Ingersoll RandCharting the Course for Continued Stakeholder Value Creation
April 15, 2020
Forward-Looking Statements
This presentation contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the completed transaction (the “transaction”) between Ingersoll Rand plc’s Industrial segment (the “Ingersoll Rand Industrial segment”) and Gardner Denver. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “target,” “endeavor,” “seek,” “predict,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “on track to” “will continue,” “will likely result,” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements, other than historical facts, including, but not limited to, statements regarding the expected benefits of the transaction, including future financial and operating results and strategic benefits, the tax consequences of the transaction, and the combined company’s plans, objectives, expectations and intentions, legal, economic and regulatory conditions, and any assumptions underlying any of the foregoing, are forward-looking statements.
These forward-looking statements are based on Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these current expectations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) the duration and severity of and governmental, market and individual responses to the coronavirus (COVID-19) pandemic (2) unexpected costs, charges or expenses resulting from the transaction; (3) uncertainty of the expected financial performance of the combined company following completion of the transaction; (4) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in integrating the businesses of Gardner Denver and Ingersoll Rand Industrial; (5) the ability of the combined company to implement its business strategy; (6) difficulties and delays in the combined company achieving revenue and cost synergies; (7) inability of the combined company to retain and hire key personnel; (8) evolving legal, regulatory and tax regimes; (9) changes in general economic and/or industry specific conditions; (10) actions by third parties, including government agencies; (11) adverse impact on our operations and financial performance due to natural disaster, catastrophe, pandemic or other event events outside of our control; and (12) other risk factors detailed from time to time in Ingersoll Rand’s reports filed with the Securities and Exchange Commission (the “SEC”), including Ingersoll Rand’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC, which are available on the SEC’s website at http://www.sec.gov. The foregoing list of important factors is not exclusive.
Any forward-looking statements speak only as of the date of this presentation. Ingersoll Rand undertakes no obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
Non-GAAP Financial MeasuresIncluded in this presentation are certain non-GAAP financial measures designed to supplement, and not substitute, the financial information provided in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. The reconciliation of those measures to the most comparable GAAP measures is set forth in the appendix to this presentation.
2
Health and Safety:Activated COVID-19 Task Force Early; Applied Early Learnings from Asia-Pacific
3
Formed COVID-19 Response Teams early. We continue to add enhanced protocols in response to COVID-19, including recommendations and
requirements issued by the Centers for Disease Control and Prevention (“CDC”), World Health Organization (“WHO”) and local, state and national
health authorities to protect our employees, customers, suppliers and communities.
Quickly Implemented Actions
to Protect Employees
Launched Organization-wide
Communication Approach to
Engage Employees
Empowering Leadership to Ensure
Consistent Adherence to and Effective
Execution of Best Practices
Reinforced hand washing and infection control
training
Enhanced site cleaning and sanitizing measures
Prohibited non-essential travel
Implemented on-site social distancing processes,
including mandatory work from home policy for
those who can work remotely and limited on-site
visits to essential personnel only
Introduced health screening processes for on-site,
essential employees and visitors, including self-
declaration forms and temperature screenings
Cascading critical information from CDC and
WHO to global employees; embraced early
Conducting daily calls with sites globally
Broadcasting weekly CEO communication to all
employees on status of employees, clear
guidelines and actions
Designed local and regional task forces
comprising business, HR and Environmental,
Health & Safety (EHS) leaders to share best
practices and learnings; facilitates quick
assessment and decision making for global
operations
Proactively implemented best practices
organization-wide; for example, early on
implemented best practices in Europe that were
proven to work in China
Adhering to state and country mandates and
guidelines where we operate
Protecting Our Employees, Our Business and Our Future
4
Employee Health, Safety & Support /
Business Continuity
Executing Downturn Playbook;
Implementing Prudent Actions to Preserve Cash
Modified production work flows in plants to allow for 6 feet of employee
separation, where possible
All locations have an assigned EHS associate trained in contact tracing and
quarantine procedures
Daily tracking of status of all employees by global EHS team
Providing at least a month of paid health benefits for employees who are on
furlough
In the US, established unemployment compensation COEs by state to
assist employees in applying for benefits
Protecting employees and staying operational – 98% of company sites
operational or transitioned to remote work model as of 4/13
All major manufacturing locations in US, UK, Germany, Brazil and
China operational; most Italian sites currently operational with balance
expected to return to work by end of April
Following all local governmental recommendations and applying for
exemption status where applicable due to mission-critical nature of
products and industries served
Reduced senior executive salaries and Board of Director fees by 15% for
remainder of 2020
Deferred discretionary merit increases for all employees worldwide until at
least middle of the year
Implemented a hiring freeze
Limited all discretionary spend across organization
All business indirect spend requires approval from VP/GMs and all
corporate spend from CEO/CFO
All capital expenditures require approval from CEO and expect
meaningful reduction from typical historical levels of ~2% of revenue
Deploying furloughs, job sharing and reduced hours in locations where
warranted by demand environment
Exciting Runway Ahead with a Track Record for Capturing Opportunity
5
Merging two strong cultures to form a talented global workforce powered by an entrepreneurial spirit, ownership
mindset and sustainability focus
Enhancing scale and reach of innovative and leading brands centered around mission-critical flow creation and
industrial solutions creating greater end market balance and diversity
Leveraging world-class demand generation expertise and operating platform to capture profitable growth, including
ongoing aftermarket growth as a percentage of total revenue, and margin expansion opportunities; IRX is our
accelerator for execution
Fortifying our financial position supported by a strong balance sheet and ample liquidity; committed to achieving
top-quartile industrial performance
Re-energizing our focus around environmental, social and governance (“ESG”) initiatives with highly
aspirational goals
1.
2.
3.
4.
5.
Ingersoll Rand at a Glance (NYSE: IR)
6
2019 KEY STATS & FINANCIAL METRICS1
Davidson, NCHeadquarters
~$6.2BAdjusted Revenue
$10.9BMarket-Cap2
~18,000Total Employees
$2.3BAftermarket Parts
~$1.2BAdj. EBITDA
19.4%Adj. EBITDA Margin
~2%Capex as a %
Portfolio of Mission-critical Flow Creation and Industrial Technologies with Leading Brands Powered
by Employee Ownership, Execution Rigor and ESG Mindset
TIMELINE OF EVENTS REVENUE BY SEGMENT REVENUE BY GEOGRAPHY
• MAY 2017: Gardner Denver IPO
• APRIL 30, 2019: Gardner Denver entered agreement to combine
with Ingersoll Rand’s Industrial segment; highly complementary
companies with combined history of 300+ years and shared
commitment to operational excellence, innovation and quality
• MARCH 1, 2020: Began operating as the new Ingersoll Rand,
including four-segment reporting structure and new Board of
Directors
Industrial Technologies & Services
Precision & Science Technologies
Specialty Vehicle Technologies
High Pressure Solutions
Americas
EMEIA
AP66%
14%
13%
7%
54%
27%
19%
& Service of Revenue
1 Combined financial metrics based on supplemental financial information furnished on the Company’s Current Report on Form 8-K filed with the SEC on April 15, 2020 (the “Form 8-K”) and included in appendix of this
presentation. 2 As of 4/13/2020.
Industrial Technologies and Services Snapshot
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Description
• Global business executing under five main P&Ls:
• Ingersoll Rand Industrial CTS business and Gardner Denver Industrials business (including Emco
Wheaton fuel systems); run as three regional business units
• New Global Pressure and Vacuum Solutions business unit with a significant engineered-to-order
focus, including Nash/Garo, Ingersoll Rand MSG centrifugal compressors, and Emco Wheaton
loading systems
• Additionally includes the Power Tools and Lifting business unit
• Broad portfolio of air compression, blower, vacuum and fluid transfer technology as well as tools,
hoists and winches
2019 Financials & Revenue Mix1
$4.1B $0.8B 20.1%
Geography Composition
44%
33%
23% Americas
EMEIA
AP
40%
60%
Aftermarket
OEM
Key Brands & Select Product Examples
Rotary Screw
Compressor
Centrifugal
Compressor
Side Channel
Blower
Vacuum Pump Couplers Power Tools
Reciprocating Air
Compressor
Liquid Ring
Vacuum Pump
Engineered-to-Order
Systems
1 Financials based on supplemental financial information furnished on the Form 8-K and included in appendix of this presentation.
Expecting Majority of ~$250M of Forecasted Synergies from
the Transformative Merger in this Segment
Adjusted Revenue Adj. EBITDA Adj. EBITDA Margin
Precision and Science Technologies Snapshot
8
Key Brands & Select Product Examples
Metering Pump Diaphragm Pump Wob-L Pump
Dosing Pump Syringe Pump Peristaltic Pump
Rotary
Vane Pump
Air-Driven Liquid
Pump
Condensate
Pump
Description
• Consists of Ingersoll Rand’s Industrial Fluid Management (PFS/ARO) business unit as well as
Gardner Denver’s Medical business unit and Gardner Denver’s Specialty Pumps
• Broad portfolio of positive displacement technologies, including metering and dosing
pumps for multi-industry use and specialized gas and liquid pumps for medical, lab and life-
science applications
• Serving mission-critical applications with attractive aftermarket and like-for-like
replacement pump opportunities
2019 Financials & Revenue Mix1
$0.9B $0.2B 27.7%
Geography Composition
48%
31%
21% Americas
EMEIA
AP
15%
85%
Aftermarket
OEM
Adjusted Revenue Adj. EBITDA Adj. EBITDA Margin
1 Financials based on supplemental financial information furnished on the Form 8-K and included in appendix of this presentation.
Specialty Vehicle Technologies Snapshot
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Key Brand & Select Product Examples
TempoOnward 2
PassengerCaryall 1500
Car Tracking &
Power
Tempo 4FunOnward 6
PassengerXRT 1550 SE Car Control
Mobile
Merchandising
Precedent
Stretch PTV
XRT 1550
IntellitachAdd-ons
Description
• Consists of Ingersoll Rand’s Industrial Club Car business
• Global provider of utility, consumer, and golf vehicles and aftermarket services
• Utility: Fit to task, 4 x 2, AWD and multi-passenger transport vehicles in commercial applications
across many vertical markets
• Consumer: Personal Transportation Vehicles and accessories used in neighborhoods, communities
and vacation locations
• Golf: market-leader in fleet golf cars and light-duty turf utility vehicles for private, daily-fee and
municipal golf courses worldwide
2019 Financials & Revenue Mix1
$0.8B $0.1B 14.2%
Geography Composition
88%
7%5%
Americas
EMEIA
AP
26%
74%
Aftermarket
OEM
Adjusted Revenue Adj. EBITDA Adj. EBITDA Margin
GOLF CONSUMER UTILITY SOFTWARE
1 Financials based on supplemental financial information furnished on the Form 8-K and included in appendix of this presentation.
High Pressure Solutions Snapshot
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Key Brand & Select Product Examples
Frac Pump Stainless Steel Valves and Seats
Drilling Pump GDNX Packing
NEW: Industrial
Applications for
Frac/Drill Pumps
“Will-Fit” Plungers
Description
• Consists of Gardner Denver’s Upstream Energy business
• Highly engineered frac and drilling pumps and associated aftermarket parts, consumables and
services for oil and gas development operations
• Global network of 10+ repair facilities located in shale basins to provide real-time service to
customer base
• Strong customer relationships and large installed base coupled with leading aftermarket
service/repair capabilities and consumables technology allow for business continuity in cyclical
markets; leveraging existing technology to enter adjacent industrial applications
2019 Financials & Revenue Mix1
$0.4B $0.1B 27.0%
Geography Composition
95%
5%
Americas
RoW
84%
16%
Aftermarket
OEM
Adjusted Revenue Adj. EBITDA Adj. EBITDA Margin
PUMPS FLUID ENDS CONSUMABLES
1 Financials based on supplemental financial information furnished on the Form 8-K and included in appendix of this presentation.
We Have Significantly Transformed Our Company
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Legacy
Gardner Denver
(TY 2015)
Legacy
Gardner Denver
(TY 2019)1
Ingersoll Rand
Today2
Revenue $2.1B $2.5B $6.2B
% Aftermarket
Revenue36% 38% 38%
% Upstream Energy
of Total Revenue18% 19% <10%
Adj. EBITDA $0.4B $0.6B $1.2B
Adj. EBITDA Margin 19.7% 23.0% 19.4%
Leverage Ratio3 6.3x 2.0x ~2.6x
Employee Base ~6,700 ~6,600 ~18,000
1 All figures shown based on total year 2019 financial results as presented by Gardner Denver during 4Q and TY’19 Earnings Release and Presentation on 2/17/20. 2 All figures shown based on total year 2019
combined financial results from supplemental financial information furnished on Form 8-K unless otherwise noted. 3 Leverage defined as (Gross Debt less Cash)/LTM Adj EBITDA; “Ingersoll Rand Today” leverage
ratio calculated using: (1) Pro-forma gross debt for Ingersoll Rand as of 12/31/19 including legacy Gardner Denver debt as of 12/31/19 and incremental $1.9B of debt raised in February of 2020 as part of
transaction; (2) Cash and cash equivalents comprised of legacy Gardner Denver cash as of 12/31/19 plus $25M of Ingersoll Rand contributed cash at close less ~$74M of transaction fees and expenses.
Continuing to Execute Our Simple Strategy and Adding Sustainability as a New Pillar
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Deploy Talent
Allocate Capital Effectively
Expand Margins
Accelerate Growth
Operate Sustainably
• Ownership culture
• Highly engaged employees
• Speed of innovation in selected niche markets
• Execution of Demand Generation
• Grow aftermarket revenue stream (40%+)
• Innovate to Value (i2V)
• Unlocking cash (NWC as % of sales)
• Converting supply chain to pull system
• Embedding Environmental, Social, Governance (“ESG”)
mindset into our way of life
• Aspiring to be in ESG top quartile in industry
We Are Building a High-Performance Culture; IRX Is a Competitive Differentiator
IRX IS OUR ACCELERATOR TO DRIVE THE BUSINESS
• IRX is our execution engine, providing employees with a simple
process to drive high performance
• With IRX, we instill our values and execute our strategic areas of
focus in self-directed work teams
• Through this focused, simple execution process we strive to deliver
our purpose and live our values every day
• Policy Deployment (focus on employee engagement, inventory
reduction, i2V and synergy execution) has been launched in all
segments globally – 14 locations are making progress weekly in
execution and countermeasure implementation sessions
• IMPACT Daily Management (self-directed work teams effectively
planning, implementing, measuring and countermeasuring to achieve
100-day objectives) has been launched in all segments globally
• ~75 IDM sessions are executed weekly – including most
Corporate functions
• ~15 are new since integration – installs work virtually!
13
Expanded Total Addressable Market: ~65% Larger
14
TAM 201 9 TAM Today
$25B
$41B
Legacy Gardner Denver
2019 Investor Day
Today
(April 2020)1
INDUSTRIAL
TECHNOLOGIES & SERVICES
MARKET DRIVERS
PRECISION & SCIENCE TECH.
SPECIALTY VEHICLE TECH.
HIGH PRESSURE SOLUTIONS
Advances in Scientific Research,
Medicine and Urbanization
Electrification of Passenger and Utility
Mobility
Unconventional O&G exploration and
advances in Industrial Processing
Our Combined
Competitive Advantages
Mission-critical technologies with low
cost relative to overall system
Broad spectrum of technologies
centered on flow ‘creation’
Significant and growing aftermarket
platform
Strong engineering capabilities and
significant investment in innovation
Resilient financial profile that
positions us well to capture growth
opportunities
Leading brands
In region for the region presence with
40+ manufacturing sites
Expanding presence in new adjacent
market around Precision & Science
Technologies
Energy Efficiency & Total Cost of Ownership;
Real Time Monitoring
1 Sources: Frost & Sullivan, Oxford Economics, Ducker Worldwide, Freedonia, National Golf Foundation, Small Vehicle Resource, Power Products Marketing, Management Estimates.
15
Upstream
Energy
9%
Midstream
Energy
3%
Downstream
Energy
3%
Specialty
Vehicles
13%
Industrial
Manufacturing
28%
Food &
Beverage
5%
Chemical(Process & Dosing)
7%
Transportation (Land & Marine)
4%
Medical &
Laboratory
4%
Automotive
Services
3%
Mining &
Construction
3%
Environmental
3%
Paper
2%
Printing
1%
Other(Small Niche Markets)
12%
Enhanced End Market Balance and Diversity
Strong End Market Diversity with Upstream Energy Exposure <10%
Leading Product Portfolio Covers Broad Range of Technologies and Applications
Complementary Legacy Businesses Cover the Spectrum of Air Compression and Specialty Pump Technology
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HIGH
PR
ES
SU
RE
FLOW HIGHLOW
VA
CU
UM
LOW
ReciprocatingVane / Oil
Less Recip
Bottle Blowing - Reciprocating
2-Stage
Small Recip
1-Stage
Small Recip
Scroll / Oil
Less Recip
1-Stage Rotary Screw 2-Stage Rotary Screw
1-Stage Screw 2-Stage Dry Screw
Fluid
Pumps
Liquid Ring Side Channel
Helical & Variable Helix Screw
Radial
Turbo
Bi-Lobe & Tri-Lobe
Centrifugal – Engineered Air
Centrifugal – Plant Air
Multi-stage Centrifugal
Peristaltic
WOB-L
Diaphragm
Liquid Ring
Radial
Claw
Side Channel
Vane
Helical
Screw
Lobe
Turbo
Legacy Gardner Denver Legacy Ingersoll Rand Complementary
Compressors
Blowers and
Specialty Pumps
Vacuums
Complementary Product Portfolios Create Full Suite of Technologies and Solutions
Enhanced Solutions Are Expanding Our Ability to Compete and Win in the $3B+ Oil-Free Market
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Compelling MarketA leading player in the fast growing $3B+ oil free market with breadth of
technology solutions; market growing at ~2x above traditional market level1
Differentiated SolutionHigh-quality compressed air, free of oil contaminants to power air driven
instruments and equipment
Strong Customer Traction
• Lower total cost of ownership
• Increased uptime; reduced maintenance and improved life
• Reduced operating expense
• Efficient production and delivery of clean, dry air
• Access to capable and responsive service
• Ability to configure and option up
NOW BETTER POSITIONED TO CAPTURE
OIL-FREE MARKET OPPORTUNITY
Ingersoll Rand: 185-355 kW (E-Series)
Gardner Denver: 75-160 kW (Ultima)
Expansive installed base with opportunity to
capture greater value
Expanded aftermarket opportunity
Enhanced solution and cross-selling
opportunities
Building a complete line of air compression
technology from small to large compressors
Legacy Gardner Denver
Legacy Ingersoll Rand
Complementary
OIL-FREE TECHNOLOGY COVERAGE
1 Sources: CAGI, Frost & Sullivan, Oxford Economics, Management Estimates.
GOALS
Focus on Demand Generation is Creating Significant Pull-Through Opportunity
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• Proprietary engine to digitally connect all marketing/sales outreach efforts
• Gardner Denver launched in 2016 in Industrials and expanded in late 2018 to
Energy/Medical; launching consistent process in legacy IR compressor business
in 2020
• Channel-agnostic and scalable across regions, products and brands
• Global team of 50+ marketing professionals with COEs in US, Poland and China
Targeted Emails and Integrated Campaigns • Webinars • Telemarketing • Inbound
Calls • Social Media • Tradeshows • Website SEO • Search Engine Ads •
Account Based Marketing
AREAS OF DEMAND GENERATION
Develop a
Growth Engine
Increase Customer Retention
and Lifecycle Revenue Stream
Target attractive verticals
Accelerate new product adoption
Capture and reinvigorate
aftermarket growth
Leverage automation and
analytics to optimize customer
experience
Develop talent force – deep bench
for global sales and marketing
Optimizing Opportunity Capture through Global, Seamless
Contact and Lead Collection Across All Channels and Real-Time
Lead Distribution
“Real-Time” Case Study
Ventilator Demand Generation
Background
Demand for ventilators is at the heart of the fight against COVID-19. Worldwide ventilator
stocks are insufficient for predicted demand.
We have deployed an innovative combined sales and marketing approach to engage
ventilator manufacturers and overcome travel restrictions with digital marketing, telesales
and social selling techniques. Due to these efforts we are now working with leading
manufacturers to supply vital ventilator components.
Our Mission-Critical Solutions
• Elmo Rietschle side channel blowers for mobile ventilators and hyperbaric chambers
• Thomas pumps for ventilators/respirators (non-invasive ventilation technology)
44 Accounts /
5,000+ Contacts 2,000+ $12M+
Top ventilator manufacturers
targeted with known key
supply chain contacts across
28 countries
Unique visitors on dedicated
ventilator page within
2 weeks
Funnel value created in
last 2 weeks
Translating to Quantifiable Results
Integrating Two Great Organizations: Key Observations as CEO
A Truly Transformational Combination and an Exciting Time – More to Come from New Ingersoll Rand
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Strong complementary cultures that are excited to come together and achieve
greater heights as one company01
COVID-19 crisis accelerating integration and bringing teams together quicker
with notable collaboration02
Strength and depth of talent around technology, products, talent development
and sustainability focus03
Deployment of IRX is a significant opportunity across the organization; more
than initial view04
Long-term growth vectors remain healthy; significant, identified cross-selling
revenue capture and margin expansion in focus05
Multi-Year Integration Effort Underway: First 100 Days Strategy, Goals and Results
Based on Process Muscle We Built in Integration Planning, We Are Executing in Line with Expectations
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To-Date Results
Milestone Events STATUS
Day 1 Celebration and Global Town Hall
Global Product Planning Summit (Virtual)
i2V IR Kick-off Scheduled
Global Commercial Planning Summit Scheduled
2021 – 2023 Strategic Plan Kick-off Scheduled
1st Annual Leader Summit Rescheduled 2021
Process Implementation
Day 1: L2 Global Organization In Place
Day 6: L3 – L5 Global Organization In Place
Week 2: Monthly Business Reviews (Globally)
Week 3: IR Operating Plan Execution (IROPE) Deployed
Week 3: IMPACT Daily Management Installs Begin Globally
Week 4: 1st Year Plan for Synergy Execution
Launched 16 RFQs Covering ~1/3 of Direct Material Spend1
PHASE 1 PHASE 2 PHASE 3
COMPLETE
May ‘19 – Nov ‘19
Value Stream
Mapping Planning
TEAM & PROCESS
ESTABLISHED
Dec ‘19 – Feb ‘20
Implementing and
Day 1 Readiness
DAY 1: PLAN
READINESS
Mar ‘20 – May ‘20
100 Day
Execution Plan
FAST START: IRX
IMPLEMENTATION
Major Events & Process Implementation
1 Based on 2019 direct material spend.
Strong Additions to Our Seasoned Leadership Team
30 Year Average Industry Experience Across Leadership Team
21
VICENTE
REYNAL
EMILY
WEAVER
CRAIG
MUNDY
ANDY
SCHIESL
MIKE
WEATHERRED
CHRIS
NEUBAUER
CESARE
TRABATTONI
CEO SVP and CFO SVP, HR,
Talent and Diversity &
Inclusion
SVP, General Counsel,
Chief Compliance Officer
and Secretary
SVP, IRX, Strategy and
Business Development
VP, Global Sourcing and
Logistics
VP, Demand Generation,
Pricing and Commercial
Excellence
TODD
WYMAN
GARY
GILLESPIE
ARNOLD
LI
ENRIQUE M.
VISERAS
SIA
ABBASZADEH
MARIA
BLASE
EDWARD
BAYHI
NICK
KENDALL-JONES
MARK
WAGNER
SVP, Industrial
Technologies
and Services Business
VP and GM, Industrial
Technologies and
Services, Americas
VP and GM, Industrial
Technologies and
Services, AP
VP and GM, Industrial
Technologies and
Services, EMEIA
VP and GM, Pressure
and Vacuum Solutions
VP and GM, Power Tools
and Lifting
VP and GM, High
Pressure Solutions
VP and GM, Precision
and Science
Technologies
VP and GM, Specialty
Vehicle Technologies
Functional Leadership
Joined from Legacy Ingersoll Rand
Business Leadership
KIRK ARNOLD
Former CEO,
Data Intensity
ELIZABETH CENTONI
SVP,
Emerging Technology &
Incubation,
Cisco Systems, Inc
WILLIAM DONNELLY
Retired EVP,
Mettler-Toledo
GARY FORSEE
Retired Chairman,
President & CEO,
Sprint Nextel Corporation
Former President,
University of Missouri System
JOHN HUMPHREY
Retired EVP & CFO,
Roper Technologies
MARC JONES
CEO & Chairman,
Aeris Communications, Inc.
VICENTE REYNAL
CEO,
Ingersoll Rand
JOSHUA WEISENBECK
Partner, Private Equity,
KKR
TONY WHITE
Retired Chairman,
President & CEO,
Applied Biosystems, Inc.
Engaged and Accountable Board of Directors
Director Experience and Capabilities Support Our Long-term Vision
22
New directors bring expertise and
leadership in technology, entrepreneurship,
employee engagement, innovation and
demand generation
3 years average tenure
All independent directors (other
than CEO)
40% of Board of Directors are
diverse
PETER STAVROS
Chairman | Partner,
Co-Head of Americas
Private Equity;
Co-Chair, Inclusion
and Diversity Council;
Head of Industrials, KKR
Joined from Legacy Ingersoll Rand BoD
Merging Strong Cultures to Enhance Our Competitive Advantages
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Our Purpose: Lean On Us To Help You Make Life Better
We Think and Act
Like Owners
For 160 years we have been waking up every day to help make life better.
We are driven by an entrepreneurial spirit and an ownership mindset,
inspiring us to care deeply about our neighbors and shared planet. We have
a bias for action, take accountability and quickly bounce back from setbacks.
We Are Committed to Making
Our Customers Successful
We pride ourselves on innovation, and we aim to operate in a clear,
straightforward fashion. We aspire to be connected for life with our
customers and embrace the responsibility that comes with that. We know
they lean on us for essential, vital and mission critical solutions.
We Are Bold in Our Aspirations While Moving
Forward with Humility and Integrity
We have the confidence to take on the hardest problems, yet we are rooted
in a genuine sense of humility. We endeavor to earn trust every day by being
honest in our dealings and acting with integrity regardless of how hard the
challenge. We speak with candor, own our mistakes and always strive to be
better tomorrow.
We Foster
Inspired Teams
We nurture and celebrate a culture that embraces diverse points of views,
backgrounds and experiences. We are committed to equity in how people
are treated and the opportunities available to them. And we know that a
workplace which cultivates a sense of inclusion, belonging and respect will
develop the most talented and capable employees.
Our Values:
A safety-focused, zero-incident culture is
a priority for all of us
• Fostering a strong safety culture where
management is personally committed, and
employees engaged through Safety Moments,
enhanced audits and heightened leader
communication
• Developed a new EHS Policy, which is being
implemented globally across all businesses
• Established a new company-wide
Environmental Management System to
increase best practice sharing, incident tracking
and corrective actions
SAFETY
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Committed to sustainability in the work
we do and the way we work
• Solutions aid in energy savings, energy
efficiency, heat recovery, water and
wastewater treatment, solar power and
operator safety and ergonomics, helping to
make a positive impact on the environment and
communities worldwide
• Added “Operate Sustainably” as a new
strategic imperative; now a global priority
• Deployed IRX to ensure execution of key ESG
projects and initiatives
• Launched formal materiality assessment to
engage customers, employees, investors and
suppliers in defining our ESG priorities
SUSTAINABILITY
Increasing Our Focus on ESG – It is Now a Strategic Imperative
Intend to publish new
IR’s first ever
sustainability report
based on Global
Reporting Initiative
(GRI) standards
Nurturing and celebrating a culture that
embraces diverse points of view,
backgrounds and experiences
• CEO signed CEO Action for Diversity &
Inclusion pledge
• Focused on initiatives such as our Women’s
Mentoring Circles that support success and
development of diverse talent
• Dedicated to creating and maintaining an
environment that allows for open conversations
about diversity and inclusion
DIVERSITY & INCLUSION
Intense organizational-
wide effort to prepare
submittals to prominent
rating agencies
including the Dow
Jones Sustainability
Index and CDP
Initiatives in Place to Capture Value Creation through Synergies
Accelerating Execution Given Current Environment
25
Manufacturing
• Detailed database created for 14M+ sq. ft. of facilities to develop roadmap
• Phase 1 manufacturing optimization defined and under analysis
• Initial observations indicate strong potential for “Lean Manufacturing” as it is
deployed across enterprise
Supply Chain / Procurement
• Launched 16 RFQs covering ~33% of direct material spend2; “quick wins” executed
• Leveraging current market to harmonize and secure supply chain
• Developing i2V roadmap across business with launch expected in 2H’20
Structural: G&A and Other
• Focused on simplification of structure to reduce layers and increase span of
control
• Opportunity to optimize Corporate functions
Cost Synergies
Manufacturing
Supply Chain /
Procurement2
Structural:
G&A and Other
~$250M1
Run-Rate Synergy Estimate
Estimated One-Time Costs of ~$350M3 to Achieve Cost Synergies
and ~$100M3 for Associated Stand-up of the New Company
Plus Incremental Revenue Growth Opportunities
1 We expect to be able to realize anticipated cost synergies of ~$250M by the end of year 3 after closing. We expect to incur ~$450M of expense in connection with both achieving these cost synergies and the associated
stand-up of the new company. 2 Based on 2019 direct material spend. 3 Excludes transaction costs.
Strong Liquidity with Multiple Levers to Unlock Cash
26
Credit Rating • Ba2 (Positive) / BB+ (stable) from Moody’s and S&P, respectively
Debt Structure and
Recent Actions
(As of 2/29/20)
• Total debt of $3.5B with legacy Gardner Denver debt amended/extended at the same time as placement of new debt (all occurred in Feb. 2020)
• Existing USD $928M Term Loan B repriced at L+175; 100 bps better pricing than before
• Existing €602M Term Loan B repriced at E+200 (with a 0% floor); 100 bps better pricing than before
• New USD $1.9B Term Loan B priced at L+175
• Legacy fixed interest rate swaps of $825M all expire by Sep. 2020 ($100M in Jun., $350M in Jul., and $375M in Sep.)
Maturities • No maturities until 2027
Financial
Covenants
• None on term loans
• $1B revolving credit facility: maximum net first lien secured debt1 to EBITDA of 6.25x, tested when 40% of revolving credit facility is utilized
• At current debt level of $3.5B and cash balance as of 12/31/19, covenant not tripped unless Adjusted EBITDA falls to ~$500M and $1B revolver usage of
at least 40%
Liquidity
• Cash on Gardner Denver balance sheet of $505M as of 12/31/19
• $1.0B Revolving Credit Facility (currently undrawn)
• $125M Receivables Financing Agreement (no outstanding borrowings as of 12/31/19 with only letters of credit committed against the facility and ~$60M of
available borrowing capacity)
Levers to
Unlock Cash
• Working Capital
• AR and AP: Applying best practices, including lessons learned from Gardner Denver that helped drive 500+ bps improvement in Net Working Capital as a
% of sales from IPO in 2017 to 2019
• Inventory: Deploying Ingersoll Rand Execution Excellence (IRX) toolkit to drive sustainable inventory reduction initiatives, using same practices from
Gardner Denver
• Interest Expense: Benefiting from interest expense savings on repriced loans; targeting additional savings given current interest rate environment as well as
fixed rate swaps all expiring by Q3’20
• Tax: Building funnel of opportunities to minimize cash taxes given the merger; taking advantage of payment extensions and refund opportunities
1 Net first lien secured debt defined as gross debt secured on a first priority basis less unrestricted cash and cash equivalents.
Multiple Catalysts for Future Value Creation – Invest with Us
27
ENHANCED MARKET GROWTH OPPORTUNITY
o Expanded addressable market – ~65% larger
o Expansive installed base with opportunity to capture greater value
o Continued thoughtful portfolio optimization
01.
COMPOUNDING POTENTIAL OF TWO GREAT ORGANIZATIONS
o Merging strong cultures to enhance our competitive advantages
o Embedding ESG into our way of life to drive meaningful results
o Multi-year integration effort underway
02.
DURABLE BUSINESS MODEL ENABLED BY IRX
o Accelerating execution to achieve results faster through IMPACT Daily Management and Policy Deployment rigor
o Strong financial profile: outpacing market growth, margin discipline, aftermarket revenue and strong free cash flow
o Focus on achieving top-quartile industrial performance
03.
Appendix
Sources of Financial Data
• Supplemental Financial Information – furnished in Current Report on Form 8-K filed with SEC on April 15, 2020
• Source of financial information of the combined company in this presentation
• Excel model included on the investor section of www.irco.com
• Management’s view of supplemental historical financial information of the combined company provided to assist investors in assessing the Company’s historical performance on a basis that includes the combined results of operations of both Gardner Denver Holdings, Inc. and the Ingersoll Rand Industrial segment
• Amendment No. 1 to Current Report on Form 8-K filed March 31, 2020• The Company filed an amendment to its Current Report on Form 8-K filed with the SEC on March 4, 2020 to provide:
• Audited financial statements of the Industrial Business of Ingersoll-Rand plc for the years ended December 31, 2019 2018 and 2017 and the combined
balance sheets as of December 31, 2019 and 2018
• Unaudited pro forma combined financial statements of the Company as of and for the year ended December 31, 2019
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001699150/4da03c43-e2f9-4b8d-86d4-6c1ddbab469d.pdf
• Registration Statement: Amendment No. 1 to Registration Statement on Form S-4 Filed January 15, 2020• The Company filed a Registration Statement on Form S-4 with the SEC on December 30, 2019 (as amended by Amendment No. 1 to Registration Statement on
Form S-4 filed with the SEC on January 15, 2020, the “S4”) to register shares of its common stock, that were issued in connection with the merger of Charm
Merger Sub Inc. (“Merger Sub”), a wholly-owned subsidiary of Gardner Denver, with and into Ingersoll-Rand U.S. HoldCo, Inc. (“Ingersoll Rand Industrial”), which
was a wholly-owned subsidiary of Ingersoll-Rand plc (“Ingersoll Rand”), with Ingersoll Rand Industrial surviving the merger as a wholly-owned subsidiary of
Gardner Denver
• The S-4 included audited financial statements of the Industrial Business of Ingersoll-Rand plc for the years ended December 31, 2018, 2017 and 2016 and the
combined balance sheets as of December 31, 2018 and 2017 and unaudited pro forma combined financial statements of the Company as of and for the year
ended December 31, 2018
http://d18rn0p25nwr6d.cloudfront.net/CIK-0001699150/f86cb9c4-c2a9-4172-b924-fb01eb816ec2.pdf
29
Supplemental Financial Information: 2019 Condensed Combined Statement of Operations
30
Adjusted Combined
Pro Forma Combined Financial Information
Year Ended Supplemental Year Ended
Dec 31, 2019 (a) Adjustments Dec 31, 2019
Revenues 6,173.2$ (8.7)$ (b) 6,164.5$
Cost of sales 4,004.4 (3.0) (c) 4,001.4
Gross profit 2,168.8 (5.7) 2,163.1
Selling and administrative expenses 1,148.2 (38.4) (c) 1,109.8
Amortization of intangible assets 359.8 - 359.8
Other operating expense, net 72.1 - 72.1
Operating income 588.7 32.7 621.4
Interest expense 156.5 - 156.5
Loss on extinguishment of debt 0.2 - 0.2
Other income, net (4.2) - (4.2)
Income before income taxes 436.2 32.7 468.9
Provision for income taxes 96.5 22.1 (d) 118.6
Net income 339.7 10.6 350.3
Less: Net earnings attributable to noncontrolling interests 2.7 - 2.7
Net income attributable to Ingersoll Rand 337.0$ 10.6$ 347.6$
Basic earnings per share 0.81$ 0.03$ 0.84$
Diluted earnings per share 0.80$ 0.03$ 0.83$
Weighted average shares, basic 414.5 414.5
Weighted average shares, diluted 420.1 420.1
Notes to the Supplemental Adjustments to the Unaudited Condensed Combined Statement of Operations
(a) This column represents the unaudited pro forma condensed combined statement of operations giving effect to the Merger which were included as Exhibit 99.2 to the Form 8-K/A.
(b) Adjustment reflecting certain ongoing sales with Trane Technologies per the Transition Services Agreement that will be sold at zero margin post-Merger.
(d) Adjustment reflecting the application of the effective tax rate of 25.3% to all of the supplemental pro forma adjustments previously discussed above and additional tax provision related
to Global Intangible Low-Taxed Income (“GILTI”) and income as defined under Subpart F of the Internal Revenue Code (“Subpart F”).
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
CONDENSED COMBINED STATEMENT OF OPERATIONS
(Dollars and Shares in millions, except per share amounts)
(c) Adjustment reflecting the removal of certain corporate expenses allocated to the Ingersoll Rand Industrial Segment by its former parent (inclusive of corporate expenses allocated to
Precision Flow Systems by its former parent) recorded in connection with the carve-out financial statements which did not convey with the Ingersoll Rand Industrial Segment.
Supplemental Financial Information: 2018 Condensed Combined Statement of Operations
31
Adjusted Combined
Pro Forma Combined Financial Information
Year Ended Supplemental Year Ended
Dec 31, 2018 (a) Adjustments Dec 31, 2018
Revenues 6,460.3$ (6.2)$ (b) 6,454.1$
Cost of sales 4,168.1 (1.7) (c) 4,166.4
Gross profit 2,292.2 (4.5) 2,287.7
Selling and administrative expenses 1,198.2 (45.8) (c) 1,152.4
Amortization of intangible assets 361.3 - 361.3
Other operating expense, net 70.5 - 70.5
Operating income 662.2 41.3 703.5
Interest expense 170.3 (3.1) (d) 167.2
Loss on extinguishment of debt 1.1 - 1.1
Other income, net (8.8) - (8.8)
Income before income taxes 499.6 44.4 544.0
Provision for income taxes 116.6 18.3 (e) 134.9
Net income 383.0 26.1 409.1
Less: Net earnings attributable to noncontrolling interests 2.6 - 2.6
Net income attributable to Ingersoll Rand 380.4$ 26.1$ 406.5$
Basic earnings per share 0.92$ 0.06$ 0.98$
Diluted earnings per share 0.90$ 0.07$ 0.97$
Weighted average shares, basic 412.9 412.9
Weighted average shares, diluted 420.5 420.5
Notes to the Supplemental Adjustments to the Unaudited Condensed Combined Statement of Operations
(a) This column represents the unaudited pro forma condensed combined statement of operations giving effect to the Merger which were included in the Form S-4.
(b) Adjustment reflecting certain ongoing sales with Trane Technologies per the Transition Services Agreement that will be sold at zero margin post-Merger.
(d) Adjustment reflecting the removal of pro forma interest expense included in the unaudited pro forma condensed combined statement of operations included in the Form S-4.
The original pro forma interest expense amount was calculated using the best available estimated interest rates at the time the Form S-4 was filed. This incremental adjustment
reflects a change in the interest expense calculation due to the application of actual agreed upon interest rates confirmed in the new borrowing facility.
(e) Adjustment reflecting the application of the effective tax rate of 24.8% to all of the supplemental pro forma adjustments previously discussed above and additional tax
provision related to GILTI and Subpart F.
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
CONDENSED COMBINED STATEMENT OF OPERATIONS
(Dollars and Shares in millions, except per share amounts)
(c) Adjustment reflecting the removal of certain corporate expenses allocated to the Ingersoll Rand Industrial segment by its former Parent (inclusive of corporate expenses
allocated to Precision Flow Systems by its former Parent) recorded in connection with the carve-out financial statements which did not convey with the Ingersoll Rand
Industrial segment.
Supplemental Financial Information: 2019 and 2018 Combined Financial Information by Segment
32
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Ingersoll Rand
Adjusted Revenue (non-GAAP) $ 6,164.5 $ 1,588.4 $ 1,481.0 $ 1,595.5 $ 1,499.6 $ 6,454.1
Adjusted EBITDA (non-GAAP) 1,196.5 314.2 293.8 313.1 275.4 1,294.9
Adjusted EBITDA Margin (non-GAAP) 19.4% 19.8% 19.8% 19.6% 18.4% 20.1%
Further Adjusted Net Income (non-GAAP) 690.8 184.4 169.0 183.3 154.1 755.3
Further Adjusted Diluted EPS (non-GAAP) 1.64$ 0.44$ 0.39$ 0.44$ 0.37$ 1.80$
Industrial Technologies & Services
Adjusted Revenue (non-GAAP) $ 4,057.5 $ 1,069.8 $ 984.0 $ 1,027.5 $ 976.2 $ 4,216.1
Adjusted EBITDA (non-GAAP) 816.1 236.0 199.8 199.5 180.8 825.6
Adjusted EBITDA Margin (non-GAAP) 20.1% 22.1% 20.3% 19.4% 18.5% 19.6%
Precision & Science Technologies
Adjusted Revenue (non-GAAP) $ 850.3 $ 213.2 $ 208.0 $ 215.5 $ 213.6 $ 818.5
Adjusted EBITDA (non-GAAP) 235.9 59.4 56.6 63.4 56.5 208.7
Adjusted EBITDA Margin (non-GAAP) 27.7% 27.9% 27.2% 29.4% 26.5% 25.5%
Specialty Vehicle Technologies
Adjusted Revenue (non-GAAP) $ 822.3 $ 226.4 $ 189.0 $ 233.0 $ 173.9 $ 749.4
Adjusted EBITDA (non-GAAP) 116.7 32.9 27.6 37.6 18.6 104.3
Adjusted EBITDA Margin (non-GAAP) 14.2% 14.5% 14.6% 16.1% 10.7% 13.9%
High Pressure Solutions
Adjusted Revenue (non-GAAP) $ 434.4 $ 79.0 $ 100.0 $ 119.5 $ 135.9 $ 670.1
Adjusted EBITDA (non-GAAP) 117.4 16.0 26.9 32.6 41.9 227.9
Adjusted EBITDA Margin (non-GAAP) 27.0% 20.3% 26.9% 27.3% 30.8% 34.0%
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT
(Dollars and Shares in millions, except per share amounts)
Quarter ended
Supplemental Financial Information: 2019 and 2018 Combined Revenue Growth / (Decline) by Segment
33
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Ingersoll Rand
Organic growth (decline) (non-GAAP) (3.0%) (7.1%) (5.8%) (0.9%) 2.3% 9.0%
Impact of foreign currency (non-GAAP) (2.2%) (1.0%) (1.7%) (2.7%) (3.6%) 1.1%
Impact of acquisitions (non-GAAP) 0.7% 0.4% 0.6% 0.6% 1.3% 1.3%
Total adjusted revenue growth (decline) (non-GAAP) (4.5%) (7.7%) (6.9%) (3.0%) - % 11.4%
Industrial Technologies & Services
Organic growth (decline) (non-GAAP) (1.6%) (5.4%) (3.4%) (0.9%) 4.1% 6.9%
Impact of foreign currency (non-GAAP) (2.7%) (1.2%) (2.1%) (3.4%) (4.6%) 1.2%
Impact of acquisitions (non-GAAP) 0.5% 0.3% 0.3% 0.3% 1.3% 1.8%
Total adjusted revenue growth (decline) (non-GAAP) (3.8%) (6.3%) (5.2%) (4.0%) 0.8% 9.9%
Precision & Science Technologies
Organic growth (decline) (non-GAAP) 3.5% 0.8% (0.3%) 4.9% 9.1% 12.5%
Impact of foreign currency (non-GAAP) (2.4%) (1.2%) (1.9%) (2.9%) (3.9%) 2.0%
Impact of acquisitions (non-GAAP) 2.8% 1.9% 2.9% 3.1% 3.2% 0.1%
Total adjusted revenue growth (non-GAAP) 3.9% 1.5% 0.7% 5.1% 8.4% 14.6%
Specialty Vehicle Technologies
Organic growth (non-GAAP) 10.3% 7.9% 17.6% 13.3% 2.8% 12.8%
Impact of foreign currency (non-GAAP) (0.6%) (0.3%) (0.4%) (0.7%) (1.0%) 0.4%
Impact of acquisitions (non-GAAP) - % - % - % - % - % - %
Total adjusted revenue growth (non-GAAP) 9.7% 7.6% 17.2% 12.6% 1.8% 13.2%
High Pressure Solutions
Organic growth (decline) (non-GAAP) (35.1%) (49.8%) (45.9%) (26.5%) (17.2%) 14.6%
Impact of foreign currency (non-GAAP) (0.3%) (0.5%) (0.3%) (0.3%) (0.4%) - %
Impact of acquisitions (non-GAAP) 0.3% - % - % 0.4% 0.8% 1.0%
Total adjusted revenue growth (decline) (non-GAAP) (35.1%) (50.3%) (46.2%) (26.4%) (16.8%) 15.6%
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED REVENUE GROWTH / (DECLINE) BY SEGMENT
(Dollars and Shares in millions, except per share amounts)
Quarter ended
(1) Organic growth/(decline), impact of foreign currency, and impact of acquisitions are non-GAAP measures. References to “impact of acquisitions” refer to GAAP sales from acquired
businesses recorded prior to the first anniversary of the acquisition. The portion of GAAP revenue attributable to currency translation is calculated as the difference between (a) the period-to-period
change in revenue (excluding acquisition sales) and (b) the period-to-period change in revenue (excluding acquisition sales) after applying prior year foreign exchange rates to the current year period.
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Net Income and Diluted EPS to Further Adjusted Net Income and Further Adjusted Diluted EPS
34
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Adjusted Net Income (1) $ 350.3 $ 104.1 $ 90.4 $ 93.6 $ 62.2 $ 409.1
Adjusted Diluted Earnings Per Share (1) $ 0.83 $ 0.25 $ 0.21 $ 0.22 $ 0.15 $ 0.97
Plus:
Amortization of acquisition related intangible assets (a) $ 348.0 $ 86.9 $ 86.8 $ 87.0 $ 87.3 $ 347.4
Acquisition related expenses and non-cash charges (b) 9.7 4.4 2.1 1.6 1.6 16.7
Restructuring and related business transformation costs (c) 63.1 15.1 17.8 15.1 15.1 84.5
Stock-based compensation (d) 32.4 8.8 2.9 9.1 11.6 17.8
Foreign currency transaction losses (gains), net 7.2 5.3 (2.2) 1.6 2.5 (0.6)
Shareholder litigation settlement recoveries (e) (6.0) - - - (6.0) (9.5)
Other adjustments (f) 0.7 - - - 0.7 4.1
Minus:
Income tax provisions, as adjusted (g) 114.6 40.2 28.8 24.7 20.9 114.2
Further Adjusted Net Income $ 690.8 $ 184.4 $ 169.0 $ 183.3 $ 154.1 $ 755.3
Further Adjusted Diluted Earnings Per Share $ 1.64 $ 0.44 $ 0.39 $ 0.44 $ 0.37 $ 1.80
Average Shares Outstanding:
Diluted shares outstanding 208.9 209.4 209.0 208.9 207.7 209.1
Effects of transaction 211.3 211.3 211.3 211.3 211.3 211.3
Adjusted diluted shares outstanding 420.2 420.7 420.3 420.2 419.0 420.4
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF ADJUSTED NET INCOME AND DILUTED EPS TO
FURTHER ADJUSTED NET INCOME AND FURTHER ADJUSTED DILUTED EPS
(Dollars and Shares in millions, except per share amounts)
Quarter ended
(1) See tables on slides 30 and 31 for the years ended December 31, 2019 and December 31, 2018, respectively, for a reconciliation of unaudited pro forma Net Income and unaudited
pro forma Diluted EPS as previously disclosed in SEC filings in accordance with Article 11 of Regulation S-X to these adjusted measures presented above.
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Diluted EPS to Further Adjusted Diluted EPS
35
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Adjusted Diluted Earnings Per Share (1) $ 0.83 $ 0.25 $ 0.21 $ 0.22 $ 0.15 $ 0.97
Plus:
Amortization of acquisition related intangible assets (a) 0.83 0.20 0.21 0.21 0.21 0.83
Acquisition related expenses and non-cash charges (b) 0.01 0.01 - - - 0.04
Restructuring and related business transformation costs (c) 0.15 0.04 0.04 0.04 0.03 0.20
Stock-based compensation (d) 0.08 0.02 0.01 0.02 0.03 0.04
Foreign currency transaction losses (gains), net 0.01 0.01 (0.01) - 0.01 -
Shareholder litigation settlement recoveries (e) (0.01) - - - (0.01) (0.02)
Other adjustments (f) - - - - - 0.01
Minus: -
Income tax provisions, as adjusted (g) 0.26 0.09 0.07 0.05 0.05 0.27
Further Adjusted Diluted Earnings Per Share 1.64$ 0.44$ 0.39$ 0.44$ 0.37$ 1.80$
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF ADJUSTED DILUTED EPS TO FURTHER ADJUSTED DILUTED EPS
(Share amounts in millions, per share amounts in whole dollars)
Quarter ended
(1) See tables on slides 30 and 31 for the years ended December 31, 2019 and December 31, 2018, respectively, for a reconciliation of unaudited pro forma Diluted EPS as previously
disclosed in SEC filings in accordance with Article 11 of Regulation S-X to Adjusted Diluted EPS presented above.
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Net Income to Adjusted EBITDA and Further Adjusted Net Income
36
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Adjusted Net Income (1) 350.3$ 104.1$ 90.4$ 93.6$ 62.2$ 409.1$
Plus:
Interest expense 156.5$ 37.8$ 40.1$ 39.3$ 39.3$ 167.2$
Provision for income taxes 118.6 22.1 28.2 37.2 31.1 134.9
Depreciation expense 95.8 24.0 23.0 23.8 25.0 99.3
Amortization expense (a) 368.2 92.6 91.5 91.8 92.3 371.4
Acquisition related expenses and non-cash charges (b) 9.7 4.4 2.1 1.6 1.6 16.7
Restructuring and related business transformation costs (c) 63.1 15.1 17.8 15.1 15.1 84.5
Stock-based compensation (d) 32.4 8.8 2.9 9.1 11.6 17.8
Foreign currency transaction losses (gains), net 7.2 5.3 (2.2) 1.6 2.5 (0.6)
Shareholder litigation settlement recoveries (e) (6.0) - - - (6.0) (9.5)
Other adjustments (f) 0.7 - - - 0.7 4.1
Adjusted EBITDA 1,196.5$ 314.2$ 293.8$ 313.1$ 275.4$ 1,294.9$
Minus:
Interest expense 156.5$ 37.8$ 40.1$ 39.3$ 39.3$ 167.2$
Income tax provision, as adjusted (g) 233.2 62.3 57.0 61.9 52.0 249.1
Depreciation expense 95.8 24.0 23.0 23.8 25.0 99.3
Amortization of non-acquisition related intangible assets (a) 20.2 5.7 4.7 4.8 5.0 24.0
Further Adjusted Net Income 690.8$ 184.4$ 169.0$ 183.3$ 154.1$ 755.3$
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF ADJUSTED NET INCOME TO
ADJUSTED EBITDA AND FURTHER ADJUSTED NET INCOME
(Dollars and Shares in millions, except per share amounts)
Quarter ended
(1) See tables on slides 30 and 31 for the years ended December 31, 2019 and December 31, 2018, respectively, for a reconciliation of unaudited pro forma Net income as previously
disclosed in SEC filings in accordance with Article 11 of Regulation S-X to Adjusted Net income presented above.
Supplemental Financial Information: 2019 and 2018 Reconciliation of Segment Adjusted EBITDA to Adjusted Income Before Income Taxes
37
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Adjusted Revenue
Industrial Technologies & Services 4,057.5$ $ 1,069.8 $ 984.0 $ 1,027.5 $ 976.2 $ 4,216.1
Precision & Science Technologies 850.3 213.2 208.0 215.5 213.6 818.5
Specialty Vehicle Technologies 822.3 226.4 189.0 233.0 173.9 749.4
High Pressure Solutions 434.4 79.0 100.0 119.5 135.9 670.1
Total Adjusted Revenue (1) 6,164.5$ 1,588.4$ 1,481.0$ 1,595.5$ 1,499.6$ 6,454.1$
Segment Adjusted EBITDA
Industrial Technologies & Services 816.1$ 236.0$ 199.8$ 199.5$ 180.8$ 825.6$
Precision & Science Technologies 235.9 59.4 56.6 63.4 56.5 208.7
Specialty Vehicle Technologies 116.7 32.9 27.6 37.6 18.6 104.3
High Pressure Solutions 117.4 16.0 26.9 32.6 41.9 227.9
Total Segment Adjusted EBITDA 1,286.1$ 344.3$ 310.9$ 333.1$ 297.8$ 1,366.5$
Corporate expenses not allocated to segments 89.6$ 30.1$ 17.1$ 20.0$ 22.4$ 71.6$
Interest expense 156.5 37.8 40.1 39.3 39.3 167.2
Depreciation and amortization expense 464.0 116.6 114.5 115.6 117.3 470.7
Acquisition related expenses and non-cash charges (b) 9.7 4.4 2.1 1.6 1.6 16.7
Restructuring and related business transformation costs (c) 63.1 15.1 17.8 15.1 15.1 84.5
Stock-based compensation (d) 32.4 8.8 2.9 9.1 11.6 17.8
Foreign currency transaction losses (gains), net 7.2 5.3 (2.2) 1.6 2.5 (0.6)
Shareholder litigation settlement recoveries (e) (6.0) - - - (6.0) (9.5)
Other adjustments (f) 0.7 - - - 0.7 4.1
Adjusted Income Before Income Taxes (1) 468.9$ 126.2$ 118.6$ 130.8$ 93.3$ 544.0$
(1) See tables on slides 30 and 31 for the years ended December 31, 2019 and December 31, 2018, respectively, for a reconciliation of unaudited pro forma Revenue and unaudited pro forma
Income Before Income Taxes as previously disclosed in SEC filings in accordance with Article 11 of Regulation S-X to these adjusted measures presented above.
INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO ADJUSTED INCOME BEFORE INCOME TAXES
(Dollars and Shares in millions, except per share amounts)
Quarter ended
Less items to reconcile Segment Adjusted EBITDA to Adjusted Income Before Income Taxes:
Supplemental Financial Information: Notes to Slides 34-37 - Adjusted Combined Financial Information
38
All supplemental financial information presented in this document represents the newly combined Ingersoll Rand giving effect to the Merger as if it happened on January 1, 2018.
(a) Amortization expense consisted of the following:
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Amortization of acquisition-related intangible assets 348.0$ 86.9$ 86.8$ 87.0$ 87.3$ 347.4$
Amortization of non-acquisition related intangible assets 20.2 5.7 4.7 4.8 5.0 24.0
Total amortization expense 368.2$ 92.6$ 91.5$ 91.8$ 92.3$ 371.4$
(c) Restructuring and related business transformation costs consisted of the following:
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Restructuring charges 54.6$ 11.7$ 16.0$ 13.9$ 13.0$ 62.6$
Severance, sign-on, relocation and executive search costs 2.5 1.2 0.1 0.2 1.0 4.1
Facility reorganization, relocation and other costs 2.4 0.5 0.8 0.5 0.6 3.1
Information technology infrastructure transformation 1.2 0.3 0.2 0.4 0.3 0.8
Losses (gains) on asset and business disposals 0.8 0.9 0.2 (0.4) 0.1 (5.3)
Consultant and other advisor fees 0.3 - 0.1 0.1 0.1 14.1
Other, net 1.3 0.5 0.4 0.4 - 5.1
Total restructuring and related business transformation costs 63.1$ 15.1$ 17.8$ 15.1$ 15.1$ 84.5$
(e) Represents insurance recoveries of our shareholder litigation settlement in 2014.
Quarter ended
Quarter ended
(b) Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs (including certain incentive and non-incentive
cash compensation costs), and non-cash charges and credits arising from fair value purchase accounting adjustments.
(d) Represents stock-based compensation expense recognized for stock options outstanding of $30.8 million and $17.8 million for the years ended December 31, 2019 and 2018,
respectively. Represents stock-based compensation expense recognized for stock options outstanding of $8.7 million, $2.7 million, $9.0 million and $10.4 million for the quarters ended
December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.
Supplemental Financial Information: Notes to Slides 34-37 - Adjusted Combined Financial Information (Continued)
39
(f) Other adjustments are comprised of the following items:
i. estimated environmental remediation costs and losses relating to a former production facility;
ii. certain expenses related to our initial public offering and secondary offerings;
v. other individually immaterial miscellaneous adjustments.
Year ended Year ended
Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Provision for income taxes 118.6$ 22.1$ 28.2$ 37.2$ 31.1$ 134.9$
Tax impact of pre-tax income adjustments 114.6 40.2 28.8 24.7 20.9 113.5
Income tax provision, as adjusted 233.2$ 62.3$ 57.0$ 61.9$ 52.0$ 248.4$
iv. losses on the extinguishment of the Company's senior notes, extinguishment of a portion of the Company’s U.S. Term Loan, refinancing of the Company’s Original Dollar Term Loan
Facility and the Company’s Original Euro Term Loan Facility and losses reclassified from accumulated other comprehensive income/(loss) into income related to the amendment of the
interest rate swaps in conjunction with the debt repayment; and
(g) Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of applicable discrete tax items. The tax effect of
pre-tax items excluded from Adjusted Net Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact
of permanent differences and valuation allowances. The income tax provision, as adjusted for each of the periods presented below consists of the following:
Quarter ended
iii. third party expenses to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of new accounting standards in the first quarter of 2018 and 2019, respectively;
Reconciliation of Net (Loss) Income to Adjusted EBITDA for Legacy Gardner Denver
40
($ M) FY 19 FY15
Net (Loss) Income $159.1 ($352.0)
Plus:
Interest Expense $88.9 $162.9
(Benefit) Provision for Income Taxes $31.8 ($14.7)
Depreciation Expense $53.8 $47.6
Amortization Expense $124.3 $115.4
Impairment of Goodwill and Other Intangible Assets $421.4
Sponsor Fees and Expenses $4.6
Restructuring and Related Business Transformation $25.6 $31.4
Acquisition Related Expenses and Non-cash Charges $54.6 $4.8
Environmental Remediation Loss Reserve $0.1
Expenses Related to Initial Stock Offering
Establish Public Company Financial Reporting $0.6
Stock-based Compensation $23.1
Loss on Extinguishment of Debt $0.2
Foreign Currency Transaction Losses (Gains), Net $8.1 $1.1
Shareholder Litigation Settlement Recoveries ($6.0)
Other Adjustments $0.6 ($3.6)
Adjusted EBITDA $564.8 $418.9
Revenue $2,451.9 $2,126.9
Adjusted EBITDA % 23.0% 19.7%
Legacy Gardner Denver
Net Debt to Adjusted EBITDA Leverage Ratio
41
Ingersoll Rand
FY 19 FY 19 FY15
Senior Secured bank debts $3,502 $1,602 $2,274
Senior Unsecured notes $575
Mortgages/Cap Lease/Other $18 $18 $18
Gross Debt1 $3,520 $1,620 $2,867
Less: Cash & Cash Equivalents2 ($456) ($505) ($228)
Net Debt $3,063 $1,114 $2,638
Net Debt/Adj EBITDA Leverage Ratio 2.6 2.0 6.3
Legacy Gardner Denver
1 Pro-forma Gross Debt for Ingersoll Rand as of 12/31/19 including legacy Gardner Denver debt as of
12/31/19 and incremental $1.9B of debt raised in February of 2020 as part of transaction
2 Cash and Cash Equivalents comprised of legacy Gardner Denver cash as of 12/31/19 plus $25M of
Ingersoll Rand contributed cash at close less ~$74M of transaction fees and expenses
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