pentair: differentiated growth · 2018-02-21 · pentair 2013 houston investor & analyst event...

PENTAIR

PENTAIR: DIFFERENTIATED GROWTHPENTAIR INVESTOR & ANALYST EVENT

1

Randall J. Hogan

Chairman and Chief Executive Officer

November 13, 2013

2013 Houston Investor & Analyst Event

PENTAIR 2

FORWARD-LOOKING STATEMENTS

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This communication 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. Without limitation, any statements preceded or followed by or that include the words "targets,” "plans,”

"believes,” "expects,” "intends,” "will,” "likely,” "may,” "anticipates,” "estimates,” "projects,” "should,” "would,”

"positioned,” "strategy,” "future" or words, phrases or terms of similar substance or the negative thereof, are forward-

looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks,

uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to

differ materially from those expressed or implied by such forward-looking statements. These factors include the ability to

successfully integrate Pentair, Inc. and the Flow Control business and achieve expected benefits from the Merger; overall

global economic and business conditions; competition and pricing pressures in the markets we serve; the strength of

housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from

excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices; increased

risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of

markets to accept new product introductions and enhancements; the impact of changes in laws and regulations, including

those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve our

long-term strategic operating goals. Additional information concerning these and other factors is contained in our filings

with the U.S. Securities and Exchange Commission, including in our Quarterly Report on Form 10-Q for the quarter ended

September 28, 2013 and our 2012 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of

this communication. Pentair Ltd. assumes no obligation, and disclaims any obligation, to update the information contained

in this communication.


PENTAIR 32013 Houston Investor & Analyst Event

KEY DEFINITIONS FOR TODAY’S PRESENTATION

• All 2015T References Represent Our 2015 Long Term Goals

• All 2013F References Represent Our 2013 Full Year Expected Results

• All References to 2012 are Presented on a Pro Forma Basis to Include the Results ofFlow Control for the Full Year

• All References to 2011 are Presented on a Pro Forma Basis to Include the Results ofFlow Control for the Full Year

• All 2013, 2012, and 2011 Amounts are Presented on an Adjusted Basis and Excludethe Impact of Severance, Asset Impairment, Deal-Related, and Other Costs

Please Refer to the Appendices for Reconciliations of Non-GAAP Measures and Pro Forma Results

PENTAIR 4

AGENDA

1) Strategy Overview & Trends Randy Hogan 8:30 – 9:15

2) Thermal Management Overview Alok Maskara 9:15 – 10:00

3) Valves & Controls Overview David Dunbar 10:15 – 11:00

4) Q&A Leadership Team 11:00 – 11:30

5) Transportation to Pasadena 11:45 – 12:30

6) Pasadena Service Center Tour 12:45 – 2:00

Welcome!2013 Houston Investor & Analyst Event

PENTAIR 5

LAST YEAR’S THEME AND KEY MESSAGES

A New Company Building Off Proven Platforms for Success

A StrongerCompany

MoreOpportunities

ProvenOperatingDisciplines

Setting &Meeting

Expectations

1

The NewPentair

2

3

4

• More Balanced• More Global• More Diversified

• Growth• Cost• Standardization

• PIMS: Focus on Lean Enterprise

• Aggressive & Achievable

• Smart Capital Deployment


PENTAIR 6

A StrongerCompany

Many Indicators of Our Strength

PROGRESS TO DATE …

+ Added to S&P 500

+ Share Price up 53% (+31% versus S&P 500)

+ Recognized in Bloomberg BusinessWeek Top 50

+ Recognized Forbes Top 100 Innovators

+ Two Shingo Silver Medallion Awards in 12 months

+ 30,000 Employees … Leadership in Key Verticals


PENTAIR 7

A Successful Year One

PROGRESS TO DATE …+ Integration Synergies Expected to be $120M in 2013

• Original Target ~ $90M• Overdriving Lean / Sourcing and StandardizationMore

Opportunities

ProvenOperatingDisciplines

+ PIMS Aggressively Adopted

• All 100+ Mfg. Facilities Driving PIMS’ Lean Enterprise• Standardization Actions Underway for ’14 & ’15

+ Solid Financial Returns YTD

• Adj. EPS* Up 18% … Free Cash Flow >100% of NI• Adj. Operating Margins* Up 120 Basis Points• Smart Capital Allocation: Buy Backs = $875 Million

of $1.2 BillionSetting &Meeting

Expectations+ Significant Opportunities Remain

• G&A Complexity and ERP Consolidations• More Growth Synergies Anticipated as Programs Take Off• Capital Deployment Flexibility

2013 Houston Investor & Analyst Event* All year-over-year comparisons against 2012 adjusted results on a pro forma basis for the Flow Control acquisition.See Appendix for reconciliation of non GAAP measures.

PENTAIR 8

PENTAIR STRATEGY – CONSISTENT APPROACH

• Higher Organic Growth: Verticals & Innovation Focus

‒ Where We Lead and Can Drive Differentiated Growth

‒ Aligned with Growth Trends

• Successfully Integrate Company

‒ PIMS … One Pentair Culture / Win Right … Aligned Verticals

‒ Targeting Synergies and Base Performance to Deliver ~$5.00 EPS in ’15

• Drive Operational Excellence

‒ Known as World-Class in Lean and Growth

‒ Destination Company for Customers and Top Talent

Continue to Execute These Strategic Imperatives2013 Houston Investor & Analyst Event

PENTAIR 9

PENTAIR: A BALANCED & DIVERSE PORTFOLIO

Broad Diversification

By Reporting Segment By Vertical

•Balanced GeographicExposure with 25% in FastGrowth Regions

•Current Trends: USStrength and WesternEurope has Stabilized

Resi/Comm,~24%

Energy,~28%

Infrastructure,~13%

Industrial,~26%

Food & Beverage,~9%

Water &Fluid

Solutions,~44%

TechnicalSolutions,

~23%

Valves &Controls,

~33%

By Geography

U.S. andCanada,

~42%WesternEurope,

~18%Fast

Growth,~25%

DevelopedNon-U.S.,

~15%

•Balanced Across Verticals

•Current Trends: Strength inNorth American Residentialand Food & Beverage;Industrial has Stabilized;Energy Mixed

100% = 2012 sales* of $7.3B

•Long & Short CycleBalanced Portfolio

•Global Solutions Leader /Recognized Brands

•Largest “Valve Company”Globally

2013 Houston Investor & Analyst Event *2012 sales. Adjusted results on a pro forma basis for the Flow Control acquisition. See appendix for reconciliation of non GAAP measures.

PENTAIR 10

KEY GROWTH VERTICALS

Leveraging Global Mega Trends

• Oil & Gas

• Power

• Mining

• Chemical

• Pharma

• Manufacturing

• Agriculture

• Aquaculture

• Food & Beverage

• Municipal

• Telecom &Networks

• Transport

• Commercial

• Residential

• Recreation &Leisure

*2012 sales. Adjusted results on a pro forma basis for the Flow Control acquisition. See appendix for reconciliation of non GAAP measures.

** PNR estimates.

~28% ~26% ~9%~13%~24%% ofSales*

~4-6% ~2-3% ~6-8%~Flat~5-8%Long-TermGrowthRate**


PENTAIR 11

OUR SUCCESS

Positioned Well to be the Next Great Industrial Company

Cultural Transformation… Energized and Committed

Our Strategies are Working… 2013 a Great Example

Trends in Our Favor… Must Seize Opportunities

A Stronger Portfolio… Global Leadership

New Growth Framework… to Drive More Organic Growth


PENTAIR 12

OUR SUCCESS








PENTAIR 13

HighPerformance Co.

Today +

Operating Co.2001 - 2012

Holding Company1966 - 2000

Strong Executionof Strategies:

• Portfolio Transformation—Exited Tools—Expanded in Water—Added Energy

• PIMS

—Lean / Ops Excellence—Growth (3D / RGP)—Talent Management

• Solid Merger Integration

• Technology Innovation

• “Win Right” Culture

COMPANY TRANSFORMATION ~ 45+ YEARS

Executing on Strategies Profoundly Changed Company

• Advancing andMaximizingPIMS

• A Leader in KeyRegions andVerticals

• One Pentair

• Strongly AlignedLeadershipDriving Growth

• PIMS

• Strategic Focus

• Branding

• More Global

• Water &TechnicalProductsCompany

• EntrepreneurialStart

• De-centralizedBusinesses

• Strong Focus onFinancial Metrics

• Grew intoIndustrialCompany

$1B$4B

>$13BMarket Cap


PENTAIR 14

ROBUST STANDARD OPERATING MODEL

TalentManagementOur Global TalentProcess to Select,Develop, and RetainTop Talent

LeanEnterpriseThe Way We DriveValue to OurCustomers ThroughoutAll Our BusinessProcesses by ReducingWaste andImproving Speedand Efficiency

Pentair Integrated Management System

PIMS

Proven Operating Disciplines

Rapid GrowthProcessThe Tools and Languageto Drive Above-AverageGrowth Consistently

3D Processfor InnovationWorks in Concert withRapid Growth to BringNew Products to MarketThrough Three Key Phases:

• Discover• Develop• Deploy

Growth


PENTAIR

36%

146% 156% 164% 187% 198%244% 265%

341%

472%

655%705%

1324%

S&P 500 EMR MidCap400

HON MMM DOV ITW UTX DHR ETN PNR ROP AME

15

(1/1/2001 to 11/07/2013)

Pentair Performance is Firmly in the Upper Quartile

’01 – ‘13 TOTAL STOCK RETURN AGAINST SELECT INDUSTRIALS


PENTAIR 16

TRANSFORMATION … MORE GLOBAL

Portfolio Diversification to “Control Destiny “

$2B

2001

$7.4B

2013F

$8.4B

2015T

U.S.

80%

15%Other Dev.Fast Growth 5%

~40%

~35%

~25%

27%+

~33%

~40%


PENTAIR

2012 2013F 2015T

17

FAST GROWTH REGIONS

Current Strength• Scale and Resource Numbers

• Good Manufacturing / Service Footprint

• Starting to Build Brand Awareness

• Win Right Culture

Execute on Vision to Make Fast Growth Regions Work

Focus Areas For Growth

Developed

FastGrowth

$7.3B ~$7.4B

$5.6B ~$5.7B

$1.7B ~$1.8B • Grow at GDP+ (~10%+ / Year)

• More Marketing Talent

• Each Vertical Has Focus Area …Energy = Middle East …

• Continue to Localize Products

• More Cross Selling /Collaboration

$8.4B+

$6.1B+

$2.3B+


PENTAIR 18

STANDARDIZATION

Significant Savings Opportunity in Operating Expenses

G&A Reductions Through LeanEnterprise to Fuel Growth

Key Synergy Initiatives: ~$175M Funnel

• Operating Expense as % of Sales … Goal toDrop ~200 basis points 2013 to 2015

• Drive 2013 Savings (Repositioning) andStandardization Targets for 2014, 2015and Beyond:

− Major Repositioning

− Aggressive ERP and Back-office Consolidations (Most Savings 2014+)

− G&A: From 8% of Sales to 6% (Legacy PNR Businesses are Under 4%)

− ERP: Reduce from ~66 to ~16

− Reporting Entities Reduced by 65%

− Other: Reduce Payroll / Acctg. Centers


2012 2013F 2015T

~20%

~22%

>22%Opex.

PENTAIR 19

MARGIN EXPANSION

2012 2013F 2015T

Robust Margin Expansion Highlights Execution Capabilities

Operating Margins

Key Drivers 2012 2013

Pricing

Cost Productivity

Standardization

Expanding Margins

• Pricing− Execute on Pricing Management

− Targeting >1% of Sales

• Cost Productivity− PIMS: Rapid Adoption / Implementation

− Growth While Leveraging Structure

− Productivity > Inflation & Mix

• Standardization (previous slide)

− $90M Cost-Out in 2013

− 2 Points of G&A Reduction Targeted by 2015

− Reduce Complexity and Continue Functional Standardization

~11%~13%

>16%


PENTAIR 20

OUR SUCCESS








PENTAIR 21

OUR FUTURE: POSITIONING FOR DIFFERENTIATED GROWTH

• In Strong Position with Mega Trends

• Maximize Growth with Platform / Vertical Prioritization

• Driving in New Geographies and Growth Capabilities

Driving Core Important … But Must Pursue Differentiation2013 Houston Investor & Analyst Event

PENTAIR 22

CURRENT TRENDS

US: Steady Recovery (Bright Spot)+ Housing Back Strong+ Petrochemical Opportunity– Fiscal Uncertainty

Developed Regions Fast Growth Regions

Europe: Could Be Good Growth+ Stabilizing Now+ Could Surprise to Upside– Difficult Decisions Ahead

FGR: Mixed but Slowed in ’12 & ’13+ China 5-yr Plan Attractive+/– China Slow but Still Important– India, Brazil Bouncing Around

Resource Rich: Infrastructure Build+ Significant Energy Investment+ Adding Lots of Jobs– Mining Slow … For Now

In Position to Take Advantage of Trends U.S. Housing Remains Strong and Europe Improving Continuing to Add Talent to Key Growth Regions PIMS Executes on Our Strategies Aggressively

Generally Good-To-Improving Environment2013 Houston Investor & Analyst Event

PENTAIR 23

THE TRENDS INFORMING OUR STRATEGIC THINKING

Driven by the “New-New” World

The Nexus of Demands Driving “Food – Water – Energy”

• Changing Population & Demographics

• Increasing Energy Demands

• Shifts in Food Consumption

• Water Crises


PENTAIR 24

GROWTH* OVER THE NEXT TWO DECADES

Today: 7B

9BWorld’s

Population

Today: $50T

$110TWorld GDP More

than Doubles

Today: $20T

$60TMiddle ClassPurchasing

Power Triples

Today: ~55%

75%Population inAPAC & Africa

Today: 2B

5BGlobal Middle

Class

Today: 5 out of 10

7of 10People Living in

Urban Areas

Drives Much of Our Thinking and Strategy

• More Food/Protein Consumption

• Increased Housing Needs

• Increased Power Consumption

• Increased Water Consumption

• Middle-Class Aspirations

• More Industrial Production

• Water / Waste Water Infrastructure

• More Cars, Rail, Airplanes

• Increased Oil & Gas Demand

• Better Living Conditions

2013 Houston Investor & Analyst Event * PNR Estimates

PENTAIR 25

PENTAIR: POSITION TO BENEFIT

Well Positioned

FOOD WATER ENERGY+ Ag Pumps / Spray+ Aquaculture+ Food & Bev Process+ Food Service- Not Yet Global Ag

+ Global Pump+ Global Filtration+ Flood Control+ Advanced Systems- Limited 50Hz Pump

+ Leader in Valves+ Leader in Thermal+ Separations Technology+ Service Model- Limited Energy Pumps


PENTAIR

3 Reporting Segments

ORGANIZING FOR SUCCESS – CURRENT ALIGNMENT

Platforms are Where We Serve Customers … GBU’s + ELT Aligned to ImproveGrowth and Productivity Trajectory

26

Water & Fluid SolutionsValves &Controls

Technical Solutions

Executive Leadership Team (ELT)

AquaticSystems

EquipmentProtection

ThermalManagement

7 Global Business Units

Filtration &Process

FlowTechnologies

WESValves &Controls

24 Operating Platforms

Standard Pumps

Engineered Pumps

Fluid Motion

Advanced Filtration Electrical/Cooling

Aquaculture

Ag Spray

Pool

Oil & Gas Separation

F & B Processing

Water Purification

Bldg. Infra. Solutions

Actuation & Controls

Adv. Ind. Solutions

Food Service

Quarter Turn

ElectronicsPressure Relief

Gate, Globe, & Check

Water Services

Mega-Projects

Water Transmission

Water Dynamics

Clean Air Systems

CEO + COO + CFO + Growth + HR + Legal/Compliance


PENTAIR 27

ALIGNING PLATFORMS TO DRIVE GROWTH

Platforms Aligned with Key Growth Verticals

FOOD &BEVERAGE F & B Processing

Food ServiceAquaculture

Ag Spray

RESI &COMMERCIAL

Fluid Motion

Water Purification

Bldg. Infra. SolutionsStandard Pumps

Pool

ENERGYQuarter Turn


Adv. Ind. Solutions

Mega-Projects

Water Transmission

Electrical/Cooling


Actuation & Control

Pressure Relief

INDUSTRIALActuation & Control

Quarter Turn Gate, Globe, & Check

Electrical/Cooling

Water Services

Clean Air Systems

Advanced FiltrationAdv. Ind. Solutions

Pressure Relief

INFRA-STRUCTURE Advanced Filtration

Water Dynamics Electronics

Engineered Pumps

Water Transmission


PENTAIR 28

MAINTAINING LEADERSHIP IN ENERGY

Pentair’s Capabilities and Solutions

WAYS TO WIN

1

2

4

3

5

Product Innovation for CriticalApplications – Sub-sea, Cryogenic

Expanded Solutions & ServiceOfferings – HRT, HIPPS, Rentals

Fast Growth Region Expansion –Mid-East, China, Russia / CIS, Africa

Global Strategy Serving Local Needs

PIMS … Best in Class Quality,Delivery, and Standardization

2013F: ~$2.1B~75% Direct Sales~25% Indirect Sales~225 Sales Engineers~600 Distributors

Actuation & Control

Electrical/Cooling


Adv. Ind. Solutions

Quarter Turn

Pressure Relief


Mega-Projects

Water Transmission


PENTAIR 29

EXPANDING OFFERINGS IN INDUSTRIAL

Led by North American Industrial Recovery


WAYS TO WIN

1

2

4

3

5

Expanded Service Offerings –Cooling Audits, Plant Services

Fast Growth Region Expansion –Russia, Middle-East, China

Maximize NA Distribution Channels

Product Innovation for SevereService Applications


Water Services

Clean Air Systems

Adv. Ind. Solutions

Pressure Relief

Actuation & Control

Quarter Turn


Electrical/Cooling

Advanced Filtration


PENTAIR 30

MAINTAINING LEADERSHIP IN RESIDENTIAL & COMMERCIAL

Taking Advantage of Residential / Commercial Recovery

WAYS TO WIN

1

2

4

3

5


Fast Growth Region Expansion –Middle East & Southeast Asia

Led by the US Residential Recovery

Expand Eco-Select Offerings andExecute Hybrid DI

Product Innovation – EnergyEfficiency


Standard Pumps

Fluid Motion

Pool

Water Purification

Bldg. Infra. Solutions


PENTAIR 31

ESTABLISHING LEADERSHIP IN INFRASTRUCTURE

Selectively Choose Where to Play

WAYS TO WIN

1

2

4

3

5

2013F: ~$1B~70% Direct Sales~30% Indirect Sales~200 Sales Engineers~900 Distributors

Fast Growth Region Expansion –Middle East, SE Asia, Africa

Global Flood Control Leadership

More Systems / Solutions With OurProducts

Establish Membrane TechnologyLeadership – Nano Filtration


Engineered Pumps

Advanced Filtration

Electronics

Water Dynamics

Water Transmission


PENTAIR 32

EXPANDING LEADERSHIP IN FOOD & BEVERAGE

Food & Bev Offers the Fastest Growth for Pentair

WAYS TO WIN

1

2

4

3

5

2013F: ~$700M~60% Direct Sales~40% Indirect Sales~40 Sales Engineers~60 Distributors

Fast Growth Region Expansion –Lead in Africa

Aquaculture Leadership

Globalize Agriculture Strategy

Application Expertise – Breweries,Dairy, etc.


Aquaculture

Ag Spray

Beverage Systems

F & B Processing


PENTAIR 33

OUR CURRENT LANDSCAPE – FAST GROWTH REGIONS

We Have Real & Global Capabilities

China

Africa

India

Middle East

Eastern Europe

Latin America

$360M

3,340

6South East Asia

$350M

1,150

2

$200M

65

-$390M

2,860

6

$200M

400

2

$100M

1,340

4$100M

60

1Total FGRs - Additional Info:

Sales & Mktg HeadcountR&D Headcount# of Distributors & Agents

950350

1,100

Legend:

2013F Ship-to-SalesHeadcount

Manufacturing Sites


PENTAIR 34

FOCUS AREAS – BIG BETS

Several Ways To Win … Increasing Odds by Prioritizing

RESI &COMMERCIAL

INFRA-STRUCTURE

ENERGY

INDUSTRIAL

FOOD &BEVERAGE

= Priority / Focus Area

ChinaMiddleEast

Brazil /LAM IndiaSEA Eastern

EuropeAfrica


PENTAIR 35

FOCUS AREAS – ADDITIONAL PRIORITIES

… Without Forgetting the Other Nice Opportunities

ChinaMiddleEast

Brazil /LAM IndiaSEA Eastern

EuropeAfrica

RESI &COMMERCIAL

INFRA-STRUCTURE

ENERGY

INDUSTRIAL

FOOD &BEVERAGE

= Priority / Focus Area

= Opportunity / Core


PENTAIR 36

OUR SUCCESS








PENTAIR

STRATEGY

PENTAIR … DRIVING HIGH PERFORMANCE

37

ALIGNMENT

HOW WE DIFFERENTIATE PENTAIR

• Purpose, Vision & Strategic Priorities

• Value Proposition & Competitive Advantage

• Controlling Our Destiny

HOW WE EXECUTE

• Standard Operating Model … PIMS

• Organization Design … Corporate, GBUs, Fast Growth Regions

• Functional Excellence … Standards & Practices

HOW WE WIN RIGHT

• Win Right … Pentair Values

• Leadership Behaviors … Top Talent

• How We Work Together

Three Levers … Aligned To Achieve Our Goals

PROCESS &STRUCTURE

CULTURE &TALENT


PENTAIR

30,000 People Understand “What”, “How” and “Why”38

PENTAIR … WHAT WE STAND FOR

HOW WE MAKE A DIFFERENCE IN THE WORLD

HOW WE ACHIEVE OUR VISION

HOW WE WIN RIGHT

Purpose

We Improve the Quality of Life of PeopleAround the World

Mission & Vision

Be the Next Great Industrial Company

Destination Company for Customers,Top Talent, & Shareholders

Strategic Principles

• Invest in Attractive Markets … Where We Compete

• Control Our Destiny … How We Compete

— “Right-To-Left” Thinking & Actions

— Positioning to Win

Operating Principles … PIMS

• Growth

• Talent Management

• Lean Enterprise

WINCustomer First

Accountability for Performance

Innovation and Adaptability

RIGHTPositive Energy

Respect and Teamwork

Absolute Integrity


PENTAIR

ORGANIZING FOR SUCCESS – NEW ALIGNMENT

Simplified & Aligned to Drive Growth & Productivity39

Executing Growth & Productivity of Prioritized Platforms

5 Global Business UnitsExecuting the PNR Priorities as Strategic and Operating Leaders

Executive Leadership Team

CEO + Executive Officers + Presidents = Aligned Priorities & Agenda

TechnicalSolutions

Alok Maskara~$1.7B*

Valves &Controls

David Dunbar~$2.4B*

Filtration &Process

Netha Johnson~$1.1B*

AquaticSystems

Karl Frykman~$0.7B*

FlowTechnologies

Phil Pejovich~$1.7B*

4 ExecutiveOfficers Driving

PNR-WideLean Enterprise

John Stauch/CFO/ITDriving G&A Transformation

Todd Gleason/GrowthDriving Marketing,

Strategy, and Sales Excellence

Fred Koury/HRGlobal Talent Management

Angela Lageson/LegalGlobal Compliance & Legal

ERP’s, Lean Enterprise, and Financial Performance

Aligned and Prioritized Strategies for Growth

Deployment of Top Talent Against Most Important Priorities

Ensuring Global Compliance

2013 Houston Investor & Analyst Event * Estimated 2013 sales.

PENTAIR 40

VALUE CREATION: 2015 GOALS

Road Map to ~$5.00 EPS Goal

~$2.73 ~($0.21)~$2.52

~$1.80

~$0.68 ~$5.00

2012*Pre-Deal

2012*Pro Forma

Impact

2012*Pro Forma Performance

CapitalAllocation

2015Goal

~$0.80

~$1.00

IST

Base

* 2012 adjusted results and 2013 guidance on an adjusted pro forma basis, see appendix for reconciliation of non GAAP measures.2013 Houston Investor & Analyst Event


THERMAL MANAGEMENTPENTAIR INVESTOR & ANALYST EVENT

Alok Maskara

President, Pentair Thermal Management

November 13, 2013

41


KEY MESSAGES

• Thermal Management is a Great Addition to the Pentair Portfolio

• Heat Tracing is an Attractive Industry with Favorable Mega Trends

• Thermal Management Expects to Deliver Above Average Growthand has Mega Project Upside

• Integration is Yielding Desired Synergies and PIMS is Expected toAccelerate Margin Expansion

Thermal: Proud to be Part of Pentair!42


WE PROTECT PIPES FROM FREEZING

Where We Began and Our #1 Application

Sometimes Solving Simple Problems …. but Mostly Solving Difficult Challenges

43


HEAT TRACING: HOW WE PROTECT PIPES

Heat Tracing MaintainsTemperature of Fluids byReplacing Heat LostThrough Thermal Insulationon Pipes, Vessels, andAssociated Equipment

Heat-trace Panel(may include circuitbreakers, controllersand alarms)

Transformer

Lighted End Seal

Remote Configuration AndMonitoringwith DigiTrace Supervisorsoftware

Insulation Systems

Power Connection

Heating Cable

Pentair Thermal Provides Complete Solution to Customers44


Product QualityPortfolio to Meet Customer’s NeedInnovative TechnologyProduct ReliabilityEase of Use

OUR VALUE PROPOSITION

Leading Product Attributes

Global Field Service NetworkCustomer ServiceProduct Brand – RaychemService Brand – Tracer

A Leader in Brand Equity, Product Quality, Innovation, and Service

Leading Service and Brand Reputation

45


North America

Fast GrowthRegions

DevelopedNon-NA

Heat Tracing& SpecialtyCables

Control,Monitoring,& Sensing

Services

BUSINESS OVERVIEW

Attractive Growth Portfolio

• Service Enables Customer toReceive “Warm Pipe Guarantee”

• Control Monitoring and SensingExpands Our Core Product

• Heat Tracing and SpecialtyCables Remains Our CoreProduct

• North America GrowthDriven by Oil Sands andBakken

• Fast Growth Regions Drivenby Russia, China, Indonesia

• Developed Non-NA Drivenby Scandinavia & Offshore

• Oil & Gas Driven by ProcessTemp. & Freeze Protection

• Chemical Driven by CurrentNatural Gas Price Dynamics

• Commercial Driven by SafetyApplications and Luxury Needs

By Vertical

Oil & Gas

Chemical

Commercial &Residential

Power

Other

By Product / Service By Geography

Energy –Oil & Gas

Industrial –Chemical

Residential &Commercial

Energy –Power

Other

100% = ~$0.7B* 100% = ~$0.7B* 100% = ~$0.7B*

* 2013 estimated sales. 46


AdvancedIndustrialSolutions

Building &Infrastructure

Solutions

MegaProjects

THERMAL: GO-TO-MARKET OVERVIEW

Broad and Diversified Portfolio

By Sub Platforms

• Advanced Industrial Solutions:‒ Oil & Gas 60%, Chemical 20%, Other

Industrial 20%‒ Green Field 30% vs. MRO 70%‒ EPC 20%, EP 50%, P only 30%

• Building & Infrastructure Solutions:‒ Commercial 50%, Infra 30%, Resi 20%‒ Mostly Product Only Sales

• Mega Projects‒ Oil & Gas Projects that are $100M+

Direct Sales

Indirect(Distributors,Wholesale)

By Channel

• Direct Sales are Sales Through Ourown Employees or Exclusive Reps. Thisis Our Typical Go-to-Market Approach

• Indirect Sales Through Distributorsare Used for Harder to Reach EndUsers Such as Light Commercial andFast Growth Regions

100% = ~$0.7B*100% = ~$0.7B*

* 2013 estimated sales. 47


Strong Industrial and Refining Position with Opportunities in Mid/Upstream

THERMAL: ADVANCED INDUSTRIAL SOLUTIONS

48


EXAMPLE: QATARGAS SULPHUR TRANSFER LINE

• Application:

– 35Km, Dual, 12-inch Sulphur Pipeline toTransfer Molten Sulphur from 11Producers to a Pelletizer Facility

– Temperature Maintain at 135 C with TightAllowable Range from 125 C to 145 C

• Scope: Heating System Design, Specification,Engineering, Procurement, Construction,and Commissioning

• Pentair Sulphur Flow Thermal TechnologyIncludes Fiber Optic Temperature Sensing

• Future Opportunities Could Include MROServices and Leak Detection

A World Leader in Heated Sulphur Pipelines

Sulphur flowsimulation

49


THERMAL: BUILDING & INFRASTRUCTURE SOLUTIONS

Building & Infrastructure Solutions: Utilizing Pentair Channels50


EXAMPLE: BEIJING CAPITAL AIRPORT

• Application:

– 48Km of Heat Tracing to PreventSnow and Ice from Forming on theGuideway and Running Surfaces ofthe Automated People Mover

• Scope:

– Heating System Design,Specification, and Material Supply

Snow Melting System for Tracks51


KEY MESSAGES







ATTRACTIVE MEGA TRENDS

• Increased Extraction of Heavy Crude(Oil Sands, Africa, Russia, etc.) NeedsHeat Tracing

• Growth in Oil Extraction in ColderClimate Requires Heat Tracing

• Lower US Natural Gas PricesIncreasing Petrochemical Investments

Energy• Infrastructure Investments Especially

in Colder Climate (North China,Russia / CIS)

• Increased Safety Focus DrivingDemand for Fire Alarm and FireSprinkler System Protection

• Growing Demand for Radiant FloorHeating Continues (Electric SmallAreas / Hydronic Large Areas)

• Commercial Building ConstructionDriving Demand for Gutter FreezeProtection and Hot WaterTemperature Applications

Quality of Life• Clean Water and Energy Concerns

Pushing More Customers TowardsElectrical Heat Tracing vs. Steam

• Pipeline Leak Environmental ImpactDriving Growth of More AccurateWire Based Leak DetectionTechnology

Environment

Global Trends Contribute to Thermal’s Growth Outlook

Infrastructure

53

PENTAIR

ADVANCED INDUSTRIAL SERVICES LANDSCAPE(TAM)

0

20

40

60

80

PTM129

A 108

B 70

C 30

LargerRegional

Providers 100

SmallRegional

Providers713

PTM

74

A35

Sm

allRegio

nalP

rov

iders

191

PLC/D

CS

Sys

tem

Pro

viders

100

Small

RegionalProviders

922

J 818

K 90

Electric & Steam HT Services

Other EPCs, Electrical & Mechanical Contractors 11,950

$13,950M100%

Heat

Tracing& Specialty

Wiring

$1,150M

Control,Monitoring

& Sensing

$400M

SteamProducts

$2,000MTotal =$17,500M

AIS Business More Global in Nature than BIS

Product TAM = $3.5Bn Services TAM = $14.0Bn

Pentair Thermal Management


Source: PNR Estimates

54

PENTAIR

BUILDING & INFRASTRUCTURE LANDSCAPE (TAM)

Highly Fragmented, Services Led By Regional Players

Electric TAM = $3.4Bn Hydronic TAM = $6.1Bn

0

20

40

60

80

100%

Heat Tracing& Specialty

Wiring

N 96

O 85

Q 42

A 30

S 30

T 30U 20

LDetection 20

SmallRegionalProviders

497

$1,020M

Control,Monitoring& Sensing

PTM 64

N 64

O 65

Q 10

W 40

Small

Regional

Providers

375

$680M

Electric

Services

Regional SystemDesigners 300

Regional Installers

900

Global System Designers150

Global Installers 350

$1,700M

Hydronic Product

P 650

V 370

Larger Regional Providers 500

Small Regional Providers 1,530

$3,050M

Hydronic Services

Hydronic Service Providers 3,050

$3,050M

Total =$9,500M


Source: PNR Estimates

Pentair Thermal Management

55


KEY COMPETITORS

Fragmented Industry Structure

Building & Infrastructure SolutionsAdvanced Industrial Solutions

56


BROAD AND DIVERSIFIED CUSTOMER BASE

Top 20 Customers Make up Only 30% of Total Revenues

41 42.3

Top 20 Customers Total Customer Base

Gross Margin Average %*

Top 20 Customers by Geography

Canada

APAC

FGR

US

W. Europe

Top 20 Customers by Type

Oil & Gas

EPC

Distributors

Top 20Customers

~30%

Remaining 1000+Customers

~70%

* 2013 estimate

57


KEY MESSAGES







2011 2012 2013F 2015T

2011 2012 2013F 2015T

+ megaprojects

+ megaprojects

THERMAL: PERFORMANCE OVERVIEW

Strong Earnings Increase, Steady Base Business Growth

Drivers of 6% Anticipated Future Growth

• Services (Excluding Mega Projects)

• Fast Growth Regions

• Innovative New Products

Future Margin Growth: Operational Excellence

• Integration Synergies

• Material and Labor Productivity

• Standardization to Lower G&A - 35%Reduction in the Next 3 Years

Sales ($M)

Operating Income ($M)

ROS 10.5%

656

~6-10%

Mega

Mega

669637

735+

6787

105150+

13% 16% 20.5%

59


2012 2015T

Innovation

THERMAL: 2012 – 2015 GROWTH DRIVERS

RGP Driven Detailed Growth Playbook

Key Drivers

• Engineering Services

• Field Construction Services

• MRO Services

• Remote Monitoring Services

Key Drivers

• Russia / CIS

• China

• Middle East and Africa

Key Drivers

• Applications

• Basic Wire and Cables

• Control, Monitoring,and Sensing

2012 2015T

Fast Growth Regions

2012 2015T

ServicesRevenue Revenue Vitality

$105M $80M $70M

60


THERMAL GLOBAL FOOTPRINT

Our Strength: 50+ Global Sales & Service Centers

Pentair Service Center Example: Fort McMurray• Year of Construction: 2007• Employees: 50 Plus up to 500 Field Personnel for Projects• Size: 24K sq ft• Pentair Annual Revenues: ~ $50 - 100 M• Cross-GBU Opportunities

– Currently Shared with Pentair Valves & Controls– Future Opportunity for Water & Fluid Solutions

THERMAL GLOBAL FOOTPRINT

61


FAST GROWTH REGIONS: RUSSIA / CIS EXAMPLE

Broad Coverage, Strong Growth

Tuymen

5.1 5.75.4

12.416.2

25.6

18.4

23.7

34.5

39.1

FY0

3FY

04

FY0

5FY

06

FY0

7FY

08

FY0

9FY

10

FY1

1FY

12

Revenue ($M)

62


HIGHLIGHTS OF POTENTIAL PROJECT FUNNEL

Actively Pursuing Global Projects

Goliat – Korea / NorwayGoliat – Korea / Norway Bayer Golden Tiger - ChinaBayer Golden Tiger - China Seadrill MOSS CS60 - SingaporeSeadrill MOSS CS60 - Singapore

NWR - CanadaNWR - Canada Fort Hills - CanadaFort Hills - Canada Chevron Gorgon - AustraliaChevron Gorgon - Australia

50k bbd Refinery Near EdmontonSanctioned in 2012

Suncor Operated Mine with 160kbpd Bitumen Froth Capacity

Marine LNG Offloading Facility.Liquid Fuel and Water LeakDetection Opportunity

Korean Built Floating Production,Storage and Offloading Facility forBarents Sea. Pentair Supplied HeatTracing and Anti-Icing/De-Icing

Heat Management System forExpansion at Bayer MaterialScience Facility in the ShanghaiChemical Industry Park

Winterized Semi-Submersible DrillingRig Built in Singapore for NorthAtlantic Deployment. Includes HeatTracing, Anti-Icing and De-Icing

63

http://www.statoil.com/


KEY MESSAGES







ONE PENTAIR: INTEGRATION UPDATEIndia Office Consolidation China Plant Consolidation

GBU Meeting or Exceeding IST Targets

Thermal Site at Legacy Pentair Brazil

Moscow Office Consolidation Redwood City Lean Transformation Control Panel Insourcing: Hoffman

$400K Annual Savings + Growth $2M Savings in 2014Secured $4.8M Petrobras Order

$500K Annual Savings Plus Growth $~4M Lean Savings in 2013

Eliminated One Shift with Same Output$2M+ Annual Sales Synergies

65


Scrap Before Scrap Now

PIMS LEAN EXAMPLE: SCRAP REDUCTION

Key Actions: PIMS Playbook

• Created LeanTransformation Plan forScrap Reduction

• Created Pareto to PrioritizeOpportunities

• Held Kaizen to IdentifyWays to Reduce Wire Scrap

• Implemented Team’sProcess ImprovementRecommendations

• Created VisualManagement to EnsureSustainability

• Investigated VariousCauses of Wire Breaks (SixSigma Project) - AddressedMechanical Defect inBraider

Lowering Our Scrap Costs … One Initiative at a Time66


PIMS EXAMPLE: REDUCING MATERIALS COSTS

• Rationalization of Existing Lighted EndSeal Products with Brighter LEDs andUnique Lens

• Reducing Costs While ImprovingPerformance and Durability

Delivering 5%+ Net Material Savings this Year … Strong Funnel for Future Years

Indirect Materials SavingsDirect Materials Savings

• Freight Savings Using ConsolidatedPentair Rate

• Telecommunication Savings UsingPentair Renegotiated Contracts

• Travel Savings from Policy Changesand Better Rates

• Other Miscellaneous SavingsIncluding Office Supplies, TemporaryLabor, etc.

$1+M Savings in 2013

Rap

idN

ego

tiat

ion

s

Val

ue

Engi

ne

eri

ng

• Renegotiated Prices of High VolumePolymers by On-Boarding AlternateSuppliers and Consolidating Purchases

• Renegotiated Prices of Raw Metals byLeveraging Pentair Metals’ Expertise

Stra

tegi

cSo

urc

ing

• Consolidated Molding Supply Base toImprove Costs, Quality, and JIT Delivery

• Cost Modeling to Reduce Conductors’Fabrication Costs. Qualify Alternates

$5+M Savings in 2013

67


PIMS RGP – NAM MRO SERVICES EXAMPLE

Alpha Test Underway

• Offer Tiered MRO Services on an Annuity Contract Basis to Petrochemical

Plants in the Gulf Coast Region to a Combination of Small to Large PTM &

Competitive Installations through Direct Channels to Plant /

Maintenance Managers

• US MRO Industrial Market Opportunity Estimated at $150M Annually

(2010)

Concept

68


Product Overview

• LSTMI Offers a Lower SheathTemperature on the Outer Portion ofthe Heated Section as Compared to theStandard Alloy 825 MI Heating Product

• Provides the Customer withConstructible Designs at a PremiumMaterial Price that is Off-Set byReductions in Field Installation Laborand On-Going Maintenance Costs

DeployDevelopDiscover

Pre-CharterComplete

CharterComplete

StartDevelopment

CompletePrototype (3P)

Final DesignFreeze

CompleteCommercialization Plan

CompleteProduct & ProcessValidation

Launch(Jan/2014)

3D Project Status

PIMS 3D INNOVATION: LOW SHEATH TEMPERATURE MI

Enhancing Technology Differentiation

Sectional view of Design D LST MI cable

69


PIMS: HIGH PERFORMANCE “WIN RIGHT” CULTURE

Quick Adoption of Pentair Values

POSITIVE ENERGYWe Display a Positive Outlook at

All Times

ABSOLUTE INTEGRITYWe are Committed to Honest and

Ethical Business Practices

RESPECT AND TEAMWORKWe Treat Others With Respect /

We Collaborate for Team Success

CUSTOMER FIRSTWe Make it Easy for Customers to

Do Business With Pentair

ACCOUNTABILITY FOR PERFORMANCEWe Commit to High Standards

of Performance

INNOVATION AND ADAPTABILITYWe Adapt to Changing

Circumstances and Excel at ApplyingNew Ideas

NPS Strategy Deployment 3 D

Key Leadership Criteria Feedback & CoachingCode of BusinessConduct & Ethics

70


KEY MESSAGES






PENTAIR

VALVES & CONTROLSPENTAIR INVESTOR & ANALYST EVENT

David Dunbar

President, Pentair Valves & Controls

November 13, 2013


PENTAIR

KEY MESSAGES

73

Valves & Controls Positioned to Deliver Superior Value

• Pentair Valves & Controls is a Leading Solution Provider in a Growing,High Demand, Fragmented Segment

• We Believe We are Well Positioned to Win Through:

— Breadth of Offering

— Superior Application Expertise

— Strong Global Presence

— Project and Aftermarket Opportunities

• We Expect to Deliver Shareholder Value Through:

— Organic Revenue Growth

— Operation Improvements (PIMS)

— Simplification and Standardization (Lean Enterprise)


PENTAIR 74

WE CONTROL FLOW

We are a World Leader in Valves and Controls74

ACTUATOR: The MusclesA Mechanical Device Usedto Open and Close a Valve

CONTROLS: The BrainsInstruments Used to Monitor,Control, or Diagnose a Valve andActuator Package

VALVE: The BonesA Mechanical Device thatControls the Flow of aLiquid, Gas, or Vapor in aPiping System


PENTAIR

VALVES—CRITICAL TO GLOBAL INFRASTRUCTURE

Our Products Enable Safer, More Efficient, and More Sustainable Operations

From Oil & GasUpstream Applicationsin FPSO Vessels that are6X Larger than anAircraft Carrier…

… to Relief Valves Beingthe Last Line of DefensePreventing CatastrophicEquipment Failure inNuclear Power Plants

… and Control Valves inSupercritical Steam Power

Plants to Meet the EverIncreasing Electricity Demand

in the Emerging World

… to High IntegrityIsolation Valves at anAlumina Refinery withHighly Caustic, HighTemperature Fluids

Isolation Valves forLiquid Natural GasTerminals Operating atExtremely LowTemperatures of -320 F

Zero Leakage Valves PreventingEscape of Hazardous Gases LikePhosgene in Petrochem Plants

75

Valves are Highly Critical Components for Energy and Industrial Infrastructure


PENTAIR

• $2.4 Billion in Global Sales*

• 140 Years of Experience

• 10,000 Employees

• 50+ Sales Offices

• 42 Manufacturing Sites

• 80 Service Centers

• 900 Patent Filings in Last 20 Years

• 900+ Technical Sales Staff

• 1,000+ Application and Customer Service Specialists

• Our Products

– Sizes Range from 1 Inch to 7 Feet in Diameter

– Weights from Ounces to Over 30 Tons

– Operate from -370 F to Over 1,100 F

– Are Installed on Every Continent on the Planet

Fasani Gate Valve• 23 Feet High & e31 Tons• Flare Line Isolation at

Petrochemical Plant

VALVES & CONTROLS FAST FACTS

V&C Offers Significant Experience in a Broad Array of Solutions76

FCT Ball Valve• Subsea Pipeline Operation• 1,000 Feet Water Depth

2013 Houston Investor & Analyst Event * 2013 estimated sales.

PENTAIR

SEGMENT CHARACTERISTICS

Diversified Industry and Geographical Presence77

Oil & Gas

Mining

Power

Chemical

OtherProcess

Middle East

ROW

Dev. Asia

LatinAmerica

N. America

China

India

Europe

Next 10Competitors

OtherCompetitors

OtherLocal &RegionalCompetitors

PVC


• Target Complex, DifficultApplications

• Customers are Super-Majors/ Majors

• Requires High Technology &Expertise

• Developed Regions HaveLarge Installed Base andAftermarket Activity

• Emerging Markets BuildingNew Infrastructure to SupportGrowth

• PVC is a Leader

• ~15 True Global Players

• Thousands of Small LocalCompetitors; Limited Reachand Range

Valve ManufacturersIndustry Geography100% = ~$38B 100% = ~$38B 100% = ~$38B

PENTAIR

KEY TRENDS

Overall Trends Favorable for Strong Growth

CUSTOMER TRENDSINDUSTRY TRENDSDEMAND TRENDS

+ Increasingly HarshOperating Environments

+ Increasing GlobalCoordination of LargeComplex Projects

+ Growing Focus on Safety

+ Tightening ofEnvironmentalRegulations

‒ Increasing EPCCompetition

+ Oil & Gas Growth atRecord Levels

+ Growth in NAPetrochemical

+ Power Industry SeeingCoal to Gas Transition

+ Power Growth in MiddleEast / Asia

‒ Mining InvestmentSlowing in theShort Term

+ Increasing Populationand Growing MiddleClass Resulting inGreater Demand forEnergy and Power

Total Primary Energy Demand

Source: World Energy Outlook 2012Presentation by Dr. Fatih Birol, IEA ChiefEconomist.

Mto

e

Source: Citi, JPMorgan, Jefferies, UBS, MorganStanley, Deutsche Bank, Bloomberg, BMI


PENTAIR

2325

3032

3634

30

3638 38

4042

44

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

GROWTH DYNAMICS ARE EXPECTED TO BE SOLID

Forecasting Moderate Growth Through Next 3 Years

• Global Opportunity forValves has Grown ~5%CAGR Since 2004

• Recent Peak to TroughDecline of 15%

• We Expect 4-6% SalesGrowth Through 2016

– Continued Demand forCritical Infrastructure inDeveloping Markets

– Marginal Strengtheningin Developed Economies

– Increased ProjectInvestments after MinorSlowdown in 2013

CAGR5%

CAGR

Global V&C Total Addressable Market (TAM)$ Billions

Source: EIF 2012, PNR Estimates

2013 Houston Investor & Analyst Event 79

PENTAIR

CONSISTENT THROUGH THE CYCLE GROWTH

A Result of Product and Industry Breadth80

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Pentair V&C Sales

6.3% CAGRThrough the Cycle


$M

PENTAIR

0

20

40

60

80

100%

Pentair

Others

Pentair

Others

Pentair

Others

Pentair

Others

Pentair

Others

VALVES USE ACROSS INDUSTRIES

Pentair is a Leader in Targeted Industry Segments

Source: EIF 2012, PNR Estimates

81

• Total Segment Opportunity: $38B

• Pentair Share: ~6%

• Fragmentation in Current Segments Points to Continued GrowthOpportunities Through Share Gain and Acquisitions


(Includes Water, Food & Beverage, Pulp & Paper,HVAC, Marine, etc.)

Oil & Gas Mining Power Chemical


VALVES PROCUREMENT IN PROJECT CYCLE

Valves Procured Late in Large Capital Projects

Long Cycle•Compressors•AutomationSystem

•Pumps•Heat Exchangers

“Mid Cycle”•Control Valves•AutomatedValves

•SpecialInstruments

Short Cycle•Manual Valves•Safety Valves•StandardInstruments

FEEDDetailedDesign

Constructionand

InstallationPRE-FEED

EquipmentOrdering

ProjectApproval

Start-Up

Project Approval to Start-up Time in Months• Combined Cycle Power Plant: ~18-24• Ethylene Plant: ~36-48• Offshore Platform: ~48-60• FPSO: ~48-60

~12-36 Months fromProject Approval to

Valves Orders

Operation

82

PENTAIR

CUSTOMER REQUIREMENTS

Customers Value Better Products83

32%

13%

13%

9%

9%

8%

7%

5%

Valve Performance

Lead Time

On-Time Delivery

Ease of Maintenance

Sales Support

Technical Support

Brand

After-Market Service

Customer Key BuyingCriteria*

Valve Performance Defined:• Cycle Life

• Leakage (Both Inside andOutside the Pipe)

Better Performance Provides:• Process Reliability / Uptime

• Process Safety / Lower Risk

• Improved EnvironmentalPerformance

• Lower Capital Costs

• Lower Operating Costs

*Non-price attributesSource: PV&C market research


PENTAIR

KEY MESSAGES

84













PENTAIR

VALVES & CONTROLS OFFERINGS

85

Leading Global Valves & Controls Supplier … $2.4B

Actuation& Controls

QuarterTurn

Valves

PressureManagement

Valves

GGC &ControlValves

SALES BY PRODUCT PLATFORM

100% = ~$2.4B*

SALES BY VERTICAL

100% = ~$2.4B*

Energy

Industrial

OtherDeveloped

FastGrowth

U.S. &Canada

WesternEurope

SALES BY GEOGRAPHY

100% = ~$2.4B*

SALES BY CHANNEL

100% = ~$2.4B*

Projects

Installed

2013 Houston Investor & Analyst Event * 2013 estimated sales.

PENTAIR

QUARTER TURN VALVES

~$1B Estimated Quarter Turn Valves Revenue in 201386

SALES BY VERTICAL

EnergyIndustrial

SALES BY REGIONSALES BY CHANNEL

MAJOR BRANDS

SAMPLE CUSTOMERSKEY GROWTH DRIVERS / VERTICALSPRODUCT

• Keystone

• KTM

• Vanessa

Installed

Projects

U.S. &Canada

FastGrowth

OtherDeveloped

WesternEurope

ButterflyValve Ball

Valve

• Offshore O&G Platforms

• FPSO (FloatingProduction, Storage,and Offloading)

• Chemical &Petrochemical

• LNG Terminals

• Food & Beverage

• Cryogenic Isolation

• Corrosive ChemicalIsolation


Triple OffsetValve

100% = ~$1.0B* 100% = ~$1.0B* 100% = ~$1.0B*

* 2013 estimated sales.

PENTAIR

PRESSURE MANAGEMENT VALVES

87

SALES BY VERTICAL

Energy

Industrial


MAJOR BRANDS


• Anderson Greenwood

• Crosby

• Sempell

Aftermarket Project

Direct SpringRelief Valve

PilotOperatedReliefValve

~$600M Estimated Pressure Management Valves Revenue in 2013

• Steam Power Plants

• Nuclear Power Plants

• Oil and Gas Explorationand Refining

• Petrochemical TankFarms

• LNG Terminals

• Power Plant SteamBoiler Protection

• Refinery Tank Protection

U.S. &CanadaFast

Growth

OtherDeveloped

WesternEurope

Installed

Projects


100% = ~$0.6B* 100% = ~$0.6B* 100% = ~$0.6B*


PENTAIR

GATE, GLOBE, CHECK & CONTROL VALVES

88

SALES BY VERTICAL

Energy

Industrial


MAJOR BRANDS


• Clarkson

• Fasani

• Sempell

Installed

Projects

U.S. &Canada

FastGrowth

OtherDeveloped

WesternEurope

Knife GateValve

Globe Valve

~$400M Estimated Gate, Globe, & Check Valves Revenue in 2013

• Steam Control forPower Plants

• Mining Tailings Isolation

• Steam Power Plants

• Nuclear Power Plants

• Copper and GoldMining

• Alumina Refining

• Oil and Gas Explorationand Refining


100% = ~$0.4B*100% = ~$0.4B*100% = ~$0.4B*


PENTAIR

ACTUATION & CONTROLS

89

SALES BY VERTICAL

Energy Industrial


MAJOR BRANDS


• Biffi

• Morin

• Westlock

Installed

Projects

U.S.

FastGrowth

OtherDeveloped

W. Europe

Valve Actuator

ValvePositioner

~$400M Estimated Actuation & Controls Revenue in 2013

• ~30% Captive V&C

• ~70% Other ValveCompanies

• O&G Pipelines

• O&G Upstream

• FPSO (FloatingProduction, Storage,and Offloading)

• Chemical &Petrochemical

• LNG Terminals

U.S. &Canada

FastGrowth

OtherDeveloped

WesternEurope

EnergyIndustrial


100% = ~$0.4B* 100% = ~$0.4B* 100% = ~$0.4B*


PENTAIR

0

20

40

60

80

100%

Pentair

Target Market

Non-Target

Pentair

TargetMarket

Non-Target

Pentair

Target Market

Non-Target

TargetMarket

Pentair

TargetMarket

Pentair

Target Market

Non-Target

Pentair

Non-Target

WINNING THROUGH PRODUCT BREADTH

Pentair Valves & Controls is a Leader in all Segments90

#2#1 #1

• Most Product Segments Also Very Fragmented

• PVC Targets the Highly Engineered and Technical Segments of Each Product Space ($23B)


(Includes valve parts (seals, etc.), solenoid valves,fittings, etc.; Excludes control, pressure reducing,plug, and manual diaphragm valves)

QT PMV GGC A&C OtherService

$9B $4B $12B $2B $9B$2B

Non-TargetMarket

Non-Target Market Non-TargetMarket

Non-Target Market

Quarter Turn PressureManagement

Gate, Globe, Check A&C Service Other(Includes Valve Parts,

Solenoid Valves, Fittings, etc.)Source: EIF 2012, PNR Estimates

PENTAIR

WINNING THROUGH APPLICATION EXPERTISE

Leading Brands are Trusted for Critical Applications91

• 75 Years ofExperience

• The World’s FirstSupplier of FullBore, Split BodyType Ball Valves

• Developed theResilient SeatedButterfly Valvein 1951

• Provides MarketLeading Cycle Life

• Started in 1874

• Trusted to ProtectNuclear Submarinesand CommercialNuclear Plants in theUS and Across theWorld

• A Leading Supplier ofRelief Valves with a TrackRecord of ProductInnovations andTechnical Breakthroughsto Solve the ToughestApplication Challenges

ANDERSON GREENWOOD

CROSBYKEYSTONE

KTM


PENTAIR

WINNING THROUGH APPLICATION EXPERTISE

Leading Brands are Trusted for Critical Applications92

• Developed the MetalSeat Valve with “ZeroLeakage”

• Used in HighlyChallenging IsolationApplications

• Pioneer of the DualElastomer SleeveSlurry Valve

• One of the Highest Qualityand Most TechnologicallyAdvanced Slurry Valves onthe Market

• 140 Years of Experience

• Deep Expertise in PowerPlant Valve Applicationsfor Both Nuclear andConventional Fuels

• A Leading ActuatorManufacturer for Over50 Years

• Wide Range of Standardand Custom DesignedAutomation Solutions

SEMPELL

BIFFICLARKSON

VANESSA


PENTAIR

WINNING WITH GLOBAL PRESENCE

We Can Make Commitments at a Global Level and Execute Consistently Locally

Service Center

Mobile Service CenterMajor Manufacturing Location

Major Sales Office

50+ Sales Offices80 Service Centers

42 Manufacturing Plants

1900

780

1100

2800

1050

650

675350


# Employees

PENTAIR


Pentair Provides Global Scale to Serve Our Customers’ Needs

DownstreamActivity

UNITED STATES

UpstreamActivity

Jetty

Pipeline

DownstreamActivty

AUSTRALIA

LNG Storage Tanks

FRANCE

Chevron Wheatstone Project Scope…

• LNG Plant in Western Australia• $29B Project• 25M Tonnes / Year LNG Production• 650M / Day Cubic Feet Domestic Gas


PVC InvolvementProject Management

Sales OfficesPlants

Service

Pentair Valves & Controls Supplied:

Anderson Greenwood & Crosby Relief Valves

Biffi Actuators

Vanessa Triple Offset Valves

Richards Ball Valves

EPC 1

LNG Tank Supplier

EPC 1

EPC 2

JettyConsortium

PipelineSupplier

PENTAIR


95

Latin America•Hiter Acquisition in Brazil•Localized Assembly andTest for Actuators, PressureRelief, Butterfly, Knife Gate,and Control Valves

China•Localized Assembly andTest for Actuators,Butterfly, Ball, PressureRelief, and Knife GateValves

India• Localized Assembly and

Test for Actuators,Butterfly, and SlurryValves

Middle East•KEF Acquisition in UAE•Localized Assemblyand Test for Gate,Globe, Check, and BallValves

• Local Design & Development to Meet Regional Needs• Local Assembly & Test to Reduce Lead Times

Using Our Global Footprint to Better Serve Our Customers2013 Houston Investor & Analyst Event

PENTAIR

WINNING WITH PROJECT AND AFTERMARKET

Valve Growth Driven by Infrastructure Expansion and Operation96

Refinery (300,000 Barrels Per Day)

• ~$200M in Valves for Greenfield Site

• ~$7M in Annual Aftermarket Opportunity

LNG Liquefaction Plant (8 MTPA)

• ~$150M in Valves for Greenfield Site

• ~$12M in Annual Aftermarket Opportunity

Alumina Refinery(5 MTPA)

• ~$50M in Valves forGreenfield Site

• ~$5M in AnnualAftermarketOpportunity

Power Plant (600MW Coal Fired)

• ~$6M in Valves forGreenfield Site

• ~$1M in AnnualAftermarketOpportunity


PENTAIR

KEY MESSAGES

97













PENTAIR

2011 2012 2013F 2015T

2011 2012 2013F 2015T

PNR V&C EXPECTATIONS

Higher Quality of Revenue and Stronger Operating Performance

Top 2014 / 2015 Priorities

1. Drive Organic Revenue GrowthThrough New ProductDevelopments

2. Capture Growth ThroughImproved Customer Serviceand Operations Improvements

3. Simplify Our Business


Sales ($B)

Operating Income ($M)

2.4>4%

2.42.3

2.7

232 244295

400+

ROS 10.2% 10.3% 12.5% >15%

98

PENTAIR

RENEWED PRODUCT INNOVATION

PIMS Tools Driving Standardized Approach to Product Development99

New Product Sales Have Grown from$0 in 2010 to an Estimated $40M+ in2013 with a Strong Funnel for 2014+

1990's 2000's 2010's

Patent Filings

Patent Filings are Back to 1990sLevels Showing Reinvestment inProduct Technology

~60 / Year

~28 / Year

~60 / YearDiscover23 Projects

~ $50M+

Develop

Deploy

25 Projects~ $80M+

17 Projects~ $50M+

New Product Development Funnel3 Year Run Rate Revenue Estimate


PENTAIR


Pentair Valves are Innovative100

Keystone GR Series Butterfly Valves are More Durable• Independent Lab Testing Verifies Cycle Life of 2.5X Our

Nearest Competitor• Sizes Ranging from 2” – 72” and 1,000+ Trim Configurations

Vonk Choke Valves Last Longer• Unique Rotating Disc Technology Provides 3X Longer Cycle Life than

Competing Products• Customer Field Testing in Shale Gas Applications have Shown 4X Longer

Cycle Life Leading to Lower Maintenance Costs

Clarkson Knife Gate Valve Solves Customer Problem• Canadian Oil Sands Customer was Replacing Knife Gate Valves Every 6 Weeks• Pentair Used Computational Fluid Dynamics to Determine Root Cause of

Wear and Designed a New Valve• Redesigned Valve now Lasts 2 years—17X Longer than Competing Valve


PENTAIR



Narvik CircTemp Desuperheater Perform More Effectively• Optimized for Supercritical Boilers Operating at 1,100 F and to Withstand

2,000 Cycles Annually• Independent Lab Testing Verifies a 50% Reduction in Evaporation Rates

Leading to Shorter Pipe Distances, Saving Installation, and Operating Costs

Keystone CompoSeal Butterfly Valves are More Environmentally Friendly• Patented Composite Two Piece Housing can Operate at 10 Bar and 250 F,

Giving a Light Weight Alternative to Metal Body Valves• 70% Lower Carbon Foot Print Compared to an Ordinary Butterfly Valve

with Fully Recyclable Material

Vanessa Triple Offset Valves Give Best Isolation• First Triple Offset Valve with True Zero Leakage Performance• The Preferred Triple Offset Valve in Cryogenic Applications• Over $500 Million in Project Wins in Last 5 Years


PENTAIR



Wellbond High Pressure Globe Valve is Easily Repaired• Design-for-Maintenance Approach Offers Fastest and Lowest Cost In-

Line Repair vs. Competitors• Typical Plant with 100 Valves may see up to $1M in Life Cycle Savings

Clarkson Slurry Knife Gate Valves provide more process uptime• Patented Sleeve Design Resists Jamming and Provides Bubble Tight

Shut Off for Slurry Flows• Field Replaceable Sleeves Reduce Repair Time and Increase

Operating Up-Time

Biffi OLGAS Hydraulic Actuator Provides Record Operating Time• Designed for Operation in High-Integrity Pressure Protection

Systems (HIPPS) to Prevent Over-Pressurization• Unique Design Allows for Record Closing Time While Preventing

Impact Damage to the Valve


PENTAIR

ORGANIC GROWTH—LEAN

Lean Efforts Driving ~12% Increase in Aftermarket Sales

Aftermarket Focus• Focused Resources, Programs, and Incentives to Drive MRO Product Sales• Lean Transformation to Simplify RFQ Process and Improve Organization Capability to

Handle Increased Volume• Target Inventory Program to Support Off-the-Shelf• Rapid Growth Process (RGP) to Test Sites with Opportunities


Q1 Q2 Q3 Q4 Q1 Q2 Q3

+12%

0

0.1

0.2

0.3

0.4

Jan Feb Mar Apr May Jun Jul Aug Sep

Global MRO Sales

2012 2013

Pasadena Inside Sales ProductivityQuotes/Person/Hour

Lean Kaizen Event

PENTAIR

SERVICE FACTS

104

• 80 Locations• 600 Technicians• Over 5,000 Customers• Over 55,000 Square Meters of Shop Space• 200,000 Order Transactions

• 80 Locations• 600 Technicians• Over 5,000 Customers• Over 55,000 Square Meters of Shop Space• 200,000 Order Transactions

A Leading Global Valves Services Network2013 Houston Investor & Analyst Event

PENTAIR

GROWTH THROUGH SERVICE CENTER EXPANSION

October 2013Macae, Brazil

New February 2011:Port Arthur, TX

New March 2012:Coatzacoalcos, Mexico

New August 2013:Tampico, Mexico

Extension 2012Baton Rouge, LA

Extension 2012Pasadena, TX Latin America

April 2013Buenos Aires

Argentina

VizagDec 2013

HaziraDec 2013

Asia

Rayong, ThailandMarch 2011

Songkla, ThailandOctober 2010

Pacific

September 2011Karratha, AUS

Extension 2012Gladstone, AUS … and Others in

Europe, US,Canada

Following Our Customers to Support Them Locally1052013 Houston Investor & Analyst Event

PENTAIR

GROWTH THROUGH AN EXPANDED OFFERING

106

Automation

Valves Asset Management

Turnaround Planning

Turnaround Execution

Project Commissioning

Diagnostics

Spare Parts Supply

On Site Repair

In Shop Repair

• Many Service Centers Have Developed LocalInnovative Services Offerings

• Service Centers were Brought Under Single GlobalManagement in 2013 to Drive Standardizationand Best Practices Across the Network

Innovating to Improve Customers Total Cost of Ownership

BasicServices

Higher ValueServices


PENTAIR

Key Account Program Creates Organic Growth107

• Domain Expertise within Supply Base toSolve Difficult Application Requirements

• Supplier Rationalization to SimplifySupply Chain Operations

• Standardization to Improve Operationsand Reduce Maintenance Costs

• Peace of Mind that Products WillPerform Efficiently, Reliably, and Safely

V&C Customer Buying Trends

ORGANIC GROWTH—GLOBAL KEY ACCOUNTS

Value of V&C Key Account Management

• Leading Engineering CapabilitiesEnables Breakthrough Solutions

• Single Point of Contact Aligns withCustomer Supply Chain Strategy

• Portfolio of World Class ProductsCovers Wide Range of Needs

• Global Service Footprint SupportsCustomer Facilities

2011 2012 2013F

24%CAGR

15% of PV&C Revenue with Strong Growth

Oil & Gas Petrochem Mining Process Power

Global Key Accounts Across Multiple Industries

BPChevronConocoPhillipsExxonMobilShellTotal

BASFBayerDowSabic

BHPFreeport-McMoRanNewmontRioTinto

Air ProductsPraxairSiemensVeolia

Alstom


PENTAIR

IMPROVE CUSTOMER EXPERIENCE

PIMS Toolkit Supports Growth for V&C108

0.31

-0.23

-0.39

0.08

0.30

0.22

0.31

0.05

Valve Performance

Lead Time

On-Time Delivery

Ease of Maintenance

Sales Support

Technical Support

Brand

After-Market Service

V&C Performance vs.Competitors

PIMS as Growth Tool

Source: PV&C market research

• Customers Prefer OurProducts, Support, andServices

• Key Priority is ImprovingCustomer Experience Via:

Lean FactoryImprovements

Global Sourcing

Office Based Lean


PENTAIR 109

FAST LEAN EXECUTION

Valves & Controls Adopted LEAN Successfully within 12 Months

Expansionof “4 Wall”

Lean toEnterprise

Servicesand Sales

OfficesLEAN

BeginsLegacyOpEx

LeanAssessment

12 LEANFocus Sites

42 SitesLean Plans

CCF / MMF/ PFEPEvents

Mar 12 Jun 12 Sep 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14

LEAN inOur DNA!

PNR / TYCAnnouncement

1st PIMSMeetings

PNR / FlowControlMerger

*Lean Transformation Plan

12 Focus Sites Cover$1B Sales


PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORYImproved Lead Times—Sample Results to Date:• High Performance Butterfly Valve Lead Times Reduced from 20 Weeks to 6 Weeks

(Breda, Netherlands)

• Safety Relief Valves Lead Time Reduced from 12 Weeks to 6 Weeks (JOS) and from 12Weeks to 7 Weeks for OMNIs and 80s (Stafford, TX)

15+ Product Lines Have Seen Lead Time Reductions in Last 9 months110

Example: Breda, Netherlands After: Productivity Increased by 200%,WIP Reduced by 99%, and Space by 75%


PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORYImproved Quality—Sample Results to Date:

• Reduced Rejects on RPI Actuator Line by 47%

• 38% Reduction in Slurry Knife Gate Valve Defects

• Defects on Safety Relief Valve Line Reduced by 62%

Improved Quality Leading to Shorter Lead Times and Lower Costs111

Example: Armentieres, France After: Building All Small Valves in “OnePiece Flow” Reduced Rejects Significantly

Improved FirstPass Yields andLess Rework


PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORYIncrease Available Space—Results to Date:• Overall 10%+ Reduction in Space in Our Major Focus Sites Freeing Up Over

250,000 Square Feet of Available Factory Space

Utilizing Space to Expand Localization Efforts — Further Reducing Lead Times to Customers

112

Example: Qingpu, China

Example: Black Mountain, NC


PENTAIR

IMPROVE CUSTOMER EXPERIENCE—OFFICE LEAN

• V&C Multi-Million $ Projects are Complex

– Custom Engineered Products

– Multiple Plants

– Multiple Constituents: Suppliers, InspectionAgencies, Freight Companies, End Users, andEPC Firms

– Detailed Testing and CertificationPaperwork Required

• Applying Lean Principles to Managing Projects:

– Variable Staffing to Match Project Phase

– Co-Located Office Teams for HyperCommunication

– Standard Work for Project Control

– Daily Gemba Walks to Identify Issues andResolve Quickly

– Daily Objectives to Drive Results

Customers Praise the Dedicated Focus113

Daily Gemba Walk for Project Team

Early Results Show Improved Delivery,Improved Quality, Reduced Costs, andHappier Customers


PENTAIR

SIMPLIFICATION—LEAN ENTERPRISE

Key Metrics 2010 2013F 2017T

Plants 48 ~40 < 40

ERP 39 29 TBD

% Production in DestinationRegion

61% 66% > 75%

Product Groups 30+ 12 5

MILESTONES

• 2010-2011: Dissolved RegionalOrganizations and Created Global VerticalIndustry Focus

• 2012: Creation of Global Functional GroupIncreased Speed and Efficiency of DecisionMaking and Execution

• 2013: Consolidating Product ManagementUnder 4 Core Global Product Platforms

• 2014: Begin Rollout of Global ERP Templateand System Consolidation

Aggressively Reducing Complexity114

We are Building a Lean Business Model to:• Improve the Customer Experience• Use Our Global Portfolio• Create an Efficient High Performance

Global Organization


PENTAIR

KEY MESSAGES

115








• Expect to Deliver Shareholder Value Through:






APPENDIX: VALVES 101

116

PENTAIR

VALVES 101—WHAT IS A VALVE

Valve: A Valve is a Mechanical Device Whose Function isto Control the Flow of Fluids in a Piping System

– Control Applied to These Fluids can Take MultipleForms

• Starting and Stopping Flow (Isolation or On/Off)

• Limiting or Managing Fluid Pressure

• Preventing Reverse Flow (Backflow)

• Changing Flow Direction

• Regulating Flow Volume (Throttling)

– Fluids can be Liquids, Gases, and Vapors, and canalso be Liquids Carrying Suspended Solid Particles(Slurries)

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

A “Globe” Valve, Used toStart and Stop Flow

A “Pressure Relief” Valve,Used to Regulate Pressure

2013 Houston Investor & Analyst Event 117

PENTAIR

VALVES 101—QUARTER TURN VALVESQuarter-Turn Valves: Category of Valves (Such as Ball or Butterfly) Which Require 90Degree Turn of the Stem to Move from the Fully Open to the Fully Closed Position.Typically Used for Isolation and Throttling Applications.

Ball ValveA Quarter-Turn Valve with a BallShaped Closing Element held BetweenTwo Seats. Ball Valves are Widely Usedas On/Off Valves, but Some SpecialDesigns are Available for ThrottlingApplications.

Butterfly ValveA Quarter-Turn Valve Which has a Circular Disk as itsClosing Element. The Standard Design has the ValveStem Running Through the Disk, Giving aSymmetrical Appearance. Later Designs Off-Set theStem, so that the Disk ‘Cams’ into the Valve Seat.



118

PENTAIR

VALVES 101—GATE AND GLOBE VALVESGate ValveA Multi-Turn Valve Used for Isolation ApplicationsWhich has a Gate as its Closing Element. The GateMoves Linearly, Perpendicular to the Direction of Flow.Gate Valves Provide Robust Sealing and are usedExtensively in the Petrochemicals Industries. This Classof Valves also Includes Knife Gate Valves, which havemuch Thinner Gates with a Knife-like Edge, Makingthem Suited to use with Floating Solids.

Globe ValveA Multi-Turn Valve with a Closing Elementthat Moves Perpendicularly to the ValveBody Seat and Generally Seals in a PlaneParallel to the Direction of Flow. This Typeof Valve is Suited both to Throttling andGeneral Flow Control.



119

PENTAIR

VALVES 101—CHECK AND CONTROL VALVESCheck ValveA Valve that is Designed to Allow the Fluidto Flow in a Given Direction but Closes toPrevent Backflow. Check Valves (alsocalled Non-Return Valves) are Usually Self-Acting.

Control ValveA Valve which Regulates the Flow or Pressure of aFluid. Control Valves Normally Respond to SignalsGenerated by Independent Devices such as FlowMeters, Temperature Gauges, etc. Control Valvesare Normally Fitted with Actuators andPositioners.



120

PENTAIR

VALVES 101—PRESSURE MANAGEMENT VALVESPressure Management Valves: Category of Valves used to Reduce Excess Pressure inPressurized Systems, for Example a Steam Boiler. Pressure Management ValvesAutomatically Open to Relieve Overpressure which Prevents Potentially ViolentEquipment Failure.

Direct Spring Relief ValvesTypically use a Spring to Hold the discor Piston on the Seat.

Pilot Operated Relief ValvesThe Difference Between PORV and Spring LoadedPRV is that Pilot Valves use System Pressure to Sealthe Valve.



121

PENTAIR

VALVES 101—ACTUATORS AND CONTROLS

ActuatorActuators are Mechanical Devicesthat use Hydraulic, Pneumatic, orElectric Power to Provide theMuscle (Torque or Thrust) Neededto Move a Valve to Open, Closed,or Stop Positions.

Actuators & Controls: Valves can be Operated with a Variety of Mechanisms from SimpleLever Handles and Hand-Wheels to Very Complex Valve Automation Systems.

GearsGears are Mechanical DevicesUsed with Valves and / orActuators to Provide the Muscle(Torque or Thrust) Needed toMove a Valve to Open, Closed, orStop Positions.

Controls

Controls are the Brains whichCommand the Actuators’ Power.They are Instruments and / orSystems Necessary to Provide Localor Remote Monitoring, Control,and Diagnostics of Valves.



122

PENTAIR 123

APPENDIXGAAP to Non-GAAP Measurements & Reconciliations


PENTAIR 124

REPORTED TO ADJUSTED 2013 RECONCILIATION

Pentair Ltd. and Subsidiaries

Reconciliation of the GAAP “As Reported” year ended December 31, 2013 to the “Adjusted” non-GAAP

excluding the effect of 2013 adjustments (Unaudited)

Actual

In millions, except per-share data

FirstQuarter

SecondQuarter

ThirdQuarter

FullYear

Total PentairNet sales $ 1,774.5 $ 1,963.7 $ 1,824.8 approx $ 7,400

Operating income—as reported 74.3 225.9 240.0 approx 782% of net sales 4.2% 11.5% 13.2% approx 10.6%

Adjustments:Inventory step-up and customer backlog 76.8 10.1 — approx 88Restructuring and other 27.4 32.4 8.7 approx 70

Operating income—as adjusted 178.5 268.4 248.7 approx 940% of net sales 10.1% 13.7% 13.6% approx 12.7%

Net income attributable to Pentair Ltd.—as reported 51.7 154.1 172.8 approx 549

Gain on sale of business, net of tax (12.5) — — approx (13)Interest expense, net of tax — 1.6 — approx 2Adjustments, net of tax 80.8 33.5 1.1 approx 115

Net income attributable to Pentair Ltd.—as adjusted 120.0 189.2 173.9 approx 653

Earnings per common share attributable toPentair Ltd.—dilutedDiluted earnings per common share—as reported $ 0.25 $ 0.75 $ 0.85 approx $2.68 - $2.70Adjustments 0.33 0.17 0.01 approx 0.51

Diluted earnings per common share—as adjusted $ 0.58 $ 0.92 $ 0.86 approx $3.19 - $3.21


PENTAIR 125

REPORTED TO ADJUSTED 2013 RECONCILIATIONPentair Ltd. and Subsidiaries

Reconciliation of the GAAP “As Reported” year ended December 31, 2013 to the “Adjusted” non-GAAP


Actual

In millions

FirstQuarter

SecondQuarter

ThirdQuarter

FullYear

Water & Fluid Solutions

Net sales $ 782.0 $ 949.8 $ 814.3 approx $ 3,345

Operating income—as reported 74.8 136.1 105.9 approx 411-416

% of net sales 9.6% 14.3% 13.0% approx 12.4%

Adjustments:

Restructuring and other 7.5 6.6 3.5 approx 18

Inventory step-up and customer backlog 0.6 0.2 — approx 1

Operating income—as adjusted 82.9 142.9 109.4 approx 430-435


Valves & Controls

Net sales $ 585.8 $ 619.9 $ 611.5 approx $ 2,400

Operating income (loss)—as reported (18.6) 56.9 76.6 approx 187-192

% of net sales (3.2)% 9.2% 12.5% approx 7.9%

Adjustments:


Inventory step-up and customer backlog 70.6 10.0 — approx 81



Technical Solutions

Net sales $ 410.0 $ 397.4 $ 405.9 approx $ 1,655

Operating income—as reported 53.3 65.1 82.2 approx 292-297


Adjustments:


Inventory step-up and customer backlog 5.7 — — approx 6




PENTAIR 126


Reconciliation of the GAAP "As Reported" year ended December 31, 2012 to the "Adjusted" non-GAAPexcluding the effect of 2012 adjustments (Unaudited)

First Quarter Second Quarter Third Quarter Fourth Quarter YearIn millions, except per-share data 2012 2012 2012 2012 2012

Total Pentair

Net sales 858.2$ 941.5$ 865.5$ 1,750.9$ 4,416.1$

Operating income (loss) - as reported 86.5 119.3 55.2 (304.1) (43.1)

% of net sales 10.1% 12.7% 6.4% (17.4%) (1.0%)

Adjustments:

Deal related costs and expenses 11.8 6.3 52.7 12.0 82.8

Inventory step-up and customer backlog — — — 179.6 179.6

Restructuring — 10.4 1.1 55.3 66.8

Trade name impairment — — — 60.7 60.7

Change in accounting method - pension and post-retirement (1.5) (1.5) (1.5) 146.2 141.7

Operating income - as adjusted 96.8 134.5 107.5 149.7 488.5

% of net sales 11.3% 14.3% 12.4% 8.5% 11.1%

Net income (loss) attributable to Pentair Ltd. - as reported 61.8 72.8 31.4 (273.1) (107.1)

Bond redemption and interest expense (0.8) — 1.8 51.9 52.9

Other adjustments net of tax 3.0 10.9 32.3 320.9 367.1

Net income from continuing operations attributable

to Pentair Ltd. - as adjusted 64.0 83.7 65.5 99.7 312.9

Continuing earnings per common share attributable to Pentair Ltd. - diluted

Diluted earnings (loss) per common share - as reported 0.62$ 0.72$ 0.31$ (1.31)$ (0.84)$

Adjustments 0.02 0.11 0.33 1.78 3.23

Diluted earnings per common share - as adjusted 0.64$ 0.83$ 0.64$ 0.47$ 2.39$


PENTAIR 127Note: Inventory step-up and customer backlog reflect amortization of fair market value step-up associatedwith inventory and in process customer contracts.


Reconciliation of the GAAP "As Reported" year ended December 31, 2012 to the "Adjusted" non-GAAP


First Quarter Second Quarter Third Quarter Fourth Quarter YearIn millions 2012 2012 2012 2012 2012

Water & Fluid Solutions

Net sales 587.1$ 675.4$ 605.5$ 771.2$ 2,639.2$

Operating income (loss) - as reported 63.7 92.0 69.2 (56.9) 168.0% of net sales 10.8% 13.6% 11.4% (7.4%) 6.4%

Adjustments:

Restructuring — 6.9 1.1 42.5 50.5



Operating income - as adjusted 63.7 98.9 70.3 58.1 291.0% of net sales 10.8% 14.6% 11.6% 7.5% 11.0%

Valves & Controls

Net sales —$ —$ —$ 548.6$ 548.6$

Operating income (loss) - as reported — — — (76.8) (76.8)% of net sales 0.0% 0.0% 0.0% (14.0%) (14.0%)

Adjustments:

Restructuring — — — 5.1 5.1


Operating income - as adjusted — — — 41.8 41.8% of net sales 0.0% 0.0% 0.0% 7.6% 7.6%

Technical Solutions

Net sales 272.6$ 267.5$ 261.5$ 434.8$ 1,236.4$

Operating income - as reported 50.5 50.6 52.3 11.6 165.0% of net sales 18.5% 18.9% 20.0% 2.7% 13.3%

Adjustments:

Restructuring — 3.1 — 9.7 12.8



Operating income - as adjusted 50.5 53.7 52.3 75.6 232.1% of net sales 18.5% 20.1% 20.0% 17.4% 18.8%


PENTAIR 128

2012 PRO FORMA ADJUSTMENTS – TOTAL PENTAIR

Note: “Other” adjustments represent the elimination of certain large projects and sales to sanctioned countries (which wereterminated prior to the completion of the Flow Control acquisition), changes in corporate allocation assumptions,income taxes, and share count.

Pro Forma Adjustments

2012 Total Pentair(in millions, except

EPS )

Historical

Adjusted

Results

Historical Flow

Control

Acquisition

Depreciation &

Amortization

Other

Adjustments

Adjusted Pro

Forma Results

First Quarter

Sales 858.2$ 995.9$ -$ (74.0)$ 1,780.1$

Operating Income 96.8$ 124.9$ (17.1)$ (32.2)$ 172.4$

Net Income 64.0$ 93.7$ (12.8)$ (28.1)$ 116.8$

Diluted EPS 0.64$ 0.44$ (0.06)$ (0.48)$ 0.54$

Second Quarter

Sales 941.5$ 980.8$ -$ (33.2)$ 1,889.1$


Net Income 83.7$ 107.6$ (12.9)$ (14.0)$ 164.4$

Diluted EPS 0.83$ 0.50$ (0.06)$ (0.50)$ 0.77$

Third Quarter

Sales 865.5$ 1,019.8$ -$ (16.0)$ 1,869.3$

Operating Income 107.5$ 119.9$ (17.3)$ 5.5$ 215.6$

Net Income 65.5$ 89.9$ (13.0)$ 6.3$ 148.8$

Diluted EPS 0.64$ 0.42$ (0.06)$ (0.31)$ 0.69$

Fourth Quarter

Sales 1,750.9$ -$ -$ (7.1)$ 1,743.8$

Operating Income 149.7$ -$ -$ 16.6$ 166.3$

Net Income 99.7$ -$ -$ 12.7$ 112.4$

Diluted EPS 0.47$ -$ -$ 0.06$ 0.53$

Full Year

Sales 4,416.1$ 2,996.5$ -$ (130.3)$ 7,282.3$


Net Income 312.9$ 291.3$ (38.7)$ (23.1)$ 542.4$

Diluted EPS 2.39$ 1.36$ (0.18)$ (1.03)$ 2.54$


PENTAIR 129

2012 PRO FORMA ADJUSTMENTS – WATER & FLUID SOLUTIONS

Note: “Other” adjustments represent changes in corporate allocation assumptions2013 Houston Investor & Analyst Event

PENTAIR 130

2012 PRO FORMA ADJUSTMENTS – VALVES & CONTROLS

Note: “Other” adjustments represent the elimination of sales to sanctioned countries (which were terminated prior to thecompletion of the Flow Control acquisition), and changes in corporate allocation assumptions2013 Houston Investor & Analyst Event

PENTAIR 131

2012 PRO FORMA ADJUSTMENTS – TECHNICAL SOLUTIONS

Note: “Other” adjustments represent the elimination of certain large projects and changes in corporate allocation assumptions.2013 Houston Investor & Analyst Event

pentair: differentiated growth · 2018-02-21 · pentair 2013 houston investor & analyst event...

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