Financial Statements of Parent Company Guarantor (Tables)

3 Months Ended

Mar. 30, 2013

Condensed Consolidating Statement of Operations and Comprehensive Income

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three months ended March 30, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Net sales	$	—		$	—		$	1,774		$	—		$	1,774
Cost of goods sold		—			—			1,250			—			1,250
Gross profit		—			—			524			—			524
Selling, general and administrative		(1	)		3			414			—			416
Research and development		—			—			34			—			34
Operating (loss) income		1			(3	)		76			—			74
Loss (earnings) from investment in subsidiaries		(51	)		(55	)		—			106			—
Other (income) expense:
Gain on sale of business		—			—			(17	)		—			(17)
Net interest expense		—			3			14			—			17
Income (loss) from continuing operations before income taxes and noncontrolling interest		52			49			79			(106	)		74
Provision for income taxes		—			—			21			—			21
Net income (loss) before noncontrolling interest		52			49			58			(106	)		53
Noncontrolling interest		—			—			1			—			1
Net income (loss) attributable to Pentair Ltd.	$	52			49		$	57		$	(106	)	$	52
Comprehensive income (loss), net of tax
Net income (loss) before noncontrolling interest	$	52		$	49		$	58		$	(106	)	$	53
Changes in cumulative translation adjustment		(76	)		(76	)		(76	)		152			(76)
Changes in market value of derivative financial instruments		1			1			1			(2	)		1
Total comprehensive income (loss)		(23	)		(26	)		(17	)		44			(22)
Less: Comprehensive income attributable to noncontrolling interest		—			—			1			—			1
Comprehensive income (loss) attributable to Pentair Ltd.	$	(23	)	$	(26	)	$	(18	)	$	44		$	(23	)

Condensed Consolidating Balance Sheet

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

March 30, 2013

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	215	$	—		$	215
Accounts and notes receivable, net		18		10		1,507		(131	)		1,404
Inventories		—		—		1,327		—			1,327
Other current assets		1		—		343		—			344
Total current assets		19		10		3,392		(131	)		3,290
Property, plant and equipment, net		—		—		1,222		—			1,222
Other assets
Investments in subsidiaries		6,356		7,469		—		(13,825	)		—
Goodwill		—		—		4,867		—			4,867
Intangibles, net		—		—		1,859		—			1,859
Other non-current assets		31		1,551		475		(1,574	)		483
Total other assets		6,387		9,020		7,201		(15,399	)		7,209
Total assets	$	6,406	$	9,030	$	11,815	$	(15,530	)	$	11,721
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—		—		6		—		$	6
Accounts payable		99		4		598		(121	)		580
Employee compensation and benefits		—		—		264		—			264
Other current liabilities		48		14		571		—			633
Total current liabilities		147		18		1,439		(121	)		1,483
Other liabilities
Long-term debt		—		2,400		1,745		(1,553	)		2,592
Pension and other post-retirement compensation and benefits		—		—		370		—			370
Deferred tax liabilities		—		—		481		—			481
Other non-current liabilities		31		—		452		(31	)		452
Total liabilities		178		2,418		4,487		(1,705	)		5,378
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries		6,228		6,612		7,213		(13,825	)		6,228
Noncontrolling interest		—		—		115		—			115
Total equity		6,228		6,612		7,328		(13,825	)		6,343
Total liabilities and equity	$	6,406	$	9,030	$	11,815	$	(15,530	)	$	11,721

Pentair Ltd. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2012

In millions	Parent Company Guarantor		Subsidiary Issuer		Non-guarantor Subsidiaries		Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	261	$	—		$	261
Accounts and notes receivable, net		20		1,459		1,351		(1,535	)		1,295
Inventories		—		—		1,379		—			1,379
Other current assets		2		—		322		—			324
Total current assets		22		1,459		3,313		(1,535	)		3,259
Property, plant and equipment, net		—		—		1,224		—			1,224
Other assets
Investments in subsidiaries		6,492		7,470		—		(13,962	)		—
Goodwill		—		—		4,895		—			4,895
Intangibles, net		—		—		1,910		—			1,910
Other non-current assets		31		6		481		(31	)		487
Total other assets		6,523		7,476		7,286		(13,993	)		7,292
Total assets	$	6,545	$	8,935	$	11,823	$	(15,528	)	$	11,775
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and short-term borrowings	$	—	$	—	$	3	$	—		$	3
Accounts payable		54		2		590		(76	)		570
Employee compensation and benefits		—		—		294		—			294
Other current liabilities		97		11		564		—			672
Total current liabilities		151		13		1,451		(76	)		1,539
Other liabilities
Long-term debt		—		2,298		1,615		(1,459	)		2,454
Pension and other post-retirement compensation and benefits		—		—		378		—			378
Deferred tax liabilities		—		—		488		—			488
Other non-current liabilities		31		—		437		(31	)		437
Total liabilities		182		2,311		4,369		(1,566	)		5,296
Equity
Shareholders’ equity attributable to Pentair Ltd. and subsidiaries		6,363		6,624		7,338		(13,962	)		6,363
Noncontrolling interest		—		—		116		—			116
Total equity		6,363		6,624		7,454		(13,962	)		6,479
Total liabilities and equity	$	6,545	$	8,935	$	11,823	$	(15,528	)	$	11,775

Condensed Consolidating Statement of Cash Flows

Pentair Ltd. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Three months ended March 30, 2013

In millions	Parent Company Guarantor			Subsidiary Issuer			Non-guarantor Subsidiaries			Eliminations			Pentair Ltd. and Subsidiaries Consolidated
Operating activities
Net cash provided by (used for) operating activities	$	95		$	51		$	(20	)	$	(106	)	$	20
Investing activities
Capital expenditures		—			—			(50	)		—			(50)
Proceeds from sale of property and equipment		—			—			1			—			1
Proceeds from sale of business, net		—			—			30			—			30
Net cash provided by (used for) investing activities		—			—			(19	)		—			(19	)
Financing activities
Net receipts of short-term borrowings		—			—			3			—			3
Net receipts of commercial paper and revolving long-term debt		—			103			37			—			140
Repayment of long-term debt		—			—			(2	)		—			(2)
Debt issuance costs		—			(1	)		—			—			(1)
Net change in advances to subsidiaries		(48	)		(153	)		95			106			—
Shares issued to employees, net of shares withheld		—			—			11			—			11
Repurchases of common shares		—			—			(140	)		—			(140)
Dividends paid		(47	)		—			—			—			(47)
Distributions to noncontrolling interest		—			—			(2	)		—			(2)
Net cash provided by (used for) financing activities		(95	)		(51	)		2			106			(38)
Effect of exchange rate changes on cash and cash equivalents		—			—			(9	)		—			(9)
Change in cash and cash equivalents		—			—			(46	)		—			(46)
Cash and cash equivalents, beginning of period		—			—			261			—			261
Cash and cash equivalents, end of period	$	—		$	—		$	215		$	—		$	215