Pentair 8K Reports Earnings Per Share of $1.81 for Fiscal Year 2006 on 7% Sales Gain | PNR 6 Feb 07

EXHIBIT 99.2

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

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

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

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


	Year Ended
	As Reported			Third Quarter			Adjusted			As Reported
	December 31			One-Time			December 31			December 31
In thousands, except per-share data	2006			Adjustments			2006			2005

Net sales	$	3,154,469		$	—		$	3,154,469		$	2,946,579
Cost of goods sold		2,248,219			(9,211	)		2,239,008			2,098,558

Gross profit		906,250			9,211			915,461			848,021
% of net sales		28.7	%		n/a			29.0	%		28.8	%
Selling, general and administrative		541,209			(7,738	)		533,471			478,907
% of net sales		17.2	%		n/a			16.9	%		16.2	%
Research and development		58,055			—			58,055			46,042
% of net sales		1.8	%		n/a			1.8	%		1.6	%

Operating income		306,986			16,949			323,935			323,072
% of net sales		9.7	%		n/a			10.3	%		11.0	%
Gain on sale of investment		364			—			364			5,435
Net interest expense		51,881			—			51,881			44,989
% of net sales		1.6	%		n/a			1.6	%		1.5	%

Income from continuing operations before income taxes		255,469			16,949			272,418			283,518
% of net sales		8.1	%		n/a			8.6	%		9.6	%
Provision for income taxes		71,702			6,102			77,804			98,469
Effective tax rate		28.1	%		36.0	%		28.6	%		34.7	%

Income from continuing operations		183,767			10,847			194,614			185,049
Gain on disposal of discontinued operations, net of tax		(36	)		—			(36	)		—

Net income	$	183,731		$	10,847		$	194,578		$	185,049


Earnings per common share
*Basic*
Continuing operations	$	1.84		$	0.11		$	1.95		$	1.84
Discontinued operations		—			—			—			—

Basic earnings per common share	$	1.84		$	0.11		$	1.95		$	1.84


*Diluted*
Continuing operations	$	1.81		$	0.11		$	1.92		$	1.80
Discontinued operations		—			—			—			—

Diluted earnings per common share	$	1.81		$	0.11		$	1.92		$	1.80


Weighted average common shares outstanding
Basic		99,784			99,784			99,784			100,665
Diluted		101,371			101,371			101,371			102,618

Cash dividends declared per common share	$	0.56					$	0.56		$	0.52


	Year Ended
	As Reported			Third Quarter		Adjusted			As Reported
	Year			One-Time		Year			Year
In thousands	2006			Adjustments		2006			2005


*Net sales to external customers*
Water	$	2,155,225		$	—	$	2,155,225		$	2,131,505

*Operating income*
Water	$	212,498		$	14,906	$	227,404		$	267,140

*Operating income as a percent of net sales*
Water		9.9	%				10.6	%		12.5	%

Pentair (PNR) 8-KPentair Reports Earnings Per Share of $1.81 for Fiscal Year 2006 on 7% Sales Gain