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Pentair Announces Record Earnings Per Share of $2.10 for Fiscal Year 2007 on Record Sales of $3.4 Billion, Up 8 Percent
02.05.2008

GOLDEN VALLEY, Minn.--(BUSINESS WIRE)--Feb. 5, 2008--Pentair, Inc. (NYSE:PNR):

  • Delivers full year net earnings per share from continuing operations (EPS) on adjusted basis(a) $2.08, up 21 percent versus 2006 adjusted EPS of $1.72
  • Generates record free cash flow of $285 million for the full year 2007, up $104 million versus 2006
  • Reports strong fourth quarter sales of $830 million, up 12 percent year over year
  • Announces fourth quarter reported EPS of 48 cents or 51 cents on an adjusted basis(a)
  • Affirms full year 2008 EPS guidance of between $2.25 and $2.40

(a) Adjusted 2007 and 2006 EPS exclude the benefit of non-recurring tax items as well as the negative impact associated with restructuring costs, legal settlements, and other market related actions in the respective period. Adjusted 2007 and 2006 Operating Income and Margins exclude the negative impact associated with restructuring costs, legal settlements and other market related actions in the respective period (see reconciliation tables attached to this release).

Pentair, Inc. (NYSE:PNR) today announced fourth-quarter earnings per share of 48 cents, up 23 percent from 39 cents per share in the fourth quarter 2006. Fourth quarter 2007 adjusted earnings per share of 51 cents were up 65 percent as compared to fourth quarter 2006 adjusted earnings per share of 31 cents. Fourth quarter 2007 adjusted earnings per share exclude $0.01 per share favorable impact from one-time net tax benefits and $0.04 per share negative impact from restructuring and legal matters. Fourth quarter 2007 earnings per share benefited from curtailments associated with changes to the company's long-term, defined benefit and retiree medical plans partially offset by certain cost actions. The net impact of these items provided a $0.02 EPS benefit in the fourth quarter of 2007.

Pentair's sales for fourth quarter 2007 were $830 million, an increase of 11.7 percent from the year-ago quarter or 4 percent excluding acquisitions and foreign exchange. In the quarter, the company delivered operating income of $90 million versus $61 million in the year-earlier quarter. On a reported basis, operating margins expanded 260 basis points to 10.9 percent. The company delivered adjusted operating income of $96 million. On this basis, operating margins expanded 330 basis points to 11.6 percent. Margin expansion was driven by a positive 600 basis point improvement from productivity, price, acquisitions, and volume. These items more than offset a negative 270 basis point impact related to total inflation.

"Pentair's fourth quarter results demonstrate the value of the diversity in our end markets," said Randall J. Hogan, Pentair chairman and CEO. "Our investments in key growth regions and vertical market initiatives, such as food service, desalination, commercial pools and industrial water, produced double digit growth. These focused initiatives, coupled with our strong overall growth in China, India and the Middle East, provide momentum as we exit the year," he added. "Further, the actions we took early in the decline of the North American residential market and our productivity and lean enterprise disciplines enabled the company to expand margins as expected."

FOURTH QUARTER BUSINESS HIGHLIGHTS

The Water Group delivered $566 million in sales or 13 percent year-over-year sales growth. Acquisitions accounted for 7 points of growth and foreign exchange equaled 2 points of growth.

  • Sales in Asia-Pacific grew 28 percent year-over-year. These results reflect strong growth in China sales for filtration and pump systems, and in India led by sales of commercial pump, food service solutions and rural water systems.
  • Sales in Europe grew 51 percent year-over-year or 12 percent excluding the Jung Pump acquisition. These results reflect strength in the East European markets as well as key successes in the flow technologies market in the Middle East.
  • North American filtration sales rose 11 percent with strong growth in food service, commercial water treatment and industrial markets muted by declines in residential water treatment markets. Total North American filtration sales were down when adjusted to exclude the Porous Media acquisition.
  • North American flow technologies (previously named North American pump) sales were flat as growth in commercial and municipal markets, new products and pricing actions offset declines in residential markets.
  • North American pool and spa sales increased 11 percent as new products, price actions and a solid early buy program more than offset residential market softness.

The Water Group's fourth quarter operating income totaled $64 million, an increase of 70 percent as compared to $38 million in the same period last year. On an adjusted basis, the Group's operating income was $68 million or 80 percent higher than the $38 million in the year-ago period. Adjusted operating margins of 12 percent expanded 450 basis points as the benefit from productivity actions, acquisitions, curtailment, and positive price more than offset the negative impact from inflation, decreased volumes and cost actions.

Technical Products delivered fourth quarter 2007 sales of $265 million, an increase of 9 percent versus the year-earlier period. Strong sales in Asia and in the North American electrical market set the pace.

  • Total electrical sales grew approximately 10 percent driven by continued market share gains year-over-year in the industrial, commercial and networking segments. New products contributed significantly to this growth, especially in the networking segment.
  • Global electronic sales increased approximately 8 percent. In Asia, sales grew 44 percent, reflecting continued growth in China. In Europe, sales increased 8 percent; in North America, sales declined approximately 3 percent.

Technical Products' fourth quarter reported operating income totaled $40 million, an increase of 15 percent as compared to $34 million in the same quarter last year. Reported operating margins were 15 percent, up 80 basis points. Adjusting for the restructuring expenses associated with a North America plant closure, operating income totaled $42 million, up 21 percent versus the $34 million in the fourth quarter 2006. Adjusted operating margins were 15.7 percent, an increase of 150 basis points versus the year-ago period. In the quarter, the benefits from volume, price, and productivity more than offset the negative impact from total inflation.

FISCAL YEAR 2007 RESULTS

Record sales of $3.4 billion for fiscal year 2007 increased 7.7 percent from $3.15 billion a year ago. For the year, the company reported EPS of $2.10. This represents an increase of 16 percent as compared to the $1.81 of reported EPS in 2006. Full year 2007 results include the favorable impact of $0.12 per share from one-time net tax benefits and a negative $0.10 per share impact from adjustments. Full year 2006 results included the favorable impact of $0.20 per share from one-time net tax benefits and a negative $0.11 per share impact from similar adjustments. Full year adjusted 2007 EPS was $2.08, up 21 percent as compared to adjusted full year 2006 EPS of $1.72.

For the year, Pentair generated a record $285 million in free cash flow, up 57 percent compared to free cash flow of $181 million in 2006, driven by higher income and working capital reductions. The company paid a $0.60 dividend for each share of common stock and repurchased 1.2 million shares of stock in 2007. The company recently announced it increased its dividend to $0.68 for each share of common stock. Additionally, the board has approved a $50 million share repurchase authorization that the company expects to utilize in 2008.

"Pentair's 2007 results demonstrate tremendous achievements," said Hogan. "Despite the uncertain economic environment, we believe we are better positioned to deliver results than we were a year ago. We delivered in 2007 because of several key factors. First, we aggressively reduced general and administrative cost and streamlined our leadership. Second, we aggressively drove Pentair's Integrated Management System (PIMS) and achieved productivity to offset high material inflation. Moreover, we increased our investments for growth, positioned ourselves in more attractive market segments, and improved customer service levels from 2006.

"Our ability to expand margins 120 basis points on an adjusted basis and deliver free cash flow well in excess of net income reflects lean disciplines taking deeper root throughout the company, and actions taken to improve our cost structure and to lower our corporate tax rate," Hogan noted. "The $0.04 per share or $6.0 million total pre-tax charge in the fourth quarter was taken to improve our North American electronics footprint and to settle a portion of the Horizon case. The expected benefits associated with our 2007 restructuring actions - as well as continued productivity improvements driven by lean disciplines - are included in our 2008 outlook," he said.

OUTLOOK

The company introduces first quarter 2008 earnings per share guidance in the range of $0.46 to $0.48, an increase of 10 to 14 percent year-over-year. The company affirms full year 2008 EPS guidance range of $2.25 to $2.40, an increase of 8 to 15 percent versus 2007 adjusted EPS.

"Pentair remains focused on delivering operating margin and earnings growth in 2008," Hogan said. "We expect the return on the investments we made this past year to drive growth and expand international sales in 2008 - and we will further increase investments against our best opportunities. We remain relentless on cost productivity and we expect greater improvements from supply management," he noted. "These factors, coupled with our lower sustainable tax rate, enable us to remain committed to our EPS range of $2.25 to $2.40 for 2008. We continue to drive working capital performance and expect full year 2008 free cash flow to be at least 100 percent conversion of net income," Hogan concluded.

EARNINGS CONFERENCE CALL

Pentair Chairman and CEO Randall J. Hogan and Chief Financial Officer John L. Stauch will discuss the Company's performance, and first quarter and full year 2008 guidance on a two-way conference call with investors at 12:00 p.m. Eastern today. Reconciliation of any non-GAAP financial measures are set forth in the attachments to this fourth quarter 2007 earnings release and in the fourth quarter 2007 earning release conference call presentation, both of which can be found at Pentair's web site (www.pentair.com). Related financial charts and certain other information to be discussed on the conference call will be available on the company's website shortly before the conference call. The web cast and presentation will be archived at the same site following the conclusion of the conference call.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Any statements made about the company's anticipated financial results are forward-looking statements subject to risks and uncertainties such as continued economic growth, including: the strength of housing and related markets; the ability to integrate acquisitions successfully and the risk that expected synergies may not be fully realized or may take longer to realize than expected; the ability to successfully limit any judgment arising out of the Horizon litigation; foreign currency effects; retail and industrial demand; product introductions; and pricing and other competitive pressures, as well as other risk factors set forth in our SEC filings. Forward-looking statements included herein are made as of the date hereof, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.

ABOUT PENTAIR, INC.

Pentair (www.pentair.com) is a diversified operating company headquartered in Minnesota. Its Water Group is a global leader in providing innovative products and systems used worldwide in the movement, treatment, storage and enjoyment of water. Pentair's Technical Products Group is a leader in the global enclosures and thermal management markets, designing and manufacturing thermal management products and standard, modified, and custom enclosures that house and protect sensitive electronics and electrical components. With 2007 revenues of $3.40 billion, Pentair employs approximately 16,000 people worldwide.

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

                         Three months ended          Year ended
                       ----------------------- -----------------------
                       December 31 December 31 December 31 December 31
In thousands, except
 per-share data           2007        2006        2007        2006
----------------------------------------------------------------------
Net sales              $  830,224  $  743,038  $3,398,698  $3,154,469
Cost of goods sold        572,589     534,472   2,374,048   2,248,219
----------------------------------------------------------------------
Gross profit              257,635     208,566   1,024,650     906,250
  % of net sales             31.0%       28.1%       30.1%       28.7%
Selling, general and
 administrative           152,866     133,126     587,865     537,877
  % of net sales             18.4%       17.9%       17.3%       17.1%
Research and
 development               14,606      14,038      58,810      58,055
  % of net sales              1.8%        1.9%        1.7%        1.8%
----------------------------------------------------------------------
Operating income           90,163      61,402     377,975     310,318
  % of net sales             10.9%        8.3%       11.1%        9.8%
Gain (loss) on sale of
 assets, net               (1,230)        197      (1,230)        364
Equity losses of
 unconsolidated
 subsidiary                (1,027)     (1,240)     (2,865)     (3,332)
Net interest expense       17,396      13,020      70,237      51,881
  % of net sales              2.1%        1.7%        2.1%        1.6%
----------------------------------------------------------------------
Income from continuing
 operations before
 income taxes              70,510      47,339     303,643     255,469
  % of net sales              8.5%        6.4%        8.9%        8.1%
Provision for income
 taxes                     22,196       8,717      93,154      71,702
  Effective tax rate         31.5%       18.4%       30.7%       28.1%
----------------------------------------------------------------------
Income from continuing
 operations                48,314      38,622     210,489     183,767
Gain (loss) on
 disposal of
 discontinued
 operations, net of
 tax                          231          15         438         (36)
----------------------------------------------------------------------
Net income             $   48,545  $   38,637  $  210,927  $  183,731
======================================================================

Earnings per common
 share
Basic
Continuing operations  $     0.49  $     0.39  $     2.13  $     1.84
Discontinued
 operations                    --          --          --          --
----------------------------------------------------------------------
Basic earnings per
 common share          $     0.49  $     0.39  $     2.13  $     1.84
======================================================================

Diluted
Continuing operations  $     0.48  $     0.39  $     2.10  $     1.81
Discontinued
 operations                    --          --          --          --
----------------------------------------------------------------------
Diluted earnings per
 common share          $     0.48  $     0.39  $     2.10  $     1.81
======================================================================

Weighted average
 common shares
 outstanding
Basic                      98,448      98,747      98,762      99,784
Diluted                    99,859     100,233     100,205     101,371

Cash dividends
 declared per common
 share                 $     0.15  $     0.14  $     0.60  $     0.56
                    Pentair, Inc. and Subsidiaries
          Condensed Consolidated Balance Sheets (Unaudited)

                                               December 31 December 31
In thousands                                      2007        2006
----------------------------------------------------------------------
                    Assets
Current assets
Cash and cash equivalents                      $   70,795  $   54,820
Accounts and notes receivable, net                472,222     422,134
Inventories                                       407,127     398,857
Deferred tax assets                                51,556      50,578
Prepaid expenses and other current assets          36,321      31,239
----------------------------------------------------------------------
Total current assets                            1,038,021     957,628

Property, plant and equipment, net                367,426     330,372

Other assets
Goodwill                                        2,021,526   1,718,771
Intangibles, net                                  491,403     287,011
Other                                              82,238      71,197
----------------------------------------------------------------------
Total other assets                              2,595,167   2,076,979
----------------------------------------------------------------------
Total assets                                   $4,000,614  $3,364,979
======================================================================

     Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings                          $   13,586  $   14,563
Current maturities of long-term debt                5,182       7,625
Accounts payable                                  231,643     206,286
Employee compensation and benefits                112,147      88,882
Current pension and post-retirement benefits        8,557       7,918
Accrued product claims and warranties              49,382      44,093
Income taxes                                       12,599      22,493
Accrued rebates and sales incentives               36,867      39,419
Other current liabilities                          90,943      90,003
----------------------------------------------------------------------
Total current liabilities                         560,906     521,282

Other liabilities
Long-term debt                                  1,042,223     721,873
Long term income taxes payable                     21,306          --
Pension and other retirement compensation         161,042     207,676
Post-retirement medical and other benefits         37,147      47,842
Deferred tax liabilities                          170,033     109,781
Other non-current liabilities                      97,086      86,526
----------------------------------------------------------------------
Total liabilities                               2,089,743   1,694,980

Shareholders' equity                            1,910,871   1,669,999
----------------------------------------------------------------------
Total liabilities and shareholders' equity     $4,000,614  $3,364,979
======================================================================

Days sales in accounts receivable (13 month
 moving average)                                       53          54
Days inventory on hand (13 month moving
 average)                                              77          76
Days in accounts payable (13 month moving
 average)                                              54          56
Debt/total capital                                   35.7%       30.8%

NOTE: The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB No. 109 ("FIN 48") on January 1, 2007. As a result of adoption of FIN 48, the Company recorded an adjustment to retained earnings of $2.9 million in the first quarter of 2007. Additionally, the Company has added the line "Long-term income taxes payable" to the Company's Condensed Consolidated Balance Sheets to report its total long-term liability for unrecognized tax benefits.

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

                                                     Year ended
                                               -----------------------
                                               December 31 December 31
In thousands                                      2007        2006
----------------------------------------------------------------------
Operating activities
Net income                                     $  210,927   $ 183,731
Adjustments to reconcile net income to net
 cash provided by operating activities
Loss (gain) on disposal of discontinued
 operations                                          (438)         36
Equity losses of unconsolidated subsidiary          2,865       3,332
Depreciation                                       58,948      56,899
Amortization                                       25,601      18,197
Deferred income taxes                             (16,496)    (11,085)
Stock compensation                                 22,913      25,377
Excess tax benefits from stock-based
 compensation                                      (4,204)     (3,043)
Loss on sale of assets, net                        (1,929)       (364)
Changes in assets and liabilities, net of
 effects of business acquisitions
  Accounts and notes receivable                   (16,777)     15,873
  Inventories                                      19,057     (39,354)
  Prepaid expenses and other current assets         2,504      (5,052)
  Accounts payable                                 18,134     (18,935)
  Employee compensation and benefits                4,129     (13,229)
  Accrued product claims and warranties             4,739         456
  Income taxes                                      1,885       9,556
  Other current liabilities                        (2,947)    (13,784)
  Pension and post-retirement benefits                  6      19,398
  Other assets and liabilities                     12,963       3,554
----------------------------------------------------------------------
     Net cash provided by continuing
      operations                                  341,880     231,563
     Net cash provided by operating activities
      of discontinued operations                       --          48
----------------------------------------------------------------------
      Net cash provided by operating
       activities                                 341,880     231,611

Investing activities
Capital expenditures                              (62,129)    (51,078)
Proceeds from sale of property and equipment        5,209         684
Acquisitions, net of cash acquired               (487,561)    (29,286)
Divestitures                                           --     (24,007)
Proceeds from sale of investment                       --       1,153
Other                                              (5,544)     (7,523)
----------------------------------------------------------------------
      Net cash used for investing activities     (550,025)   (110,057)

Financing activities
Net short-term borrowings                          (1,830)     13,831
Proceeds from long-term debt                    1,269,428     608,975
Repayment of long-term debt                      (954,077)   (631,755)
Debt issuance costs                                (1,876)         --
Excess tax benefits from stock-based
 compensation                                       4,204       3,043
Proceeds from exercise of stock options             7,388       4,066
Repurchases of common stock                       (40,641)    (59,359)
Dividends paid                                    (59,910)    (56,583)
----------------------------------------------------------------------
      Net cash provided by (used for)
       financing activities                       222,686    (117,782)

Effect of exchange rate changes on cash             1,434       2,548
----------------------------------------------------------------------
Change in cash and cash equivalents                15,975       6,320
Cash and cash equivalents, beginning of period     54,820      48,500
----------------------------------------------------------------------
Cash and cash equivalents, end of period       $   70,795   $  54,820
======================================================================

Free cash flow
Net cash provided by operating activities      $  341,880   $ 231,611
Less capital expenditures                         (62,129)    (51,078)
Proceeds from sale of property and equipment        5,209         684
----------------------------------------------------------------------
Free cash flow                                 $  284,960   $ 181,217
======================================================================
                    Pentair, Inc. and Subsidiaries
Supplemental Financial Information by Reportable Business Segment for
                           2007 (Unaudited)


                 First Qtr Second Qtr Third Qtr Fourth Qtr    Year
In thousands       2007       2007      2007       2007       2007
----------------------------------------------------------------------

Net sales to
 external
 customers
Water            $555,412   $665,495  $562,133  $ 565,525  $2,348,565
Technical
 Products         252,583    257,150   275,701    264,699   1,050,133
----------------------------------------------------------------------
Consolidated     $807,995   $922,645  $837,834  $ 830,224  $3,398,698
======================================================================

Intersegment
 sales
Water            $    214   $     46  $    207  $     196  $      663
Technical
 Products             896      1,689     1,526      1,192       5,303
Other              (1,110)    (1,735)   (1,733)    (1,388)     (5,966)
----------------------------------------------------------------------
Consolidated     $     --   $     --  $     --  $      --  $       --
======================================================================

Operating income
 (loss)
Water            $ 61,836   $ 91,014  $ 54,530  $  63,987  $  271,367
Technical
 Products          31,631     36,140    46,237     39,578     153,586
Other             (12,357)   (12,273)   (8,946)   (13,402)    (46,978)
----------------------------------------------------------------------
Consolidated     $ 81,110   $114,881  $ 91,821  $  90,163  $  377,975
======================================================================

Operating income
 as a percent of
 net sales
Water                11.1%      13.7%      9.7%      11.3%       11.6%
Technical
 Products            12.5%      14.1%     16.8%      15.0%       14.6%
Consolidated         10.0%      12.5%     11.0%      10.9%       11.1%



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


                 First Qtr Second Qtr Third Qtr Fourth Qtr    Year
In thousands       2006       2006      2006       2006       2006
----------------------------------------------------------------------

Net sales to
 external
 customers
Water            $517,169   $605,516  $531,703  $ 500,837  $2,155,225
Technical
 Products         254,220    256,506   246,317    242,201     999,244
----------------------------------------------------------------------
Consolidated     $771,389   $862,022  $778,020  $ 743,038  $3,154,469
======================================================================

Intersegment
 sales
Water            $     50   $     55  $    140  $     214  $      459
Technical
 Products             889      1,312     1,133        623       3,957
Other                (939)    (1,367)   (1,273)      (837)     (4,416)
----------------------------------------------------------------------
Consolidated     $     --   $     --  $     --  $      --  $       --
======================================================================

Operating income
 (loss)
Water            $ 56,196   $ 84,956  $ 36,944  $  37,734  $  215,830
Technical
 Products          37,704     39,678    37,050     34,473     148,905
Other             (14,735)   (15,894)  (12,983)   (10,805)    (54,417)
----------------------------------------------------------------------
Consolidated     $ 79,165   $108,740  $ 61,011  $  61,402  $  310,318
======================================================================

Operating income
 as a percent of
 net sales
Water                10.9%      14.0%      6.9%       7.5%       10.0%
Technical
 Products            14.8%      15.5%     15.0%      14.2%       14.9%
Consolidated         10.3%      12.6%      7.8%       8.3%        9.8%
                    Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ending December 31, 2007
                      to the "Adjusted" non-GAAP
         excluding the effect of 2007 adjustments (Unaudited)


                     First    Second     Third    Fourth
                    Quarter   Quarter   Quarter   Quarter     Year
In thousands,
 except per-share
 data                2007      2007      2007      2007       2007
----------------------------------------------------------------------
Net sales          $807,995  $922,645  $837,834  $830,224  $3,398,698
----------------------------------------------------------------------

Operating income -
 as reported         81,110   114,881    91,821    90,163     377,975
  % of net sales       10.0%     12.5%     11.0%     10.9%       11.1%
Adjustments              --        --     9,192     5,970      15,162
----------------------------------------------------------------------
Operating income -
 as adjusted         81,110   114,881   101,013    96,133     393,137
  % of net sales       10.0%     12.5%     12.1%     11.6%       11.6%

Income from
 continuing
 operations - as
 reported            42,130    62,001    58,044    48,314     210,489
Adjustments - tax
 affected                --        --     6,246     3,881      10,127
Non-recurring tax
 items                 (145)      (83)  (11,517)   (1,073)    (12,818)
----------------------------------------------------------------------
Income from
 continuing
 operations - as
 adjusted            41,985    61,918    52,773    51,122     207,798
======================================================================

Continuing
 earnings per
 common share -
 diluted
Diluted earnings
 per common share
 - as reported     $   0.42  $   0.62  $   0.58  $   0.48  $     2.10
Adjustments              --        --     (0.05)     0.03       (0.02)
----------------------------------------------------------------------
Diluted earnings
 per common share
 - as adjusted     $   0.42  $   0.62  $   0.53  $   0.51  $     2.08
======================================================================


Weighted average
 common shares
 outstanding -
 Diluted            100,271   100,371   100,365    99,859     100,205





                    Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ending December 31, 2006
                      to the "Adjusted" non-GAAP
         excluding the effect of 2006 adjustments (Unaudited)


                     First    Second     Third    Fourth
                    Quarter   Quarter   Quarter   Quarter     Year
In thousands,
 except per-share
 data                2006      2006      2006      2006       2006
----------------------------------------------------------------------
Net sales          $771,389  $862,022  $778,020  $743,038  $3,154,469
----------------------------------------------------------------------

Operating income -
 as reported         79,165   108,740    61,011    61,402     310,318
  % of net sales       10.3%     12.6%      7.8%      8.3%        9.8%
Adjustments              --        --    16,949        --      16,949
----------------------------------------------------------------------
Operating income -
 as adjusted         79,165   108,740    77,960    61,402     327,267
  % of net sales       10.3%     12.6%     10.0%      8.3%       10.4%

Income from
 continuing
 operations - as
 reported            43,071    68,633    33,441    38,622     183,767
Adjustments - tax
 affected                --        --    10,847        --      10,847
Non-recurring tax
 items                 (878)   (8,023)   (3,080)   (8,285)    (20,266)
----------------------------------------------------------------------
Income from
 continuing
 operations - as
 adjusted            42,193    60,610    41,208    30,337     174,348
======================================================================

Continuing
 earnings per
 common share -
 diluted
Diluted earnings
 per common share
 - as reported     $   0.42  $   0.67  $   0.33  $   0.39  $     1.81
Adjustments           (0.01)    (0.08)     0.08     (0.08)      (0.09)
----------------------------------------------------------------------
Diluted earnings
 per common share
 - as adjusted     $   0.41  $   0.59  $   0.41  $   0.31  $     1.72
======================================================================


Weighted average
 common shares
 outstanding -
 Diluted            102,492   102,429   101,062   100,233     101,371
                    Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ending December 31, 2007
                      to the "Adjusted" non-GAAP
         excluding the effect of 2007 adjustments (Unaudited)


                     First    Second     Third    Fourth
                    Quarter   Quarter   Quarter   Quarter     Year
In thousands         2007      2007      2007      2007       2007
----------------------------------------------------------------------
Water
Net sales          $555,412  $665,495  $562,133  $565,525  $2,348,565
----------------------------------------------------------------------

Operating income -
 as reported         61,836    91,014    54,530    63,987     271,367
   % of net sales      11.1%     13.7%      9.7%     11.3%       11.6%
Adjustments              --        --     9,843     3,897      13,740
----------------------------------------------------------------------
Operating income -
 as adjusted         61,836    91,014    64,373    67,884     285,107
   % of net sales      11.1%     13.7%     11.5%     12.0%       12.1%


Technical Products
Net sales          $252,583  $257,150  $275,701  $264,699  $1,050,133
----------------------------------------------------------------------

Operating income -
 as reported         31,631    36,140    46,237    39,578     153,586
   % of net sales      12.5%     14.1%     16.8%     15.0%       14.6%
Adjustments              --        --      (652)    2,073       1,421
----------------------------------------------------------------------
Operating income -
 as adjusted         31,631    36,140    45,585    41,651     155,007
   % of net sales      12.5%     14.1%     16.5%     15.7%       14.8%




                    Pentair, Inc. and Subsidiaries
Reconciliation of the GAAP "As Reported" year ending December 31, 2006
                      to the "Adjusted" non-GAAP
         excluding the effect of 2006 adjustments (Unaudited)


                     First    Second     Third    Fourth
                    Quarter   Quarter   Quarter   Quarter     Year
In thousands         2006      2006      2006      2006       2006
----------------------------------------------------------------------
Water
Net sales          $517,169  $605,516  $531,703  $500,837  $2,155,225
----------------------------------------------------------------------

Operating income -
 as reported         56,196    84,956    36,944    37,734     215,830
   % of net sales      10.9%     14.0%      6.9%      7.5%       10.0%
Adjustments              --        --    14,906        --      14,906
----------------------------------------------------------------------
Operating income -
 as adjusted         56,196    84,956    51,850    37,734     230,736
   % of net sales      10.9%     14.0%      9.8%      7.5%       10.7%



Technical Products
Net sales          $254,220  $256,506  $246,317  $242,201  $  999,244
----------------------------------------------------------------------

Operating income -
 as reported         37,704    39,678    37,050    34,473     148,905
   % of net sales      14.8%     15.5%     15.0%     14.2%       14.9%
Adjustments              --        --        --        --          --
----------------------------------------------------------------------
Operating income -
 as adjusted         37,704    39,678    37,050    34,473     148,905
   % of net sales      14.8%     15.5%     15.0%     14.2%       14.9%

CONTACT: Pentair, Inc.
Todd Gleason, 763-656-5570
Vice President, Investor Relations
E-mail: todd.gleason@pentair.com
or
Rachael Jarosh, 763-656-5280
Vice President, Communications
E-mail: rachael.jarosh@pentair.com

SOURCE: Pentair, Inc.

Categories: Press Releases