset allocation

Our actual overall asset allocation for the plans as compared to our investment policy goals is as follows:

	Plan assets				Target allocation
Asset class	2011		2010		2011		2010
Equity securities		42 %		47 %		40 %		50 %
Fixed income investments		50 %		37 %		50 %		40 %
Alternative investments		5 %		12 %		10 %		10 %
Cash		3 %		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

As part of our strategy to reduce U.S. pension plan funded status volatility, we plan to increase the allocation to long duration fixed income securities in future years as the funded status of our U.S. pension plans improve. In 2011 we increased our fixed income investments from 40% to 50% and from 30% to 40% in 2010.

Fair value measurement

The following table presents our plan assets using the fair value hierarchy as of December 31, 2011 and December 31, 2010.

in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,084	$	—	$	13,084
Fixed income:
Corporate and non U.S. government		—		76,046		150		76,196
U.S. treasuries		—		82,989		—		82,989
Mortgage-backed securities		—		40,286		629		40,915
Other		—		7,958		219		8,177
Global equity securities:
Small cap equity		7,094		—		—		7,094
Mid cap equity		7,528		4		—		7,532
Large cap equity		—		47,398		—		47,398
International equity		19,942		19,652		—		39,594
Long/short equity		—		56,575		—		56,575
Pentair company stock		16,645		—		—		16,645
Other investments		—		4,563		19,009		23,572
Total as of December 31, 2011	$	51,209	$	348,555	$	20,007	$	419,771
in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,803	$	—	$	13,803
Fixed income:
Corporate and non U.S. government		—		42,544		284		42,828
U.S. treasuries		—		60,710		—		60,710
Mortgage-backed securities		—		30,052		1,368		31,420
Other		—		6,818		125		6,943
Global equity securities:
Small cap equity		7,982		—		—		7,982
Mid cap equity		8,811		—		—		8,811
Large cap equity		—		45,700		—		45,700
International equity		23,964		21,895		—		45,859
Long/short equity		—		56,639		—		56,639
Pentair company stock		18,255		—		—		18,255
Other investments		—		33,542		12,991		46,533
Total as of December 31, 2010	$	59,012	$	311,703	$	14,768	$	385,483

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Notes to consolidated financial statements

Valuation methodologies used for investments measured at fair value are as follows:

• Cash equivalents: Consist of investments in commingled funds valued based on observable market data. Such investments are classified as Level 2.

• Fixed income: Investments in corporate bonds, government securities, mortgages and asset backed securities are value based upon quoted market prices for identical or similar securities and other observable market data. Investments in commingled funds are 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 are classified as Level 2. Certain investments in commingled funds are valued based on unobservable inputs due to liquidation restrictions. These investments are classified as Level 3.

• Global equity securities: Equity securities and Pentair common stock are valued based on the closing market price in an active market and are classified as Level 1. Investments in commingled funds are 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 are classified as Level 2.

• Other investments: Other investments include investments in commingled funds with diversified investment strategies. Investments in commingled funds that are 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 are classified as Level 2. Investments in commingled funds that are valued based on unobservable inputs due to liquidation restrictions are classified as Level 3.

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2011 and December 31, 2010, respectively.

	Balance January 1, 2011		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2011
Other investments	$	12,991	$	251	$	5,767		$	—	$	19,009
Fixed income investments		1,777		87		(866	)		—		998
	$	14,768	$	338	$	4,901		$	—	$	20,007
	Balance January 1, 2010		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2010
Other investments	$	14,427	$	678	$	(2,114	)	$	—	$	12,991
Fixed income investments		2,739		334		(1,296	)		—		1,777
	$	17,166	$	1,012	$	(3,410	)	$	—	$	14,768

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Notes to consolidated financial statements

Cash flows

Contributions

Pension contributions totaled $37.1 million and $49.8 million in 2011 and 2010, respectively. Our 2012 required pension contributions are expected to be in the range of $40 million to $45 million. The 2012 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 as follows:

In millions	Pension benefits		Post-retirement
2012	$	31.8	$	3.3
2013		32.6		3.2
2014		33.5		3.1
2015		35.9		3.0
2016		38.7		2.9
2017-2021		221.4		13.1

Savings plan

We have a 401(k) plan (“the plan”) with an employee stock ownership (“ESOP”) bonus component, which covers certain union and nearly all non-union U.S. employees who meet certain age requirements. Under the 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 June 2009, we temporarily suspended the company match of the plan and ESOP. We reinstated the company match in 2010.

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.

Our combined expense for the plan and ESOP was approximately $15.8 million, $11.0 million and $6.7 million, in 2011, 2010 and 2009, respectively.

Other retirement compensation

Total other accrued retirement compensation was $12.6 million and $13.9 million in 2011 and 2010, respectively and is included in the Pension and other retirement compensation line of our Consolidated Balance Sheet.

13. Shareholders’ Equity

Authorized shares

We may issue up to 250 million shares of common stock. Our Board of Directors may designate up to 15 million of those shares as preferred stock. On December 10, 2004, the Board of Directors designated a new series of preferred stock with authorization to issue up to 2.5 million shares, Series A Junior Participating Preferred Stock, par value $0.10 per share. No shares of preferred stock were issued or outstanding as of December 31, 2011 or December 31, 2010.

Purchase rights

On December 10, 2004, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock. The dividend was payable upon the close of business on January 28, 2005 to the shareholders of record upon the close of business on January 28, 2005. Each Right

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Notes to consolidated financial statements

entitles the registered holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock, at a price of $240.00 per one one-hundredth of a share, subject to adjustment. However, the Rights are not exercisable unless certain change in control events occur, such as a person acquiring or obtaining the right to acquire beneficial ownership of 15% or more of our outstanding common stock. The description and terms of the Rights are set forth in a Rights Agreement, dated December 10, 2004. The Rights will expire on January 28, 2015, unless the Rights are earlier redeemed or exchanged in accordance with the terms of the Rights Agreement. On January 28, 2005, the common share purchase rights issued pursuant to the Rights Agreement dated July 31, 1995 were redeemed in their entirety for an amount equal to $0.0025 per right.

Share repurchases

In July 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2010 we had repurchased 734,603 shares for $25 million pursuant to this plan. In December 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2011, we had repurchased 389,300 shares for $12.5 million pursuant to this authorization, which expired in December 2011. In December 2011, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. This authorization expires in December 2012.

14. Stock Plans

Total stock-based compensation expense in 2011, 2010 and 2009 was $19.5 million, $21.5 million and $17.3 million, respectively.

Omnibus stock incentive plans

In May 2008, the 2008 Omnibus Stock Incentive Plan as Amended and Restated (the “2008 Plan” or the “Plan”) was approved by shareholders. The 2008 Plan authorizes the issuance of additional shares of our common stock and extends through February 2018. The 2008 Plan allows for the granting of nonqualified stock options; incentive stock options; restricted shares; restricted stock units; dividend equivalent units; stock appreciation rights; performance shares; performance units; and other stock based awards.

The 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 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 Pentair. 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 Plan. The Plan restricts the Committee’s authority to reprice awards or to cancel and reissue awards at lower prices.

The Omnibus Stock Incentive Plan approved by the shareholders in 2004 (the “2004 Plan”) expired upon approval of the 2008 Plan by shareholders. Prior grants made under the 2004 Plan and earlier stock incentive plans remained outstanding on the terms in effect at the time of grant.

Non-qualified and incentive stock options

Under the 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 $8.9 million in 2011, $10.7 million in 2010 and $7.1 million in 2009.

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Notes to consolidated financial statements

Restricted shares and restricted stock units

Under the Plan, eligible employees are awarded restricted shares or restricted stock units (awards) of our common stock. Share awards generally vest from two to five years after issuance, subject to continuous employment and certain other conditions. Restricted share awards 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 $10.6 million in 2011, $10.8 million in 2010 and $10.2 million in 2009.

Stock appreciation rights, performance shares and performance units

Under the Plan, the Committee is permitted to issue these awards which are generally earned over a three-year vesting period and are tied to specific financial metrics.

Outside directors nonqualified stock option plan

Nonqualified stock options were granted to outside directors under the Outside Directors Nonqualified Stock Option Plan (the “Directors Plan”) with an exercise price equal to the market value of the shares on the option grant dates. Options generally vest over a three-year period commencing on the grant date and expire ten years after the grant date. The Directors Plan expired in January 2008. Prior grants remain outstanding on the terms in effect at the time of grant.

Non-employee Directors are also eligible to receive awards under the 2008 Plan. Director awards are made by our Governance Committee, which is made up of independent members of our Board of Directors.

Stock options

The following table summarizes stock option activity under all plans:

Options outstanding	Shares			Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value
Balance January 1, 2011		7,967,416		$	31.34
Granted		817,707			36.73
Exercised		(839,886	)		25.03
Forfeited		(45,203	)		32.86
Expired		(62,338	)		40.06
Balance December 31, 2011		7,837,696		$	32.50		5.6	$	20,161,647
Options exercisable as of December 31, 2011		5,694,049		$	32.38		4.6	$	16,052,331
Options expected to vest as of December 31, 2011		2,107,848		$	32.82		8.2	$	4,109,316

The weighted-average grant date fair value of options granted in 2011, 2010 and 2009 was estimated to be $9.98, $9.47 and $5.09 per share, respectively. The total intrinsic value of options that were exercised during 2011, 2010 and 2009 was $10.9 million, $7.4 million and $5.2 million, respectively. At December 31, 2011, 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.

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Notes to consolidated financial statements

We estimated the fair values using the Black-Scholes option-pricing model, modified for dividends and using the following assumptions:

	2011			2010			2009
Risk-free interest rate		1.51	%		2.45	%		1.77	%
Expected dividend yield		2.32	%		2.30	%		3.20	%
Expected stock price volatility		35.50	%		35.00	%		32.50	%
Expected lives		5.5 yrs			5.5 yrs			5.2 yrs

Cash received from option exercises for the years ended December 31, 2011, 2010 and 2009 was $14.7 million, $14.9 million and $8.2 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $4.1 million, $2.8 million and $1.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Restricted share awards

The following table summarizes restricted share award activity under all plans:

Restricted shares outstanding	Shares			Weighted average grant date fair value
Balance January 1, 2011		1,309,403		$	29.33
Granted		278,418			36.60
Vested		(276,956	)		31.63
Forfeited		(60,783	)		28.32
Balance December 31, 2011		1,250,082		$	30.49

As of December 31, 2011, there was $16.4 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2004 Plan and the 2008 Plan. That cost is expected to be recognized over a weighted-average period of 2.0 years. The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009, was $10.2 million, $12.7 million and $5.5 million, respectively. The actual tax benefit realized for the tax deductions from restricted share compensation arrangements totaled $3.6 million, $3.4 million and $2.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.

15. Business Segments

We classify our continuing operations into the following business segments based primarily on types of products offered and markets served:

• Water & Fluid Solutions — manufactures and markets essential products and systems used in the movement, storage, treatment and enjoyment of water. Products include water and wastewater pumps; filtration and purification components and systems; storage tanks and pressure vessels; and pool and spa equipment and accessories.

• Technical Products — designs, manufactures and markets standard, modified and custom enclosures that house and protect sensitive electronics and electrical components and protect the people that use them. Applications served include industrial machinery, data communications, networking, telecommunications, test and measurement, automotive, medical, security, defense and general electronics. Products include mild steel, stainless steel, aluminum and non-metallic enclosures, cabinets, cases, subracks, backplanes and associated thermal management systems.

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Notes to consolidated financial statements

• Other — is primarily composed of unallocated corporate expenses, our captive insurance subsidiary, intermediate finance companies and divested operations.

The accounting policies of our operating 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 business segment is included in the following summary:

In thousands	2011		2010			2009			2011			2010			2009
	Net sales to external customers								Operating income (loss)
Water & Fluid Solutions	$	2,369,804	$	2,041,281		$	1,847,764		$	58,311		$	231,588		$	163,745
Technical Products		1,086,882		989,492			844,704			185,240			151,533			100,355
Other		—		—			—			(75,034	)		(48,966	)		(44,152	)
Consolidated	$	3,456,686	$	3,030,773		$	2,692,468		$	168,517		$	334,155		$	219,948
	Identifiable assets (1)								Depreciation
Water & Fluid Solutions	$	3,792,188	$	3,409,556		$	3,205,774		$	42,419		$	37,449		$	44,063
Technical Products		651,693		728,969			716,092			17,826			17,544			19,035
Other (1)		142,432		(164,992	)		(10,532	)		5,990			3,002			1,725
Consolidated	$	4,586,313	$	3,973,533		$	3,911,334		$	66,235		$	57,995		$	64,823
	Amortization								Capital expenditures
Water & Fluid Solutions	$	39,451	$	22,981		$	34,919		$	49,241		$	39,631		$	36,513
Technical Products		2,446		2,610			2,687			15,806			8,336			15,388
Other		—		593			3,051			8,301			11,556			2,236
Consolidated	$	41,897	$	26,184		$	40,657		$	73,348		$	59,523		$	54,137
The following table presents certain geographic information:
In thousands	2011		2010			2009			2011			2010			2009
	Net sales to external customers								Long-lived assets
U.S.	$	2,336,845	$	2,222,856		$	1,964,138		$	195,631		$	196,440		$	203,206
Europe		701,865		470,879			439,312			140,290			77,000			87,880
Asia and other		417,976		337,038			289,018			51,604			55,995			42,602
Consolidated	$	3,456,686	$	3,030,773		$	2,692,468		$	387,525		$	329,435		$	333,688

⁽¹⁾All cash and cash equivalents are included in Other

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.

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Notes to consolidated financial statements

We sell our products through various distribution channels including wholesale and retail distributors, original equipment manufacturers and home centers. In Water & Fluid Solutions, one customer accounted for approximately 10% of segment sales in 201l and 2010 and no single customer accounted for more than 10% of segment sales in 2009. In Technical Products, no single customer accounted for more than 10% of segment sales in 2011, 2010 or 2009.

16. Commitments and Contingencies

Operating lease commitments

Net rental expense under operating leases follows:

In thousands	2011			2010			2009
Gross rental expense	$	39,808		$	32,662		$	32,799
Sublease rental income		(455	)		(225	)		(74	)
Net rental expense	$	39,353		$	32,437		$	32,725

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, vehicles, and machinery and equipment are as follows:

In thousands	2012			2013			2014			2015			2016			Thereafter			Total
Minimum lease payments	$	25,961		$	19,343		$	15,944		$	12,689		$	10,331		$	16,794		$	101,062
Minimum sublease rentals		(280	)		(283	)		(285	)		(118	)		(103	)		(103	)		(1,172	)
Net future minimum lease commitments	$	25,681		$	19,060		$	15,659		$	12,571		$	10,228		$	16,691		$	99,890

Environmental

We have been named as defendants, targets, or PRPs in a small number of environmental clean-ups, in which our current or former business units have generally been given de minimis status. To date, none of these claims have resulted in clean-up costs, fines, penalties, or damages in an amount material to our financial position or results of operations. We have disposed of a number of businesses in the past and in certain cases, such as the disposition of the Cross Pointe Paper Corporation uncoated paper business in 1995, the disposition of the Federal Cartridge Company ammunition business in 1997, the disposition of Lincoln Industrial in 2001 and the disposition of the Tools Group in 2004, we have retained responsibility and potential liability for certain environmental obligations. We have received claims for indemnification from purchasers of these businesses and have established what we believe to be adequate accruals for potential liabilities arising out of retained responsibilities. We settled some of the claims in prior years; to date our recorded accruals have been adequate.

In addition, there are ongoing environmental issues at a limited number of sites, including one site acquired in the acquisition of Essef Corporation in 1999, which relates to operations no longer carried out at the sites. We have established what we believe to be adequate accruals for remediation costs at these sites. We do not believe that projected response costs will result in a material liability.

We may be named as a PRP at other sites in the future, for both divested and acquired businesses. When the outcome of the matter is probable and it is possible to provide reasonable estimates of our liability with respect to environmental sites, provisions have been made in accordance with GAAP. As of December 31, 2011 and 2010, our undiscounted reserves for such environmental liabilities were approximately $1.5 million and $1.3 million, respectively. We cannot ensure that environmental requirements will not change or become more stringent over time or that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

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Notes to consolidated financial statements

Litigation

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, environmental, safety and health, patent infringement and employment matters.

We record liabilities for an estimated loss from a loss contingency where the outcome of the matter is probable and can be reasonably estimated. Factors that are considered when determining whether the conditions for accrual have been met include the (a) nature of the litigation, claim, or assessment, (b) progress of the case, including progress after the date of the financial statements but before the issuance date of the financial statements, (c) opinions of legal counsel and (d) management’s intended response to the litigation, claim, or assessment. Where the reasonable estimate of the probable loss is a range, we record the most likely estimate of the loss. When no amount within the range is a better estimate than any other amount, however, the minimum amount in the range is accrued. Gain contingencies are not recorded until realized.

While we believe that a material impact on our consolidated financial position, results of operations, or cash flows from any such future charges 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 could change 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. 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.

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.

75

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

The changes in the carrying amount of service and product warranties for the years ended December 31, 2011 and 2010 were as follows:

In thousands	2011			2010
Balance at beginning of the year	$	30,050		$	24,288
Service and product warranty provision		50,096			56,553
Payments		(53,937	)		(50,729	)
Acquired		3,575			—
Translation		(429	)		(62	)
Balance at end of the period	$	29,355		$	30,050

Stand-by letters of credit and bonds

In the ordinary course of business, we are required to commit to bonds that require payments to our customers for any non-performance. The outstanding face value of the bonds 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, 2011 and December 31, 2010, the outstanding value of these instruments totaled $136.2 million and $116.5 million, respectively.

17. Selected Quarterly Financial Data (Unaudited)

The following table represents the 2011 quarterly financial information:

	2011
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	790,273	$	910,175	$	890,546	$	865,692		$	3,456,686
Gross profit		249,059		287,736		272,062		264,865			1,073,722
Operating income		86,177		109,422		92,903		(119,985	)		168,517
Income from continuing operations		52,034		68,137		52,054		(133,704	)		38,521
Net income from continuing operations attributable to Pentair, Inc.		50,541		66,712		51,092		(134,123	)		34,222
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Basic earnings per common share	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Diluted
Continuing operations	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34
Diluted earnings per common share	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34

⁽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.

76

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

The following table represents the 2010 quarterly financial information:

	2010
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	707,013	$	796,167	$	773,735	$	753,858		$	3,030,773
Gross profit		213,702		248,168		236,542		232,228			930,640
Operating income		63,601		100,126		90,823		79,605			334,155
Income from continuing operations		36,029		61,612		55,729		49,577			202,947
Gain (loss) on disposal of discontinued operations, net of tax		524		593		549		(2,292	)		(626	)
Net income from continuing operations attributable to to Pentair, Inc.		34,797		60,488		54,501		48,668			198,454
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.50		$	2.02
Discontinued operations		0.01		0.01		0.01		(0.02	)		(0.01	)
Basic earnings per common share	$	0.36	$	0.62	$	0.56	$	0.48		$	2.01
Diluted
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.49		$	2.00
Discontinued operations		0.01		—		—		(0.02	)		(0.01	)
Diluted earnings per common share	$	0.36	$	0.61	$	0.55	$	0.47		$	1.99

⁽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.

77

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

18. Financial Statements of Subsidiary Guarantors

Certain of the domestic subsidiaries (the “Guarantor Subsidiaries”) of Pentair, Inc. (the “Parent Company”), each of which is directly or indirectly wholly-owned by the Parent Company, jointly and severally, and fully and unconditionally, guarantee the Parent Company’s indebtedness under the Notes and the Credit Facility. The following supplemental financial information sets forth the Condensed Consolidated Statements of Income, the Condensed Consolidated Balance Sheets, and the Condensed Consolidated Statements of Cash Flows for the Parent Company, the Guarantor Subsidiaries, the non-Guarantor Subsidiaries, and total consolidated Pentair and subsidiaries. 

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,243,362		$	1,437,242		$	(223,918	)	$	3,456,686
Cost of goods sold		4,000			1,562,298			1,039,362			(222,696	)		2,382,964
Gross profit		(4,000	)		681,064			397,880			(1,222	)		1,073,722
Selling, general and administrative		18,967			338,830			269,952			(1,222	)		626,527
Research and development		1,032			41,860			35,266			—			78,158
Goodwill impairment		—			—			200,520			—			200,520
Operating (loss) income		(23,999	)		300,374			(107,858	)		—			168,517
Loss (earnings) from investment in subsidiaries		18,792			(27,419	)		(1,321	)		9,948			—
Other (income) expense:
Equity income of unconsolidated subsidiaries		—			(1,654	)		(244	)		—			(1,898	)
Net interest (income) expense		(107,743	)		152,264			14,314			—			58,835
Income (loss) from continuing operations before income taxes and noncontrolling interest		64,952			177,183			(120,607	)		(9,948	)		111,580
Provision for income taxes		30,730			45,156			(2,827	)		—			73,059
Net income before noncontrolling interest		34,222			132,027			(117,780	)		(9,948	)		38,521
Noncontrolling interest		—			—			4,299			—			4,299
Net income attributable to Pentair, Inc.	$	34,222		$	132,027		$	(122,079	)	$	(9,948	)	$	34,222

78

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,092,487		$	1,189,597		$	(251,311	)	$	3,030,773
Cost of goods sold		3,167			1,453,786			893,570			(250,390	)		2,100,133
Gross profit		(3,167	)		638,701			296,027			(921	)		930,640
Selling, general and administrative		(3,713	)		337,408			196,555			(921	)		529,329
Research and development		393			42,386			24,377			—			67,156
Operating income		153			258,907			75,095			—			334,155
Earnings from investment in subsidiaries		(129,872	)		—			—			129,872			—
Other (income) expense:
Equity income of unconsolidated subsidiaries		—			(1,551	)		(557	)		—			(2,108	)
Net interest (income) expense		(111,034	)		153,904			(6,754	)		—			36,116
Income (loss) from continuing operations before income taxes and noncontrolling interest		241,059			106,554			82,406			(129,872	)		300,147
Provision for income taxes		42,605			36,447			18,148			—			97,200
Income from continuing operations		198,454			70,107			64,258			(129,872	)		202,947
Loss on disposal of discontinued operations, net of tax		(626	)		—			—			—			(626	)
Net income before noncontrolling interest		197,828			70,107			64,258			(129,872	)		202,321
Noncontrolling interest		—			—			4,493			—			4,493
Net income attributable to Pentair, Inc.	$	197,828		$	70,107		$	59,765		$	(129,872	)	$	197,828
Net income from continuing operations attributable to Pentair, Inc.	$	198,454		$	70,107		$	59,765		$	(129,872	)	$	198,454

79

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2009

In thousands	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,827,463	$	1,050,381		$	(185,376	)	$	2,692,468
Cost of goods sold		7,024			1,310,011		775,116			(184,818	)		1,907,333
Gross profit		(7,024	)		517,452		275,265			(558	)		785,135
Selling, general and administrative		10,074			312,079		185,708			(558	)		507,303
Research and development		306			34,844		22,734			—			57,884
Operating (loss) income		(17,404	)		170,529		66,823			—			219,948
Earnings from investment in subsidiaries		(60,528	)		—		—			60,528			—
Other (income) expense:
Equity losses of unconsolidated subsidiaries		—			1,379		—			—			1,379
Loss on early extinguishment of debt		4,804			—		—			—			4,804
Net interest (income) expense		(106,586	)		153,672		(5,968	)		—			41,118
Income (loss) from continuing operations before income taxes and noncontrolling interest		144,906			15,478		72,791			(60,528	)		172,647
Provision for income taxes		29,270			6,063		21,095			—			56,428
Income from continuing operations		115,636			9,415		51,696			(60,528	)		116,219
(Loss) gain on disposal of discontinued operations, net of tax		(143	)		551		(427	)		—			(19	)
Net income before noncontrolling interest		115,493			9,966		51,269			(60,528	)		116,200
Noncontrolling interest		—			—		707			—			707
Net income attributable to Pentair, Inc.	$	115,493		$	9,966	$	50,562		$	(60,528	)	$	115,493
Net income from continuing operations attributable to Pentair, Inc.	$	115,636		$	9,415	$	50,989		$	(60,528	)	$	115,512

80

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	3,097		$	3,332		$	43,648	$	—		$	50,077
Accounts and notes receivable, net		828			360,027			263,201		(54,852	)		569,204
Inventories		—			227,472			222,391		—			449,863
Deferred tax assets		134,240			40,698			13,382		(127,421	)		60,899
Prepaid expenses and other current assets		28,937			(6,886	)		107,121		(21,380	)		107,792
Total current assets		167,102			624,643			649,743		(203,653	)		1,237,835
Property, plant and equipment, net		19,693			136,102			231,730		—			387,525
Other assets
Investments in/advances to subsidiaries		2,910,927			1,447,522			92,396		(4,450,845	)		—
Goodwill		—			1,330,265			943,653		—			2,273,918
Intangibles, net		—			250,792			341,493		—			592,285
Other		63,508			27,337			23,045		(19,140	)		94,750
Total other assets		2,974,435			3,055,916			1,400,587		(4,469,985	)		2,960,953
Total assets	$	3,161,230		$	3,816,661		$	2,282,060	$	(4,673,638	)	$	4,586,313
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	—		$	—		$	3,694	$	—		$	3,694
Current maturities of long-term debt		2,585			—			1,168		(2,585	)		1,168
Accounts payable		5,036			189,355			152,065		(51,598	)		294,858
Employee compensation and benefits		24,466			30,015			54,880		—			109,361
Current pension and post-retirement benefits		9,052			—			—		—			9,052
Accrued product claims and warranties		165			22,037			20,428		—			42,630
Income taxes		40,999			(28,717	)		2,265		—			14,547
Accrued rebates and sales incentives		—			25,612			11,397		—			37,009
Other current liabilities		25,050			53,960			71,890		(21,378	)		129,522
Total current liabilities		107,353			292,262			317,787		(75,561	)		641,841
Other liabilities
Long-term debt		1,312,053			2,417,922			542,411		(2,968,161	)		1,304,225
Pension and other retirement compensation		182,556			(7,701	)		73,760		—			248,615
Post-retirement medical and other benefits		17,024			33,890			—		(19,140	)		31,774
Long-term income taxes payable		26,470			—			—		—			26,470
Deferred tax liabilities		—			229,962			86,416		(127,421	)		188,957
Due to/ (from) affiliates		(479,943	)		751,145			711,705		(982,907	)		—
Other non-current liabilities		62,388			1,508			33,143		—			97,039
Total liabilities		1,227,901			3,718,988			1,765,222		(4,173,190	)		2,538,921
Noncontrolling interest		—			—			114,063		—			114,063
Shareholders’ equity attributable to Pentair, Inc.		1,933,329			97,673			402,775		(500,448	)		1,933,329
Total liabilities and shareholders’ equity	$	3,161,230		$	3,816,661		$	2,282,060	$	(4,673,638)		$	4,586,313

81

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	3,201		$	3,404		$	39,451	$	—		$	46,056
Accounts and notes receivable, net		678			357,730			222,319		(63,822	)		516,905
Inventories		—			232,369			172,987		—			405,356
Deferred tax assets		115,722			40,064			7,928		(107,365	)		56,349
Prepaid expenses and other current assets		8,278			10,098			51,497		(25,242	)		44,631
Total current assets		127,879			643,665			494,182		(196,429	)		1,069,297
Property, plant and equipment, net		17,392			144,332			167,711		—			329,435
Other assets
Investments in/advances to subsidiaries		2,355,343			89,659			748,181		(3,193,183	)		—
Goodwill		—			1,549,537			516,507		—			2,066,044
Intangibles, net		—			265,987			187,583		—			453,570
Other		56,052			4,045			20,139		(25,049	)		55,187
Total other assets		2,411,395			1,909,228			1,472,410		(3,218,232	)		2,574,801
Total assets	$	2,556,666		$	2,697,225		$	2,134,303	$	(3,414,661	)	$	3,973,533
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	—		$	—		$	4,933	$	—		$	4,933
Current maturities of long-term debt		135,678			—			18,154		(153,814	)		18
Accounts payable		4,908			170,747			150,517		(63,815	)		262,357
Employee compensation and benefits		38,513			32,167			37,315		—			107,995
Current pension and post-retirement benefits		8,733			—			—		—			8,733
Accrued product claims and warranties		12,245			23,410			6,640		—			42,295
Income taxes		4,788			633			543		—			5,964
Accrued rebates and sales incentives		—			23,500			10,059		—			33,559
Other current liabilities		9,772			33,227			63,185		(25,242	)		80,942
Total current liabilities		214,637			283,684			291,346		(242,871	)		546,796
Other liabilities
Long-term debt		702,500			1,947,400			377,539		(2,324,918	)		702,521
Pension and other retirement compensation		136,750			112			72,997		—			209,859
Post-retirement medical and other benefits		18,388			36,986			—		(25,049	)		30,325
Long-term income taxes payable		23,507			—			—		—			23,507
Deferred tax liabilities		5			213,385			63,173		(107,365	)		169,198
Due to/ (from) affiliates		(678,966	)		(80,779	)		810,652		(50,907	)		—
Other non-current liabilities		46,692			1,892			37,711		—			86,295
Total liabilities		463,513			2,402,680			1,653,418		(2,751,110	)		1,768,501
Noncontrolling interest		—			—			111,879		—			111,879
Shareholders’ equity attributable to Pentair, Inc.		2,093,153			294,545			369,006		(663,551	)		2,093,153
Total liabilities and shareholders’ equity	$	2,556,666		$	2,697,225		$	2,134,303	$	(3,414,661)		$	3,973,533

82

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year ended December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	34,222		$	132,027		$	(117,780)		$	(9,948)		$	38,521
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Equity income of unconsolidated subsidiaries		—			(1,654	)		(244	)		—			(1,898	)
Depreciation		5,991			27,742			32,502			—			66,235
Amortization		—			15,195			26,702			—			41,897
Loss (earnings) from investments in subsidiaries		18,792			(27,419	)		(1,321	)		9,948			—
Deferred income taxes		6,889			18,084			(30,556	)		—			(5,583	)
Stock compensation		19,489			—			—			—			19,489
Goodwill impairment		—			—			200,520			—			200,520
Excess tax benefits from stock-based compensation		(3,310	)		—			—			—			(3,310	)
Loss on sale of assets		933			—			—			—			933
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(53,661	)		20,574			32,870			1,565			1,348
Inventories		—			7,589			10,674			—			18,263
Prepaid expenses and other current assets		(19,728	)		17,041			(5,601	)		18,320			10,032
Accounts payable		60,209			5,320			(78,308	)		(11,551	)		(24,330	)
Employee compensation and benefits		(23,553	)		(2,193	)		5,260			—			(20,486	)
Accrued product claims and warranties		—			(1,533	)		(451	)		—			(1,984	)
Income taxes		48,947			(33,965	)		(4,898	)		—			10,084
Other current liabilities		10,539			22,568			(3,867	)		(18,319	)		10,921
Pension and post-retirement benefits		(17,662	)		(10,910	)		3,976			—			(24,596	)
Other assets and liabilities		502			(18,485	)		(7,832	)		9,985			(15,830	)
Net cash provided by (used for) operating activities		88,599			169,981			61,646			—			320,226
Investing activities
Capital expenditures		(8,301	)		(27,625	)		(37,422	)		—			(73,348	)
Proceeds from sale of property and equipment		—			143			1,167			—			1,310
Acquisitions, net of cash acquired		—			—			(733,105	)		—			(733,105	)
Other		3,702			(4,604	)		(2,041	)		—			(2,943	)
Net cash provided by (used for) investing activities		(4,599	)		(32,086	)		(771,401	)		—			(808,086	)
Financing activities
Net short-term borrowings		(1,239	)		—			—			—			(1,239	)
Proceeds from long-term debt		1,421,602			—			—			—			1,421,602
Repayment of long-term debt		(832,147	)		—			—			—			(832,147	)
Debt issuance costs		(8,973	)		—			—			—			(8,973	)
Net change in advances to subsidiaries		(579,126	)		(137,767)			716,893			—			—
Excess tax benefits from stock-based compensation		3,310			—			—			—			3,310
Stock issued to employees, net of shares withheld		13,324			—			(2	)		—			13,322
Repurchases of common stock		(12,785	)		—			—			—			(12,785	)
Dividends paid		(78,351	)		(200	)		(986	)		—			(79,537	)
Net cash provided by (used for) financing activities		(74,385	)		(137,967	)		715,905			—			503,553
Effect of exchange rate changes on cash and cash equivalents		(9,719	)		—			(1,953	)		—			(11,672	)
Change in cash and cash equivalents		(104	)		(72	)		4,197			—			4,021
Cash and cash equivalents, beginning of period		3,201			3,404			39,451			—			46,056
Cash and cash equivalents, end of period	$	3,097		$	3,332		$	43,648		$	—		$	50,077

83

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year ended December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	197,828		$	70,107		$	64,258		$	(129,872)		$	202,321
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss on disposal of discontinued operations		626			—			—			—			626
Equity income of unconsolidated subsidiaries		—			(1,551	)		(557	)		—			(2,108	)
Depreciation		3,002			29,902			25,091			—			57,995
Amortization		593			15,597			9,994			—			26,184
Earnings from investments in subsidiaries		(129,872)			—			—			129,872			—
Deferred income taxes		18,075			9,679			1,699			—			29,453
Stock compensation		21,468			—			—			—			21,468
Excess tax benefits from stock-based compensation		(2,686	)		—			—			—			(2,686	)
Loss on sale of assets		466			—			—			—			466
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		1,759			(61,042	)		(14,222)			11,161			(62,344	)
Inventories		—			(10,683	)		(33,812	)		—			(44,495	)
Prepaid expenses and other current assets		(8,519	)		(3,035	)		6,993			7,338			2,777
Accounts payable		(1,431	)		43,578			24,248			(11,074	)		55,321
Employee compensation and benefits		14,630			4,840			7,782			—			27,252
Accrued product claims and warranties		12,245			5,695			(9,872	)		—			8,068
Income taxes		(13,267	)		15,813			(755	)		—			1,791
Other current liabilities		3,314			(5,258	)		9,921			(7,416	)		561
Pension and post-retirement benefits		(33,762	)		(11,798	)		2,536			—			(43,024	)
Other assets and liabilities		(2,191	)		(12,731	)		5,672			—			(9,250	)
Net cash provided by (used for) operating activities		82,278			89,113			98,976			9			270,376
Investing activities
Capital expenditures		(11,557	)		(22,954	)		(25,012	)		—			(59,523	)
Proceeds from sale of property and equipment		—			284			74			—			358
Other		525			—			(1,673	)		—			(1,148	)
Net cash provided by (used for) investing activities		(11,032	)		(22,670	)		(26,611	)		—			(60,313	)
Financing activities
Net short-term borrowings		2,728			31			(31	)		—			2,728
Proceeds from long-term debt		703,641			—			—			—			703,641
Repayment of long-term debt		(804,713	)		—			—			—			(804,713	)
Debt issuance costs		(50	)		—			—			—			(50	)
Net change in advances to subsidiaries		106,372			(59,269	)		(47,090	)		(13	)		—
Excess tax benefits from stock-based compensation		2,686			—			—			—			2,686
Stock issued to employees, net of shares withheld		9,941			—			—			—			9,941
Repurchases of common stock		(24,712	)		—			—			—			(24,712	)
Dividends paid		(73,014	)		142			(2,593	)		—			(75,465	)
Distribution to noncontrolling interest		—			—			(4,647	)		—			(4,647	)
Net cash provided by (used for) financing activities		(77,121	)		(59,096)			(54,361	)		(13	)		(190,591)
Effect of exchange rate changes on cash and cash equivalents		7,044			(5,756	)		(8,104	)		4			(6,812	)
Change in cash and cash equivalents		1,169			1,591			9,900			—			12,660
Cash and cash equivalents, beginning of period		2,032			1,813			29,551			—			33,396
Cash and cash equivalents, end of period	$	3,201		$	3,404		$	39,451		$	—		$	46,056

84

Pentair, Inc. and Subsidiaries

Notes to consolidated financial statements

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year end December 31, 2009

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	115,493		$	9,966		$	51,269		$	(60,528)		$	116,200
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations		143			(551	)		427			—			19
Equity losses of unconsolidated subsidiaries		—			1,379			—			—			1,379
Depreciation		8,166			30,506			26,151			—			64,823
Amortization		14,332			15,752			10,573			—			40,657
Earnings from investments in subsidiaries		(60,528	)		—			—			60,528			—
Deferred income taxes		8,223			18,582			3,811			—			30,616
Stock compensation		17,324			—			—			—			17,324
Excess tax benefits from stock-based compensation		(1,746	)		—			—			—			(1,746	)
(Gain) loss on sale of assets		(1,389	)		—			2,374			—			985
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(1,456	)		10,492			7,484			(5,213	)		11,307
Inventories		—			46,791			19,893			—			66,684
Prepaid expenses and other current assets		48,529			2,985			(37,221)			1,909			16,202
Accounts payable		5,615			(18,623	)		(5,209	)		4,395			(13,822	)
Employee compensation and benefits		(1,385	)		(13,968	)		(7,078	)		—			(22,431	)
Accrued product claims and warranties		—			(7,645	)		205			—			(7,440	)
Income taxes		(10,921	)		6,917			5,976			—			1,972
Other current liabilities		(29,030	)		(15,312	)		25,118			(1,857	)		(21,081	)
Pension and post-retirement benefits		(30,630	)		(11,716	)		2,739			—			(39,607	)
Other assets and liabilities		(19,117	)		39,226			(22,250	)		—			(2,141	)
Net cash provided by (used for) continuing operations		61,623			114,781			84,262			(766	)		259,900
Net cash provided by (used for) operating activities of discontinued operations		(30	)		(1,590	)		89			—			(1,531	)
Net cash provided by (used for) operating activities		61,593			113,191			84,351			(766	)		258,369
Investing activities
Capital expenditures		(2,237	)		(19,676	)		(32,224	)		—			(54,137	)
Proceeds from sale of property and equipment		—			446			762			—			1,208
Divestitures		404			1,002			161			—			1,567
Other		7			—			(3,231	)		—			(3,224	)
Net cash provided by (used for) investing activities		(1,826	)		(18,228	)		(34,532	)		—			(54,586	)
Financing activities
Net short-term borrowings		2,205			115			(115	)		—			2,205
Proceeds from long-term debt		580,000			—			—			—			580,000
Repayment of long-term debt		(730,304)			—			—			—			(730,304)
Debt issuance costs		(50	)		—			—			—			(50	)
Net change in advances to subsidiaries		152,482			(110,046)			(43,201	)		765			—
Excess tax benefits from stock-based compensation		1,746			—			—			—			1,746
Stock issued to employees, net of shares withheld		8,247			—			—			—			8,247
Dividends paid		(63,686	)		5,313			(12,554	)		—			(70,927	)
Net cash provided by (used for) financing activities		(49,360	)		(104,618	)		(55,870	)		765			(209,083	)
Effect of exchange rate changes on cash and cash equivalents		(11,095	)		8,123			2,323			1			(648	)
Change in cash and cash equivalents		(688	)		(1,532	)		(3,728	)		—			(5,948	)
Cash and cash equivalents, beginning of period		2,720			3,345			33,279			—			39,344
Cash and cash equivalents, end of period	$	2,032		$	1,813		$	29,551		$	—		$	33,396

85

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, 2011, 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, 2011 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, 2011 that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

86

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 2011 annual meeting of shareholders under the captions “Corporate Governance Matters”, “Proposal 1 Election of Certain 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 www.pentair.com/resources/images/2673.pdf. 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 www.pentair.com/resources/images/2673.pdf.

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 2012 annual meeting of shareholders under the captions “Corporate Governance Matters — Committees of the Board — Compensation Committee,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” and “Director Compensation” and is incorporated herein by reference.

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 2012 annual meeting of shareholders under the captions “Security Ownership” and is incorporated herein by reference.

The following table summarizes, as of December 31, 2011, 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:
2008 Omnibus Stock Incentive Plan		3,313,980	$	31.03		4,326,895	(1)
2004 Omnibus Stock Incentive Plan		4,060,835	$	33.51		—	(2)
Outside Directors Non-qualified Stock Option Plan		462,881	$	34.20		—	(2)
Total		7,837,696	$	32.50		4,326,895

(1) Represents securities remaining available for issuance under the 2008 Omnibus Plan.

87

(2) The 2004 Omnibus Plan and the Directors Plan were terminated in 2008. Options previously granted remain outstanding under these plans, but no further options or shares may be granted or issued under either plan.

All share numbers and per share amounts described in this section have been adjusted to reflect our 2-for-1 stock split in 2004.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information required under this item is contained in our Proxy Statement for our 2012 annual meeting of shareholders under the captions “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 ACCOUNTANT FEES AND SERVICES

Information required under this item is contained in our Proxy Statement for our 2012 annual meeting of shareholders under the caption “Audit Committee Disclosure” and is incorporated herein by reference.

88

PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) List of documents filed as part of this report:

(1)   Financial Statements

Consolidated Statements of Income for the Years Ended December 31, 2011, 2010 and 2009

Consolidated Balance Sheets as of December 31, 2011 and 2010

Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2011, 2010 and 2009

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.

89

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 21, 2012.

PENTAIR, INC.
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 21, 2012.

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
T. Michael Glenn
*	Director
Charles A. Haggerty
*	Director
David H. Y. Ho
*	Director
David A. Jones

90

Signature	Title
*	Director
Ronald L. Merriman
*	Director
William T. Monahan

*By	/s/ Angela D. Lageson
	Angela D. Lageson Attorney-in-fact

91

Schedule II — Valuation and Qualifying Accounts

Pentair, Inc and subsidiaries

in thousands	Balance beginning in period		Additions charged to costs and expenses		Deductions			Other changes add (deduct)			Balance end of period
Allowances for doubtful accounts
Year ended December 31, 2011	$	17,119	$	4,447	$	4,724	(1)	$	(842	)(2)	$	16,000
Year ended December 31, 2010	$	14,154	$	4,300	$	1,152	(1)	$	(183	)(2)	$	17,119
Year ended December 31, 2009	$	8,925	$	6,832	$	2,449	(1)	$	846	(2)	$	14,154

⁽¹⁾ Uncollectible accounts written off, net of expense

⁽²⁾ Result of acquisitions and foreign currency effects

92

Exhibit Index

Exhibit Number	Exhibit
3.1	Third Restated Articles of Incorporation as amended through May 3, 2007 (Incorporated by reference to Exhibit 3.1 contained in Pentair’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007).
3.2	Fourth Amended and Superseding By-Laws as amended through May 3, 2007 (Incorporated by reference to Exhibit 3.2 contained in Pentair’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007).
3.3	Statement of Resolution of the Board of Directors Establishing the Series and Fixing the Relative Rights and Preferences of Series A Junior Participating Preferred Stock (Incorporated by reference to Exhibit 3.1 contained in Pentair’s Current Report on Form 8-K dated December 10, 2004).
4.1	Rights Agreement dated as of December 10, 2004 between Pentair, Inc. and Wells Fargo Bank, N.A. (Incorporated by reference to Exhibit 4.1 contained in Pentair’s Registration Statement on Form 8-A, dated as of December 31, 2004).
4.2	Fourth Amended and Restated Credit Agreement dated April 28, 2011, among Pentair, Inc., certain of its subsidiaries and the lenders and agents party thereto (Incorporated by reference to Exhibit 4.1 contained in Pentair’s Current Report on Form 8-K dated April 28, 2011).
4.3	Note Purchase Agreement dated as of July 25, 2003 for $50,000,000 4.93% Senior Notes, Series A, due July 25, 2013, $100,000,000 Floating Rate Senior Notes, Series B, due July 25, 2013 and $50,000,000 5.03% Senior Notes, Series C, due October 15, 2013 (Incorporated by reference to Exhibit 10.22 contained in Pentair’s Current Report on Form 8-K dated July 25, 2003).
4.4	First Amendment to Note Purchase agreement dated July 19, 2005 by and among Pentair, Inc. and the undersigned holders (Incorporated by reference to Exhibit 4 contained in Pentair’s Quarterly Report on Form 10-Q for the quarterly period ended July 2, 2005).
4.5	Form of Note Purchase Agreement, dated May 17, 2007, by and among Pentair, Inc. and various institutional investors, for the sale of $300 million aggregate principal amount of Pentair’s 5.87% Senior Notes, Series D, due May 17, 2017 and $105 million aggregate principal amount of Pentair’s Floating Rate Senior Notes, Series E, due May 17, 2012 (Incorporated by reference to Exhibit 4.1 contained in Pentair’s Current Report on Form 8-K dated May 17, 2007).
4.6	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)).
4.7	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 contained in Pentair’s Current Report on Form 8-K dated May 9, 2011).
10.1	Pentair’s 1999 Supplemental Executive Retirement Plan as Amended and Restated effective August 23, 2000 (Incorporated by reference to Exhibit 10.2 contained in Pentair’s Current Report on Form 8-K filed September 21, 2000).*
10.2	Pentair’s 1999 Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2009 (Incorporated by reference to Exhibit 10.2 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2008).*
10.3	Pentair’s Restoration Plan as Amended and Restated effective August 23, 2000 (Incorporated by reference to Exhibit 10.3 contained in Pentair’s Current Report on Form 8-K filed September 21, 2000).*

93

Exhibit Number	Exhibit
10.4	Pentair’s Restoration Plan as Amended and Restated effective January 1, 2009 (Incorporated by reference to Exhibit 10.4 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2008).*
10.5	Pentair, Inc. Non-Qualified Deferred Compensation Plan effective January 1, 1996 (Incorporated by reference to Exhibit 10.17 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2005).*
10.6	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 Pentair’s Annual Report on Form 10-K for the year ended December 31, 1995).*
10.7	Amendment effective August 23, 2000 to Pentair’s Non-Qualified Deferred Compensation Plan effective January 1, 1996 (Incorporated by reference to Exhibit 10.8 contained in Pentair’s Current Report on Form 8-K filed September 21, 2000).*
10.8	Pentair, Inc. Non-Qualified Deferred Compensation Plan effective January 1, 2009, as Amended and Restated Through July 29, 2009 (Incorporated by reference to Exhibit 10.2 contained in Pentair’s Quarterly Report on Form 10-Q for the year ended September 26, 2009).*
10.9	Pentair, Inc. Executive Officer Performance Plan as Amended and Restated, effective January 1, 2009 (Incorporated by reference to Appendix B contained in Pentair’s Proxy Statement for its 2009 annual meeting of shareholders).*
10.10	Form of Key Executive Employment and Severance Agreement for Randall J. Hogan (Incorporated by reference to Exhibit 10.10 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2008).*
10.11	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 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2008).*
10.12	Form of Key Executive Employment and Severance Agreement for John L. Stauch, Mark C. Borin and Angela D. Lageson (Incorporated by reference to Exhibit 10.12 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2008).*
10.13	Pentair, Inc. International Stock Purchase and Bonus Plan, as Amended and Restated, effective May 1, 2004 (Incorporated by reference to Appendix I contained in Pentair’s Proxy Statement for its 2004 annual meeting of shareholders).*
10.14	Pentair, Inc. Compensation Plan for Non-Employee Directors, as Amended and Restated Through December 16, 2009 (Incorporated by reference to Exhibit 10.14 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2009).*
10.15	Pentair, Inc. Omnibus Stock Incentive Plan, as Amended and Restated, effective December 12, 2007 (Incorporated by reference to Exhibit 10.14 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2007).*
10.16	Pentair, Inc. Employee Stock Purchase and Bonus Plan, as Amended and Restated, effective May 1, 2004 (Incorporated by reference to Appendix H contained in Pentair’s Proxy Statement for its 2004 annual meeting of shareholders).*
10.17	Letter Agreement, dated January 6, 2005, between Pentair, Inc. and Michael Schrock (Incorporated by reference to Exhibit 10.1 contained in Pentair’s Current Report on Form 8-K dated January 6, 2005).*

94

Exhibit Number	Exhibit
10.18	Confidentiality and Non-Competition Agreement, dated January 6, 2005, between Pentair, Inc. and Michael Schrock (Incorporated by reference to Exhibit 10.2 contained in Pentair’s Current Report on Form 8-K dated January 6, 2005).*
10.19	Pentair, Inc. 2008 Omnibus Stock Incentive Plan, as Amended and Restated (Incorporated by reference to Appendix A contained in Pentair’s Proxy Statement for its 2010 annual meeting of shareholders filed on March 18, 2010).*
10.20	Form of award letter for executive officers under the Pentair, Inc. 2008 Omnibus Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.1 contained in Pentair’s Current Report on Form 8-K filed January 8, 2009).*
10.21	Form of award letter for directors under the Pentair, Inc. 2008 Omnibus Stock Incentive Plan, as amended (Incorporated by reference to Exhibit 10.21 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2009).*
10.22	Amended and Restated Pentair, Inc. Outside Directors Nonqualified Stock Option Plan as amended through February 27, 2002 (Incorporated by reference to Exhibit 10.7 contained in Pentair’s Annual Report on Form 10-K for the year ended December 31, 2001).*
21	List of Pentair subsidiaries.
23	Consent of Independent Registered Public Accounting Firm — Deloitte & Touche LLP.
24	Power of Attorney.
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
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, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the three years ended December 31, 2011, 2010 and 2009, (ii) the Consolidated Balance Sheets as of December 31, 2011 and December 31, 2010, (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009, (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2011, 2010 and 2009 and (v) the Notes to the Consolidated Financial Statements.

95

EX-21

Exhibit 21

Pentair, Inc. and subsidiaries as of December 31, 2011.

Name of Company	Jurisdiction of Incorporation	Segment
Alberta Electronic Company Limited	Hong Kong	Technical Products
Aplex Industries, Inc.	United States	Water
Apno, S.A. de C.V.	Mexico	Other
Beijing Pentair Environmental Protection Equipment Co., Ltd. 1	P.R.C.	Water
Calmark Europe Limited	Ireland	Technical Products
Century Mfg. Co.	United States	Other
Chansuba Pumps Private Limited 2	India	Water
Combinatie Nijuis-Ippel V.o.f.	Netherlands	Water
Davies Pumps & Co Limited	New Zealand	Water
Dongguan Jieming Tianyuan Water Purifying Equipment Co., Ltd.1	P.R.C.	Water
Electronic Enclosures, LLC	United States	Technical Products
Epps, Ltd.	Mauritius	Water
EuroPentair GmbH	Germany	Other
Everpure Japan K.K.	Japan	Water
FARADYNE Motors (Suzhou) Co., Ltd 3	P.R.C.	Water
Faradyne Motors LLC 3	United States	Water
FilterSoft, LLC	United States	Water
Filtrix B.V.	Netherlands	Water
Fleck Controls, Inc.	United States	Water
Haffmans B.V.	Netherlands	Water
Haffmans North America, Inc.	United States	Water
Hoffman Enclosures (Mex.), LLC	United States	Technical Products
Hoffman Enclosures Inc.	United States	Technical Products
Hoffman Enclosures Mexico, S. de R.L. de C.V.	Mexico	Technical Products
Hoffman Schroff PTE Ltd	Singapore	Technical Products
Holding Nijhuis Pompen B.V.	Netherlands	Water
Hypro EU Limited	United Kingdom	Water
Jung Pumpen CZ s.r.o.	Czech Republic	Water
Jung Pumpen France S.a.r.l.	France	Water
Jung Pumpen GmbH	Germany	Water
Jung Pumpen Hungary Kft.	Hungary	Water
Leushuis China Ltd.	Hong Kong	Water
Leushuis Projects International B.V.	Netherlands	Water
Lincoln Automotive Company	United States	Other
McNeil (Ohio) Corporation	United States	Other
Moraine Properties, LLC	United States	Other
Nijhuis International B.V.	Netherlands	Water
Nijhuis Pompen B.V.	Netherlands	Water
Nijhuis Pompen BVBA	Belgium	Water
Nijhuis Pompen Exploitatiemaatschappij B.V.	Netherlands	Water
Nijhuis Pompen GmbH	Germany	Water
Nocchi Pompes Europe S.a.r.l.	France	Water
Onga (NZ) Limited	New Zealand	Water
Onga Pump Shop Pty. Ltd.	Australia	Water
Optima Enclosures Limited	United Kingdom	Technical Products
Pentair Asia PTE Ltd.	Singapore	Other
Pentair Bermuda Holdings 4	Bermuda	Other

Pentair Bermuda, LLC	United States	Other
Pentair Beteiligungs GmbH	Germany	Other
Pentair Brasil Holdings Ltda.	Brazil	Water
Pentair Brazil, LLC	United States	Water
Pentair Canada, Inc.	Canada	Water
Pentair Clean Process Technologies India Private Limited	India	Water
Pentair DMP Corp.	United States	Other
Pentair Electronic Packaging de Mexico, S. de R.L de C.V.	Mexico	Technical Products
Pentair Enclosures Inc.	United States	Technical Products
Pentair Enclosures S. de R.L. de C.V.	Mexico	Technical Products
Pentair Federal Pump, LLC	United States	Water
Pentair Filtration Solutions, LLC	United States	Water
Pentair France SARL	France	Water
Pentair Germany GmbH	Germany	Other
Pentair Global S.a.r.l.	Luxembourg	Other
Pentair Hidro Filtros do Brasil Indústria e Comércio de Filtros Ltda.	Brazil	Water
Pentair Holdings S.a.r.l.	Luxembourg	Other
Pentair Housing, Inc.	United States	Other
Pentair Housing, LP	United States	Other
Pentair Technical Products S.a.r.l.	Luxembourg	Technical Products
Pentair International S.a.r.l.	Switzerland	Other
Pentair Janus Holdings	Bermuda	Other
Pentair Luxembourg, S.a.r.l.	Luxembourg	Other
Pentair Manufacturing Belgium BVBA	Belgium	Water
Pentair Manufacturing France S.A.S.	France	Water
Pentair Manufacturing Italy, S.r.L.	Italy	Water
Pentair Nanosoft Bermuda Holdings	Bermuda	Other
Pentair Nanosoft US Holdings, LLC	United States	Other
Pentair Netherlands B.V.	Netherlands	Water
Pentair Netherlands Global B.V.	Netherlands	Water
Pentair Netherlands Holding B.V.	Netherlands	Water
Pentair Netherlands International B.V.	Netherlands	Water
Pentair Pacific Rim (Water) Limited	Hong Kong	Other
Pentair Pacific Rim Limited	Hong Kong	Technical Products
Pentair Poland Sp.z.o.o.	Poland	Technical Products
Pentair Pump Group, Inc.	United States	Water
Pentair Residential Filtration, LLC 4	United States	Water
Pentair Services France S.A.S.	France	Water
Pentair Shenzhen Enclosure Company, Ltd.	P.R.C.	Technical Products
Pentair Taunus Electrometalurgica Ltda	Brazil	Technical Products
Pentair Technical Products China	P.R.C.	Technical Products
Pentair Technical Products Holdings, Inc.	United States	Technical Products
Pentair Technical Products, Inc.	United States	Technical Products
Pentair Technical Products India Private Limited	India	Technical Products
Pentair Technical Products, S. de R.L. de C.V.	Mexico	Technical Products
Pentair Technical Products Service Co.	United States	Technical Products
Pentair Thailand Ltd.	Thailand	Water
Pentair Trading (Shanghai) Co. Ltd.	Shanghai	Water
Pentair Transport, Inc.	United States	Other
Pentair UK Group Limited	United Kingdom	Other
Pentair Verwaltungs GmbH & Co. KG	Germany	Other

Pentair Water (Suzhou) Co. Ltd.	P.R.C.	Water
Pentair Water Asia Pacific Ltd.	Singapore	Water
Pentair Water Australia Pty Ltd	Australia	Water
Pentair Water Belgium B.V.B.A.	Belgium	Water
Pentair Water Components & Services B.V.	Netherlands	Water
Pentair Water do Brasil Ltda	Brazil	Water
Pentair Water Europe s.r.l.	Italy	Water
Pentair Water France SAS	France	Water
Pentair Water Germany GmbH	Germany	Water
Pentair Water Group, Inc.	United States	Water
Pentair Water Holdings, LLC	United States	Water
Pentair Water Holdings Pty Ltd	Australia	Water
Pentair Water India Private Limited	India	Water
Pentair Water Italy s.r.l.	Italy	Water
Pentair Water Latinamérica S.A.	Argentina	Water
Pentair Water Membraan Techonologie B.V.	Netherlands	Water
Pentair Water Middle East	United Arab Emirates	Water
Pentair Water New Zealand Limited	New Zealand	Water
Pentair Water Polska Sp.z.o.o.	Poland	Water
Pentair Water Pool and Spa, Inc.	United States	Water
Pentair Water Proces Technologie Holding B.V.	Netherlands	Water
Pentair Water Process Technology B.V.	Netherlands	Water
Pentair Water Projects International B.V.	Netherlands	Water
Pentair Water Purification Systems (Shanghai) Co. Ltd	China	Water
Pentair Water South Africa (Proprietary) Limited	South Africa	Water
Pentair Water Spain, S.L.	Spain	Water
Pentair Water Treatment (OH) Company	United States	Water
Pentair Water Treatment Company	United States	Water
Pentair Water Treatment Pvt. Ltd.	India	Water
Pentair Water Winkelsteeg B.V.	Netherlands	Water
Pentair Water, LLC	United States	Water
Pentair Water-Mexico, S. de R.L. de C.V.	Mexico	Water
Penwald Insurance Company	United States	Other
PFAM, Inc.	United States	Other
Plymouth Products, Inc.	United States	Water
PNR Water Netherlands CV	Netherlands	Water
Poromedia GmbH	Germany	Water
Porous Media Corporation	United States	Water
Porter-Cable de Mexico S.A. de C.V.	Mexico	Other
PTG Accessories Corp.	United States	Other
Purification Valley C.V.	Netherlands	Water
Schroff Co. Ltd. Taiwan	Taiwan	Technical Products
Schroff GmbH	Germany	Technical Products
Schroff K.K.	Japan	Technical Products
Schroff S.A.S.	France	Technical Products
Schroff S.r.l.	Italy	Technical Products
Schroff Scandinavia AB	Sweden	Technical Products
Schroff UK Limited	United Kingdom	Technical Products
Seneca Enterprises Co.	United States	Water
Shanghai Alberta Electronics Co., Ltd.	P.R.C.	Technical Products
Shanxi Jieming Environmental Protection Equipment Co., Ltd.1	P.R.C.	Water
SHURflo Limited	United Kingdom	Water

Sta-Rite de Mexico S.A. de C.V.	Mexico	Water
Sta-Rite de Puerto Rico, Inc.	Puerto Rico	Water
Sta-Rite Industries, LLC	United States	Water
Südmo (UK) Ltd.	United Kingdom	Water
Südmo Components GmbH	Germany	Water
Südmo Holding GmbH	Germany	Water
Südmo North America, Inc.	United States	Water
Südmo Projects GmbH	Germany	Water
Surewood Acquisition Corporation	United States	Other
Tupelo Real Estate, LLC	United States	Other
Voltea Ltd.	United Kingdom	Water
Webster Electric Company, LLC	United States	Water
WICOR Industries (Australia) Pty. Ltd.	Australia	Water
X-Flow B.V.	Netherlands	Water
Yabaida Electronic (Shenzhen) Company Limited	P.R.C.	Technical Products

⁽¹⁾ – 70% owned

⁽²⁾ – 47% owned

⁽³⁾ – 50% owned

⁽⁴⁾ – 80.1% owned

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-12561, 333-62475, 333-75166, 333-115429, 333-115430, 333-115432, 333-126693, 333-152458, 333-160925, 333-168377 on Form S-8, and 333-173829 on Form S-3 of our reports dated February 21, 2012, relating to the financial statements and financial statement schedule of Pentair, Inc. and subsidiaries (the “Company”) (which reports expressed an unqualified opinion), and the effectiveness of Pentair Inc.’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Pentair Inc. for the year ended December 31, 2011.

Minneapolis, Minnesota

February 21, 2012

EX-24

Exhibit 24

Power of Attorney

KNOW ALL MEN BY THESE PRESENTS that the undersigned directors of Pentair, Inc., a Minnesota corporation, 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, Inc. 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 21, 2012

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/	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

Certifications

I, Randall J. Hogan, certify that:

1. I have reviewed this annual report on Form 10-K of Pentair, Inc.;

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 the 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 21, 2012

/s/	Randall J. Hogan
	Randall J. Hogan Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications

I, John L. Stauch, certify that:

1. I have reviewed this annual report on Form 10-K of Pentair, Inc.;

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 the 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 21, 2012

/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, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2011 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 21, 2012

/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, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2011 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 21, 2012

/s/ John L. Stauch

John L. Stauch

Executive Vice President and Chief Financial Officer

XML

Stock Plans (Tables)

12 Months Ended

Dec. 31, 2011

Stock Option Activity

The following table summarizes stock option activity under all plans:

Options outstanding	Shares			Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value
Balance January 1, 2011		7,967,416		$	31.34
Granted		817,707			36.73
Exercised		(839,886	)		25.03
Forfeited		(45,203	)		32.86
Expired		(62,338	)		40.06
Balance December 31, 2011		7,837,696		$	32.50		5.6	$	20,161,647
Options exercisable as of December 31, 2011		5,694,049		$	32.38		4.6	$	16,052,331
Options expected to vest as of December 31, 2011		2,107,848		$	32.82		8.2	$	4,109,316

Assumptions Used in Calculating Estimated Fair Value of Stock Option Award

We estimated the fair values using the Black-Scholes option-pricing model, modified for dividends and using the following assumptions:

	2011			2010			2009
Risk-free interest rate		1.51	%		2.45	%		1.77	%
Expected dividend yield		2.32	%		2.30	%		3.20	%
Expected stock price volatility		35.50	%		35.00	%		32.50	%
Expected lives		5.5 yrs			5.5 yrs			5.2 yrs

Restricted Share Award Activity

The following table summarizes restricted share award activity under all plans:

Restricted shares outstanding	Shares			Weighted average grant date fair value
Balance January 1, 2011		1,309,403		$	29.33
Granted		278,418			36.60
Vested		(276,956	)		31.63
Forfeited		(60,783	)		28.32
Balance December 31, 2011		1,250,082		$	30.49

XML

Detail of Acquired Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 746,696	$ 579,411
Accumulated amortization	(154,411)	(125,841)
Net	592,285	453,570
Finite-life intangibles
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	494,662	373,656
Accumulated amortization	(154,411)	(125,841)
Net	340,251	247,815
Finite-life intangibles | Patents
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	5,896	15,469
Accumulated amortization	(4,038)	(12,695)
Net	1,858	2,774
Finite-life intangibles | Proprietary technology
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	128,841	74,176
Accumulated amortization	(39,956)	(29,862)
Net	88,885	44,314
Finite-life intangibles | Customer relationships
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	358,410	282,479
Accumulated amortization	(109,887)	(82,901)
Net	248,523	199,578
Finite-life intangibles | Trade names
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	1,515	1,532
Accumulated amortization	(530)	(383)
Net	985	1,149
Indefinite-life intangibles | Trade names
Acquired Intangible Assets by Major Class [Line Items]
Gross carrying amount	252,034	205,755
Net	$ 252,034	$ 205,755

XML

Discontinued Operations - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liability due to product recall	$ 3.2
Liability due to product recall, net of tax	2.0
Lincoln Industrial
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Escrow balances from our sale of Lincoln Industrial	0.5
Tax reserves reversed due to the expiration of various statues of limitations.	$ 1.0

XML

Deferred Taxes (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Line Items]
Deferred tax assets	$ 60,899	$ 56,349
Other noncurrent assets		1,647
Other current liabilities		(547)
Deferred tax liabilities	(188,957)	(169,198)
Net deferred tax liability	$ (128,058)	$ (111,749)

XML

Estimated Future Amortization Expense for Identifiable Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Expected Amortization Expense [Line Items]
Estimated amortization expense 2012	$ 38,828
Estimated amortization expense 2013	38,663
Estimated amortization expense 2014	38,296
Estimated amortization expense 2015	38,018
Estimated amortization expense 2016	$ 37,079

XML

Estimated Amount that will be Amortized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Net actuarial (gain) loss	$ (354)	$ 993
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
Net actuarial (gain) loss	10,308
Total estimated 2012 amortization	10,308
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Prior service cost (benefit)	(27)
Net actuarial (gain) loss	(3,306)
Total estimated 2012 amortization	$ (3,333)

XML

Condensed Consolidated Statements of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities
Net income before noncontrolling interest	$ 38,521	$ 202,321	$ 116,200
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations		626	19
Equity income of unconsolidated subsidiaries	(1,898)	(2,108)	1,379
Depreciation	66,235	57,995	64,823
Amortization	41,897	26,184	40,657
Deferred income taxes	(5,583)	29,453	30,616
Stock compensation	19,489	21,468	17,324
Goodwill impairment	200,520
Excess tax benefits from stock-based compensation	(3,310)	(2,686)	(1,746)
(Gain) loss on sale of assets	933	466	985
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	1,348	(62,344)	11,307
Inventories	18,263	(44,495)	66,684
Prepaid expenses and other current assets	10,032	2,777	16,202
Accounts payable	(24,330)	55,321	(13,822)
Employee compensation and benefits	(20,486)	27,252	(22,431)
Accrued product claims and warranties	(1,984)	8,068	(7,440)
Income taxes	10,084	1,791	1,972
Other current liabilities	10,921	561	(21,081)
Pension and post-retirement benefits	(24,596)	(43,024)	(39,607)
Other assets and liabilities	(15,830)	(9,250)	(2,141)
Net cash provided by (used for) continuing operations	320,226	270,376	259,900
Net cash provided by (used for) operating activities of discontinued operations			(1,531)
Net cash provided by (used for) operating activities	320,226	270,376	258,369
Investing activities
Capital expenditures	(73,348)	(59,523)	(54,137)
Proceeds from sale of property and equipment	1,310	358	1,208
Divestitures			1,567
Acquisitions, net of cash acquired	(733,105)
Other	(2,943)	(1,148)	(3,224)
Net cash provided by (used for) investing activities	(808,086)	(60,313)	(54,586)
Financing activities
Net short-term borrowings	(1,239)	2,728	2,205
Proceeds from long-term debt	1,421,602	703,641	580,000
Repayment of long-term debt	(832,147)	(804,713)	(730,304)
Debt issuance costs	(8,973)	(50)	(50)
Excess tax benefits from stock-based compensation	3,310	2,686	1,746
Stock issued to employees, net of shares withheld	13,322	9,941	8,247
Repurchases of common stock	(12,785)	(24,712)
Dividends paid	(79,537)	(75,465)	(70,927)
Distribution to noncontrolling interest		(4,647)
Net cash provided by (used for) financing activities	503,553	(190,591)	(209,083)
Effect of exchange rate changes on cash and cash equivalents	(11,672)	(6,812)	(648)
Change in cash and cash equivalents	4,021	12,660	(5,948)
Cash and cash equivalents, beginning of period	46,056	33,396	39,344
Cash and cash equivalents, end of period	50,077	46,056	33,396
Parent Company
Operating activities
Net income before noncontrolling interest	34,222	197,828	115,493
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations		626	143
Depreciation	5,991	3,002	8,166
Amortization		593	14,332
Earnings from investments in subsidiaries	18,792	(129,872)	(60,528)
Deferred income taxes	6,889	18,075	8,223
Stock compensation	19,489	21,468	17,324
Excess tax benefits from stock-based compensation	(3,310)	(2,686)	(1,746)
(Gain) loss on sale of assets	933	466	(1,389)
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	(53,661)	1,759	(1,456)
Prepaid expenses and other current assets	(19,728)	(8,519)	48,529
Accounts payable	60,209	(1,431)	5,615
Employee compensation and benefits	(23,553)	14,630	(1,385)
Accrued product claims and warranties		12,245
Income taxes	48,947	(13,267)	(10,921)
Other current liabilities	10,539	3,314	(29,030)
Pension and post-retirement benefits	(17,662)	(33,762)	(30,630)
Other assets and liabilities	502	(2,191)	(19,117)
Net cash provided by (used for) continuing operations			61,623
Net cash provided by (used for) operating activities of discontinued operations			(30)
Net cash provided by (used for) operating activities	88,599	82,278	61,593
Investing activities
Capital expenditures	(8,301)	(11,557)	(2,237)
Divestitures			404
Other	3,702	525	7
Net cash provided by (used for) investing activities	(4,599)	(11,032)	(1,826)
Financing activities
Net short-term borrowings	(1,239)	2,728	2,205
Proceeds from long-term debt	1,421,602	703,641	580,000
Repayment of long-term debt	(832,147)	(804,713)	(730,304)
Debt issuance costs	(8,973)	(50)	(50)
Net change in advances to subsidiaries	(579,126)	106,372	152,482
Excess tax benefits from stock-based compensation	3,310	2,686	1,746
Stock issued to employees, net of shares withheld	13,324	9,941	8,247
Repurchases of common stock	(12,785)	(24,712)
Dividends paid	(78,351)	(73,014)	(63,686)
Net cash provided by (used for) financing activities	(74,385)	(77,121)	(49,360)
Effect of exchange rate changes on cash and cash equivalents	(9,719)	7,044	(11,095)
Change in cash and cash equivalents	(104)	1,169	(688)
Cash and cash equivalents, beginning of period	3,201	2,032	2,720
Cash and cash equivalents, end of period	3,097	3,201	2,032
Guarantor Subsidiaries
Operating activities
Net income before noncontrolling interest	132,027	70,107	9,966
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations			(551)
Equity income of unconsolidated subsidiaries	(1,654)	(1,551)	1,379
Depreciation	27,742	29,902	30,506
Amortization	15,195	15,597	15,752
Earnings from investments in subsidiaries	(27,419)
Deferred income taxes	18,084	9,679	18,582
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	20,574	(61,042)	10,492
Inventories	7,589	(10,683)	46,791
Prepaid expenses and other current assets	17,041	(3,035)	2,985
Accounts payable	5,320	43,578	(18,623)
Employee compensation and benefits	(2,193)	4,840	(13,968)
Accrued product claims and warranties	(1,533)	5,695	(7,645)
Income taxes	(33,965)	15,813	6,917
Other current liabilities	22,568	(5,258)	(15,312)
Pension and post-retirement benefits	(10,910)	(11,798)	(11,716)
Other assets and liabilities	(18,485)	(12,731)	39,226
Net cash provided by (used for) continuing operations			114,781
Net cash provided by (used for) operating activities of discontinued operations			(1,590)
Net cash provided by (used for) operating activities	169,981	89,113	113,191
Investing activities
Capital expenditures	(27,625)	(22,954)	(19,676)
Proceeds from sale of property and equipment	143	284	446
Divestitures			1,002
Other	(4,604)
Net cash provided by (used for) investing activities	(32,086)	(22,670)	(18,228)
Financing activities
Net short-term borrowings		31	115
Net change in advances to subsidiaries	(137,767)	(59,269)	(110,046)
Dividends paid	(200)	142	5,313
Net cash provided by (used for) financing activities	(137,967)	(59,096)	(104,618)
Effect of exchange rate changes on cash and cash equivalents		(5,756)	8,123
Change in cash and cash equivalents	(72)	1,591	(1,532)
Cash and cash equivalents, beginning of period	3,404	1,813	3,345
Cash and cash equivalents, end of period	3,332	3,404	1,813
Non-Guarantor Subsidiaries
Operating activities
Net income before noncontrolling interest	(117,780)	64,258	51,269
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations			427
Equity income of unconsolidated subsidiaries	(244)	(557)
Depreciation	32,502	25,091	26,151
Amortization	26,702	9,994	10,573
Earnings from investments in subsidiaries	(1,321)
Deferred income taxes	(30,556)	1,699	3,811
Goodwill impairment	200,520
(Gain) loss on sale of assets			2,374
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	32,870	(14,222)	7,484
Inventories	10,674	(33,812)	19,893
Prepaid expenses and other current assets	(5,601)	6,993	(37,221)
Accounts payable	(78,308)	24,248	(5,209)
Employee compensation and benefits	5,260	7,782	(7,078)
Accrued product claims and warranties	(451)	(9,872)	205
Income taxes	(4,898)	(755)	5,976
Other current liabilities	(3,867)	9,921	25,118
Pension and post-retirement benefits	3,976	2,536	2,739
Other assets and liabilities	(7,832)	5,672	(22,250)
Net cash provided by (used for) continuing operations			84,262
Net cash provided by (used for) operating activities of discontinued operations			89
Net cash provided by (used for) operating activities	61,646	98,976	84,351
Investing activities
Capital expenditures	(37,422)	(25,012)	(32,224)
Proceeds from sale of property and equipment	1,167	74	762
Divestitures			161
Acquisitions, net of cash acquired	(733,105)
Other	(2,041)	(1,673)	(3,231)
Net cash provided by (used for) investing activities	(771,401)	(26,611)	(34,532)
Financing activities
Net short-term borrowings		(31)	(115)
Net change in advances to subsidiaries	716,893	(47,090)	(43,201)
Stock issued to employees, net of shares withheld	(2)
Dividends paid	(986)	(2,593)	(12,554)
Distribution to noncontrolling interest		(4,647)
Net cash provided by (used for) financing activities	715,905	(54,361)	(55,870)
Effect of exchange rate changes on cash and cash equivalents	(1,953)	(8,104)	2,323
Change in cash and cash equivalents	4,197	9,900	(3,728)
Cash and cash equivalents, beginning of period	39,451	29,551	33,279
Cash and cash equivalents, end of period	43,648	39,451	29,551
Eliminations
Operating activities
Net income before noncontrolling interest	(9,948)	(129,872)	(60,528)
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Earnings from investments in subsidiaries	9,948	129,872	60,528
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	1,565	11,161	(5,213)
Prepaid expenses and other current assets	18,320	7,338	1,909
Accounts payable	(11,551)	(11,074)	4,395
Other current liabilities	(18,319)	(7,416)	(1,857)
Other assets and liabilities	9,985
Net cash provided by (used for) continuing operations			(766)
Net cash provided by (used for) operating activities		9	(766)
Financing activities
Net change in advances to subsidiaries		(13)	765
Net cash provided by (used for) financing activities		(13)	765
Effect of exchange rate changes on cash and cash equivalents		$ 4	$ 1

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Total Purchase Price Allocated to Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) (CPT) In Thousands, unless otherwise specified	May 12, 2011 USD ($)	May 12, 2011 EUR (€)
Business Acquisition [Line Items]
Accounts and notes receivable	$ 70,038
Inventories	60,382
Deferred tax assets	4,926
Prepaid expenses and other current assets	40,252
Property, plant and equipment	69,010
Goodwill	451,809
Intangibles	197,231
Accounts payable	(41,061)
Income taxes	(3,937)
Other current liabilities	(59,229)
Long-term debt	(17,041)
Deferred tax liabilities	(57,069)
Purchase price	$ 715,311	€ 502,700

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2011

Supplemental Disclosure of Cash Flow Information

The following table summarizes supplemental cash flow information:

In thousands	2011		2010		2009
Interest payments	$	54,516	$	37,083	$	43,010
Income tax payments		64,389		55,991		8,719

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Change in Accumulated Other Comprehensive Income, Net of Tax (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Beginning of the year	$ (71,210)	$ (58,448)
Additional prior service cost incurred during the year		171
Actuarial gains (losses) incurred during the year	(42,139)	(11,861)
Translation gains (losses) incurred during the year	118	(75)
Transition obligation		8
Unrecognized prior service cost (benefit)	(16)	(12)
Actuarial gains	354	(993)
End of the year	$ (112,893)	$ (71,210)

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Benefit Plans - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Defined Fund Plan	$ 241,800,000
Defined accumulated benefit obligation plans	625,900,000	557,700,000
Expected rate of return on plan assets	8.00%	8.50%	8.50%
Pension plan assets yielded returns	7.80%	11.20%	19.50%
Expected rate of return on plan assets assumption	7.50%
Cumulative unrecognized losses	186,100,000
Minimum percentage of unrecognized gains or losses	10.00%
Description of plan asset and benefit obligation	To the extent the unrecognized losses, when adjusted for the difference between market and market related values of assets, exceeds 10% of the projected benefit obligation, it will be amortized into expense each year on a straight-line basis over the remaining expected future-working lifetime of active participants (currently approximating 12 years).
Defined benefit plan amortization description	It will be amortized into expense each year on a straight-line basis over the remaining expected future-working lifetime of active participants (currently approximating 12 years).
Pension plan contribution	37,100,000	49,800,000
Annual eligible compensation percentage	1.50%
Expense for the plan and ESOP	15,800,000	11,000,000	6,700,000
Other accrued retirement compensation	12,600,000	13,900,000
Minimum
Defined Benefit Plan Disclosure [Line Items]
Expected contribution	40,000,000
Maximum
Defined Benefit Plan Disclosure [Line Items]
Expected contribution	45,000,000
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Defined Fund Plan	$ 137,900,000
Foreign Pension Plans, Defined Benefit | Minimum
Defined Benefit Plan Disclosure [Line Items]
Discount rate	0.75%	0.75%	2.00%
Foreign Pension Plans, Defined Benefit | Maximum
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.00%	5.40%	6.00%
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.05%	5.90%	6.00%
Fixed income investment percentage minimum	40.00%	30.00%
Fixed income investment percentage maximum	50.00%	40.00%
Defined Contribution Pension Plan 401k
Defined Benefit Plan Disclosure [Line Items]
401(k) plan description	Under the 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 June 2009, we temporarily suspended the company match of the plan and ESOP. We reinstated the company match in 2010.
Defined Contribution Pension Plan 401k | The first 1% of eligible compensation
Defined Benefit Plan Disclosure [Line Items]
Matching contribution to eligible employee contributions	100.00%
Defined Contribution Pension Plan 401k | The next 5% of eligible compensation
Defined Benefit Plan Disclosure [Line Items]
Matching contribution to eligible employee contributions	50.00%

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Stock Plans - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation	$ 19,489,000	$ 21,468,000	$ 17,324,000
Weighted-average grant date fair value of options granted	$ 9.98	$ 9.47	$ 5.09
Total intrinsic value of options exercised	10,900,000	7,400,000	5,200,000
Cash received from option exercises	14,700,000	14,900,000	8,200,000
Tax benefit realized for tax deductions from option exercises	4,100,000	2,800,000	1,900,000
Nonqualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Expiration period	10 years
Total stock-based compensation expense	8,900,000	10,700,000	7,100,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	10,600,000	10,800,000	10,200,000
Restricted Stock Units (RSUs) | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Outside Directors Option Plan, 2010 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Expiration period	10 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to stock options	5,300,000
Expected weighted average period to recognize stock options cost	1.4
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to stock options	16,400,000
Expected weighted average period to recognize stock options cost	2.0
Total fair value of shares vested	10,200,000	12,700,000	5,500,000
Tax benefit realized for tax deductions from option exercises	$ 3,600,000	$ 3,400,000	$ 2,200,000

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Supplemental Disclosure of Cash Flow Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Schedule of Cash Flow, Supplemental [Line Items]
Interest payments	$ 54,516	$ 37,083	$ 43,010
Income tax payments	$ 64,389	$ 55,991	$ 8,719

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Components of Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Amortization of transition obligation		$ 8
Amortization of prior year service cost (benefit)	(16)	(12)
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	12,466	11,588	12,334
Interest cost	32,768	31,671	32,612
Expected return on plan assets	(31,849)	(30,910)	(30,286)
Amortization of transition obligation		13	25
Amortization of prior year service cost (benefit)		7	23
Recognized net actuarial (gain) loss	3,887	1,674	82
Settlement gain	23	(8)	(9)
Net periodic benefit cost	17,295	14,035	14,781
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Service cost	180	200	214
Interest cost	1,889	2,013	2,377
Amortization of prior year service cost (benefit)	(27)	(27)	(41)
Recognized net actuarial (gain) loss	(3,306)	(3,295)	(3,326)
Net periodic benefit cost	$ (1,264)	$ (1,109)	$ (776)

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Reconciliation of Level 3 Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Beginning balance	$ 14,768	$ 17,166
Net realized and unrealized gains (losses)	338	1,012
Net purchases, issuances and settlements	4,901	(3,410)
Net transfers into (out of) level 3
Ending balance	20,007	14,768
Other Investments
Defined Benefit Plan Disclosure [Line Items]
Beginning balance	12,991	14,427
Net realized and unrealized gains (losses)	251	678
Net purchases, issuances and settlements	5,767	(2,114)
Net transfers into (out of) level 3
Ending balance	19,009	12,991
Fixed Income Investments
Defined Benefit Plan Disclosure [Line Items]
Beginning balance	1,777	2,739
Net realized and unrealized gains (losses)	87	334
Net purchases, issuances and settlements	(866)	(1,296)
Net transfers into (out of) level 3
Ending balance	$ 998	$ 1,777

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Weighted-Average Assumptions used to Determine Domestic Net Periodic Benefit Cost (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.05%	5.90%	6.00%
Net Periodic Benefit Costs | United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.90%	6.00%	6.50%
Expected long-term return on plan assets	8.00%	8.50%	8.50%
Rate of compensation increase	4.00%	4.00%	4.00%
Net Periodic Benefit Costs | United States Postretirement Benefit Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.90%	6.00%	6.50%

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Expected Future Service to be Paid by Plans (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
2012	$ 31.8
2013	32.6
2014	33.5
2015	35.9
2016	38.7
2017-2021	221.4
Other Postretirement Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
2012	3.3
2013	3.2
2014	3.1
2015	3.0
2016	2.9
2017-2021	$ 13.1

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Amounts not yet Recognized in net Periodic Benefit Cost and Included in Accumulated Other Comprehensive Income (Pre-Tax) (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
Prior service cost (benefit)	$ (171)	$ (162)
Net actuarial (gain) loss	201,093	138,558
Accumulated other comprehensive (income) loss	200,922	138,396
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Prior service cost (benefit)	(850)	(878)
Net actuarial (gain) loss	(14,982)	(20,781)
Accumulated other comprehensive (income) loss	$ (15,832)	$ (21,659)

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Tax Effects of Major Items Recorded as Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Deferred tax assets
Accounts receivable allowances	$ 3,726	$ 4,490
Inventory valuation	18,891	17,381
Accrued product claims and warranties	22,430	25,753
Employee benefit accruals	129,642	110,547
Total deferred taxes	174,689	158,171
Deferred tax Liabilities
Accelerated depreciation/amortization	13,270	11,436
Goodwill and other intangibles	191,067	187,103
Other, net	98,410	71,381
Total deferred taxes	302,747	269,920
Net deferred tax liability	$ (128,058)	$ (111,749)

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Financial Statements of Subsidiary Guarantors

12 Months Ended

Dec. 31, 2011

Financial Statements of Subsidiary Guarantors

18. Financial Statements of Subsidiary Guarantors

Certain of the domestic subsidiaries (the “Guarantor Subsidiaries”) of Pentair, Inc. (the “Parent Company”), each of which is directly or indirectly wholly-owned by the Parent Company, jointly and severally, and fully and unconditionally, guarantee the Parent Company’s indebtedness under the Notes and the Credit Facility. The following supplemental financial information sets forth the Condensed Consolidated Statements of Income, the Condensed Consolidated Balance Sheets, and the Condensed Consolidated Statements of Cash Flows for the Parent Company, the Guarantor Subsidiaries, the non-Guarantor Subsidiaries, and total consolidated Pentair and subsidiaries. 

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,243,362		$	1,437,242		$	(223,918	)	$	3,456,686
Cost of goods sold		4,000			1,562,298			1,039,362			(222,696	)		2,382,964
Gross profit		(4,000	)		681,064			397,880			(1,222	)		1,073,722
Selling, general and administrative		18,967			338,830			269,952			(1,222	)		626,527
Research and development		1,032			41,860			35,266			—			78,158
Goodwill impairment		—			—			200,520			—			200,520
Operating (loss) income		(23,999	)		300,374			(107,858	)		—			168,517
Loss (earnings) from investment in subsidiaries		18,792			(27,419	)		(1,321	)		9,948			—
Other (income) expense:
Equity income of unconsolidated subsidiaries		—			(1,654	)		(244	)		—			(1,898	)
Net interest (income) expense		(107,743	)		152,264			14,314			—			58,835
Income (loss) from continuing operations before income taxes and noncontrolling interest		64,952			177,183			(120,607	)		(9,948	)		111,580
Provision for income taxes		30,730			45,156			(2,827	)		—			73,059
Net income before noncontrolling interest		34,222			132,027			(117,780	)		(9,948	)		38,521
Noncontrolling interest		—			—			4,299			—			4,299
Net income attributable to Pentair, Inc.	$	34,222		$	132,027		$	(122,079	)	$	(9,948	)	$	34,222

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,092,487		$	1,189,597		$	(251,311	)	$	3,030,773
Cost of goods sold		3,167			1,453,786			893,570			(250,390	)		2,100,133
Gross profit		(3,167	)		638,701			296,027			(921	)		930,640
Selling, general and administrative		(3,713	)		337,408			196,555			(921	)		529,329
Research and development		393			42,386			24,377			—			67,156
Operating income		153			258,907			75,095			—			334,155
Earnings from investment in subsidiaries		(129,872	)		—			—			129,872			—
Other (income) expense:
Equity income of unconsolidated subsidiaries		—			(1,551	)		(557	)		—			(2,108	)
Net interest (income) expense		(111,034	)		153,904			(6,754	)		—			36,116
Income (loss) from continuing operations before income taxes and noncontrolling interest		241,059			106,554			82,406			(129,872	)		300,147
Provision for income taxes		42,605			36,447			18,148			—			97,200
Income from continuing operations		198,454			70,107			64,258			(129,872	)		202,947
Loss on disposal of discontinued operations, net of tax		(626	)		—			—			—			(626	)
Net income before noncontrolling interest		197,828			70,107			64,258			(129,872	)		202,321
Noncontrolling interest		—			—			4,493			—			4,493
Net income attributable to Pentair, Inc.	$	197,828		$	70,107		$	59,765		$	(129,872	)	$	197,828
Net income from continuing operations attributable to Pentair, Inc.	$	198,454		$	70,107		$	59,765		$	(129,872	)	$	198,454

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the year ended December 31, 2009

In thousands	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,827,463	$	1,050,381		$	(185,376	)	$	2,692,468
Cost of goods sold		7,024			1,310,011		775,116			(184,818	)		1,907,333
Gross profit		(7,024	)		517,452		275,265			(558	)		785,135
Selling, general and administrative		10,074			312,079		185,708			(558	)		507,303
Research and development		306			34,844		22,734			—			57,884
Operating (loss) income		(17,404	)		170,529		66,823			—			219,948
Earnings from investment in subsidiaries		(60,528	)		—		—			60,528			—
Other (income) expense:
Equity losses of unconsolidated subsidiaries		—			1,379		—			—			1,379
Loss on early extinguishment of debt		4,804			—		—			—			4,804
Net interest (income) expense		(106,586	)		153,672		(5,968	)		—			41,118
Income (loss) from continuing operations before income taxes and noncontrolling interest		144,906			15,478		72,791			(60,528	)		172,647
Provision for income taxes		29,270			6,063		21,095			—			56,428
Income from continuing operations		115,636			9,415		51,696			(60,528	)		116,219
(Loss) gain on disposal of discontinued operations, net of tax		(143	)		551		(427	)		—			(19	)
Net income before noncontrolling interest		115,493			9,966		51,269			(60,528	)		116,200
Noncontrolling interest		—			—		707			—			707
Net income attributable to Pentair, Inc.	$	115,493		$	9,966	$	50,562		$	(60,528	)	$	115,493
Net income from continuing operations attributable to Pentair, Inc.	$	115,636		$	9,415	$	50,989		$	(60,528	)	$	115,512

Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	3,097		$	3,332		$	43,648	$	—		$	50,077
Accounts and notes receivable, net		828			360,027			263,201		(54,852	)		569,204
Inventories		—			227,472			222,391		—			449,863
Deferred tax assets		134,240			40,698			13,382		(127,421	)		60,899
Prepaid expenses and other current assets		28,937			(6,886	)		107,121		(21,380	)		107,792
Total current assets		167,102			624,643			649,743		(203,653	)		1,237,835
Property, plant and equipment, net		19,693			136,102			231,730		—			387,525
Other assets
Investments in/advances to subsidiaries		2,910,927			1,447,522			92,396		(4,450,845	)		—
Goodwill		—			1,330,265			943,653		—			2,273,918
Intangibles, net		—			250,792			341,493		—			592,285
Other		63,508			27,337			23,045		(19,140	)		94,750
Total other assets		2,974,435			3,055,916			1,400,587		(4,469,985	)		2,960,953
Total assets	$	3,161,230		$	3,816,661		$	2,282,060	$	(4,673,638	)	$	4,586,313
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	—		$	—		$	3,694	$	—		$	3,694
Current maturities of long-term debt		2,585			—			1,168		(2,585	)		1,168
Accounts payable		5,036			189,355			152,065		(51,598	)		294,858
Employee compensation and benefits		24,466			30,015			54,880		—			109,361
Current pension and post-retirement benefits		9,052			—			—		—			9,052
Accrued product claims and warranties		165			22,037			20,428		—			42,630
Income taxes		40,999			(28,717	)		2,265		—			14,547
Accrued rebates and sales incentives		—			25,612			11,397		—			37,009
Other current liabilities		25,050			53,960			71,890		(21,378	)		129,522
Total current liabilities		107,353			292,262			317,787		(75,561	)		641,841
Other liabilities
Long-term debt		1,312,053			2,417,922			542,411		(2,968,161	)		1,304,225
Pension and other retirement compensation		182,556			(7,701	)		73,760		—			248,615
Post-retirement medical and other benefits		17,024			33,890			—		(19,140	)		31,774
Long-term income taxes payable		26,470			—			—		—			26,470
Deferred tax liabilities		—			229,962			86,416		(127,421	)		188,957
Due to/ (from) affiliates		(479,943	)		751,145			711,705		(982,907	)		—
Other non-current liabilities		62,388			1,508			33,143		—			97,039
Total liabilities		1,227,901			3,718,988			1,765,222		(4,173,190	)		2,538,921
Noncontrolling interest		—			—			114,063		—			114,063
Shareholders’ equity attributable to Pentair, Inc.		1,933,329			97,673			402,775		(500,448	)		1,933,329
Total liabilities and shareholders’ equity	$	3,161,230		$	3,816,661		$	2,282,060	$	(4,673,638)		$	4,586,313

Pentair, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	3,201		$	3,404		$	39,451	$	—		$	46,056
Accounts and notes receivable, net		678			357,730			222,319		(63,822	)		516,905
Inventories		—			232,369			172,987		—			405,356
Deferred tax assets		115,722			40,064			7,928		(107,365	)		56,349
Prepaid expenses and other current assets		8,278			10,098			51,497		(25,242	)		44,631
Total current assets		127,879			643,665			494,182		(196,429	)		1,069,297
Property, plant and equipment, net		17,392			144,332			167,711		—			329,435
Other assets
Investments in/advances to subsidiaries		2,355,343			89,659			748,181		(3,193,183	)		—
Goodwill		—			1,549,537			516,507		—			2,066,044
Intangibles, net		—			265,987			187,583		—			453,570
Other		56,052			4,045			20,139		(25,049	)		55,187
Total other assets		2,411,395			1,909,228			1,472,410		(3,218,232	)		2,574,801
Total assets	$	2,556,666		$	2,697,225		$	2,134,303	$	(3,414,661	)	$	3,973,533
Liabilities and Shareholders’ Equity
Current liabilities
Short-term borrowings	$	—		$	—		$	4,933	$	—		$	4,933
Current maturities of long-term debt		135,678			—			18,154		(153,814	)		18
Accounts payable		4,908			170,747			150,517		(63,815	)		262,357
Employee compensation and benefits		38,513			32,167			37,315		—			107,995
Current pension and post-retirement benefits		8,733			—			—		—			8,733
Accrued product claims and warranties		12,245			23,410			6,640		—			42,295
Income taxes		4,788			633			543		—			5,964
Accrued rebates and sales incentives		—			23,500			10,059		—			33,559
Other current liabilities		9,772			33,227			63,185		(25,242	)		80,942
Total current liabilities		214,637			283,684			291,346		(242,871	)		546,796
Other liabilities
Long-term debt		702,500			1,947,400			377,539		(2,324,918	)		702,521
Pension and other retirement compensation		136,750			112			72,997		—			209,859
Post-retirement medical and other benefits		18,388			36,986			—		(25,049	)		30,325
Long-term income taxes payable		23,507			—			—		—			23,507
Deferred tax liabilities		5			213,385			63,173		(107,365	)		169,198
Due to/ (from) affiliates		(678,966	)		(80,779	)		810,652		(50,907	)		—
Other non-current liabilities		46,692			1,892			37,711		—			86,295
Total liabilities		463,513			2,402,680			1,653,418		(2,751,110	)		1,768,501
Noncontrolling interest		—			—			111,879		—			111,879
Shareholders’ equity attributable to Pentair, Inc.		2,093,153			294,545			369,006		(663,551	)		2,093,153
Total liabilities and shareholders’ equity	$	2,556,666		$	2,697,225		$	2,134,303	$	(3,414,661)		$	3,973,533

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year ended December 31, 2011

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	34,222		$	132,027		$	(117,780)		$	(9,948)		$	38,521
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Equity income of unconsolidated subsidiaries		—			(1,654	)		(244	)		—			(1,898	)
Depreciation		5,991			27,742			32,502			—			66,235
Amortization		—			15,195			26,702			—			41,897
Loss (earnings) from investments in subsidiaries		18,792			(27,419	)		(1,321	)		9,948			—
Deferred income taxes		6,889			18,084			(30,556	)		—			(5,583	)
Stock compensation		19,489			—			—			—			19,489
Goodwill impairment		—			—			200,520			—			200,520
Excess tax benefits from stock-based compensation		(3,310	)		—			—			—			(3,310	)
Loss on sale of assets		933			—			—			—			933
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(53,661	)		20,574			32,870			1,565			1,348
Inventories		—			7,589			10,674			—			18,263
Prepaid expenses and other current assets		(19,728	)		17,041			(5,601	)		18,320			10,032
Accounts payable		60,209			5,320			(78,308	)		(11,551	)		(24,330	)
Employee compensation and benefits		(23,553	)		(2,193	)		5,260			—			(20,486	)
Accrued product claims and warranties		—			(1,533	)		(451	)		—			(1,984	)
Income taxes		48,947			(33,965	)		(4,898	)		—			10,084
Other current liabilities		10,539			22,568			(3,867	)		(18,319	)		10,921
Pension and post-retirement benefits		(17,662	)		(10,910	)		3,976			—			(24,596	)
Other assets and liabilities		502			(18,485	)		(7,832	)		9,985			(15,830	)
Net cash provided by (used for) operating activities		88,599			169,981			61,646			—			320,226
Investing activities
Capital expenditures		(8,301	)		(27,625	)		(37,422	)		—			(73,348	)
Proceeds from sale of property and equipment		—			143			1,167			—			1,310
Acquisitions, net of cash acquired		—			—			(733,105	)		—			(733,105	)
Other		3,702			(4,604	)		(2,041	)		—			(2,943	)
Net cash provided by (used for) investing activities		(4,599	)		(32,086	)		(771,401	)		—			(808,086	)
Financing activities
Net short-term borrowings		(1,239	)		—			—			—			(1,239	)
Proceeds from long-term debt		1,421,602			—			—			—			1,421,602
Repayment of long-term debt		(832,147	)		—			—			—			(832,147	)
Debt issuance costs		(8,973	)		—			—			—			(8,973	)
Net change in advances to subsidiaries		(579,126	)		(137,767)			716,893			—			—
Excess tax benefits from stock-based compensation		3,310			—			—			—			3,310
Stock issued to employees, net of shares withheld		13,324			—			(2	)		—			13,322
Repurchases of common stock		(12,785	)		—			—			—			(12,785	)
Dividends paid		(78,351	)		(200	)		(986	)		—			(79,537	)
Net cash provided by (used for) financing activities		(74,385	)		(137,967	)		715,905			—			503,553
Effect of exchange rate changes on cash and cash equivalents		(9,719	)		—			(1,953	)		—			(11,672	)
Change in cash and cash equivalents		(104	)		(72	)		4,197			—			4,021
Cash and cash equivalents, beginning of period		3,201			3,404			39,451			—			46,056
Cash and cash equivalents, end of period	$	3,097		$	3,332		$	43,648		$	—		$	50,077

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year ended December 31, 2010

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	197,828		$	70,107		$	64,258		$	(129,872)		$	202,321
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss on disposal of discontinued operations		626			—			—			—			626
Equity income of unconsolidated subsidiaries		—			(1,551	)		(557	)		—			(2,108	)
Depreciation		3,002			29,902			25,091			—			57,995
Amortization		593			15,597			9,994			—			26,184
Earnings from investments in subsidiaries		(129,872)			—			—			129,872			—
Deferred income taxes		18,075			9,679			1,699			—			29,453
Stock compensation		21,468			—			—			—			21,468
Excess tax benefits from stock-based compensation		(2,686	)		—			—			—			(2,686	)
Loss on sale of assets		466			—			—			—			466
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		1,759			(61,042	)		(14,222)			11,161			(62,344	)
Inventories		—			(10,683	)		(33,812	)		—			(44,495	)
Prepaid expenses and other current assets		(8,519	)		(3,035	)		6,993			7,338			2,777
Accounts payable		(1,431	)		43,578			24,248			(11,074	)		55,321
Employee compensation and benefits		14,630			4,840			7,782			—			27,252
Accrued product claims and warranties		12,245			5,695			(9,872	)		—			8,068
Income taxes		(13,267	)		15,813			(755	)		—			1,791
Other current liabilities		3,314			(5,258	)		9,921			(7,416	)		561
Pension and post-retirement benefits		(33,762	)		(11,798	)		2,536			—			(43,024	)
Other assets and liabilities		(2,191	)		(12,731	)		5,672			—			(9,250	)
Net cash provided by (used for) operating activities		82,278			89,113			98,976			9			270,376
Investing activities
Capital expenditures		(11,557	)		(22,954	)		(25,012	)		—			(59,523	)
Proceeds from sale of property and equipment		—			284			74			—			358
Other		525			—			(1,673	)		—			(1,148	)
Net cash provided by (used for) investing activities		(11,032	)		(22,670	)		(26,611	)		—			(60,313	)
Financing activities
Net short-term borrowings		2,728			31			(31	)		—			2,728
Proceeds from long-term debt		703,641			—			—			—			703,641
Repayment of long-term debt		(804,713	)		—			—			—			(804,713	)
Debt issuance costs		(50	)		—			—			—			(50	)
Net change in advances to subsidiaries		106,372			(59,269	)		(47,090	)		(13	)		—
Excess tax benefits from stock-based compensation		2,686			—			—			—			2,686
Stock issued to employees, net of shares withheld		9,941			—			—			—			9,941
Repurchases of common stock		(24,712	)		—			—			—			(24,712	)
Dividends paid		(73,014	)		142			(2,593	)		—			(75,465	)
Distribution to noncontrolling interest		—			—			(4,647	)		—			(4,647	)
Net cash provided by (used for) financing activities		(77,121	)		(59,096)			(54,361	)		(13	)		(190,591)
Effect of exchange rate changes on cash and cash equivalents		7,044			(5,756	)		(8,104	)		4			(6,812	)
Change in cash and cash equivalents		1,169			1,591			9,900			—			12,660
Cash and cash equivalents, beginning of period		2,032			1,813			29,551			—			33,396
Cash and cash equivalents, end of period	$	3,201		$	3,404		$	39,451		$	—		$	46,056

Pentair, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the year end December 31, 2009

In thousands	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income before noncontrolling interest	$	115,493		$	9,966		$	51,269		$	(60,528)		$	116,200
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss (gain) on disposal of discontinued operations		143			(551	)		427			—			19
Equity losses of unconsolidated subsidiaries		—			1,379			—			—			1,379
Depreciation		8,166			30,506			26,151			—			64,823
Amortization		14,332			15,752			10,573			—			40,657
Earnings from investments in subsidiaries		(60,528	)		—			—			60,528			—
Deferred income taxes		8,223			18,582			3,811			—			30,616
Stock compensation		17,324			—			—			—			17,324
Excess tax benefits from stock-based compensation		(1,746	)		—			—			—			(1,746	)
(Gain) loss on sale of assets		(1,389	)		—			2,374			—			985
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable		(1,456	)		10,492			7,484			(5,213	)		11,307
Inventories		—			46,791			19,893			—			66,684
Prepaid expenses and other current assets		48,529			2,985			(37,221)			1,909			16,202
Accounts payable		5,615			(18,623	)		(5,209	)		4,395			(13,822	)
Employee compensation and benefits		(1,385	)		(13,968	)		(7,078	)		—			(22,431	)
Accrued product claims and warranties		—			(7,645	)		205			—			(7,440	)
Income taxes		(10,921	)		6,917			5,976			—			1,972
Other current liabilities		(29,030	)		(15,312	)		25,118			(1,857	)		(21,081	)
Pension and post-retirement benefits		(30,630	)		(11,716	)		2,739			—			(39,607	)
Other assets and liabilities		(19,117	)		39,226			(22,250	)		—			(2,141	)
Net cash provided by (used for) continuing operations		61,623			114,781			84,262			(766	)		259,900
Net cash provided by (used for) operating activities of discontinued operations		(30	)		(1,590	)		89			—			(1,531	)
Net cash provided by (used for) operating activities		61,593			113,191			84,351			(766	)		258,369
Investing activities
Capital expenditures		(2,237	)		(19,676	)		(32,224	)		—			(54,137	)
Proceeds from sale of property and equipment		—			446			762			—			1,208
Divestitures		404			1,002			161			—			1,567
Other		7			—			(3,231	)		—			(3,224	)
Net cash provided by (used for) investing activities		(1,826	)		(18,228	)		(34,532	)		—			(54,586	)
Financing activities
Net short-term borrowings		2,205			115			(115	)		—			2,205
Proceeds from long-term debt		580,000			—			—			—			580,000
Repayment of long-term debt		(730,304)			—			—			—			(730,304)
Debt issuance costs		(50	)		—			—			—			(50	)
Net change in advances to subsidiaries		152,482			(110,046)			(43,201	)		765			—
Excess tax benefits from stock-based compensation		1,746			—			—			—			1,746
Stock issued to employees, net of shares withheld		8,247			—			—			—			8,247
Dividends paid		(63,686	)		5,313			(12,554	)		—			(70,927	)
Net cash provided by (used for) financing activities		(49,360	)		(104,618	)		(55,870	)		765			(209,083	)
Effect of exchange rate changes on cash and cash equivalents		(11,095	)		8,123			2,323			1			(648	)
Change in cash and cash equivalents		(688	)		(1,532	)		(3,728	)		—			(5,948	)
Cash and cash equivalents, beginning of period		2,720			3,345			33,279			—			39,344
Cash and cash equivalents, end of period	$	2,032		$	1,813		$	29,551		$	—		$	33,396

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Restructuring Related Costs (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2009
Restructuring Cost and Reserve [Line Items]
Severance and related costs	$ 11,500	$ 11,160
Contract termination costs		2,030
Asset impairment and other restructuring costs	1,500	4,050
Restructuring costs	$ 13,000	$ 17,240

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information

The following table represents the 2011 quarterly financial information:

	2011
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	790,273	$	910,175	$	890,546	$	865,692		$	3,456,686
Gross profit		249,059		287,736		272,062		264,865			1,073,722
Operating income		86,177		109,422		92,903		(119,985	)		168,517
Income from continuing operations		52,034		68,137		52,054		(133,704	)		38,521
Net income from continuing operations attributable to Pentair, Inc.		50,541		66,712		51,092		(134,123	)		34,222
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Basic earnings per common share	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Diluted
Continuing operations	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34
Diluted earnings per common share	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34

⁽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.

The following table represents the 2010 quarterly financial information:

	2010
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	707,013	$	796,167	$	773,735	$	753,858		$	3,030,773
Gross profit		213,702		248,168		236,542		232,228			930,640
Operating income		63,601		100,126		90,823		79,605			334,155
Income from continuing operations		36,029		61,612		55,729		49,577			202,947
Gain (loss) on disposal of discontinued operations, net of tax		524		593		549		(2,292	)		(626	)
Net income from continuing operations attributable to to Pentair, Inc.		34,797		60,488		54,501		48,668			198,454
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.50		$	2.02
Discontinued operations		0.01		0.01		0.01		(0.02	)		(0.01	)
Basic earnings per common share	$	0.36	$	0.62	$	0.56	$	0.48		$	2.01
Diluted
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.49		$	2.00
Discontinued operations		0.01		—		—		(0.02	)		(0.01	)
Diluted earnings per common share	$	0.36	$	0.61	$	0.55	$	0.47		$	1.99

⁽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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Pension Plans with Accumulated Benefit Obligation or Projected Benefit Obligation in Excess of Plan Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets	$ 419,771	$ 385,483
Accumulated benefit obligation	625,884	557,712
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets	419,771	385,483
Accumulated benefit obligation	$ 661,571	$ 586,808

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Net Rental Expense Under Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating Leased Assets [Line Items]
Gross rental expense	$ 39,808	$ 32,662	$ 32,799
Sublease rental income	(455)	(225)	(74)
Net rental expense	$ 39,353	$ 32,437	$ 32,725

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income from Continuing Operations Before Income Taxes and Noncontrolling Interest

Income from continuing operations before income taxes and noncontrolling interest consisted of the following:

In thousands	2011		2010		2009
U.S.	$	36,832	$	217,213	$	111,530
International		74,748		82,934		61,117
Income from continuing operations before taxes and noncontrolling interest	$	111,580	$	300,147	$	172,647

Provision for Income Taxes for Continuing Operations

The provision for income taxes for continuing operations consisted of the following:

In thousands	2011			2010		2009
Currently payable
Federal	$	51,158		$	44,766	$	10,502
State		6,980			6,591		2,456
International		24,005			17,877		13,947
Total current taxes		82,143			69,234		26,905
Deferred
Federal and state		419			26,445		26,733
International		(9,503	)		1,521		2,790
Total deferred taxes		(9,084	)		27,966		29,523
Total provision for income taxes	$	73,059		$	97,200	$	56,428

Reconciliation of U.S. Statutory Income Tax Rate to Effective Tax Rate for Continuing Operations

Reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations follows:

Percentages	2011			2010			2009
U.S. statutory income tax rate		35.0			35.0			35.0
State income taxes, net of federal tax benefit		3.3			2.1			2.6
Tax effect of stock-based compensation		0.4			0.2			0.2
Tax effect of international operations		(9.8	)		(3.8	)		(3.5)
Tax credits		(0.9	)		(0.3	)		(1.4)
Domestic manufacturing deduction		(3.3	)		(1.4	)		(0.4)
ESOP dividend benefit		(0.6	)		(0.2	)		(0.4)
Goodwill		40.4			—			—
All other, net		1.0			0.8			0.6
Effective tax rate on continuing operations		65.5			32.4			32.7

Reconciliation of Beginning and Ending Gross Unrecognized Tax Benefits

Reconciliation of the beginning and ending gross unrecognized tax benefits follows:

In thousands	2011			2010			2009
Gross unrecognized tax benefits — beginning balance	$	24,260		$	29,962		$	28,139
Gross increases for tax positions in prior periods		2,042			286			3,191
Gross decreases for tax positions in prior periods		(192	)		(2,490	)		(2,433)
Gross increases based on tax positions related to the current year		3,201			1,431			1,789
Gross decreases related to settlements with taxing authorities		(2,465	)		(4,182	)		(209)
Reductions due to statute expiration		(377	)		(747	)		(515)
Gross unrecognized tax benefits at December 31	$	26,469		$	24,260		$	29,962

Deferred Taxes

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

In thousands	2011		2010
Deferred tax assets	$	60,899	$	56,349
Other noncurrent assets		—		1,647
Other current liabilities		—		(547)
Deferred tax liabilities		(188,957)		(169,198)
Net deferred tax liability	$	(128,058)	$	(111,749)

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 are as follows:

	2011				2010
	Deferred tax				Deferred tax
In thousands	Assets		Liabilities		Assets		Liabilities
Accounts receivable allowances	$	3,726	$	—	$	4,490	$	—
Inventory valuation		18,891		—		17,381		—
Accelerated depreciation/amortization		—		13,270		—		11,436
Accrued product claims and warranties		22,430		—		25,753		—
Employee benefit accruals		129,642		—		110,547		—
Goodwill and other intangibles		—		191,067		—		187,103
Other, net		—		98,410		—		71,381
Total deferred taxes	$	174,689	$	302,747	$	158,171	$	269,920
Net deferred tax liability			$	(128,058)			$	(111,749)

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Changes in Carrying Amount of Goodwill by Segment (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Goodwill [Line Items]
Beginning Balance	$ 2,066,044	$ 2,088,797
Acquisitions/ Divestitures	466,182
Foreign Currency Translation/Other	(258,308)	(22,753)
Ending Balance	2,273,918	2,066,044
Water & Fluid Solutions
Goodwill [Line Items]
Beginning Balance	1,784,100	1,802,913
Acquisitions/ Divestitures	466,182
Foreign Currency Translation/Other	(255,501)	(18,813)
Ending Balance	1,994,781	1,784,100
Technical Products
Goodwill [Line Items]
Beginning Balance	281,944	285,884
Foreign Currency Translation/Other	(2,807)	(3,940)
Ending Balance	$ 279,137	$ 281,944

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Reconciliation of U.S. Statutory Income Tax Rate to Effective Tax Rate for Continuing Operations (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Line Items]
U.S. statutory income tax rate	35.00%	35.00%	35.00%
State income taxes, net of federal tax benefit	3.30%	2.10%	2.60%
Tax effect of stock-based compensation	0.40%	0.20%	0.20%
Tax effect of international operations	(9.80%)	(3.80%)	(3.50%)
Tax credits	(0.90%)	(0.30%)	(1.40%)
Domestic manufacturing deduction	(3.30%)	(1.40%)	(0.40%)
ESOP dividend benefit	(0.60%)	(0.20%)	(0.40%)
Goodwill	40.40%
All other, net	1.00%	0.80%	0.60%
Effective tax rate on continuing operations	65.50%	32.40%	32.70%

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Debt Outstanding Matures on Calendar Year Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Debt Disclosure [Line Items]
Contractual debt obligation maturities 2012	$ 4,862
Contractual debt obligation maturities 2013	201,788
Contractual debt obligation maturities 2014	1,168
Contractual debt obligation maturities 2015	1,168
Contractual debt obligation maturities 2016	290,153
Contractual debt obligation maturities Thereafter	809,948
Total	1,309,087	707,472
Contractual Maturity
Debt Disclosure [Line Items]
Contractual debt obligation maturities 2012	3,694
Contractual debt obligation maturities 2013	200,620
Contractual debt obligation maturities 2016	288,985
Contractual debt obligation maturities Thereafter	800,000
Total	1,293,299
Capital Lease Obligations
Debt Disclosure [Line Items]
Contractual debt obligation maturities 2012	1,168
Contractual debt obligation maturities 2013	1,168
Contractual debt obligation maturities 2014	1,168
Contractual debt obligation maturities 2015	1,168
Contractual debt obligation maturities 2016	1,168
Contractual debt obligation maturities Thereafter	9,948
Total	$ 15,788

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Pro Forma Consolidated Condensed Financial Results of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				12 Months Ended
	Dec. 31, 2010	Oct. 02, 2010	Jul. 03, 2010	Apr. 03, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Business Acquisition [Line Items]
Loss on disposal of discontinued operations, net of tax	$ 2,292	$ (549)	$ (593)	$ (524)		$ 626	$ 19
Weighted average common shares outstanding
Basic					98,233	98,037	97,415
Diluted					99,753	99,294	98,522
Business Acquisition Pro Forma Information
Business Acquisition [Line Items]
Pro forma net sales					3,578,462	3,329,812
Pro forma income from continuing operations					49,363	177,867
Loss on disposal of discontinued operations, net of tax						(626)
Pro forma net income from continuing operations attributable to Pentair, Inc.					45,064	$ 173,375
Pro forma earnings per common share - continuing operations
Basic					0.46	$ 1.77
Diluted					0.45	$ 1.75
Weighted average common shares outstanding
Basic					98,233	98,037
Diluted					99,753	99,294

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Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions

2. Acquisitions

In May 2011, we acquired as part of Water & Fluid Solutions, the 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 2011 and 2010 revenues generated in European Union and Asia-Pacific countries.

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 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.

The total purchase price has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

(in thousands)
Accounts and notes receivable	$	70,038
Inventories		60,382
Deferred tax assets		4,926
Prepaid expenses and other current assets		40,252
Property, plant and equipment		69,010
Goodwill		451,809
Intangibles		197,231
Accounts payable		(41,061	)
Income taxes		(3,937	)
Other current liabilities		(59,229	)
Long-term debt		(17,041	)
Deferred tax liabilities		(57,069	)
Purchase price	$	715,311

CPT’s net sales and income from continuing operations for the period from the acquisition date to December 31, 2011 were $234.1 million and $2.4 million, respectively, and include $13.2 million of non-recurring expenses for acquisition date fair value adjustments related to inventory and customer backlog.

The following pro forma consolidated condensed financial results of operations are presented as if the acquisitions described above had been completed at the beginning of the comparable period:

	Years ended December 31
In thousands, except share and per-share data	2011		2010
Pro forma net sales	$	3,578,462	$	3,329,812
Pro forma income from continuing operations		49,363		177,867
Loss on disposal of discontinued operations, net of tax		—		(626	)
Pro forma net income from continuing operations attributable to Pentair, Inc.		45,064		173,375
Pro forma earnings per common share - continuing operations
Basic	$	0.46	$	1.77
Diluted	$	0.45	$	1.75
Weighted average common shares outstanding
Basic		98,233		98,037
Diluted		99,753		99,294

The 2010 unaudited pro forma net income was adjusted to include the impact of approximately $12.9 million in non-recurring items related to acquisition date fair value adjustments to inventory and customer backlog. The 2011 unaudited pro forma net income was adjusted to exclude the impact of these items. Acquisition-related transaction costs of approximately $8.0 million associated with the CPT acquisition were excluded from the pro forma net income in the 2011 period presented and included in the 2010 period presented.

These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as increased interest expense on acquisition debt. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of each period presented, or of future results of the consolidated entities.

In January 2011 we acquired as part of Water & Fluid Solutions, all of the outstanding shares of capital stock of Hidro Filtros do Brasil (“Hidro Filtros”) for cash of $14.9 million and a note payable of $2.1 million. The Hidro Filtros results of operations have been included in our consolidated financial statements since the date of acquisition. Hidro Filtros is a leading manufacturer of water filters and filtering elements for residential and industrial applications operating in Brazil and neighboring countries. Goodwill recorded as part of the purchase price allocation was $10.1 million, none of which is tax deductible. Identified intangible assets acquired as part of the acquisition were $6.3 million including definite-lived intangibles, primarily customer relationships of $5.5 million, with an estimated life of 13 years. The proforma impact of this acquisition was deemed to be not material.

Additionally, during 2011, we completed other small acquisitions with purchase prices totaling $4.6 million, consisting of $2.9 million in cash and $1.7 million as a note payable, adding to Water & Fluid Solutions. Total goodwill recorded as part of the purchase price allocation was $4.3 million, none of which is tax deductible. The proforma impact of these acquisitions was deemed to be not material.

Total transaction costs related to acquisition activities for the year ended December 31, 2011 were $8.2 million, which were expensed as incurred and recorded in Selling, general and administrative in our Consolidated Statements of Income.

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Derivatives and Financial Instruments - Additional Information (Detail)	12 Months Ended		1 Months Ended				12 Months Ended		1 Months Ended	12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Apr. 30, 2011 Interest Rate Swap USD ($)	May 31, 2011 Foreign Currency Option Contract USD ($)	Mar. 31, 2011 Foreign Currency Option Contract EUR (€)	Aug. 31, 2007 August 2007 Interest Rate Swap Agreement USD ($)	Dec. 31, 2011 August 2007 Interest Rate Swap Agreement USD ($)	Dec. 31, 2010 August 2007 Interest Rate Swap Agreement USD ($)	Sep. 30, 2005 September 2005 Interest Rate Swap Agreement USD ($)	Dec. 31, 2011 September 2005 Interest Rate Swap Agreement USD ($)	Dec. 31, 2010 September 2005 Interest Rate Swap Agreement USD ($)
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Notional amount of interest rate swap agreement			$ 400,000,000			$ 105,000,000			$ 100,000,000
Effective date of the fixed rate swap						Aug. 30, 2007			Apr. 25, 2006
Average swap interest rate			3.65%
Fixed interest rate paid						4.89%			4.68%
Expiration (termination) date			May 2011
Swap agreement expiration						2012-05			2013-07
Cost of expiration (termination)			11,000,000
Effective fixed rate paid on debt						5.39%			5.28%
Fair value of the swap							1,700,000	6,400,000		6,300,000	9,400,000
Location of the swap on the Consolidated Balance Sheets	Unrealized income/expense is included in Accumulated other comprehensive income ("OCI")						Other non-current liabilities	Other non-current liabilities	Other non-current liabilities	Other non-current liabilities	Other non-current liabilities
Interest rate spread over LIBOR						0.50%			0.60%
Incremental expense resulting from interest rate swaps	9,300,000	9,200,000
Variable interest payments per the underlying debt							variable interest rates of 3 month LIBOR plus .50% for $105 million of debt			3 month LIBOR plus .60% for $100 million of debt
Spread added to variable interest rates of 3 month LIBOR							0.50%			0.60%
Fair value measurement inputs classified as Level 2	our interest rate swaps are carried at fair value measured on a recurring basis. 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.	our interest rate swaps are carried at fair value measured on a recurring basis. 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.
Foreign currency option fluctuations related to acquisition					We entered into a foreign currency option contract to reduce our exposure to fluctuations in the euro related to the planned CPT acquisition.
Notional amount of foreign currency contract					286,000,000
Expiration date of Euro to U.S. dollar contract		Jan. 07, 2011			May 13, 2011
Foreign currency contract strike price					1.4375
Notional amount of Euro to U.S. dollar contract		132,500,000
Sale of foreign currency option contract				1,000,000
Fair value of the Euro to U.S. dollar contract		1,200,000
Net cost of option contract				$ (2,100,000)

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) Share data in Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Significant Accounting Policies [Line Items]
Research and development	$ 78,158,000	$ 67,156,000	$ 57,884,000
Dilutive effects of stock options and restricted stock awards and units	1,519	1,257	1,107
Stock options excluded from the calculation of diluted earnings	2,140	3,711	5,283
Goodwill planning period	5 years
Goodwill and intangible assets	2,866,000,000
Pre-tax non-cash Impairment charge on goodwill	200,520,000
Aggregate balance of investments under cost method	6,900,000	3,800,000
Reserves for policy claims	44,300,000	49,000,000
FARADYNE
Significant Accounting Policies [Line Items]
Equity method investment, ownership percentage	50.00%	50.00%
Investments in and loans to affiliate	6,000,000	6,100,000
Goodwill and identifiable intangible assets
Significant Accounting Policies [Line Items]
Percentage of total assets	62.50%
Insurance Subsidiary
Significant Accounting Policies [Line Items]
Reserves for policy claims	13,300,000	12,000,000
Other Noncurrent Liabilities
Significant Accounting Policies [Line Items]
Reserves for policy claims	31,000,000	37,000,000
Water & Fluid Solutions
Significant Accounting Policies [Line Items]
Pre-tax non-cash Impairment charge on goodwill	200,500,000
Impairment charges, related to trade names	0	0	11,300,000
Credit Concentration Risk
Significant Accounting Policies [Line Items]
Number of customers	0	0
Contract based
Significant Accounting Policies [Line Items]
Prepaid expenses and other current assets related to contracts	54,700,000	0
Other current liabilities related to these contracts	$ 17,700,000	$ 0
Minimum
Significant Accounting Policies [Line Items]
Equity method investment, ownership percentage	20.00%
Perpetual growth rate	3.00%
Discounted cash flows discount rate	12.60%
Maximum
Significant Accounting Policies [Line Items]
Equity method investment, ownership percentage	50.00%
Perpetual growth rate	3.50%
Discounted cash flows discount rate	14.00%
Percentage of recognized income tax positions that could be realized at the largest amount	50.00%
Maximum | Credit Concentration Risk
Significant Accounting Policies [Line Items]
Customer receivable balances to total trade receivables	10.00%	10.00%

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2011

Total Purchase Price Allocated to Estimated Fair Values of Assets Acquired and Liabilities Assumed

The total purchase price has been allocated to the estimated fair values of assets acquired and liabilities assumed as follows:

(in thousands)
Accounts and notes receivable	$	70,038
Inventories		60,382
Deferred tax assets		4,926
Prepaid expenses and other current assets		40,252
Property, plant and equipment		69,010
Goodwill		451,809
Intangibles		197,231
Accounts payable		(41,061	)
Income taxes		(3,937	)
Other current liabilities		(59,229	)
Long-term debt		(17,041	)
Deferred tax liabilities		(57,069	)
Purchase price	$	715,311

Pro Forma Consolidated Condensed Financial Results of Operations

The following pro forma consolidated condensed financial results of operations are presented as if the acquisitions described above had been completed at the beginning of the comparable period:

	Years ended December 31
In thousands, except share and per-share data	2011		2010
Pro forma net sales	$	3,578,462	$	3,329,812
Pro forma income from continuing operations		49,363		177,867
Loss on disposal of discontinued operations, net of tax		—		(626	)
Pro forma net income from continuing operations attributable to Pentair, Inc.		45,064		173,375
Pro forma earnings per common share - continuing operations
Basic	$	0.46	$	1.77
Diluted	$	0.45	$	1.75
Weighted average common shares outstanding
Basic		98,233		98,037
Diluted		99,753		99,294

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

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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Changes in Carrying Amount of Service and Product Warranties (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Product Liability Contingency [Line Items]
Balance at beginning of the year	$ 30,050	$ 24,288
Service and product warranty provision	50,096	56,553
Payments	(53,937)	(50,729)
Acquired	3,575
Translation	(429)	(62)
Balance at end of the period	$ 29,355	$ 30,050

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Supplemental Balance Sheet Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Inventories
Raw materials and supplies	$ 219,487	$ 223,482
Work-in-process	47,707	37,748
Finished goods	182,669	144,126
Total inventories	449,863	405,356
Property, plant and equipment
Land and land improvements	41,111	36,484
Buildings and leasehold improvements	244,246	212,168
Machinery and equipment	692,930	598,554
Construction in progress	40,251	33,841
Total property, plant and equipment	1,018,538	881,047
Less accumulated depreciation and amortization	631,013	551,612
Property, plant and equipment, net	$ 387,525	$ 329,435	$ 333,688

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Estimated Useful lives of Property and Equipment (Detail)	12 Months Ended
	Dec. 31, 2011 Year
Land Improvements
Property, Plant and Equipment [Line Items]
Estimated Useful lives	5
Estimated Useful lives	20
Buildings and Leasehold Improvements
Property, Plant and Equipment [Line Items]
Estimated Useful lives	5
Estimated Useful lives	50
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Estimated Useful lives	3
Estimated Useful lives	15

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Restructuring (Tables)

12 Months Ended

Dec. 31, 2011

Restructuring Related Costs

Restructuring related costs included in Selling, general and administrative expenses on the Consolidated Statements of Income include costs for severance and other restructuring costs as follows:

	Years Ended December 31
In thousands	2011		2010		2009
Severance and related costs	$	11,500	$	—	$	11,160
Contract termination costs		—		—		2,030
Asset impairment and other restructuring costs		1,500		—		4,050
Total restructuring costs	$	13,000	$	—	$	17,240

Restructuring Accrual Activity Recorded on Consolidated Balance Sheets

Restructuring accrual activity recorded on the Consolidated Balance Sheets is summarized as follows:

	Years Ended December 31
In thousands	2011			2010
Beginning balance	$	3,994		$	14,509
Costs incurred		11,500			—
Cash payments and other		(2,689	)		(10,515	)
Ending balance	$	12,805		$	3,994

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Goodwill and Other Identifiable Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Changes in Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill for the year ended December 31, 2011 and December 31, 2010 by segment were as follows:

In thousands	December 31, 2010		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2011
Water & Fluid Solutions	$	1,784,100	$	466,182	$	(255,501	)	$	1,994,781
Technical Products		281,944		—		(2,807	)		279,137
Consolidated Total	$	2,066,044	$	466,182	$	(258,308	)	$	2,273,918

In thousands	December 31, 2009		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2010
Water & Fluid Solutions	$	1,802,913	$	—	$	(18,813	)	$	1,784,100
Technical Products		285,884		—		(3,940	)		281,944
Consolidated Total	$	2,088,797	$	—	$	(22,753	)	$	2,066,044

Detail of Acquired Intangible Assets

The detail of intangible assets consisted of the following:

	2011							2010
In thousands	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Finite-life intangibles
Patents	$	5,896	$	(4,038	)	$	1,858	$	15,469	$	(12,695	)	$	2,774
Proprietary technology		128,841		(39,956	)		88,885		74,176		(29,862	)		44,314
Customer relationships		358,410		(109,887	)		248,523		282,479		(82,901	)		199,578
Trade names		1,515		(530	)		985		1,532		(383	)		1,149
Total finite-life intangibles	$	494,662	$	(154,411	)	$	340,251	$	373,656	$	(125,841	)	$	247,815
Indefinite-life intangibles
Trade names		252,034		—			252,034		205,755		—			205,755
Total intangibles, net	$	746,696	$	(154,411	)	$	592,285	$	579,411	$	(125,841	)	$	453,570

Estimated Future Amortization Expense for Identifiable Intangible Assets

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

In thousands	2012		2013		2014		2015		2016
Estimated amortization expense	$	38,828	$	38,663	$	38,296	$	38,018	$	37,079

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Fiscal year

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

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both U.S. and non-U.S., that 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 Income.

Use of estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that could differ from those estimates. The critical accounting policies that require our most significant estimates and judgments include:

• the assessment of recoverability of long-lived assets, including goodwill and indefinite-life intangibles; and

• accounting for pension benefits, because of the importance in making the estimates necessary to apply these policies.

Revenue recognition

Generally, 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 (POC) method of accounting. Under this method, sales and gross profit are recognized as work is performed based on the relationship between the actual costs incurred and the total estimated costs at completion. 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.

We record costs and earnings in excess of billings on uncompleted contracts within Prepaid expenses and 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 Prepaid expenses and other current assets related to these contracts were $54.7 million and $0 at December 31, 2011 and 2010, respectively. Amounts included in Other current liabilities related to these contracts were $17.7 million and $0 at December 31, 2011 and 2010, 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. The following represents a description of our pricing arrangements, promotions and other volume-based incentives:

Pricing arrangements

Pricing is established up front 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 (“OEM”) 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.

Promotions

Our primary promotional activity is what we refer to as cooperative advertising. Under our cooperative advertising programs, we agree to pay the customer a fixed percentage of sales as an allowance that may be used to advertise and promote our products. The customer is generally not required to provide evidence of the advertisement or promotion. We recognize the cost of this cooperative advertising at the time of sale. The cost of this program is recorded as a reduction in gross sales.

Volume-based incentives

These incentives involve rebates that are negotiated up front 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 Income. 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 Income.

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 2011, 2010 and 2009 were $78.2 million, $67.2 million and $57.9 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 historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of our customers’ financial condition. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2011 and December 31, 2010.

Inventories

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

Property, plant and equipment

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 cost and related accumulated depreciation are removed from the accounts 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 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 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. 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 five year long-term planning period. The five year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2018 are projected to grow at a perpetual growth rate between 3.0% and 3.5%.

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 12.6% to 14% 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 operating segment 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

In the fourth quarter of 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include trade marks and trade names, patents, non-compete agreements, proprietary technology and customer relationships. 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. There was no impairment charge recorded in 2011 or 2010 for identifiable intangible assets. An impairment charge of $11.3 million was recorded in 2009, related to trade names. These charges were recorded in Selling, general and administrative in our Consolidated Statements of Income.

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 their 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. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

At December 31, 2011 our goodwill and intangible assets were approximately $2,866 million and represented approximately 62.5% of our total assets. If we experience further 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 stock 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 Income. 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.

We have a 50% investment in FARADYNE Motors LLC (“FARADYNE”), a joint venture with Xylem, Inc. (fka ITT Water Technologies, Inc) that designs, develops and manufactures submersible pump motors. We do not consolidate the investment in our consolidated financial statements as we do not have a controlling interest over the investment. There were investments in and loans to FARADYNE of $6.0 million and $6.1 million at December 31, 2011 and December 31, 2010, respectively, which is 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. At December 31, 2011 and 2010 the aggregate balance of these investments was $6.9 million and $3.8 million, respectively.

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 basis 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.

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.

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, 2011 and 2010, reserves for policy claims were $44.3 million ($13.3 million included in Accrued product claims and warranties and $31.0 million included in Other non-current liabilities) and $49.0 million ($12.0 million included in Accrued product claims and warranties and $37.0 million included in Other non-current liabilities), respectively.

Stock-based compensation

We account for stock-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 Income. Restricted share awards and units are recorded as compensation cost on a straight-line basis over the requisite service periods based on the market value on the date of grant.

Earnings per common share

Basic earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding including the dilutive effects of common stock equivalents. The dilutive effects of stock options and restricted stock awards and units increased weighted average common shares outstanding by 1,519 thousand, 1,257 thousand and 1,107 thousand in 2011, 2010 and 2009, respectively.

Stock options excluded from the calculation of diluted earnings per share because the exercise price was greater than the average market price of the common shares were 2,140 thousand, 3,711 thousand and 5,283 thousand in 2011, 2010 and 2009, respectively.

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 as a fair-value hedge, the changes in the fair value of the derivative and the hedged item are recognized in earnings. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in other comprehensive income (“OCI”) and are recognized in the Consolidated Statements of Income 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 in to 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. 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 Accumulated other comprehensive income (loss) (“AOCI”), a separate component of shareholders’ equity.

New accounting standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to improve the consistency of fair value measurement and disclosure requirements between US GAAP and International Financial Reporting Standards. The provisions of this guidance change certain of the fair value principles related to the highest and best use premise, the consideration of blockage factors and other premiums and discounts, and the measurement of financial instruments held in a portfolio and instruments classified within shareholders' equity. Further, the guidance provides additional disclosure requirements surrounding Level 3 fair value measurements, the uses of nonfinancial assets in certain circumstances and identification of the level in the fair value hierarchy used for assets and liabilities which are not recorded at fair value, but where fair value is disclosed. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We are evaluating the potential impact of adoption.

In June 2011, the FASB issued authoritative guidance surrounding the presentation of comprehensive income, with an objective of increasing the prominence of items reported in OCI. This guidance provides entities with the option to present the total of comprehensive income, the components of net income and the components of OCI in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, entities must present on the face of the financial statement, items reclassified from OCI to net income in the section of the financial statement where the components of net income and OCI are presented, regardless of the option selected to present comprehensive income. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The FASB subsequently deferred the effective date of certain provisions of this standard pertaining to the reclassification of items out of accumulated other comprehensive income, pending the issuance of further guidance on that matter. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides entities an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

Subsequent events

In connection with preparing the audited consolidated financial statements for the year ended December 31, 2011, we have evaluated subsequent events for potential recognition and disclosure through the date of this filing.

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Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2011

Supplemental Balance Sheet Information

In thousands	2011		2010
Inventories
Raw materials and supplies	$	219,487	$	223,482
Work-in-process		47,707		37,748
Finished goods		182,669		144,126
Total inventories	$	449,863	$	405,356
Property, plant and equipment
Land and land improvements	$	41,111	$	36,484
Buildings and leasehold improvements		244,246		212,168
Machinery and equipment		692,930		598,554
Construction in progress		40,251		33,841
Total property, plant and equipment		1,018,538		881,047
Less accumulated depreciation and amortization		631,013		551,612
Property, plant and equipment, net	$	387,525	$	329,435

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Effect of One-Percentage-Point Change in the Assumed Health Care Cost Trend Rates (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Defined Benefit Plan Disclosure [Line Items]
Effect on total annual service and interest cost	$ 45
Effect on post-retirement benefit obligation	905
Effect on total annual service and interest cost	(40)
Effect on post-retirement benefit obligation	$ (801)

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Business Segments (Tables)

12 Months Ended

Dec. 31, 2011

Financial Information by Reportable Business Segment

Financial information by reportable business segment is included in the following summary:

In thousands	2011		2010			2009			2011			2010			2009
	Net sales to external customers								Operating income (loss)
Water & Fluid Solutions	$	2,369,804	$	2,041,281		$	1,847,764		$	58,311		$	231,588		$	163,745
Technical Products		1,086,882		989,492			844,704			185,240			151,533			100,355
Other		—		—			—			(75,034	)		(48,966	)		(44,152	)
Consolidated	$	3,456,686	$	3,030,773		$	2,692,468		$	168,517		$	334,155		$	219,948
	Identifiable assets (1)								Depreciation
Water & Fluid Solutions	$	3,792,188	$	3,409,556		$	3,205,774		$	42,419		$	37,449		$	44,063
Technical Products		651,693		728,969			716,092			17,826			17,544			19,035
Other (1)		142,432		(164,992	)		(10,532	)		5,990			3,002			1,725
Consolidated	$	4,586,313	$	3,973,533		$	3,911,334		$	66,235		$	57,995		$	64,823
	Amortization								Capital expenditures
Water & Fluid Solutions	$	39,451	$	22,981		$	34,919		$	49,241		$	39,631		$	36,513
Technical Products		2,446		2,610			2,687			15,806			8,336			15,388
Other		—		593			3,051			8,301			11,556			2,236
Consolidated	$	41,897	$	26,184		$	40,657		$	73,348		$	59,523		$	54,137

Geographic Information

The following table presents certain geographic information:
In thousands	2011		2010		2009		2011		2010		2009
	Net sales to external customers						Long-lived assets
U.S.	$	2,336,845	$	2,222,856	$	1,964,138	$	195,631	$	196,440	$	203,206
Europe		701,865		470,879		439,312		140,290		77,000		87,880
Asia and other		417,976		337,038		289,018		51,604		55,995		42,602
Consolidated	$	3,456,686	$	3,030,773	$	2,692,468	$	387,525	$	329,435	$	333,688

⁽¹⁾All cash and cash equivalents are included in Other

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Goodwill and Other Identifiable Intangible Assets - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Expected Amortization Expense [Line Items]
Impairment charge	$ 200,520,000
Accumulated goodwill impairment losses	200,500,000	0
Intangible assets amortization expense	41,900,000	24,500,000	27,300,000
Water & Fluid Solutions
Expected Amortization Expense [Line Items]
Impairment charge	200,500,000
Impairment charges, related to trade names	$ 0	$ 0	$ 11,300,000

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Reconciliations of Benefit Obligation, Plan Assets of Pension Plans and Funded Status of Plans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Change in plan assets
Fair value of plan assets end of year	$ 419,771	$ 385,483
Funded status
Net amount recognized	241,800
Pension benefits
Change in benefit obligation
Benefit obligation beginning of year	586,808	552,309
Service cost	12,466	11,588	12,334
Interest cost	32,768	31,671	32,612
Amendments		(281)
Settlements	(257)	(104)
Actuarial (gain) loss	62,751	24,677
Translation (gain) loss	(2,477)	(4,208)
Benefits paid	(30,488)	(28,844)
Benefit obligation end of year	661,571	586,808	552,309
Change in plan assets
Fair value of plan assets beginning of year	385,483	329,188
Actual gain (loss) return on plan assets	27,971	35,495
Company contributions	37,097	49,840
Settlements	(257)	(104)
Translation gain (loss)	(35)	(92)
Benefits paid	(30,488)	(28,844)
Fair value of plan assets end of year	419,771	385,483	329,188
Funded status
Plan assets less than benefit obligation	(241,800)	(201,325)
Net amount recognized	(241,800)	(201,325)
Post-retirement
Change in benefit obligation
Benefit obligation beginning of year	33,715	35,301
Service cost	180	200	214
Interest cost	1,889	2,013	2,377
Actuarial (gain) loss	2,494	(647)
Benefits paid	(3,197)	(3,152)
Benefit obligation end of year	35,081	33,715	35,301
Change in plan assets
Company contributions	3,197	3,152
Benefits paid	(3,197)	(3,152)
Funded status
Plan assets less than benefit obligation	(35,081)	(33,715)
Net amount recognized	$ (35,081)	$ (33,715)

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Net sales	$ 3,456,686		$ 3,030,773		$ 2,692,468
Cost of goods sold	2,382,964		2,100,133		1,907,333
Gross profit	1,073,722		930,640		785,135
Selling, general and administrative	626,527		529,329		507,303
Research and development	78,158		67,156		57,884
Goodwill impairment	200,520
Operating income	168,517		334,155		219,948
Other (income) expense:
Equity (income) losses of unconsolidated subsidiaries	(1,898)		(2,108)		1,379
Loss on early extinguishment of debt					4,804
Interest income	(1,432)		(1,263)		(999)
Interest expense	60,267		37,379		42,117
Income (loss) from continuing operations before income taxes and noncontrolling interest	111,580		300,147		172,647
Provision for income taxes	73,059		97,200		56,428
Income from continuing operations	38,521		202,947		116,219
Loss on disposal of discontinued operations, net of tax			(626)		(19)
Net income before noncontrolling interest	38,521		202,321		116,200
Noncontrolling interest	4,299		4,493		707
Net income attributable to Pentair, Inc.	34,222		197,828		115,493
Net income from continuing operations attributable to Pentair, Inc.	$ 34,222		$ 198,454		$ 115,512
Basic
Continuing operations	$ 0.35	[1]	$ 2.02	[1]	$ 1.19
Discontinued operations			$ (0.01)	[1]
Basic earnings per common share	$ 0.35	[1]	$ 2.01	[1]	$ 1.19
Diluted
Continuing operations	$ 0.34	[1]	$ 2.00	[1]	$ 1.17
Discontinued operations			$ (0.01)	[1]
Diluted earnings per common share	$ 0.34	[1]	$ 1.99	[1]	$ 1.17
Weighted average common shares outstanding
Basic	98,233		98,037		97,415
Diluted	99,753		99,294		98,522

[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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Acquisition - Additional Information (Detail)	3 Months Ended								12 Months Ended			1 Months Ended		12 Months Ended				1 Months Ended
	Dec. 31, 2011 USD ($)	Oct. 01, 2011 USD ($)	Jul. 02, 2011 USD ($)	Apr. 02, 2011 USD ($)	Dec. 31, 2010 USD ($)	Oct. 02, 2010 USD ($)	Jul. 03, 2010 USD ($)	Apr. 03, 2010 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	May 12, 2011 CPT USD ($) Year	May 12, 2011 CPT EUR (€) Year	Dec. 31, 2011 CPT USD ($)	Dec. 31, 2010 CPT USD ($)	Dec. 31, 2010 Business Acquisition Pro Forma Information USD ($)	Jan. 31, 2011 Hidro Filtros USD ($)	Jan. 31, 2011 Hidro Filtros Customer relationships USD ($) Year	Dec. 31, 2011 Other small acquisitions adding to Water Group USD ($)
Business Acquisition [Line Items]
Business acquisition purchase price												$ 715,311,000	€ 502,700,000						$ 4,600,000
Cash paid																	14,900,000		2,900,000
Note payable issued																	2,100,000		1,700,000
Goodwill												451,809,000					10,100,000		4,300,000
Intangibles												197,231,000					6,300,000
Weighted average amortization period												10	10
Net sales	865,692,000	890,546,000	910,175,000	790,273,000	753,858,000	773,735,000	796,167,000	707,013,000	3,456,686,000	3,030,773,000	2,692,468,000			234,100,000
Income (loss) from continuing operations	(133,704,000)	52,054,000	68,137,000	52,034,000	49,577,000	55,729,000	61,612,000	36,029,000	38,521,000	202,947,000	116,219,000			2,400,000
Non-recurring expenses														13,200,000
Fair value adjustments of inventory and customer backlog																12,900,000
Total transaction costs related to acquisition activities									8,200,000					8,000,000	8,000,000
Definite-lived intangibles																		$ 5,500,000
Estimated life																		13

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Business Segments - Additional Information (Detail) (Customer Concentration Risk)	12 Months Ended
	Dec. 31, 2011 Person	Dec. 31, 2010 Person	Dec. 31, 2009 Person
Water & Fluid Solutions
Revenue, Major Customer [Line Items]
Concentration risk percentage	10.00%	10.00%
Segment sales by customer information	One customer accounted for approximately 10% of segment sales	One customer accounted for approximately 10% of segment sales	No single customer accounted for more than 10% of segment sales
Number of customer accounted for significant segment sales	1	1	0
Technical Products
Revenue, Major Customer [Line Items]
Segment sales by customer information	No single customer accounted for more than 10% of segment sales	No single customer accounted for more than 10% of segment sales	No single customer accounted for more than 10% of segment sales
Number of customer accounted for significant segment sales	0	0	0

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common shares	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Total Pentair, Inc.	Noncontrolling interest	Comprehensive income (loss) attributable to Pentair, Inc.
Balance at Dec. 31, 2008	$ 2,020,069	$ 16,379	$ 451,241	$ 1,457,676	$ (26,615)	$ 1,898,681	$ 121,388
Balance (in shares) at Dec. 31, 2008		98,276,919
Net income	116,200			115,493		115,493	707	115,493
Change in cumulative translation adjustment	35,528				43,371	43,371	(7,843)	43,371
Adjustment in retirement liability, net of $(26,650) in 2011, $(8,159) in 2010 and $164 in 2009 tax	256				256	256		256
Changes in market value of derivative financial instruments, net of $ 2,884 in 2011, $229 in 2010 and ($2,323) in 2009 tax	3,585				3,585	3,585		3,585
Comprehensive income (loss)								162,705
Cash dividends-$0.80, in 2011, $0.76 in 2010 and $0.72 in 2009 per common share	(70,927)			(70,927)		(70,927)
Tax benefit of stock compensation	1,025		1,025			1,025
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment (in shares)		433,533
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment	7,711	72	7,639			7,711
Issuance of restricted shares, net of cancellations (in shares)		24,531
Issuance of restricted shares, net of cancellations	520	4	516			520
Amortization of restricted shares	7,190		7,190			7,190
Shares surrendered by employees to pay taxes (in shares)		(79,477)
Shares surrendered by employees to pay taxes	(1,880)	(13)	(1,867)			(1,880)
Stock compensation	7,063		7,063			7,063
Balance at Dec. 31, 2009	2,126,340	16,442	472,807	1,502,242	20,597	2,012,088	114,252
Balance (in shares) at Dec. 31, 2009		98,655,506
Net income	202,321			197,828		197,828	4,493	197,828
Change in cumulative translation adjustment	(32,706)				(30,487)	(30,487)	(2,219)	(30,487)
Adjustment in retirement liability, net of $(26,650) in 2011, $(8,159) in 2010 and $164 in 2009 tax	(12,762)				(12,762)	(12,762)		(12,762)
Changes in market value of derivative financial instruments, net of $ 2,884 in 2011, $229 in 2010 and ($2,323) in 2009 tax	310				310	310		310
Comprehensive income (loss)								154,889
Cash dividends-$0.80, in 2011, $0.76 in 2010 and $0.72 in 2009 per common share	(75,465)			(75,465)		(75,465)
Tax benefit of stock compensation	2,171		2,171			2,171
Distribution to noncontrolling interest	(4,647)						(4,647)
Share repurchase (in shares)		(726,777)
Share repurchase	(24,712)	(121)	(24,591)			(24,712)
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment (in shares)		651,331
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment	14,926	109	14,817			14,926
Issuance of restricted shares, net of cancellations (in shares)		(4,122)
Issuance of restricted shares, net of cancellations	706	(1)	707			706
Amortization of restricted shares	3,538		3,538			3,538
Shares surrendered by employees to pay taxes (in shares)		(166,746)
Shares surrendered by employees to pay taxes	(5,691)	(28)	(5,663)			(5,691)
Stock compensation	10,703		10,703			10,703
Balance at Dec. 31, 2010	2,205,032	16,401	474,489	1,624,605	(22,342)	2,093,153	111,879
Balance (in shares) at Dec. 31, 2010		98,409,192
Net income	38,521			34,222		34,222	4,299	34,222
Change in cumulative translation adjustment	(93,706)				(91,591)	(91,591)	(2,115)	(91,591)
Adjustment in retirement liability, net of $(26,650) in 2011, $(8,159) in 2010 and $164 in 2009 tax	(41,683)				(41,683)	(41,683)		(41,683)
Changes in market value of derivative financial instruments, net of $ 2,884 in 2011, $229 in 2010 and ($2,323) in 2009 tax	4,375				4,375	4,375		4,375
Comprehensive income (loss)								(94,677)
Cash dividends-$0.80, in 2011, $0.76 in 2010 and $0.72 in 2009 per common share	(79,537)			(79,537)		(79,537)
Tax benefit of stock compensation	3,868		3,868			3,868
Share repurchase (in shares)		(397,126)
Share repurchase	(12,785)	(66)	(12,719)			(12,785)
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment (in shares)		657,616
Exercise of stock options, net of 182,270 in 2011, 27,177 in 2010 and 124,613 in 2009 shares tendered for payment	14,708	110	14,598			14,708
Issuance of restricted shares, net of cancellations (in shares)		28,603
Issuance of restricted shares, net of cancellations	1,475	5	1,470			1,475
Amortization of restricted shares	1,006		1,006			1,006
Shares surrendered by employees to pay taxes (in shares)		(75,721)
Shares surrendered by employees to pay taxes	(2,798)	(13)	(2,785)			(2,798)
Stock compensation	8,916		8,916			8,916
Balance at Dec. 31, 2011	$ 2,047,392	$ 16,437	$ 488,843	$ 1,579,290	$ (151,241)	$ 1,933,329	$ 114,063
Balance (in shares) at Dec. 31, 2011		98,622,564

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Segment Identifiable Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 4,586,313		$ 3,973,533		$ 3,911,334
Depreciation	66,235		57,995		64,823
Water & Fluid Solutions
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	3,792,188		3,409,556		3,205,774
Depreciation	42,419		37,449		44,063
Technical Products
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	651,693		728,969		716,092
Depreciation	17,826		17,544		19,035
Significant Reconciling Items
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	142,432	[1]	(164,992)	[1]	(10,532)	[1]
Depreciation	$ 5,990	[1]	$ 3,002	[1]	$ 1,725	[1]

[1] All cash and cash equivalents are included in Other

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Debt and Average Interest Rates on Debt Outstanding (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Debt Disclosure [Line Items]
Contractual debt obligations	$ 1,309,087	$ 707,472
Less: Current maturities	(1,168)	(18)
Short-term borrowings	(3,694)	(4,933)
Long-term debt	1,304,225	702,521
Commercial Paper
Debt Disclosure [Line Items]
Debt, average interest rate	1.26%
Maturity (Year)	2016
Contractual debt obligations	3,497
Revolving credit facilities
Debt Disclosure [Line Items]
Debt, average interest rate	2.04%
Maturity (Year)	2016
Contractual debt obligations	168,500	97,500
Private Placement | Fixed Rate
Debt Disclosure [Line Items]
Debt, average interest rate	5.65%
Contractual debt obligations	400,000	400,000
Private Placement | Fixed Rate | Minimum
Debt Disclosure [Line Items]
Maturity (Year)	2013
Private Placement | Fixed Rate | Maximum
Debt Disclosure [Line Items]
Maturity (Year)	2017
Private Placement | Floating Rate
Debt Disclosure [Line Items]
Debt, average interest rate	0.99%
Contractual debt obligations	205,000	205,000
Private Placement | Floating Rate | Minimum
Debt Disclosure [Line Items]
Maturity (Year)	2012
Private Placement | Floating Rate | Maximum
Debt Disclosure [Line Items]
Maturity (Year)	2016
Public Placement | Fixed Rate
Debt Disclosure [Line Items]
Debt, average interest rate	5.00%
Maturity (Year)	2021
Contractual debt obligations	500,000
Capital Lease Obligations
Debt Disclosure [Line Items]
Debt, average interest rate	3.72%
Maturity (Year)	2025
Contractual debt obligations	15,788
Debt, Other
Debt Disclosure [Line Items]
Debt, average interest rate	3.04%
Contractual debt obligations	$ 16,302	$ 4,972
Debt, Other | Minimum
Debt Disclosure [Line Items]
Maturity (Year)	2012
Debt, Other | Maximum
Debt Disclosure [Line Items]
Maturity (Year)	2021

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Loss Contingencies [Line Items]
Undiscounted reserves for environmental liabilities	$ 1.5	$ 1.3
Standby Letters of Credit
Loss Contingencies [Line Items]
Outstanding letter of credit	$ 136.2	$ 116.5

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Debt (Tables)

12 Months Ended

Dec. 31, 2011

Debt and Average Interest Rates on Debt Outstanding

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

	Average
	interest rate			Maturity		December 31,			December 31,
In thousands	December 31, 2011			(Year)		2011			2010
Commercial paper		1.26	%		2016	$	3,497		$	—
Revolving credit facilities		2.04	%		2016		168,500			97,500
Private placement - fixed rate		5.65	%		2013 - 2017		400,000			400,000
Private placement - floating rate		0.99	%		2012 - 2016		205,000			205,000
Public - fixed rate		5.00	%		2021		500,000			—
Capital lease obligations		3.72	%		2025		15,788			—
Other		3.04	%		2012 -2021		16,302			4,972
Total debt, including current portion							1,309,087			707,472
Less: Current maturities							(1,168	)		(18)
Short-term borrowings							(3,694	)		(4,933)
Long-term debt						$	1,304,225		$	702,521

Debt Outstanding Matures on Calendar Year Basis

Debt outstanding at December 31, 2011 matures on a calendar year basis as follows:

In thousands	2012		2013		2014		2015		2016		Thereafter		Total
Contractual debt obligation maturities	$	3,694	$	200,620	$	—	$	—	$	288,985	$	800,000	$	1,293,299
Capital lease obligations		1,168		1,168		1,168		1,168		1,168		9,948		15,788
Total maturities	$	4,862	$	201,788	$	1,168	$	1,168	$	290,153	$	809,948	$	1,309,087

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Income from Continuing Operations Before Income Taxes and Noncontrolling Interest (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Line Items]
U.S.	$ 36,832	$ 217,213	$ 111,530
International	74,748	82,934	61,117
Income (loss) from continuing operations before income taxes and noncontrolling interest	$ 111,580	$ 300,147	$ 172,647

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Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments

15. Business Segments

We classify our continuing operations into the following business segments based primarily on types of products offered and markets served:

• Water & Fluid Solutions — manufactures and markets essential products and systems used in the movement, storage, treatment and enjoyment of water. Products include water and wastewater pumps; filtration and purification components and systems; storage tanks and pressure vessels; and pool and spa equipment and accessories.

• Technical Products — designs, manufactures and markets standard, modified and custom enclosures that house and protect sensitive electronics and electrical components and protect the people that use them. Applications served include industrial machinery, data communications, networking, telecommunications, test and measurement, automotive, medical, security, defense and general electronics. Products include mild steel, stainless steel, aluminum and non-metallic enclosures, cabinets, cases, subracks, backplanes and associated thermal management systems.

• Other — is primarily composed of unallocated corporate expenses, our captive insurance subsidiary, intermediate finance companies and divested operations.

The accounting policies of our operating 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 business segment is included in the following summary:

In thousands	2011		2010			2009			2011			2010			2009
	Net sales to external customers								Operating income (loss)
Water & Fluid Solutions	$	2,369,804	$	2,041,281		$	1,847,764		$	58,311		$	231,588		$	163,745
Technical Products		1,086,882		989,492			844,704			185,240			151,533			100,355
Other		—		—			—			(75,034	)		(48,966	)		(44,152	)
Consolidated	$	3,456,686	$	3,030,773		$	2,692,468		$	168,517		$	334,155		$	219,948
	Identifiable assets (1)								Depreciation
Water & Fluid Solutions	$	3,792,188	$	3,409,556		$	3,205,774		$	42,419		$	37,449		$	44,063
Technical Products		651,693		728,969			716,092			17,826			17,544			19,035
Other(1)		142,432		(164,992	)		(10,532	)		5,990			3,002			1,725
Consolidated	$	4,586,313	$	3,973,533		$	3,911,334		$	66,235		$	57,995		$	64,823
	Amortization								Capital expenditures
Water & Fluid Solutions	$	39,451	$	22,981		$	34,919		$	49,241		$	39,631		$	36,513
Technical Products		2,446		2,610			2,687			15,806			8,336			15,388
Other		—		593			3,051			8,301			11,556			2,236
Consolidated	$	41,897	$	26,184		$	40,657		$	73,348		$	59,523		$	54,137
The following table presents certain geographic information:
In thousands	2011		2010			2009			2011			2010			2009
	Net sales to external customers								Long-lived assets
U.S.	$	2,336,845	$	2,222,856		$	1,964,138		$	195,631		$	196,440		$	203,206
Europe		701,865		470,879			439,312			140,290			77,000			87,880
Asia and other		417,976		337,038			289,018			51,604			55,995			42,602
Consolidated	$	3,456,686	$	3,030,773		$	2,692,468		$	387,525		$	329,435		$	333,688

⁽¹⁾All cash and cash equivalents are included in Other

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. In Water & Fluid Solutions, one customer accounted for approximately 10% of segment sales in 201l and 2010 and no single customer accounted for more than 10% of segment sales in 2009. In Technical Products, no single customer accounted for more than 10% of segment sales in 2011, 2010 or 2009.

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Derivatives and Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Recorded Amounts and Estimated Fair Values of Long-term Debt and Derivative Financial Instruments

The recorded amounts and estimated fair values of long-term debt, excluding the effects of derivative financial instruments and the recorded amounts and estimated fair value of those derivative financial instruments were as follows:

	2011				2010
	Recorded		Fair		Recorded		Fair
In thousands	amount		value		amount		value
Total debt, including current portion
Variable rate	$	406,978	$	406,978	$	307,433	$	307,433
Fixed rate		902,109		954,053		400,039		438,492
Total	$	1,309,087	$	1,361,031	$	707,472	$	745,925

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

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

	Fair value
In thousands	December 31, 2011			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(8,034	)	$	—	$	(8,034	)	$	—
Foreign currency contract		(99	)		—		(99	)		—
Deferred compensation plan (1)		22,987			22,987		—			—

	Fair value
In thousands	December 31, 2010			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(15,768	)	$	—	$	(15,768	)	$	—
Foreign currency contract		1,183			—		1,183			—
Deferred compensation plan (1)		24,126			24,126		—			—

(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.

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Future Minimum Lease Commitments Under Non-Cancelable Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Operating Leased Assets [Line Items]
Minimum lease payments	$ 101,062
Minimum sublease rentals	(1,172)
Net future minimum lease commitments	99,890
One Year from Balance Sheet Date
Operating Leased Assets [Line Items]
Minimum lease payments	25,961
Minimum sublease rentals	(280)
Net future minimum lease commitments	25,681
More than One and within Two Years from Balance Sheet Date
Operating Leased Assets [Line Items]
Minimum lease payments	19,343
Minimum sublease rentals	(283)
Net future minimum lease commitments	19,060
More than Two and within Three Years from Balance Sheet Date
Operating Leased Assets [Line Items]
Minimum lease payments	15,944
Minimum sublease rentals	(285)
Net future minimum lease commitments	15,659
More than Three and within Four Years from Balance Sheet Date
Operating Leased Assets [Line Items]
Minimum lease payments	12,689
Minimum sublease rentals	(118)
Net future minimum lease commitments	12,571
More than Four and within Five Years from Balance Sheet Date
Operating Leased Assets [Line Items]
Minimum lease payments	10,331
Minimum sublease rentals	(103)
Net future minimum lease commitments	10,228
More than Five Years from Balance Sheet Date and Thereafter
Operating Leased Assets [Line Items]
Minimum lease payments	16,794
Minimum sublease rentals	(103)
Net future minimum lease commitments	$ 16,691

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data (Unaudited)

17. Selected Quarterly Financial Data (Unaudited)

The following table represents the 2011 quarterly financial information:

	2011
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	790,273	$	910,175	$	890,546	$	865,692		$	3,456,686
Gross profit		249,059		287,736		272,062		264,865			1,073,722
Operating income		86,177		109,422		92,903		(119,985	)		168,517
Income from continuing operations		52,034		68,137		52,054		(133,704	)		38,521
Net income from continuing operations attributable to Pentair, Inc.		50,541		66,712		51,092		(134,123	)		34,222
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Basic earnings per common share	$	0.52	$	0.68	$	0.52	$	(1.36	)	$	0.35
Diluted
Continuing operations	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34
Diluted earnings per common share	$	0.51	$	0.67	$	0.51	$	(1.36	)	$	0.34

⁽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.

The following table represents the 2010 quarterly financial information:

	2010
In thousands, except per-share data	First		Second		Third		Fourth			Year
Net sales	$	707,013	$	796,167	$	773,735	$	753,858		$	3,030,773
Gross profit		213,702		248,168		236,542		232,228			930,640
Operating income		63,601		100,126		90,823		79,605			334,155
Income from continuing operations		36,029		61,612		55,729		49,577			202,947
Gain (loss) on disposal of discontinued operations, net of tax		524		593		549		(2,292	)		(626	)
Net income from continuing operations attributable to to Pentair, Inc.		34,797		60,488		54,501		48,668			198,454
Earnings per common share attributable to Pentair, Inc. (1)
Basic
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.50		$	2.02
Discontinued operations		0.01		0.01		0.01		(0.02	)		(0.01	)
Basic earnings per common share	$	0.36	$	0.62	$	0.56	$	0.48		$	2.01
Diluted
Continuing operations	$	0.35	$	0.61	$	0.55	$	0.49		$	2.00
Discontinued operations		0.01		—		—		(0.02	)		(0.01	)
Diluted earnings per common share	$	0.36	$	0.61	$	0.55	$	0.47		$	1.99

⁽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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Reconciliation of Beginning and Ending Gross Unrecognized Tax Benefits (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 24, 2009
Income Tax Contingency [Line Items]
Gross unrecognized tax benefits - beginning balance	$ 24,260	$ 29,962	$ 28,139
Gross increases for tax positions in prior periods	2,042	286	3,191
Gross decreases for tax positions in prior periods	(192)	(2,490)	(2,433)
Gross increases based on tax positions related to the current year	3,201	1,431	1,789
Gross decreases related to settlements with taxing authorities	(2,465)	(4,182)	(209)
Reductions due to statute expiration	(377)	(747)	(515)
Gross unrecognized tax benefits, Ending Balance	$ 26,469	$ 24,260	$ 29,962

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Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Adjustment in retirement liability, tax	$ (26,650)	$ (8,159)	$ 164
Changes in market value of derivative financial instruments, tax	$ 2,884	$ 229	$ (2,323)
Cash dividends, per common share	$ 0.80	$ 0.76	$ 0.72
Exercise of stock options, shares tendered for payment	182,270	27,177	124,613

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 50,077	$ 46,056
Accounts and notes receivable, net of allowances of $39,111 and $36,343, respectively	569,204	516,905
Inventories	449,863	405,356
Deferred tax assets	60,899	56,349
Prepaid expenses and other current assets	107,792	44,631
Total current assets	1,237,835	1,069,297
Property, plant and equipment, net	387,525	329,435
Other assets
Goodwill	2,273,918	2,066,044
Intangibles, net	592,285	453,570
Other	94,750	55,187
Total other assets	2,960,953	2,574,801
Total assets	4,586,313	3,973,533
Current liabilities
Short-term borrowings	3,694	4,933
Current maturities of long-term debt	1,168	18
Accounts payable	294,858	262,357
Employee compensation and benefits	109,361	107,995
Current pension and post-retirement benefits	9,052	8,733
Accrued product claims and warranties	42,630	42,295
Income taxes	14,547	5,964
Accrued rebates and sales incentives	37,009	33,559
Other current liabilities	129,522	80,942
Total current liabilities	641,841	546,796
Other liabilities
Long-term debt	1,304,225	702,521
Pension and other retirement compensation	248,615	209,859
Post-retirement medical and other benefits	31,774	30,325
Long-term income taxes payable	26,470	23,507
Deferred tax liabilities	188,957	169,198
Other non-current liabilities	97,039	86,295
Total liabilities	2,538,921	1,768,501
Commitments and contingencies
Shareholders' equity
Common shares par value $0.16 2/3; 98,622,564 and 98,409,192 shares issued and outstanding, respectively	16,437	16,401
Additional paid-in capital	488,843	474,489
Retained earnings	1,579,290	1,624,605
Accumulated other comprehensive income	(151,241)	(22,342)
Noncontrolling interest	114,063	111,879
Total shareholders' equity	2,047,392	2,205,032
Total liabilities and shareholders' equity	$ 4,586,313	$ 3,973,533

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Derivatives and Financial Instruments

12 Months Ended

Dec. 31, 2011

Derivatives and Financial Instruments

10. Derivatives and Financial Instruments

Cash-flow hedges

In August 2007, we entered into a $105 million interest rate swap agreement with a major financial institution to exchange variable rate interest payment obligations for a fixed rate obligation without the exchange of the underlying principal amounts in order to manage interest rate exposures. The effective date of the swap was August 30, 2007. The swap agreement has a fixed interest rate of 4.89% and expires in May 2012. The fixed interest rate of 4.89% plus the .50% interest rate spread over LIBOR results in an effective fixed interest rate of 5.39%. The fair value of the swap was a liability of $1.7 million and $6.4 million at December 31, 2011 and December 31, 2010, respectively and was recorded in AOCI on the Consolidated Balance Sheets.

In September 2005, we entered into a $100 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 expires in July 2013. The fixed interest rate of 4.68% plus the .60% interest rate spread over LIBOR results in an effective fixed interest rate of 5.28%. The fair value of the swap was a liability of $6.3 million and $9.4 million at December 31, 2011 and December 31, 2010, respectively and was recorded in AOCI on the Consolidated Balance Sheets.

The variable to fixed interest rate swaps are designated as cash-flow hedges. The fair value of these swaps are recorded as assets or liabilities on the Consolidated Balance Sheets. Unrealized income/expense is included in AOCI and realized income/expense and amounts due to/from swap counterparties, are included in earnings. We realized incremental interest expense resulting from the swaps of $9.3 million and $9.2 million at December 31, 2011 and December 31, 2010, respectively.

The variable to fixed interest rate swaps are designated as and are effective as cash-flow hedges. The fair value of these swaps are recorded as assets or liabilities on the Consolidated Balance Sheets, with changes in their fair value included in OCI. Derivative gains and losses included in OCI are reclassified into earnings at the time the related interest expense is recognized or the settlement of the related commitment occurs.

Failure of one or more of our swap counterparties would result in the loss of any benefit to us of the swap agreement. In this case, we would continue to be obligated to pay the variable interest payments per the underlying debt agreements which are at variable interest rates of 3 month LIBOR plus .50% for $105 million of debt and 3 month LIBOR plus ..60% for $100 million of debt. Additionally, failure of one or all of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position.

At December 31, 2011 and 2010, our interest rate swaps are carried at fair value measured on a recurring basis. 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.

Foreign currency contract

In March 2011, we entered into a foreign currency option contract to reduce our exposure to fluctuations in the euro related to the planned CPT acquisition. The contract had a notional amount of €286.0 million, a strike price of 1.4375 and a maturity date of May 13, 2011. In May 2011, we sold the foreign currency option contract for $1.0 million. The net cost of $2.1 million is recorded in Selling, general and administrative on the Consolidated Statements on Income.

At December 31, 2010 we had a euro to U.S. dollar contract that expired on January 7, 2011 with a notional amount of $132.5 million. The fair value of the contract was an asset of $1.2 million.

We manage our economic and transaction exposure to certain market-based risks through the use of foreign currency derivative instruments. Our objective in holding derivatives is to reduce the volatility of net earnings and cash flows associated with changes in foreign currency exchange rates.

Fair value of financial instruments

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 million with an average interest rate of 3.65%. In May 2011, upon the sale of the Notes, the swaps were terminated at a cost of $11.0 million. Because we used the contracts to hedge future interest payments, this amount is recorded in Prepaid expenses and other current assets within the Consolidated Balance Sheets and will be amortized as interest exposure over the life of the Notes.

The recorded amounts and estimated fair values of long-term debt, excluding the effects of derivative financial instruments and the recorded amounts and estimated fair value of those derivative financial instruments were as follows:

	2011				2010
	Recorded		Fair		Recorded		Fair
In thousands	amount		value		amount		value
Total debt, including current portion
Variable rate	$	406,978	$	406,978	$	307,433	$	307,433
Fixed rate		902,109		954,053		400,039		438,492
Total	$	1,309,087	$	1,361,031	$	707,472	$	745,925

The following methods were used to estimate the fair values of each class of financial instrument measured on a recurring basis:

• 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.

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

	Fair value
In thousands	December 31, 2011			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(8,034	)	$	—	$	(8,034	)	$	—
Foreign currency contract		(99	)		—		(99	)		—
Deferred compensation plan (1)		22,987			22,987		—			—

	Fair value
In thousands	December 31, 2010			(Level 1)		(Level 2)			(Level 3)
Cash-flow hedges	$	(15,768	)	$	—	$	(15,768	)	$	—
Foreign currency contract		1,183			—		1,183			—
Deferred compensation plan (1)		24,126			24,126		—			—

(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.

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Condensed Consolidated Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Current assets
Cash and cash equivalents	$ 50,077	$ 46,056	$ 33,396	$ 39,344
Accounts and notes receivable, net	569,204	516,905
Inventories	449,863	405,356
Deferred tax assets	60,899	56,349
Prepaid expenses and other current assets	107,792	44,631
Total current assets	1,237,835	1,069,297
Property, plant and equipment, net	387,525	329,435	333,688
Other assets
Goodwill	2,273,918	2,066,044	2,088,797
Intangibles, net	592,285	453,570
Other	94,750	55,187
Total other assets	2,960,953	2,574,801
Total assets	4,586,313	3,973,533	3,911,334
Current liabilities
Short-term borrowings	3,694	4,933
Current maturities of long-term debt	1,168	18
Accounts payable	294,858	262,357
Employee compensation and benefits	109,361	107,995
Current pension and post-retirement benefits	9,052	8,733
Accrued product claims and warranties	42,630	42,295
Income taxes	14,547	5,964
Accrued rebates and sales incentives	37,009	33,559
Other current liabilities	129,522	80,942
Total current liabilities	641,841	546,796
Other liabilities
Long-term debt	1,304,225	702,521
Pension and other retirement compensation	248,615	209,859
Post-retirement medical and other benefits	31,774	30,325
Long-term income taxes payable	26,470	23,507
Deferred tax liabilities	188,957	169,198
Other non-current liabilities	97,039	86,295
Total liabilities	2,538,921	1,768,501
Noncontrolling interest	114,063	111,879
Shareholders' equity attributable to Pentair, Inc.	1,933,329	2,093,153
Total liabilities and shareholders' equity	4,586,313	3,973,533
Parent Company
Current assets
Cash and cash equivalents	3,097	3,201	2,032	2,720
Accounts and notes receivable, net	828	678
Deferred tax assets	134,240	115,722
Prepaid expenses and other current assets	28,937	8,278
Total current assets	167,102	127,879
Property, plant and equipment, net	19,693	17,392
Other assets
Investments in/advances to subsidiaries	2,910,927	2,355,343
Other	63,508	56,052
Total other assets	2,974,435	2,411,395
Total assets	3,161,230	2,556,666
Current liabilities
Current maturities of long-term debt	2,585	135,678
Accounts payable	5,036	4,908
Employee compensation and benefits	24,466	38,513
Current pension and post-retirement benefits	9,052	8,733
Accrued product claims and warranties	165	12,245
Income taxes	40,999	4,788
Other current liabilities	25,050	9,772
Total current liabilities	107,353	214,637
Other liabilities
Long-term debt	1,312,053	702,500
Pension and other retirement compensation	182,556	136,750
Post-retirement medical and other benefits	17,024	18,388
Long-term income taxes payable	26,470	23,507
Deferred tax liabilities		5
Due to/ (from) affiliates	(479,943)	(678,966)
Other non-current liabilities	62,388	46,692
Total liabilities	1,227,901	463,513
Shareholders' equity attributable to Pentair, Inc.	1,933,329	2,093,153
Total liabilities and shareholders' equity	3,161,230	2,556,666
Guarantor Subsidiaries
Current assets
Cash and cash equivalents	3,332	3,404	1,813	3,345
Accounts and notes receivable, net	360,027	357,730
Inventories	227,472	232,369
Deferred tax assets	40,698	40,064
Prepaid expenses and other current assets	(6,886)	10,098
Total current assets	624,643	643,665
Property, plant and equipment, net	136,102	144,332
Other assets
Investments in/advances to subsidiaries	1,447,522	89,659
Goodwill	1,330,265	1,549,537
Intangibles, net	250,792	265,987
Other	27,337	4,045
Total other assets	3,055,916	1,909,228
Total assets	3,816,661	2,697,225
Current liabilities
Accounts payable	189,355	170,747
Employee compensation and benefits	30,015	32,167
Accrued product claims and warranties	22,037	23,410
Income taxes	(28,717)	633
Accrued rebates and sales incentives	25,612	23,500
Other current liabilities	53,960	33,227
Total current liabilities	292,262	283,684
Other liabilities
Long-term debt	2,417,922	1,947,400
Pension and other retirement compensation	(7,701)	112
Post-retirement medical and other benefits	33,890	36,986
Deferred tax liabilities	229,962	213,385
Due to/ (from) affiliates	751,145	(80,779)
Other non-current liabilities	1,508	1,892
Total liabilities	3,718,988	2,402,680
Shareholders' equity attributable to Pentair, Inc.	97,673	294,545
Total liabilities and shareholders' equity	3,816,661	2,697,225
Non-Guarantor Subsidiaries
Current assets
Cash and cash equivalents	43,648	39,451	29,551	33,279
Accounts and notes receivable, net	263,201	222,319
Inventories	222,391	172,987
Deferred tax assets	13,382	7,928
Prepaid expenses and other current assets	107,121	51,497
Total current assets	649,743	494,182
Property, plant and equipment, net	231,730	167,711
Other assets
Investments in/advances to subsidiaries	92,396	748,181
Goodwill	943,653	516,507
Intangibles, net	341,493	187,583
Other	23,045	20,139
Total other assets	1,400,587	1,472,410
Total assets	2,282,060	2,134,303
Current liabilities
Short-term borrowings	3,694	4,933
Current maturities of long-term debt	1,168	18,154
Accounts payable	152,065	150,517
Employee compensation and benefits	54,880	37,315
Accrued product claims and warranties	20,428	6,640
Income taxes	2,265	543
Accrued rebates and sales incentives	11,397	10,059
Other current liabilities	71,890	63,185
Total current liabilities	317,787	291,346
Other liabilities
Long-term debt	542,411	377,539
Pension and other retirement compensation	73,760	72,997
Deferred tax liabilities	86,416	63,173
Due to/ (from) affiliates	711,705	810,652
Other non-current liabilities	33,143	37,711
Total liabilities	1,765,222	1,653,418
Noncontrolling interest	114,063	111,879
Shareholders' equity attributable to Pentair, Inc.	402,775	369,006
Total liabilities and shareholders' equity	2,282,060	2,134,303
Eliminations
Current assets
Accounts and notes receivable, net	(54,852)	(63,822)
Deferred tax assets	(127,421)	(107,365)
Prepaid expenses and other current assets	(21,380)	(25,242)
Total current assets	(203,653)	(196,429)
Other assets
Investments in/advances to subsidiaries	(4,450,845)	(3,193,183)
Other	(19,140)	(25,049)
Total other assets	(4,469,985)	(3,218,232)
Total assets	(4,673,638)	(3,414,661)
Current liabilities
Current maturities of long-term debt	(2,585)	(153,814)
Accounts payable	(51,598)	(63,815)
Other current liabilities	(21,378)	(25,242)
Total current liabilities	(75,561)	(242,871)
Other liabilities
Long-term debt	(2,968,161)	(2,324,918)
Post-retirement medical and other benefits	(19,140)	(25,049)
Deferred tax liabilities	(127,421)	(107,365)
Due to/ (from) affiliates	(982,907)	(50,907)
Total liabilities	(4,173,190)	(2,751,110)
Shareholders' equity attributable to Pentair, Inc.	(500,448)	(663,551)
Total liabilities and shareholders' equity	$ (4,673,638)	$ (3,414,661)

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Financial Information By Reportable Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 31, 2010	Oct. 02, 2010	Jul. 03, 2010	Apr. 03, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Net sales	$ 865,692	$ 890,546	$ 910,175	$ 790,273	$ 753,858	$ 773,735	$ 796,167	$ 707,013	$ 3,456,686	$ 3,030,773	$ 2,692,468
Operating income (loss)	(119,985)	92,903	109,422	86,177	79,605	90,823	100,126	63,601	168,517	334,155	219,948
Amortization									41,897	26,184	40,657
Capital expenditures									73,348	59,523	54,137
Water & Fluid Solutions
Segment Reporting Information [Line Items]
Net sales									2,369,804	2,041,281	1,847,764
Operating income (loss)									58,311	231,588	163,745
Amortization									39,451	22,981	34,919
Capital expenditures									49,241	39,631	36,513
Technical Products
Segment Reporting Information [Line Items]
Net sales									1,086,882	989,492	844,704
Operating income (loss)									185,240	151,533	100,355
Amortization									2,446	2,610	2,687
Capital expenditures									15,806	8,336	15,388
Significant Reconciling Items
Segment Reporting Information [Line Items]
Operating income (loss)									(75,034)	(48,966)	(44,152)
Amortization										593	3,051
Capital expenditures									$ 8,301	$ 11,556	$ 2,236

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Assumptions Used in Calculating Estimated Fair Value of Stock Option Award (Detail)	12 Months Ended
	Dec. 31, 2011 Year	Dec. 31, 2010 Year	Dec. 31, 2009 Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.51%	2.45%	1.77%
Expected dividend yield	2.32%	2.30%	3.20%
Expected stock price volatility	35.50%	35.00%	32.50%
Expected lives	5.5	5.5	5.2

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Jul. 02, 2011
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	PNR
Entity Registrant Name	PENTAIR INC
Entity Central Index Key	0000077360
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	98,622,564
Entity Public Float		$ 3,886,388,296

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Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

11. Income Taxes

Income from continuing operations before income taxes and noncontrolling interest consisted of the following:

In thousands	2011		2010		2009
U.S.	$	36,832	$	217,213	$	111,530
International		74,748		82,934		61,117
Income from continuing operations before taxes and noncontrolling interest	$	111,580	$	300,147	$	172,647

The provision for income taxes for continuing operations consisted of the following:

In thousands	2011			2010		2009
Currently payable
Federal	$	51,158		$	44,766	$	10,502
State		6,980			6,591		2,456
International		24,005			17,877		13,947
Total current taxes		82,143			69,234		26,905
Deferred
Federal and state		419			26,445		26,733
International		(9,503	)		1,521		2,790
Total deferred taxes		(9,084	)		27,966		29,523
Total provision for income taxes	$	73,059		$	97,200	$	56,428

Reconciliation of the U.S. statutory income tax rate to our effective tax rate for continuing operations follows:

Percentages	2011			2010			2009
U.S. statutory income tax rate		35.0			35.0			35.0
State income taxes, net of federal tax benefit		3.3			2.1			2.6
Tax effect of stock-based compensation		0.4			0.2			0.2
Tax effect of international operations		(9.8	)		(3.8	)		(3.5)
Tax credits		(0.9	)		(0.3	)		(1.4)
Domestic manufacturing deduction		(3.3	)		(1.4	)		(0.4)
ESOP dividend benefit		(0.6	)		(0.2	)		(0.4)
Goodwill		40.4			—			—
All other, net		1.0			0.8			0.6
Effective tax rate on continuing operations		65.5			32.4			32.7

Reconciliation of the beginning and ending gross unrecognized tax benefits follows:

In thousands	2011			2010			2009
Gross unrecognized tax benefits — beginning balance	$	24,260		$	29,962		$	28,139
Gross increases for tax positions in prior periods		2,042			286			3,191
Gross decreases for tax positions in prior periods		(192	)		(2,490	)		(2,433)
Gross increases based on tax positions related to the current year		3,201			1,431			1,789
Gross decreases related to settlements with taxing authorities		(2,465	)		(4,182	)		(209)
Reductions due to statute expiration		(377	)		(747	)		(515)
Gross unrecognized tax benefits at December 31	$	26,469		$	24,260		$	29,962

Included in the $26.5 million of total gross unrecognized tax benefits as of December 31, 2011 was $24.5 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, 2011 may decrease by a range of $0 to $18.7 million 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.

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 our U.S. federal income tax returns through 2003 with no material adjustments. The IRS has also completed a survey of our 2004 U.S. federal income tax return with no material findings. The IRS is currently examining our federal tax returns for years 2005 through 2009. No material adjustments have been proposed, however, actual settlements may differ from amounts accrued.

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, 2011, we had recorded approximately $0.9 million for the possible payment of penalties and $5.9 million related to the possible payment of interest expense.

U.S. income taxes have not been provided on undistributed earnings of international subsidiaries. It is our intention to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. As of December 31, 2011, approximately $261.1 million of unremitted earnings attributable to international subsidiaries were considered to be indefinitely invested. 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 Income).

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

In thousands	2011		2010
Deferred tax assets	$	60,899	$	56,349
Other noncurrent assets		—		1,647
Other current liabilities		—		(547)
Deferred tax liabilities		(188,957)		(169,198)
Net deferred tax liability	$	(128,058)	$	(111,749)

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

	2011				2010
	Deferred tax				Deferred tax
In thousands	Assets		Liabilities		Assets		Liabilities
Accounts receivable allowances	$	3,726	$	—	$	4,490	$	—
Inventory valuation		18,891		—		17,381		—
Accelerated depreciation/amortization		—		13,270		—		11,436
Accrued product claims and warranties		22,430		—		25,753		—
Employee benefit accruals		129,642		—		110,547		—
Goodwill and other intangibles		—		191,067		—		187,103
Other, net		—		98,410		—		71,381
Total deferred taxes	$	174,689	$	302,747	$	158,171	$	269,920
Net deferred tax liability			$	(128,058)			$	(111,749)

Included in Other, net in the table above are deferred tax assets of $3.3 million and $2.3 million as of December 31, 2011 and 2010, respectively, related to a foreign tax credit carryover from the tax period ended December 31, 2006 and related to state net operating losses. The foreign tax credit is eligible for carryforward until the tax period ending December 31, 2016.

Non-U.S. tax losses of $82.3 million and $49.6 million were available for carryforward at December 31, 2011 and 2010, respectively. A valuation allowance reflected above in Other, net of $11.7 million and $9.4 million exists for deferred income tax benefits related to the non-U.S. loss carryforwards available as of December 31, 2011 and 2010, respectively that may not be realized. We believe that sufficient taxable income will be generated in the respective countries to allow us to fully recover the remainder of the tax losses. The non-U.S. operating losses are subject to varying expiration periods and will begin to expire in 2012. State tax losses of $69.2 million and $69.3 million were available for carryforward at December 31, 2011 and 2010, respectively. A valuation allowance reflected above in Other, net of $1.5 million and $2.4 million exists for deferred income tax benefits related to the carryforwards available at December 31, 2011 and 2010, respectively. Certain state tax losses will expire in 2012, while others are subject to carryforward periods of up to twenty years.

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Weighted-average Assumptions Used to Determine Domestic Benefit Obligations (Detail)	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Pension
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.05%	5.90%	6.00%
Rate of compensation increase	4.00%	4.00%	4.00%
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Discount rate	5.05%	5.90%	6.00%

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Stock Option Activity (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011 Year
Shares
Beginning Balance	7,967,416
Granted	817,707
Exercised	(839,886)
Forfeited	(45,203)
Expired	(62,338)
Ending Balance	7,837,696
Options exercisable at end of period	5,694,049
Options expected to vest at end of period	2,107,848
Weighted Average Exercise Price
Beginning Balance	$ 31.34
Granted	$ 36.73
Exercised	$ 25.03
Forfeited	$ 32.86
Expired	$ 40.06
Ending Balance	$ 32.50
Options exercisable at end of period	$ 32.38
Options expected to vest at end of period	$ 32.82
Weighted Average Remaining Contractual Life
Balance at end of period	5.6
Options exercisable at end of period	4.6
Options expected to vest at end of period	8.2
Aggregate Intrinsic value
Balance at end of period	$ 20,161,647
Options exercisable at end of period	16,052,331
Options expected to vest at end of period	$ 4,109,316

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Accounts and notes receivable, allowances	$ 39,111	$ 36,343
Common stock, par value	$ 0.1667	$ 0.1667
Common stock, shares issued	98,622,564	98,409,192
Common stock, shares outstanding	98,622,564	98,409,192

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Goodwill and Other Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Identifiable Intangible Assets

5. Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the year ended December 31, 2011 and December 31, 2010 by segment were as follows:

In thousands	December 31, 2010		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2011
Water & Fluid Solutions	$	1,784,100	$	466,182	$	(255,501	)	$	1,994,781
Technical Products		281,944		—		(2,807	)		279,137
Consolidated Total	$	2,066,044	$	466,182	$	(258,308	)	$	2,273,918

In thousands	December 31, 2009		Acquisitions/ divestitures		Foreign currency translation/other			December 31, 2010
Water & Fluid Solutions	$	1,802,913	$	—	$	(18,813	)	$	1,784,100
Technical Products		285,884		—		(3,940	)		281,944
Consolidated Total	$	2,088,797	$	—	$	(22,753	)	$	2,066,044

In 2011, the acquired goodwill in Water & Fluid Solutions is primarily related to the acquisition of CPT. In 2011, we recorded an impairment charge of $200.5 million in Water & Fluid Solutions which is included in “Foreign Currency Translation/Other” above. Accumulated goodwill impairment losses were $200.5 million and $0 as of December 31, 2011 and December 31, 2010, respectively.

The detail of intangible assets consisted of the following:

	2011							2010
In thousands	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Finite-life intangibles
Patents	$	5,896	$	(4,038	)	$	1,858	$	15,469	$	(12,695	)	$	2,774
Proprietary technology		128,841		(39,956	)		88,885		74,176		(29,862	)		44,314
Customer relationships		358,410		(109,887	)		248,523		282,479		(82,901	)		199,578
Trade names		1,515		(530	)		985		1,532		(383	)		1,149
Total finite-life intangibles	$	494,662	$	(154,411	)	$	340,251	$	373,656	$	(125,841	)	$	247,815
Indefinite-life intangibles
Trade names		252,034		—			252,034		205,755		—			205,755
Total intangibles, net	$	746,696	$	(154,411	)	$	592,285	$	579,411	$	(125,841	)	$	453,570

Intangible asset amortization expense in 2011, 2010 and 2009 was approximately $41.9 million, $24.5 million and $27.3 million, respectively.

In 2009 we recorded an impairment charge to write down trade name intangible assets of $11.3 million in Water & Fluid Solutions.

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

In thousands	2012		2013		2014		2015		2016
Estimated amortization expense	$	38,828	$	38,663	$	38,296	$	38,018	$	37,079

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Restructuring

12 Months Ended

Dec. 31, 2011

Restructuring

4. Restructuring

During 2011, we announced and initiated certain business restructuring initiatives aimed at reducing our fixed cost structure and realigning our business. These initiatives included the reduction in hourly and salaried headcount of approximately 210 employees, which included 160 in Water & Fluid Solutions and 50 in Technical Products.

Restructuring related costs included in Selling, general and administrative expenses on the Consolidated Statements of Income include costs for severance and other restructuring costs as follows:

	Years Ended December 31
In thousands	2011		2010		2009
Severance and related costs	$	11,500	$	—	$	11,160
Contract termination costs		—		—		2,030
Asset impairment and other restructuring costs		1,500		—		4,050
Total restructuring costs	$	13,000	$	—	$	17,240

Total restructuring costs related to Water & Fluid Solutions and Technical Products were $11.0 million and $2.0 million, respectively, for year ended December 31, 2011.

Restructuring accrual activity recorded on the Consolidated Balance Sheets is summarized as follows:

	Years Ended December 31
In thousands	2011			2010
Beginning balance	$	3,994		$	14,509
Costs incurred		11,500			—
Cash payments and other		(2,689	)		(10,515	)
Ending balance	$	12,805		$	3,994

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

16. Commitments and Contingencies

Operating lease commitments

Net rental expense under operating leases follows:

In thousands	2011			2010			2009
Gross rental expense	$	39,808		$	32,662		$	32,799
Sublease rental income		(455	)		(225	)		(74	)
Net rental expense	$	39,353		$	32,437		$	32,725

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, vehicles, and machinery and equipment are as follows:

In thousands	2012			2013			2014			2015			2016			Thereafter			Total
Minimum lease payments	$	25,961		$	19,343		$	15,944		$	12,689		$	10,331		$	16,794		$	101,062
Minimum sublease rentals		(280	)		(283	)		(285	)		(118	)		(103	)		(103	)		(1,172	)
Net future minimum lease commitments	$	25,681		$	19,060		$	15,659		$	12,571		$	10,228		$	16,691		$	99,890

Environmental

We have been named as defendants, targets, or PRPs in a small number of environmental clean-ups, in which our current or former business units have generally been given de minimis status. To date, none of these claims have resulted in clean-up costs, fines, penalties, or damages in an amount material to our financial position or results of operations. We have disposed of a number of businesses in the past and in certain cases, such as the disposition of the Cross Pointe Paper Corporation uncoated paper business in 1995, the disposition of the Federal Cartridge Company ammunition business in 1997, the disposition of Lincoln Industrial in 2001 and the disposition of the Tools Group in 2004, we have retained responsibility and potential liability for certain environmental obligations. We have received claims for indemnification from purchasers of these businesses and have established what we believe to be adequate accruals for potential liabilities arising out of retained responsibilities. We settled some of the claims in prior years; to date our recorded accruals have been adequate.

In addition, there are ongoing environmental issues at a limited number of sites, including one site acquired in the acquisition of Essef Corporation in 1999, which relates to operations no longer carried out at the sites. We have established what we believe to be adequate accruals for remediation costs at these sites. We do not believe that projected response costs will result in a material liability.

We may be named as a PRP at other sites in the future, for both divested and acquired businesses. When the outcome of the matter is probable and it is possible to provide reasonable estimates of our liability with respect to environmental sites, provisions have been made in accordance with GAAP. As of December 31, 2011 and 2010, our undiscounted reserves for such environmental liabilities were approximately $1.5 million and $1.3 million, respectively. We cannot ensure that environmental requirements will not change or become more stringent over time or that our eventual environmental clean-up costs and liabilities will not exceed the amount of our current reserves.

Litigation

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, environmental, safety and health, patent infringement and employment matters.

We record liabilities for an estimated loss from a loss contingency where the outcome of the matter is probable and can be reasonably estimated. Factors that are considered when determining whether the conditions for accrual have been met include the (a) nature of the litigation, claim, or assessment, (b) progress of the case, including progress after the date of the financial statements but before the issuance date of the financial statements, (c) opinions of legal counsel and (d) management’s intended response to the litigation, claim, or assessment. Where the reasonable estimate of the probable loss is a range, we record the most likely estimate of the loss. When no amount within the range is a better estimate than any other amount, however, the minimum amount in the range is accrued. Gain contingencies are not recorded until realized.

While we believe that a material impact on our consolidated financial position, results of operations, or cash flows from any such future charges 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 could change 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. 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.

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, 2011 and 2010 were as follows:

In thousands	2011			2010
Balance at beginning of the year	$	30,050		$	24,288
Service and product warranty provision		50,096			56,553
Payments		(53,937	)		(50,729	)
Acquired		3,575			—
Translation		(429	)		(62	)
Balance at end of the period	$	29,355		$	30,050

Stand-by letters of credit and bonds

In the ordinary course of business, we are required to commit to bonds that require payments to our customers for any non-performance. The outstanding face value of the bonds 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, 2011 and December 31, 2010, the outstanding value of these instruments totaled $136.2 million and $116.5 million, respectively.

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Benefit Plans

12 Months Ended

Dec. 31, 2011

Benefit Plans

12. Benefit Plans

Pension and post-retirement benefits

We sponsor domestic and foreign 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 also provide certain post-retirement health care and life insurance benefits. Generally, the post-retirement health care and life insurance plans require contributions from retirees. We use a December 31 measurement date each year. In December 2007, we announced that we will be freezing certain pension plans as of December 31, 2017.

Obligations and funded status

The following tables present reconciliations of the benefit obligation of the plans, the plan assets of the pension plans and the funded status of the plans:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Change in benefit obligation
Benefit obligation beginning of year	$	586,808		$	552,309		$	33,715		$	35,301
Service cost		12,466			11,588			180			200
Interest cost		32,768			31,671			1,889			2,013
Amendments		—			(281	)		—			—
Settlements		(257	)		(104	)		—			—
Actuarial (gain) loss		62,751			24,677			2,494			(647)
Translation (gain) loss		(2,477	)		(4,208	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Benefit obligation end of year	$	661,571		$	586,808		$	35,081		$	33,715
Change in plan assets
Fair value of plan assets beginning of year	$	385,483		$	329,188		$	—		$	—
Actual gain (loss) return on plan assets		27,971			35,495			—			—
Company contributions		37,097			49,840			3,197			3,152
Settlements		(257	)		(104	)		—			—
Translation gain (loss)		(35	)		(92	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Fair value of plan assets end of year	$	419,771		$	385,483		$	—		$	—
Funded status
Plan assets less than benefit obligation	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

Of the $241.8 million under funding at December 31, 2011, $137.9 million relates to foreign pension plans and our supplemental executive retirement plans which are not commonly funded.

Amounts recognized in the Consolidated Balance Sheets are as follows:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Current liabilities	$	(5,745	)	$	(5,343	)	$	(3,307	)	$	(3,390)
Noncurrent liabilities		(236,055	)		(195,982	)		(31,774	)		(30,325)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

The accumulated benefit obligation for all defined benefit plans was $625.9 million and $557.7 million at December 31, 2011 and 2010, respectively.

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

In thousands	2011		2010
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		625,884		557,712
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		661,571		586,808

Components of net periodic benefit cost are as follows:

	Pension benefits									Post-retirement
In thousands	2011			2010			2009			2011			2010			2009
Service cost	$	12,466		$	11,588		$	12,334		$	180		$	200		$	214
Interest cost		32,768			31,671			32,612			1,889			2,013			2,377
Expected return on plan assets		(31,849	)		(30,910	)		(30,286	)		—			—			—
Amortization of transition obligation		—			13			25			—			—			—
Amortization of prior year service cost (benefit)		—			7			23			(27	)		(27	)		(41)
Recognized net actuarial (gain) loss		3,887			1,674			82			(3,306	)		(3,295	)		(3,326)
Settlement gain		23			(8	)		(9	)		—			—			—
Net periodic benefit cost	$	17,295		$	14,035		$	14,781		$	(1,264	)	$	(1,109	)	$	(776)

Amounts not yet recognized in net periodic benefit cost and included in accumulated other comprehensive income (pre-tax):

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Prior service cost (benefit)		(171	)		(162	)		(850	)		(878)
Net actuarial (gain) loss		201,093			138,558			(14,982	)		(20,781)
Accumulated other comprehensive (income) loss	$	200,922		$	138,396		$	(15,832	)	$	(21,659)

The estimated amount that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2012 is as follows:

	Pension		Post-
In thousands	benefits		retirement
Prior service cost (benefit)	$	—	$	(27)
Net actuarial (gain) loss		10,308		(3,306)
Total estimated 2012 amortization	$	10,308	$	(3,333	)

Additional information

Change in accumulated other comprehensive income, net of tax:

In thousands	2011			2010
Beginning of the year	$	(71,210	)	$	(58,448)
Additional prior service cost incurred during the year		—			171
Actuarial gains (losses) incurred during the year		(42,139	)		(11,861)
Translation gains (losses) incurred during the year		118			(75)
Amortization during the year:
Transition obligation		—			8
Unrecognized prior service cost (benefit)		(16	)		(12)
Actuarial gains		354			(993)
End of the year	$	(112,893	)	$	(71,210)

Assumptions

Weighted-average assumptions used to determine domestic benefit obligations at December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.05		5.90		6.00		5.05		5.90		6.00
Rate of compensation increase		4.00		4.00		4.00

Weighted-average assumptions used to determine the domestic net periodic benefit cost for years ending December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.90		6.00		6.50		5.90		6.00		6.50
Expected long-term return on plan assets		8.00		8.50		8.50
Rate of compensation increase		4.00		4.00		4.00

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 AA or higher bonds available in the marketplace, adjusted to eliminate the effects of call provisions. This produced a discount rate for our U.S. plans of 5.05% in 2011, 5.90% in 2010 and 6.00% in 2009. The discount rates on our foreign plans ranged from 0.75% to 5.00% in 2011, 0.75% to 5.40% in 2010 and 2.00% to 6.00% in 2009. There are no other known or anticipated changes in our discount rate assumption that will impact our pension expense in 2012.

Expected rate of return

Our expected rate of return on plan assets was 8.0% for 2011 and 8.5%, 2010 and 2009. 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. In 2011, the pension plan assets yielded returns of 7.8% and returns of 11.2% and 19.5% in 2010 and 2009. Our expected rate of return on plan assets assumption is 7.5% for 2012.

We base our determination of pension expense or income on a market-related valuation of assets which reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a five- year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets. Since the market-related value of assets recognizes gains or losses over a five-year-period, the future value of assets will be impacted as previously deferred gains or losses are recorded.

Unrecognized pension and post-retirement losses

As of our December 31, 2011 measurement date, our plans have $186.1 million of cumulative unrecognized losses. To the extent the unrecognized losses, when adjusted for the difference between market and market related values of assets, exceeds 10% of the projected benefit obligation, it will be amortized into expense each year on a straight-line basis over the remaining expected future-working lifetime of active participants (currently approximating 12 years).

The assumed health care cost trend rates at December 31 are as follows:

	2011		2010
Health care cost trend rate assumed for next year		7.50 %		7.50 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.50 %		4.50 %
Year that the rate reaches the ultimate trend rate		2027		2027

The assumed health care cost trend rates can have a significant effect on the amounts reported for health care plans. A one-percentage-point change in the assumed health care cost trend rates would have the following effects:

In thousands	1-Percentage- point increase		1-Percentage- point decrease
Effect on total annual service and interest cost	$	45	$	(40	)
Effect on post-retirement benefit obligation		905		(801	)

Plan 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. The plans will therefore be actively invested to achieve real growth of capital over inflation through appreciation of securities held and through the accumulation and reinvestment of dividend and interest income.

Asset allocation

Our actual overall asset allocation for the plans as compared to our investment policy goals is as follows:

	Plan assets				Target allocation
Asset class	2011		2010		2011		2010
Equity securities		42 %		47 %		40 %		50 %
Fixed income investments		50 %		37 %		50 %		40 %
Alternative investments		5 %		12 %		10 %		10 %
Cash		3 %		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.

As part of our strategy to reduce U.S. pension plan funded status volatility, we plan to increase the allocation to long duration fixed income securities in future years as the funded status of our U.S. pension plans improve. In 2011 we increased our fixed income investments from 40% to 50% and from 30% to 40% in 2010.

Fair value measurement

The following table presents our plan assets using the fair value hierarchy as of December 31, 2011 and December 31, 2010.

in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,084	$	—	$	13,084
Fixed income:
Corporate and non U.S. government		—		76,046		150		76,196
U.S. treasuries		—		82,989		—		82,989
Mortgage-backed securities		—		40,286		629		40,915
Other		—		7,958		219		8,177
Global equity securities:
Small cap equity		7,094		—		—		7,094
Mid cap equity		7,528		4		—		7,532
Large cap equity		—		47,398		—		47,398
International equity		19,942		19,652		—		39,594
Long/short equity		—		56,575		—		56,575
Pentair company stock		16,645		—		—		16,645
Other investments		—		4,563		19,009		23,572
Total as of December 31, 2011	$	51,209	$	348,555	$	20,007	$	419,771
in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,803	$	—	$	13,803
Fixed income:
Corporate and non U.S. government		—		42,544		284		42,828
U.S. treasuries		—		60,710		—		60,710
Mortgage-backed securities		—		30,052		1,368		31,420
Other		—		6,818		125		6,943
Global equity securities:
Small cap equity		7,982		—		—		7,982
Mid cap equity		8,811		—		—		8,811
Large cap equity		—		45,700		—		45,700
International equity		23,964		21,895		—		45,859
Long/short equity		—		56,639		—		56,639
Pentair company stock		18,255		—		—		18,255
Other investments		—		33,542		12,991		46,533
Total as of December 31, 2010	$	59,012	$	311,703	$	14,768	$	385,483

Valuation methodologies used for investments measured at fair value are as follows:

• Cash equivalents: Consist of investments in commingled funds valued based on observable market data. Such investments are classified as Level 2.

• Fixed income: Investments in corporate bonds, government securities, mortgages and asset backed securities are value based upon quoted market prices for identical or similar securities and other observable market data. Investments in commingled funds are 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 are classified as Level 2. Certain investments in commingled funds are valued based on unobservable inputs due to liquidation restrictions. These investments are classified as Level 3.

• Global equity securities: Equity securities and Pentair common stock are valued based on the closing market price in an active market and are classified as Level 1. Investments in commingled funds are 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 are classified as Level 2.

• Other investments: Other investments include investments in commingled funds with diversified investment strategies. Investments in commingled funds that are 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 are classified as Level 2. Investments in commingled funds that are valued based on unobservable inputs due to liquidation restrictions are classified as Level 3.

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2011 and December 31, 2010, respectively.

	Balance January 1, 2011		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2011
Other investments	$	12,991	$	251	$	5,767		$	—	$	19,009
Fixed income investments		1,777		87		(866	)		—		998
	$	14,768	$	338	$	4,901		$	—	$	20,007
	Balance January 1, 2010		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2010
Other investments	$	14,427	$	678	$	(2,114	)	$	—	$	12,991
Fixed income investments		2,739		334		(1,296	)		—		1,777
	$	17,166	$	1,012	$	(3,410	)	$	—	$	14,768

Cash flows

Contributions

Pension contributions totaled $37.1 million and $49.8 million in 2011 and 2010, respectively. Our 2012 required pension contributions are expected to be in the range of $40 million to $45 million. The 2012 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 as follows:

In millions	Pension benefits		Post-retirement
2012	$	31.8	$	3.3
2013		32.6		3.2
2014		33.5		3.1
2015		35.9		3.0
2016		38.7		2.9
2017-2021		221.4		13.1

Savings plan

We have a 401(k) plan (“the plan”) with an employee stock ownership (“ESOP”) bonus component, which covers certain union and nearly all non-union U.S. employees who meet certain age requirements. Under the 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 June 2009, we temporarily suspended the company match of the plan and ESOP. We reinstated the company match in 2010.

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.

Our combined expense for the plan and ESOP was approximately $15.8 million, $11.0 million and $6.7 million, in 2011, 2010 and 2009, respectively.

Other retirement compensation

Total other accrued retirement compensation was $12.6 million and $13.9 million in 2011 and 2010, respectively and is included in the Pension and other retirement compensation line of our Consolidated Balance Sheet.

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Actual Overall Asset Allocation for Plans as Compared to Investment Policy Goals (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Plan Assets
Equity Securities	42.00%	47.00%
Fixed Income Investments	50.00%	37.00%
Alternative Investments	5.00%	12.00%
Cash	3.00%	4.00%
Target Allocation
Equity Securities	40.00%	50.00%
Fixed Income Investments	50.00%	40.00%
Alternative Investments	10.00%	10.00%
Cash

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2011

Accumulated Other Comprehensive Income (Loss)

8. Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) consists of the following:

In thousands	2011		2010
Retirement liability adjustments, net of tax	$	(112,893)	$	(71,210)
Cumulative translation adjustments		(33,407)		58,184
Market value of derivative financial instruments, net of tax		(4,941)		(9,316)
Accumulated other comprehensive income (loss)	$	(151,241)	$	(22,342)

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Debt - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended								1 Months Ended	12 Months Ended
	Jun. 30, 2009	Dec. 31, 2011	Dec. 31, 2009	Apr. 15, 2009	May 31, 2011 Senior Notes, 5.000 Percent Due 2021	Dec. 31, 2011 Private Placement Debt Due May 2012	Mar. 31, 2009 Senior Notes 7.85 Percent Due 2009	Dec. 31, 2011 CPT	Dec. 31, 2011 Maximum	Apr. 30, 2011 Credit Facility	Dec. 31, 2011 Credit Facility	Dec. 31, 2011 Other Credit Facilities
Debt Disclosure [Line Items]
Aggregate principal amount					$ 500,000,000
Debt, interest rate					5.00%
Debt, maturity year					2021
Previous revolving credit facility										800,000,000
Credit facility maximum borrowing capacity										700,000,000		74,200,000
Credit facility expiration date										2016-04-28
Line of credit facility, amount outstanding												14,100,000
Credit facility interest rate, before the addition of LIBOR										1.75%
Remaining availability under the Credit Facility											528,000,000
Remaining availability under the Credit Facility limited by leverage ratio											480,300,000
Debt agreement financial covenant, leverage ratio that may not exceeded by reported date									3.5
Compliance with debt agreement financial covenants		We were in compliance with all financial covenants in our debt agreements as of December 31, 2011.
Long-term debt, outstanding						105,000,000
Long-term debt, maturity date						2012-05
Outstanding aggregate principal of Notes							133,900,000
Notes redemption price per $1,000 of principal outstanding				1,035.88
Debt tender offer				1,000
Loss due to early extinguishment of debt	(4,800,000)		(4,804,000)
Unamortized deferred financing fees write off	100,000
Previously unrecognized swap gains	300,000
Cash paid for redemption and other costs associated with the purchase	5,000,000
Capital lease obligation cost								22,700,000
Accumulated amortization								5,100,000
Future minimum lease payments		17,900,000
Imputed interest		$ 2,100,000

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Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2011

Supplemental Balance Sheet Information

6. Supplemental Balance Sheet Information

In thousands	2011		2010
Inventories
Raw materials and supplies	$	219,487	$	223,482
Work-in-process		47,707		37,748
Finished goods		182,669		144,126
Total inventories	$	449,863	$	405,356
Property, plant and equipment
Land and land improvements	$	41,111	$	36,484
Buildings and leasehold improvements		244,246		212,168
Machinery and equipment		692,930		598,554
Construction in progress		40,251		33,841
Total property, plant and equipment		1,018,538		881,047
Less accumulated depreciation and amortization		631,013		551,612
Property, plant and equipment, net	$	387,525	$	329,435

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2011

Supplemental Cash Flow Information

7. Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information:

In thousands	2011		2010		2009
Interest payments	$	54,516	$	37,083	$	43,010
Income tax payments		64,389		55,991		8,719

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Debt

12 Months Ended

Dec. 31, 2011

Debt

9. Debt

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

	Average
	interest rate			Maturity		December 31,			December 31,
In thousands	December 31, 2011			(Year)		2011			2010
Commercial paper		1.26	%		2016	$	3,497		$	—
Revolving credit facilities		2.04	%		2016		168,500			97,500
Private placement - fixed rate		5.65	%		2013 - 2017		400,000			400,000
Private placement - floating rate		0.99	%		2012 - 2016		205,000			205,000
Public - fixed rate		5.00	%		2021		500,000			—
Capital lease obligations		3.72	%		2025		15,788			—
Other		3.04	%		2012 -2021		16,302			4,972
Total debt, including current portion							1,309,087			707,472
Less: Current maturities							(1,168	)		(18)
Short-term borrowings							(3,694	)		(4,933)
Long-term debt						$	1,304,225		$	702,521

In May 2011, we completed a public offering of $500 million aggregate principal amount of our 5.00% Senior Notes due 2021 (the “Notes”). The Notes are guaranteed by certain of our wholly-owned domestic subsidiaries that are also guarantors under our primary bank credit facility. We used the net proceeds from the offering of the Notes to finance in part the CPT acquisition.

In April 2011, we entered into a Fourth Amended and Restated Credit Agreement (the “Credit Facility”). The Credit Facility replaced our previous $800 million revolving credit facility. The Credit Facility creates an unsecured, committed credit facility of up to $700 million, with multi-currency sub facilities to support investments outside the U.S. The Credit Facility expires on April 28, 2016. Borrowings under the Credit Facility currently bear interest at the rate of London Interbank Offered Rate (“LIBOR”) plus 1.75%. Interest rates and fees on the Credit Facility will vary based on our credit ratings. We used borrowings under the Credit Facility to fund a portion of the CPT acquisition and to fund ongoing operations.

Total availability under our existing Credit Facility was $528.0 million as of December 31, 2011, which was limited to $480.3 million by the leverage ratio financial covenant in the credit agreement.

Our debt agreements contain certain financial covenants, the most restrictive of which is a leverage ratio (total consolidated indebtedness, as defined, over consolidated net income before interest, taxes, depreciation, amortization and non-cash compensation expense, as defined) that may not exceed 3.5 to 1.0 as of the last date of each of our fiscal quarters thereafter. We were in compliance with all financial covenants in our debt agreements as of December 31, 2011.

In addition to the Credit Facility, we have various other credit facilities with an aggregate availability of $74.2 million, of which $14.1 million was outstanding at December 31, 2011. Borrowings under these credit facilities bear interest at variable rates.

We have $105 million of outstanding private placement debt maturing in May 2012. We classified this debt as long-term as of December 31, 2011 as we have the intent and ability to refinance such obligation on a long-term basis under the Credit Facility.

In March 2009, we announced the redemption of all of our remaining outstanding $133.9 million aggregate principal of our 7.85% Senior Notes due 2009. These notes were redeemed on April 15, 2009 at a redemption price of $1,035.88 per $1,000 of principal outstanding plus accrued interest thereon. As a result of this transaction, we recognized a loss of $4.8 million on early extinguishment of debt in the second quarter of 2009. The loss included the write off of $0.1 million in unamortized deferred financing fees in addition to recognition of $0.3 million in previously unrecognized swap gains and cash paid of $5.0 million related to the redemption and other costs associated with the purchase.

Debt outstanding at December 31, 2011 matures on a calendar year basis as follows:

In thousands	2012		2013		2014		2015		2016		Thereafter		Total
Contractual debt obligation maturities	$	3,694	$	200,620	$	—	$	—	$	288,985	$	800,000	$	1,293,299
Capital lease obligations		1,168		1,168		1,168		1,168		1,168		9,948		15,788
Total maturities	$	4,862	$	201,788	$	1,168	$	1,168	$	290,153	$	809,948	$	1,309,087

As part of the CPT acquisition, we assumed a capital lease obligation related to land and buildings. As of December 31, 2011 we had a cost of $22.7 million, and accumulated amortization of $5.1 million, all of which are included in Property, plant and equipment on the Consolidated Balance Sheets.

The present value of future minimum lease payments is the total future minimum lease payments of $17.9 million less the imputed interest of $2.1 million.

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Fair value of Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency contract			$ 1,200
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash-flow hedges	(8,034)		(15,768)
Foreign currency contract			1,183
Foreign currency contract	(99)
Deferred compensation plan	22,987	[1]	24,126	[1]
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	22,987	[1]	24,126	[1]
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash-flow hedges	(8,034)		(15,768)
Foreign currency contract			1,183
Foreign currency contract	$ (99)

[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.

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Plan Assets Using Fair Value Hierarchy (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 419,771	$ 385,483
Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	13,084	13,803
Fixed Income Securities | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	76,196	42,828
Fixed Income Securities | US Treasury Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	82,989	60,710
Fixed Income Securities | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	40,915	31,420
Fixed Income Securities | Others
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	8,177	6,943
Equity Securities | US Small Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,094	7,982
Equity Securities | US Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,532	8,811
Equity Securities | US Large Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	47,398	45,700
Equity Securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	39,594	45,859
Equity Securities | US Long Short Equity Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	56,575	56,639
Equity Securities | Common Stock
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	16,645	18,255
Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	23,572	46,533
Fair Value, Inputs, Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	51,209	59,012
Fair Value, Inputs, Level 1 | Equity Securities | US Small Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,094	7,982
Fair Value, Inputs, Level 1 | Equity Securities | US Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,528	8,811
Fair Value, Inputs, Level 1 | Equity Securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	19,942	23,964
Fair Value, Inputs, Level 1 | Equity Securities | Common Stock
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	16,645	18,255
Fair Value, Inputs, Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	348,555	311,703
Fair Value, Inputs, Level 2 | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	13,084	13,803
Fair Value, Inputs, Level 2 | Fixed Income Securities | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	76,046	42,544
Fair Value, Inputs, Level 2 | Fixed Income Securities | US Treasury Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	82,989	60,710
Fair Value, Inputs, Level 2 | Fixed Income Securities | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	40,286	30,052
Fair Value, Inputs, Level 2 | Fixed Income Securities | Others
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,958	6,818
Fair Value, Inputs, Level 2 | Equity Securities | US Mid Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	4
Fair Value, Inputs, Level 2 | Equity Securities | US Large Cap
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	47,398	45,700
Fair Value, Inputs, Level 2 | Equity Securities | International Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	19,652	21,895
Fair Value, Inputs, Level 2 | Equity Securities | US Long Short Equity Fund
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	56,575	56,639
Fair Value, Inputs, Level 2 | Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	4,563	33,542
Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	20,007	14,768
Fair Value, Inputs, Level 3 | Fixed Income Securities | Foreign Government
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	150	284
Fair Value, Inputs, Level 3 | Fixed Income Securities | Collateralized Mortgage Backed Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	629	1,368
Fair Value, Inputs, Level 3 | Fixed Income Securities | Others
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	219	125
Fair Value, Inputs, Level 3 | Other Investments
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 19,009	$ 12,991

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Provision for Income Taxes for Continuing Operations (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Currently payable
Federal	$ 51,158	$ 44,766	$ 10,502
State	6,980	6,591	2,456
International	24,005	17,877	13,947
Total current taxes	82,143	69,234	26,905
Deferred
Federal and state	419	26,445	26,733
International	(9,503)	1,521	2,790
Total deferred taxes	(9,084)	27,966	29,523
Total provision for income taxes	$ 73,059	$ 97,200	$ 56,428

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Condensed Consolidated Statements of Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended									12 Months Ended
	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 31, 2010	Oct. 02, 2010	Jul. 03, 2010	Apr. 03, 2010	Jun. 30, 2009	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Financial Statements, Captions [Line Items]
Net sales	$ 865,692	$ 890,546	$ 910,175	$ 790,273	$ 753,858	$ 773,735	$ 796,167	$ 707,013		$ 3,456,686	$ 3,030,773	$ 2,692,468
Cost of goods sold										2,382,964	2,100,133	1,907,333
Gross profit	264,865	272,062	287,736	249,059	232,228	236,542	248,168	213,702		1,073,722	930,640	785,135
Selling, general and administrative										626,527	529,329	507,303
Research and development										78,158	67,156	57,884
Goodwill impairment										200,520
Operating (loss) income	(119,985)	92,903	109,422	86,177	79,605	90,823	100,126	63,601		168,517	334,155	219,948
Other (income) expense:
Equity income of unconsolidated subsidiaries										(1,898)	(2,108)	1,379
Loss on early extinguishment of debt									4,800			4,804
Net interest (income) expense										58,835	36,116	41,118
Income (loss) from continuing operations before income taxes and noncontrolling interest										111,580	300,147	172,647
Provision for income taxes										73,059	97,200	56,428
Income from continuing operations	(133,704)	52,054	68,137	52,034	49,577	55,729	61,612	36,029		38,521	202,947	116,219
Gain (loss) on disposal of discontinued operations, net of tax					(2,292)	549	593	524			(626)	(19)
Net income before noncontrolling interest										38,521	202,321	116,200
Noncontrolling interest										4,299	4,493	707
Net income attributable to Pentair, Inc.										34,222	197,828	115,493
Net income from continuing operations attributable to Pentair, Inc.	(134,123)	51,092	66,712	50,541	48,668	54,501	60,488	34,797		34,222	198,454	115,512
Parent Company
Condensed Financial Statements, Captions [Line Items]
Cost of goods sold										4,000	3,167	7,024
Gross profit										(4,000)	(3,167)	(7,024)
Selling, general and administrative										18,967	(3,713)	10,074
Research and development										1,032	393	306
Operating (loss) income										(23,999)	153	(17,404)
Earnings from investment in subsidiaries										18,792	(129,872)	(60,528)
Other (income) expense:
Loss on early extinguishment of debt												4,804
Net interest (income) expense										(107,743)	(111,034)	(106,586)
Income (loss) from continuing operations before income taxes and noncontrolling interest										64,952	241,059	144,906
Provision for income taxes										30,730	42,605	29,270
Income from continuing operations											198,454	115,636
Gain (loss) on disposal of discontinued operations, net of tax											(626)	(143)
Net income before noncontrolling interest										34,222	197,828	115,493
Net income attributable to Pentair, Inc.										34,222	197,828	115,493
Net income from continuing operations attributable to Pentair, Inc.											198,454	115,636
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net sales										2,243,362	2,092,487	1,827,463
Cost of goods sold										1,562,298	1,453,786	1,310,011
Gross profit										681,064	638,701	517,452
Selling, general and administrative										338,830	337,408	312,079
Research and development										41,860	42,386	34,844
Operating (loss) income										300,374	258,907	170,529
Earnings from investment in subsidiaries										(27,419)
Other (income) expense:
Equity income of unconsolidated subsidiaries										(1,654)	(1,551)	1,379
Net interest (income) expense										152,264	153,904	153,672
Income (loss) from continuing operations before income taxes and noncontrolling interest										177,183	106,554	15,478
Provision for income taxes										45,156	36,447	6,063
Income from continuing operations											70,107	9,415
Gain (loss) on disposal of discontinued operations, net of tax												551
Net income before noncontrolling interest										132,027	70,107	9,966
Net income attributable to Pentair, Inc.										132,027	70,107	9,966
Net income from continuing operations attributable to Pentair, Inc.											70,107	9,415
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net sales										1,437,242	1,189,597	1,050,381
Cost of goods sold										1,039,362	893,570	775,116
Gross profit										397,880	296,027	275,265
Selling, general and administrative										269,952	196,555	185,708
Research and development										35,266	24,377	22,734
Goodwill impairment										200,520
Operating (loss) income										(107,858)	75,095	66,823
Earnings from investment in subsidiaries										(1,321)
Other (income) expense:
Equity income of unconsolidated subsidiaries										(244)	(557)
Net interest (income) expense										14,314	(6,754)	(5,968)
Income (loss) from continuing operations before income taxes and noncontrolling interest										(120,607)	82,406	72,791
Provision for income taxes										(2,827)	18,148	21,095
Income from continuing operations											64,258	51,696
Gain (loss) on disposal of discontinued operations, net of tax												(427)
Net income before noncontrolling interest										(117,780)	64,258	51,269
Noncontrolling interest										4,299	4,493	707
Net income attributable to Pentair, Inc.										(122,079)	59,765	50,562
Net income from continuing operations attributable to Pentair, Inc.											59,765	50,989
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net sales										(223,918)	(251,311)	(185,376)
Cost of goods sold										(222,696)	(250,390)	(184,818)
Gross profit										(1,222)	(921)	(558)
Selling, general and administrative										(1,222)	(921)	(558)
Earnings from investment in subsidiaries										9,948	129,872	60,528
Other (income) expense:
Income (loss) from continuing operations before income taxes and noncontrolling interest										(9,948)	(129,872)	(60,528)
Income from continuing operations											(129,872)	(60,528)
Net income before noncontrolling interest										(9,948)	(129,872)	(60,528)
Net income attributable to Pentair, Inc.										(9,948)	(129,872)	(60,528)
Net income from continuing operations attributable to Pentair, Inc.											$ (129,872)	$ (60,528)

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Recorded Amounts and Estimated Fair Values of Long-term Debt and Derivative Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Total	$ 1,309,087	$ 707,472
Carrying (Reported) Amount, Fair Value Disclosure
Derivative [Line Items]
Variable rate	406,978	307,433
Fixed rate	902,109	400,039
Total	1,309,087	707,472
Estimate of Fair Value, Fair Value Disclosure
Derivative [Line Items]
Variable rate	406,978	307,433
Fixed rate	954,053	438,492
Total	$ 1,361,031	$ 745,925

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Restricted Share Award Activity (Detail) (Restricted Stock Units (RSUs), USD $)	12 Months Ended
	Dec. 31, 2011
Restricted Stock Units (RSUs)
Restricted Shares Outstanding Shares
Beginning Balance	1,309,403
Granted	278,418
Vested	(276,956)
Forfeited	(60,783)
Ending Balance	1,250,082
Weighted Average Grant Date Fair Value
Beginning Balance	$ 29.33
Granted	$ 36.60
Vested	$ 31.63
Forfeited	$ 28.32
Ending Balance	$ 30.49

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2011

Components of Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) consists of the following:

In thousands	2011		2010
Retirement liability adjustments, net of tax	$	(112,893)	$	(71,210)
Cumulative translation adjustments		(33,407)		58,184
Market value of derivative financial instruments, net of tax		(4,941)		(9,316)
Accumulated other comprehensive income (loss)	$	(151,241)	$	(22,342)

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Restructuring Accrual Activity Recorded on Consolidated Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ 3,994	$ 14,509
Costs incurred	11,500
Cash payments and other	(2,689)	(10,515)
Ending balance	$ 12,805	$ 3,994

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Stock Plans

12 Months Ended

Dec. 31, 2011

Stock Plans

14. Stock Plans

Total stock-based compensation expense in 2011, 2010 and 2009 was $19.5 million, $21.5 million and $17.3 million, respectively.

Omnibus stock incentive plans

In May 2008, the 2008 Omnibus Stock Incentive Plan as Amended and Restated (the “2008 Plan” or the “Plan”) was approved by shareholders. The 2008 Plan authorizes the issuance of additional shares of our common stock and extends through February 2018. The 2008 Plan allows for the granting of nonqualified stock options; incentive stock options; restricted shares; restricted stock units; dividend equivalent units; stock appreciation rights; performance shares; performance units; and other stock based awards.

The 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 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 Pentair. 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 Plan. The Plan restricts the Committee’s authority to reprice awards or to cancel and reissue awards at lower prices.

The Omnibus Stock Incentive Plan approved by the shareholders in 2004 (the “2004 Plan”) expired upon approval of the 2008 Plan by shareholders. Prior grants made under the 2004 Plan and earlier stock incentive plans remained outstanding on the terms in effect at the time of grant.

Non-qualified and incentive stock options

Under the 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 $8.9 million in 2011, $10.7 million in 2010 and $7.1 million in 2009.

Restricted shares and restricted stock units

Under the Plan, eligible employees are awarded restricted shares or restricted stock units (awards) of our common stock. Share awards generally vest from two to five years after issuance, subject to continuous employment and certain other conditions. Restricted share awards 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 $10.6 million in 2011, $10.8 million in 2010 and $10.2 million in 2009.

Stock appreciation rights, performance shares and performance units

Under the Plan, the Committee is permitted to issue these awards which are generally earned over a three-year vesting period and are tied to specific financial metrics.

Outside directors nonqualified stock option plan

Nonqualified stock options were granted to outside directors under the Outside Directors Nonqualified Stock Option Plan (the “Directors Plan”) with an exercise price equal to the market value of the shares on the option grant dates. Options generally vest over a three-year period commencing on the grant date and expire ten years after the grant date. The Directors Plan expired in January 2008. Prior grants remain outstanding on the terms in effect at the time of grant.

Non-employee Directors are also eligible to receive awards under the 2008 Plan. Director awards are made by our Governance Committee, which is made up of independent members of our Board of Directors.

Stock options

The following table summarizes stock option activity under all plans:

Options outstanding	Shares			Weighted average exercise price		Weighted average remaining contractual life		Aggregate intrinsic value
Balance January 1, 2011		7,967,416		$	31.34
Granted		817,707			36.73
Exercised		(839,886	)		25.03
Forfeited		(45,203	)		32.86
Expired		(62,338	)		40.06
Balance December 31, 2011		7,837,696		$	32.50		5.6	$	20,161,647
Options exercisable as of December 31, 2011		5,694,049		$	32.38		4.6	$	16,052,331
Options expected to vest as of December 31, 2011		2,107,848		$	32.82		8.2	$	4,109,316

The weighted-average grant date fair value of options granted in 2011, 2010 and 2009 was estimated to be $9.98, $9.47 and $5.09 per share, respectively. The total intrinsic value of options that were exercised during 2011, 2010 and 2009 was $10.9 million, $7.4 million and $5.2 million, respectively. At December 31, 2011, 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 values using the Black-Scholes option-pricing model, modified for dividends and using the following assumptions:

	2011			2010			2009
Risk-free interest rate		1.51	%		2.45	%		1.77	%
Expected dividend yield		2.32	%		2.30	%		3.20	%
Expected stock price volatility		35.50	%		35.00	%		32.50	%
Expected lives		5.5 yrs			5.5 yrs			5.2 yrs

Cash received from option exercises for the years ended December 31, 2011, 2010 and 2009 was $14.7 million, $14.9 million and $8.2 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $4.1 million, $2.8 million and $1.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Restricted share awards

The following table summarizes restricted share award activity under all plans:

Restricted shares outstanding	Shares			Weighted average grant date fair value
Balance January 1, 2011		1,309,403		$	29.33
Granted		278,418			36.60
Vested		(276,956	)		31.63
Forfeited		(60,783	)		28.32
Balance December 31, 2011		1,250,082		$	30.49

As of December 31, 2011, there was $16.4 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2004 Plan and the 2008 Plan. That cost is expected to be recognized over a weighted-average period of 2.0 years. The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009, was $10.2 million, $12.7 million and $5.5 million, respectively. The actual tax benefit realized for the tax deductions from restricted share compensation arrangements totaled $3.6 million, $3.4 million and $2.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2011

Valuation and Qualifying Accounts

Schedule II — Valuation and Qualifying Accounts

Pentair, Inc and subsidiaries

in thousands	Balance beginning in period		Additions charged to costs and expenses		Deductions			Other changes add (deduct)			Balance end of period
Allowances for doubtful accounts
Year ended December 31, 2011	$	17,119	$	4,447	$	4,724	(1)	$	(842	)(2)	$	16,000
Year ended December 31, 2010	$	14,154	$	4,300	$	1,152	(1)	$	(183	)(2)	$	17,119
Year ended December 31, 2009	$	8,925	$	6,832	$	2,449	(1)	$	846	(2)	$	14,154

⁽¹⁾ Uncollectible accounts written off, net of expense

⁽²⁾ Result of acquisitions and foreign currency effects

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Geographic Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Oct. 01, 2011	Jul. 02, 2011	Apr. 02, 2011	Dec. 31, 2010	Oct. 02, 2010	Jul. 03, 2010	Apr. 03, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenue, Major Customer [Line Items]
Net sales	$ 865,692	$ 890,546	$ 910,175	$ 790,273	$ 753,858	$ 773,735	$ 796,167	$ 707,013	$ 3,456,686	$ 3,030,773	$ 2,692,468
Property, plant and equipment, net	387,525				329,435				387,525	329,435	333,688
UNITED STATES
Revenue, Major Customer [Line Items]
Net sales									2,336,845	2,222,856	1,964,138
Property, plant and equipment, net	195,631				196,440				195,631	196,440	203,206
Europe
Revenue, Major Customer [Line Items]
Net sales									701,865	470,879	439,312
Property, plant and equipment, net	140,290				77,000				140,290	77,000	87,880
Asia and other
Revenue, Major Customer [Line Items]
Net sales									417,976	337,038	289,018
Property, plant and equipment, net	$ 51,604				$ 55,995				$ 51,604	$ 55,995	$ 42,602

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Restructuring -Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Person	Dec. 31, 2009
Restructuring Cost and Reserve [Line Items]
Number of employees	210
Total restructuring costs	$ 13,000	$ 17,240
Water & Fluid Solutions
Restructuring Cost and Reserve [Line Items]
Number of employees	160
Total restructuring costs	11,000
Technical Products
Restructuring Cost and Reserve [Line Items]
Number of employees	50
Total restructuring costs	$ 2,000

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Valuation and Qualifying Accounts (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Valuation and Qualifying Accounts Disclosure [Line Items]
Ending balance	$ 44,300		$ 49,000
Allowance for Doubtful Accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	17,119		14,154		8,925
Additions Charged to Costs and Expenses	4,447		4,300		6,832
Deductions	4,724	[1]	1,152	[1]	2,449	[1]
Other changes Add (deduct)	(842)	[2]	(183)	[2]	846	[2]
Ending balance	$ 16,000		$ 17,119		$ 14,154

[1] Uncollectible accounts written off, net of expense

[2] Result of acquisitions and foreign currency effects

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2011

Net Rental Expense Under Operating Leases

Net rental expense under operating leases follows:

In thousands	2011			2010			2009
Gross rental expense	$	39,808		$	32,662		$	32,799
Sublease rental income		(455	)		(225	)		(74	)
Net rental expense	$	39,353		$	32,437		$	32,725

Future Minimum Lease Commitments Under Non-Cancelable Operating Leases

Future minimum lease commitments under non-cancelable operating leases, principally related to facilities, vehicles, and machinery and equipment are as follows:

In thousands	2012			2013			2014			2015			2016			Thereafter			Total
Minimum lease payments	$	25,961		$	19,343		$	15,944		$	12,689		$	10,331		$	16,794		$	101,062
Minimum sublease rentals		(280	)		(283	)		(285	)		(118	)		(103	)		(103	)		(1,172	)
Net future minimum lease commitments	$	25,681		$	19,060		$	15,659		$	12,571		$	10,228		$	16,691		$	99,890

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, 2011 and 2010 were as follows:

In thousands	2011			2010
Balance at beginning of the year	$	30,050		$	24,288
Service and product warranty provision		50,096			56,553
Payments		(53,937	)		(50,729	)
Acquired		3,575			—
Translation		(429	)		(62	)
Balance at end of the period	$	29,355		$	30,050

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities
Net income before noncontrolling interest	$ 38,521	$ 202,321	$ 116,200
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Loss on disposal of discontinued operations		626	19
Equity (income) losses of unconsolidated subsidiaries	(1,898)	(2,108)	1,379
Depreciation	66,235	57,995	64,823
Amortization	41,897	26,184	40,657
Deferred income taxes	(5,583)	29,453	30,616
Stock compensation	19,489	21,468	17,324
Goodwill impairment	200,520
Excess tax benefits from stock-based compensation	(3,310)	(2,686)	(1,746)
Loss on sale of assets	933	466	985
Changes in assets and liabilities, net of effects of business acquisitions and dispositions
Accounts and notes receivable	1,348	(62,344)	11,307
Inventories	18,263	(44,495)	66,684
Prepaid expenses and other current assets	10,032	2,777	16,202
Accounts payable	(24,330)	55,321	(13,822)
Employee compensation and benefits	(20,486)	27,252	(22,431)
Accrued product claims and warranties	(1,984)	8,068	(7,440)
Income taxes	10,084	1,791	1,972
Other current liabilities	10,921	561	(21,081)
Pension and post-retirement benefits	(24,596)	(43,024)	(39,607)
Other assets and liabilities	(15,830)	(9,250)	(2,141)
Net cash provided by (used for) continuing operations	320,226	270,376	259,900
Net cash provided by (used for) operating activities of discontinued operations			(1,531)
Net cash provided by (used for) operating activities	320,226	270,376	258,369
Investing activities
Capital expenditures	(73,348)	(59,523)	(54,137)
Proceeds from sale of property and equipment	1,310	358	1,208
Acquisitions, net of cash acquired	(733,105)
Divestitures			1,567
Other	(2,943)	(1,148)	(3,224)
Net cash provided by (used for) investing activities	(808,086)	(60,313)	(54,586)
Financing activities
Net short-term borrowings	(1,239)	2,728	2,205
Proceeds from long-term debt	1,421,602	703,641	580,000
Repayment of long-term debt	(832,147)	(804,713)	(730,304)
Debt issuance costs	(8,973)	(50)	(50)
Excess tax benefits from stock-based compensation	3,310	2,686	1,746
Stock issued to employees, net of shares withheld	13,322	9,941	8,247
Repurchases of common stock	(12,785)	(24,712)
Dividends paid	(79,537)	(75,465)	(70,927)
Distribution to noncontrolling interest		(4,647)
Net cash provided by (used for) financing activities	503,553	(190,591)	(209,083)
Effect of exchange rate changes on cash and cash equivalents	(11,672)	(6,812)	(648)
Change in cash and cash equivalents	4,021	12,660	(5,948)
Cash and cash equivalents, beginning of period	46,056	33,396	39,344
Cash and cash equivalents, end of period	$ 50,077	$ 46,056	$ 33,396

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Shareholders' Equity - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended		12 Months Ended
	Dec. 31, 2010	Jul. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Jan. 28, 2005
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares issued			250,000,000
Preferred stock shares			15,000,000
Preferred stock issued	0		0	0
Preferred stock outstanding	0		0	0
Dividend declaration date			Dec. 10, 2004
Dividend payable date			Jan. 28, 2005
Dividend payable shareholders of record date			Jan. 28, 2005
Minimum percentage of ownership acquired exercise purchase right			15.00%
Rights redemption amount per right					0.0025
Authorized amount to repurchase shares of common stock	$ 25	$ 25	$ 25
Common stock shares repurchased			389,300	734,603
Common stock amount repurchased			$ 12.5	$ 25.0
Authorization expiry date			2012-12
Series A Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock shares new issuance date			Dec. 10, 2004
Preferred stock shares new issuance			2,500,000
Series A Junior Participating Preferred Stock, par value			$ 0.10
Price of right per one hundredth of a share			240.00

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Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

3. Discontinued Operations

In 2010, we were notified of a product recall required by our former Tools Group (which was sold to Black and Decker Corporation in 2004 and treated as a discontinued operation). Under the terms of the sale agreement we are liable for a portion of the product recall costs. We recorded a liability of $3.2 million ($2.0 million net of tax) in 2010 representing our estimate of the potential cost for products sold prior to the date of sale of the Tools Group associated with this recall. In addition, we received the remaining escrow balances from our sale of Lincoln Industrial of approximately $0.5 million, and we reversed tax reserves of approximately $1.0 million due to the expiration of various statues of limitations.

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Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Accumulated Other Comprehensive Income (Loss) [Line Items]
Retirement liability adjustments, net of tax	$ (112,893)	$ (71,210)
Cumulative translation adjustments	(33,407)	58,184
Market value of derivative financial instruments, net of tax	(4,941)	(9,316)
Accumulated other comprehensive income (loss)	$ (151,241)	$ (22,342)

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Assumed Health Care Cost Trend Rates (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Health care cost trend rate assumed for next year	7.50%	7.50%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.50%	4.50%
Year that the rate reaches the ultimate trend rate	2027	2027

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Line Items]
Gross unrecognized tax benefits	$ 26.5
Amount of tax benefits that, if recognized, would impact the effective tax rate	24.5
Non-U.S. tax losses available for carryforward	82.3	49.6
State tax losses available for carryforward	69.2	69.3
Payment of penalties	0.9
Payment of interest expense	5.9
Unremitted earnings attributable to international subsidiaries	261.1
Deferred tax assets related to a foreign tax credit carryover and related to state net operating losses	3.3	2.3
Foreign tax credit expiration date	The foreign tax credit is eligible for carryforward until the tax period ending December 31, 2016.
Foreign Country
Income Taxes [Line Items]
Deferred tax assets, valuation allowance	11.7	9.4
Operating losses expiration period	subject to varying expiration periods and will begin to expire in 2012
State and Local Jurisdiction
Income Taxes [Line Items]
Deferred tax assets, valuation allowance	1.5	2.4
Operating losses expiration period	Certain state tax losses will expire in 2012, while others are subject to carryforward periods of up to twenty years.
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	$ 18.7
Maximum | State and Local Jurisdiction
Income Taxes [Line Items]
Operating loss carryforwards, expiration period	20 years

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2011

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.

Principles of consolidation

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Pentair and all subsidiaries, both U.S. and non-U.S., that 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 Income.

Use of estimates

Use of estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that could differ from those estimates. The critical accounting policies that require our most significant estimates and judgments include:

• the assessment of recoverability of long-lived assets, including goodwill and indefinite-life intangibles; and

• accounting for pension benefits, because of the importance in making the estimates necessary to apply these policies.

Revenue recognition

Revenue recognition

Generally, 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 (POC) method of accounting. Under this method, sales and gross profit are recognized as work is performed based on the relationship between the actual costs incurred and the total estimated costs at completion. 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.

We record costs and earnings in excess of billings on uncompleted contracts within Prepaid expenses and 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 Prepaid expenses and other current assets related to these contracts were $54.7 million and $0 at December 31, 2011 and 2010, respectively. Amounts included in Other current liabilities related to these contracts were $17.7 million and $0 at December 31, 2011 and 2010, 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. The following represents a description of our pricing arrangements, promotions and other volume-based incentives:

Pricing arrangements

Pricing is established up front 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 (“OEM”) 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.

Promotions

Our primary promotional activity is what we refer to as cooperative advertising. Under our cooperative advertising programs, we agree to pay the customer a fixed percentage of sales as an allowance that may be used to advertise and promote our products. The customer is generally not required to provide evidence of the advertisement or promotion. We recognize the cost of this cooperative advertising at the time of sale. The cost of this program is recorded as a reduction in gross sales.

Volume-based incentives

These incentives involve rebates that are negotiated up front 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 Income. 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 Income.

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 2011, 2010 and 2009 were $78.2 million, $67.2 million and $57.9 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 historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of our customers’ financial condition. We generally do not require collateral. No customer receivable balances exceeded 10% of total net receivable balances as of December 31, 2011 and December 31, 2010.

Inventories

Inventories

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

Property, plant and equipment

Property, plant and equipment

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 cost and related accumulated depreciation are removed from the accounts 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 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 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. 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 five year long-term planning period. The five year growth rates for revenues and operating profits vary for each reporting unit being evaluated. Revenues and operating profit beyond 2018 are projected to grow at a perpetual growth rate between 3.0% and 3.5%.

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 12.6% to 14% 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 operating segment 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

In the fourth quarter of 2011, we completed our annual goodwill impairment review. As a result, we recorded a pre-tax non-cash impairment charge of $200.5. This represents impairment of goodwill in our Residential Filtration reporting unit, part of Water & Fluid Solutions. The impairment charge resulted from changes in our forecasts in light of economic conditions prevailing in these markets and due to continued softness in the end-markets served by residential water treatment components.

Identifiable intangible assets

Our primary identifiable intangible assets include trade marks and trade names, patents, non-compete agreements, proprietary technology and customer relationships. 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. There was no impairment charge recorded in 2011 or 2010 for identifiable intangible assets. An impairment charge of $11.3 million was recorded in 2009, related to trade names. These charges were recorded in Selling, general and administrative in our Consolidated Statements of Income.

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 their 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. This non-recurring fair value measurement is a “Level 3” measurement under the fair value hierarchy described below.

At December 31, 2011 our goodwill and intangible assets were approximately $2,866 million and represented approximately 62.5% of our total assets. If we experience further 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 stock 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 Income. 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.

We have a 50% investment in FARADYNE Motors LLC (“FARADYNE”), a joint venture with Xylem, Inc. (fka ITT Water Technologies, Inc) that designs, develops and manufactures submersible pump motors. We do not consolidate the investment in our consolidated financial statements as we do not have a controlling interest over the investment. There were investments in and loans to FARADYNE of $6.0 million and $6.1 million at December 31, 2011 and December 31, 2010, respectively, which is 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. At December 31, 2011 and 2010 the aggregate balance of these investments was $6.9 million and $3.8 million, respectively.

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 basis 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.

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.

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, 2011 and 2010, reserves for policy claims were $44.3 million ($13.3 million included in Accrued product claims and warranties and $31.0 million included in Other non-current liabilities) and $49.0 million ($12.0 million included in Accrued product claims and warranties and $37.0 million included in Other non-current liabilities), respectively.

Stock-based compensation

Stock-based compensation

We account for stock-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 Income. Restricted share awards and units are recorded as compensation cost on a straight-line basis over the requisite service periods based on the market value on the date of grant.

Earnings per common share

Earnings per common share

Basic earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income attributable to Pentair, Inc., by the weighted-average number of common shares outstanding including the dilutive effects of common stock equivalents. The dilutive effects of stock options and restricted stock awards and units increased weighted average common shares outstanding by 1,519 thousand, 1,257 thousand and 1,107 thousand in 2011, 2010 and 2009, respectively.

Stock options excluded from the calculation of diluted earnings per share because the exercise price was greater than the average market price of the common shares were 2,140 thousand, 3,711 thousand and 5,283 thousand in 2011, 2010 and 2009, respectively.

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 as a fair-value hedge, the changes in the fair value of the derivative and the hedged item are recognized in earnings. If the derivative is designated and is effective as a cash-flow hedge, changes in the fair value of the derivative are recorded in other comprehensive income (“OCI”) and are recognized in the Consolidated Statements of Income 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 in to 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. 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 Accumulated other comprehensive income (loss) (“AOCI”), a separate component of shareholders’ equity.

New accounting standards

New accounting standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to improve the consistency of fair value measurement and disclosure requirements between US GAAP and International Financial Reporting Standards. The provisions of this guidance change certain of the fair value principles related to the highest and best use premise, the consideration of blockage factors and other premiums and discounts, and the measurement of financial instruments held in a portfolio and instruments classified within shareholders' equity. Further, the guidance provides additional disclosure requirements surrounding Level 3 fair value measurements, the uses of nonfinancial assets in certain circumstances and identification of the level in the fair value hierarchy used for assets and liabilities which are not recorded at fair value, but where fair value is disclosed. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We are evaluating the potential impact of adoption.

In June 2011, the FASB issued authoritative guidance surrounding the presentation of comprehensive income, with an objective of increasing the prominence of items reported in OCI. This guidance provides entities with the option to present the total of comprehensive income, the components of net income and the components of OCI in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, entities must present on the face of the financial statement, items reclassified from OCI to net income in the section of the financial statement where the components of net income and OCI are presented, regardless of the option selected to present comprehensive income. This guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The FASB subsequently deferred the effective date of certain provisions of this standard pertaining to the reclassification of items out of accumulated other comprehensive income, pending the issuance of further guidance on that matter. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides entities an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We believe that the adoption of this guidance will not have a material impact on our financial condition or results of operations.

Subsequent events

Subsequent events

In connection with preparing the audited consolidated financial statements for the year ended December 31, 2011, we have evaluated subsequent events for potential recognition and disclosure through the date of this filing.

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Amounts Recognized in Consolidated Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	$ (9,052)	$ (8,733)
Noncurrent liabilities	(248,615)	(209,859)
Pension benefits
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	(5,745)	(5,343)
Noncurrent liabilities	(236,055)	(195,982)
Net amount recognized	(241,800)	(201,325)
Post-retirement
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	(3,307)	(3,390)
Noncurrent liabilities	(31,774)	(30,325)
Net amount recognized	$ (35,081)	$ (33,715)

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Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2011

Reconciliations of Benefit Obligation, Plan Assets of Pension Plans and Funded Status of Plans

The following tables present reconciliations of the benefit obligation of the plans, the plan assets of the pension plans and the funded status of the plans:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Change in benefit obligation
Benefit obligation beginning of year	$	586,808		$	552,309		$	33,715		$	35,301
Service cost		12,466			11,588			180			200
Interest cost		32,768			31,671			1,889			2,013
Amendments		—			(281	)		—			—
Settlements		(257	)		(104	)		—			—
Actuarial (gain) loss		62,751			24,677			2,494			(647)
Translation (gain) loss		(2,477	)		(4,208	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Benefit obligation end of year	$	661,571		$	586,808		$	35,081		$	33,715
Change in plan assets
Fair value of plan assets beginning of year	$	385,483		$	329,188		$	—		$	—
Actual gain (loss) return on plan assets		27,971			35,495			—			—
Company contributions		37,097			49,840			3,197			3,152
Settlements		(257	)		(104	)		—			—
Translation gain (loss)		(35	)		(92	)		—			—
Benefits paid		(30,488	)		(28,844	)		(3,197	)		(3,152)
Fair value of plan assets end of year	$	419,771		$	385,483		$	—		$	—
Funded status
Plan assets less than benefit obligation	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

Amounts Recognized in Consolidated Balance Sheets

Amounts recognized in the Consolidated Balance Sheets are as follows:

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Current liabilities	$	(5,745	)	$	(5,343	)	$	(3,307	)	$	(3,390)
Noncurrent liabilities		(236,055	)		(195,982	)		(31,774	)		(30,325)
Net amount recognized	$	(241,800	)	$	(201,325	)	$	(35,081	)	$	(33,715)

Information for Pension Plans with 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 are as follows:

In thousands	2011		2010
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		625,884		557,712
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets	$	419,771	$	385,483
Accumulated benefit obligation		661,571		586,808

Components of Net Periodic Benefit Cost

Components of net periodic benefit cost are as follows:

	Pension benefits									Post-retirement
In thousands	2011			2010			2009			2011			2010			2009
Service cost	$	12,466		$	11,588		$	12,334		$	180		$	200		$	214
Interest cost		32,768			31,671			32,612			1,889			2,013			2,377
Expected return on plan assets		(31,849	)		(30,910	)		(30,286	)		—			—			—
Amortization of transition obligation		—			13			25			—			—			—
Amortization of prior year service cost (benefit)		—			7			23			(27	)		(27	)		(41)
Recognized net actuarial (gain) loss		3,887			1,674			82			(3,306	)		(3,295	)		(3,326)
Settlement gain		23			(8	)		(9	)		—			—			—
Net periodic benefit cost	$	17,295		$	14,035		$	14,781		$	(1,264	)	$	(1,109	)	$	(776)

Amounts Not Yet Recognized in Net Periodic Benefit Cost and Included in Accumulated Other Comprehensive Income (Pre-Tax)

Amounts not yet recognized in net periodic benefit cost and included in accumulated other comprehensive income (pre-tax):

	Pension benefits						Post-retirement
In thousands	2011			2010			2011			2010
Prior service cost (benefit)		(171	)		(162	)		(850	)		(878)
Net actuarial (gain) loss		201,093			138,558			(14,982	)		(20,781)
Accumulated other comprehensive (income) loss	$	200,922		$	138,396		$	(15,832	)	$	(21,659)

Estimated Amount that will be Amortized from Accumulated Other Comprehensive Income into Net Periodic Benefit Cost

The estimated amount that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2012 is as follows:

	Pension		Post-
In thousands	benefits		retirement
Prior service cost (benefit)	$	—	$	(27)
Net actuarial (gain) loss		10,308		(3,306)
Total estimated 2012 amortization	$	10,308	$	(3,333	)

Change in Accumulated Other Comprehensive Income, Net of Tax

Change in accumulated other comprehensive income, net of tax:

In thousands	2011			2010
Beginning of the year	$	(71,210	)	$	(58,448)
Additional prior service cost incurred during the year		—			171
Actuarial gains (losses) incurred during the year		(42,139	)		(11,861)
Translation gains (losses) incurred during the year		118			(75)
Amortization during the year:
Transition obligation		—			8
Unrecognized prior service cost (benefit)		(16	)		(12)
Actuarial gains		354			(993)
End of the year	$	(112,893	)	$	(71,210)

Assumed Health Care Cost Trend Rates

The assumed health care cost trend rates at December 31 are as follows:

	2011		2010
Health care cost trend rate assumed for next year		7.50 %		7.50 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.50 %		4.50 %
Year that the rate reaches the ultimate trend rate		2027		2027

Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

The assumed health care cost trend rates can have a significant effect on the amounts reported for health care plans. A one-percentage-point change in the assumed health care cost trend rates would have the following effects:

In thousands	1-Percentage- point increase		1-Percentage- point decrease
Effect on total annual service and interest cost	$	45	$	(40	)
Effect on post-retirement benefit obligation		905		(801	)

Actual Overall Asset Allocation for Plans as Compared to Investment Policy Goals

Our actual overall asset allocation for the plans as compared to our investment policy goals is as follows:

	Plan assets				Target allocation
Asset class	2011		2010		2011		2010
Equity securities		42 %		47 %		40 %		50 %
Fixed income investments		50 %		37 %		50 %		40 %
Alternative investments		5 %		12 %		10 %		10 %
Cash		3 %		4 %		- %		- %

Plan Assets Using Fair Value Hierarchy

The following table presents our plan assets using the fair value hierarchy as of December 31, 2011 and December 31, 2010.

in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,084	$	—	$	13,084
Fixed income:
Corporate and non U.S. government		—		76,046		150		76,196
U.S. treasuries		—		82,989		—		82,989
Mortgage-backed securities		—		40,286		629		40,915
Other		—		7,958		219		8,177
Global equity securities:
Small cap equity		7,094		—		—		7,094
Mid cap equity		7,528		4		—		7,532
Large cap equity		—		47,398		—		47,398
International equity		19,942		19,652		—		39,594
Long/short equity		—		56,575		—		56,575
Pentair company stock		16,645		—		—		16,645
Other investments		—		4,563		19,009		23,572
Total as of December 31, 2011	$	51,209	$	348,555	$	20,007	$	419,771
in thousands	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Cash equivalents	$	—	$	13,803	$	—	$	13,803
Fixed income:
Corporate and non U.S. government		—		42,544		284		42,828
U.S. treasuries		—		60,710		—		60,710
Mortgage-backed securities		—		30,052		1,368		31,420
Other		—		6,818		125		6,943
Global equity securities:
Small cap equity		7,982		—		—		7,982
Mid cap equity		8,811		—		—		8,811
Large cap equity		—		45,700		—		45,700
International equity		23,964		21,895		—		45,859
Long/short equity		—		56,639		—		56,639
Pentair company stock		18,255		—		—		18,255
Other investments		—		33,542		12,991		46,533
Total as of December 31, 2010	$	59,012	$	311,703	$	14,768	$	385,483

Reconciliation of Level 3 Assets

The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2011 and December 31, 2010, respectively.

	Balance January 1, 2011		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2011
Other investments	$	12,991	$	251	$	5,767		$	—	$	19,009
Fixed income investments		1,777		87		(866	)		—		998
	$	14,768	$	338	$	4,901		$	—	$	20,007
	Balance January 1, 2010		Net realized and unrealized gains (losses)		Net purchases, issuances and settlements			Net transfers into (out of) level 3		Balance December 31, 2010
Other investments	$	14,427	$	678	$	(2,114	)	$	—	$	12,991
Fixed income investments		2,739		334		(1,296	)		—		1,777
	$	17,166	$	1,012	$	(3,410	)	$	—	$	14,768

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 as follows:

In millions	Pension benefits		Post-retirement
2012	$	31.8	$	3.3
2013		32.6		3.2
2014		33.5		3.1
2015		35.9		3.0
2016		38.7		2.9
2017-2021		221.4		13.1

Benefit Obligations

Weighted-Average Assumptions used to Determine Domestic Benefit Obligations and Domestic Net Periodic Benefit Cost

Weighted-average assumptions used to determine domestic benefit obligations at December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.05		5.90		6.00		5.05		5.90		6.00
Rate of compensation increase		4.00		4.00		4.00

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 the domestic net periodic benefit cost for years ending December 31 are as follows:

	Pension benefits						Post-retirement
Percentages	2011		2010		2009		2011		2010		2009
Discount rate		5.90		6.00		6.50		5.90		6.00		6.50
Expected long-term return on plan assets		8.00		8.50		8.50
Rate of compensation increase		4.00		4.00		4.00

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Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity

13. Shareholders’ Equity

Authorized shares

We may issue up to 250 million shares of common stock. Our Board of Directors may designate up to 15 million of those shares as preferred stock. On December 10, 2004, the Board of Directors designated a new series of preferred stock with authorization to issue up to 2.5 million shares, Series A Junior Participating Preferred Stock, par value $0.10 per share. No shares of preferred stock were issued or outstanding as of December 31, 2011 or December 31, 2010.

Purchase rights

On December 10, 2004, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock. The dividend was payable upon the close of business on January 28, 2005 to the shareholders of record upon the close of business on January 28, 2005. Each Right entitles the registered holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock, at a price of $240.00 per one one-hundredth of a share, subject to adjustment. However, the Rights are not exercisable unless certain change in control events occur, such as a person acquiring or obtaining the right to acquire beneficial ownership of 15% or more of our outstanding common stock. The description and terms of the Rights are set forth in a Rights Agreement, dated December 10, 2004. The Rights will expire on January 28, 2015, unless the Rights are earlier redeemed or exchanged in accordance with the terms of the Rights Agreement. On January 28, 2005, the common share purchase rights issued pursuant to the Rights Agreement dated July 31, 1995 were redeemed in their entirety for an amount equal to $0.0025 per right.

Share repurchases

In July 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2010 we had repurchased 734,603 shares for $25 million pursuant to this plan. In December 2010, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. As of December 31, 2011, we had repurchased 389,300 shares for $12.5 million pursuant to this authorization, which expired in December 2011. In December 2011, the Board of Directors authorized the repurchase of shares of our common stock up to a maximum dollar limit of $25 million. This authorization expires in December 2012.

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Quarterly Financial Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Oct. 01, 2011		Jul. 02, 2011		Apr. 02, 2011		Dec. 31, 2010		Oct. 02, 2010		Jul. 03, 2010		Apr. 03, 2010		Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Quarterly Financial Information [Line Items]
Net sales	$ 865,692		$ 890,546		$ 910,175		$ 790,273		$ 753,858		$ 773,735		$ 796,167		$ 707,013		$ 3,456,686		$ 3,030,773		$ 2,692,468
Gross profit	264,865		272,062		287,736		249,059		232,228		236,542		248,168		213,702		1,073,722		930,640		785,135
Operating income	(119,985)		92,903		109,422		86,177		79,605		90,823		100,126		63,601		168,517		334,155		219,948
Income from continuing operations	(133,704)		52,054		68,137		52,034		49,577		55,729		61,612		36,029		38,521		202,947		116,219
Gain (loss) on disposal of discontinued operations, net of tax									(2,292)		549		593		524				(626)		(19)
Net income from continuing operations attributable to Pentair, Inc.	$ (134,123)		$ 51,092		$ 66,712		$ 50,541		$ 48,668		$ 54,501		$ 60,488		$ 34,797		$ 34,222		$ 198,454		$ 115,512
Basic
Continuing operations	$ (1.36)	[1]	$ 0.52	[1]	$ 0.68	[1]	$ 0.52	[1]	$ 0.50	[1]	$ 0.55	[1]	$ 0.61	[1]	$ 0.35	[1]	$ 0.35	[1]	$ 2.02	[1]	$ 1.19
Discontinued operations									$ (0.02)	[1]	$ 0.01	[1]	$ 0.01	[1]	$ 0.01	[1]			$ (0.01)	[1]
Basic earnings per common share	$ (1.36)	[1]	$ 0.52	[1]	$ 0.68	[1]	$ 0.52	[1]	$ 0.48	[1]	$ 0.56	[1]	$ 0.62	[1]	$ 0.36	[1]	$ 0.35	[1]	$ 2.01	[1]	$ 1.19
Diluted
Continuing operations	$ (1.36)	[1]	$ 0.51	[1]	$ 0.67	[1]	$ 0.51	[1]	$ 0.49	[1]	$ 0.55	[1]	$ 0.61	[1]	$ 0.35	[1]	$ 0.34	[1]	$ 2.00	[1]	$ 1.17
Discontinued operations									$ (0.02)	[1]					$ 0.01	[1]			$ (0.01)	[1]
Diluted earnings per common share	$ (1.36)	[1]	$ 0.51	[1]	$ 0.67	[1]	$ 0.51	[1]	$ 0.47	[1]	$ 0.55	[1]	$ 0.61	[1]	$ 0.36	[1]	$ 0.34	[1]	$ 1.99	[1]	$ 1.17

[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.