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Ingersoll Rand Reports Strong Third-Quarter 2019 Results

October 29, 2019 6:30 AM

Highlights (third quarter 2019 versus third quarter 2018, unless otherwise noted):

SWORDS, Ireland--(BUSINESS WIRE)-- Ingersoll-Rand plc (NYSE: IR), a world leader in creating comfortable, sustainable and efficient environments, today reported diluted earnings per share (EPS) from continuing operations of $1.78 for the third quarter of 2019. Adjusted continuing EPS was $1.99 which excludes planned restructuring costs of $25 million primarily related to ongoing footprint optimization, and $37 million of anticipated Industrial segment separation and acquisition related costs consistent with expectations.

Third-Quarter 2019 Results

Financial Comparisons - Third-Quarter Continuing Operations

$, millions except EPS

Q3 2019

Q3 2018

Y-O-Y Change

Organic Y-O-Y Change

Bookings

$4,162

$4,050

3%

1%

Net Revenues

$4,344

$4,031

8%

6%

GAAP Operating Income

$623

$587

6%

GAAP Operating Margin

14.3%

14.6%

(30 bps)

Adjusted Operating Income*

$684

$607

13%

Adjusted Operating Margin

15.8%

15.1%

70 bps

GAAP Continuing EPS

$1.78

$2.11

(16)%

Adjusted Continuing EPS

$1.99

$1.75

14%

Restructuring Cost

($24.5)

($20.1)

($4.4)

"Disciplined execution of our strategy and business operating system has enabled us to successfully navigate a rapidly evolving global economic and geopolitical landscape to deliver strong financial performance throughout 2019 and in the third quarter. We continue to deliver robust Climate segment growth with strong HVAC performance across virtually all of our end-markets globally, and our 2019 results are eclipsing the aggressive goals we set when we gave guidance at the beginning of the year,” said Michael W. Lamach, chairman and chief executive officer. “Our strong performance in global HVAC is offsetting declines in the Industrial segment’s Compression Technologies and Industrial Products businesses, where we are seeing continued weakness in global short cycle industrial spending. Balancing these factors, we remain confident in our ability to deliver our full year guidance of approximately $6.40 in adjusted continuing EPS for 2019. When combined with our strong revenue growth and free cash flow expectations, we believe 2019 will be another year of top tier performance for the company.

We are also making good progress with the Reverse Morris Trust transaction we announced earlier this year to combine our Industrial segment with Gardner Denver, creating a global leader in mission-critical flow creation and industrial solutions, and simultaneously creating a pure-play global leader in climate technologies for buildings, homes and transportation. Separation, integration planning and Climate business transformation activities continue, and we expect to complete the separation by early 2020, as planned. We’re excited about the potential for both companies to unlock value for shareholders, and to continue the strong momentum in our Climate businesses globally.”

Highlights from the Third Quarter of 2019 (all comparisons against the third quarter of 2018 unless otherwise noted)

Third-Quarter Business Review (all comparisons against the third quarter of 2018 unless otherwise noted)

Climate Segment: delivers energy-efficient products and innovative energy services. The segment includes Trane® and American Standard® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage™ and Nexia™; and Thermo King® transport temperature control solutions.

$, millions

Q3 2019

Q3 2018

Y-O-Y Change

Organic Y-O-Y Change

Bookings

$3,269

$3,241

1%

2%

Net Revenues

$3,471

$3,239

7%

8%

GAAP Operating Income

$584

$536

9%

GAAP Operating Margin

16.8%

16.5%

30 bps

Adjusted Operating Income

$600

$551

9%

Adjusted Operating Margin

17.3%

17.0%

30 bps

Industrial Segment: delivers products and services that enhance energy efficiency, productivity and operations. The segment includes compressed air and gas systems and services, power tools, material handling systems, fluid management systems, as well as Club Car® golf, utility and consumer low-speed vehicles.

$, millions

Q3 2019

Q3 2018

Y-O-Y Change

Organic Y-O-Y Change

Bookings

$894

$809

11%

flat

Net Revenues

$873

$792

10%

flat

GAAP Operating Income

$116

$111

5%

GAAP Operating Margin

13.3%

14.0%

(70 bps)

Adjusted Operating Income

$131

$116

13%

Adjusted Operating Margin

15.0%

14.6%

40 bps

Balance Sheet and Cash Flow

$, millions

Q3 2019

Q3 2018

Y-O-Y Change

Cash From Continuing Operating Activities Y-T-D

$1,090

$946

$144

Free Cash Flow Y-T-D*

$993

$724

$269

Working Capital/Revenue*

6.2%

5.2%

100 bps increase

Cash Balance 30 September

$831

$1,023

($192)

Debt Balance 30 September

$5,572

$4,090

$1,482

Capital Deployment

Tax Rate

This news release includes “forward-looking statements,” which are statements that are not historical facts, including statements that relate to the mix of and demand for our products; performance of the markets in which we operate; our share repurchase program including the amount of shares to be repurchased and timing of such repurchases; our capital allocation strategy including projected acquisitions; restructuring activity; our projected 2019 full-year financial performance and targets including assumptions regarding our effective tax rate and other factors described in our guidance. These forward-looking statements are based on our current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Such factors include, but are not limited to, global economic conditions, the outcome of any litigation, demand for our products and services, and tax law changes and interpretations. Additional factors that could cause such differences can be found in our Form 10-K for the year ended December 31, 2018, as well as our subsequent reports on Form 10-Q and other SEC filings. Forward-looking statements also include statements that relate to the proposed Reverse Morris Trust transaction with Gardner Denver Holdings, Inc. (GDI). These forward-looking statements are based on GDI’s and Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from GDI’s and Ingersoll Rand’s 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) that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by the stockholders of GDI may not be obtained; (2) the risk that the proposed transaction may not be completed on the terms or in the time frame expected by Ingersoll Rand or GDI, or at all, (3) unexpected costs, charges or expenses resulting from the proposed transaction, (4) uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; (5) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction or integrating the businesses of GDI and Ingersoll Rand Industrial, or at all, (6) the ability of the combined company to implement its business strategy; (7) difficulties and delays in the combined company and ClimateCo achieving revenue and cost synergies; (8) inability of the combined company and ClimateCo to retain and hire key personnel; (9) the occurrence of any event that could give rise to termination of the proposed transaction; (10) the risk that stockholder litigation in connection with the proposed transaction or other settlements or investigations may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and liability, (11) evolving legal, regulatory and tax regimes; (12) changes in general economic and/or industry specific conditions; (13) actions by third parties, including government agencies; and (14) other risk factors detailed from time to time in Ingersoll Rand’s and GDI’s reports filed with the SEC, including Ingersoll Rand’s and GDI’s annual reports on Form 10-K and subsequent 10-Qs. We assume no obligation to update these forward-looking statements.

This news release also includes non-GAAP financial information which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The definitions of our non-GAAP financial information and reconciliation to GAAP is attached to this news release.

All amounts reported within the earnings release above related to net earnings (loss), earnings (loss) from continuing operations, earnings (loss) from discontinued operations, and per share amounts are attributed to Ingersoll Rand’s ordinary shareholders.

Ingersoll Rand (NYSE: IR) advances the quality of life by creating comfortable, sustainable and efficient environments. Our people and our family of brands - including Club Car®, Ingersoll Rand®, Thermo King® and Trane® - work together to enhance the quality and comfort of air in homes and buildings; transport and protect food and perishables; and increase industrial productivity and efficiency. We are a global business committed to a world of sustainable progress and enduring results. For more information, visit ingersollrand.com.

10/29/19

(See Accompanying Tables)

*Q3 Non-GAAP measures definitions

Organic revenue is defined as GAAP net revenues adjusted for the impact of currency and acquisitions. Organic bookings is defined as reported orders in the current period adjusted for the impact of currency and acquisitions.

Adjusted operating income in 2019 is defined as GAAP operating income plus restructuring costs, PFS acquisition-related transaction costs, PFS inventory step-up and backlog amortization and Industrial Segment separation-related costs. Adjusted operating income in 2018 is defined as GAAP operating income plus restructuring costs. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 3 and 4 of the news release.

Adjusted operating margin is defined as the ratio of adjusted operating income divided by net revenues.

Adjusted earnings from continuing operations attributable to Ingersoll-Rand plc (Adjusted net earnings) in 2019 is defined as GAAP earnings from continuing operations attributable to Ingersoll-Rand plc plus restructuring costs, PFS acquisition-related transaction costs, PFS inventory step-up and backlog amortization and Industrial Segment separation-related costs, net of tax impacts. Adjusted net earnings in 2018 is defined as GAAP earnings from continuing operations attributable to Ingersoll-Rand plc plus restructuring costs, net of tax impacts less Tax Reform non-cash measurement period adjustments and a U.S. discrete non-cash tax adjustment. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 3 and 4 of the news release.

Adjusted continuing EPS in 2019 is defined as GAAP continuing EPS plus restructuring costs, PFS acquisition- related transaction costs, PFS inventory step-up and backlog amortization and Industrial Segment separation-related costs, net of tax impacts. Adjusted continuing EPS in 2018 is defined as GAAP continuing EPS plus restructuring costs, net of tax impacts less Tax Reform non-cash measurement period adjustments and a U.S. discrete non-cash tax adjustment. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 3 and 4 of the news release.

Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization expense plus or minus other income / (expense), net.

Free cash flow in 2019 is defined as net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for PFS acquisition-related transaction costs, Industrial Segment separation-related costs and restructuring. Free cash flow in 2018 is defined as net cash provided by (used in) continuing operating activities, less capital expenditures plus cash payments for restructuring. In 2018, the Company updated its definition of free cash flow to exclude the impacts of discontinued operations. Please refer to the free cash flow reconciliation on table 9 of the news release.

Working capital measures a firm’s operating liquidity position and its overall effectiveness in managing the enterprises’ current accounts.

Adjusted effective tax rate for 2019 is defined as the ratio of income tax expense plus the tax effect of adjustments for restructuring costs, PFS acquisition-related transaction costs, PFS inventory step-up and backlog amortization and Industrial Segment separation-related costs divided by earnings from continuing operations before income taxes plus restructuring costs, PFS acquisition-related transaction costs, PFS inventory step-up and backlog amortization and Industrial Segment separation-related costs. Adjusted effective tax rate for 2018 is defined as the ratio of income tax benefit minus the tax effect of Tax Reform non-cash measurement period adjustments and a U.S. discrete non-cash tax adjustment minus the tax effect of restructuring costs. This measure allows for a direct comparison of the effective tax rate between periods.

The Company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP). The following schedules provide non-GAAP financial information and a quantitative reconciliation of the difference between the non-GAAP financial measures and the financial measures calculated and reported in accordance with GAAP.

The non-GAAP financial measures should be considered supplemental to, not a substitute for or superior to, financial measures calculated in accordance with GAAP. They have limitations in that they do not reflect all of the costs associated with the operations of our businesses as determined in accordance with GAAP. In addition, these measures may not be comparable to non-GAAP financial measures reported by other companies.

We believe the non-GAAP financial information provides important supplemental information to both management and investors regarding financial and business trends used in assessing our financial condition and results of operations.

Non-GAAP financial measures assist investors with analyzing our business results as well as with predicting future performance. In addition, these non-GAAP financial measures are also reviewed by management in order to evaluate the financial performance of each segment. Presentation of these non-GAAP financial measures helps investors and management to assess the operating performance of the Company.

As a result, one should not consider these measures in isolation or as a substitute for our results reported under GAAP. We compensate for these limitations by analyzing results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to non-GAAP results.

Table 1

INGERSOLL-RAND PLC

Condensed Consolidated Income Statement

(In millions, except per share amounts)

UNAUDITED

For the quarter

For the nine months

ended September 30,

ended September 30,

2019

2018

2019

2018

Net revenues

$

4,344.3

$

4,030.9

$

12,448.0

$

11,773.1

Cost of goods sold

(2,935.8

)

(2,718.3

)

(8,547.2

)

(8,102.6

)

Selling and administrative expenses

(785.3

)

(725.6

)

(2,308.6

)

(2,199.8

)

Operating income

623.2

587.0

1,592.2

1,470.7

Interest expense

(64.1

)

(48.5

)

(179.7

)

(171.7

)

Other income/(expense), net

(7.2

)

(8.5

)

(22.6

)

(16.0

)

Earnings before income taxes

551.9

530.0

1,389.9

1,283.0

Benefit (provision) for income taxes

(112.9

)

1.1

(279.2

)

(159.9

)

Earnings from continuing operations

439.0

531.1

1,110.7

1,123.1

Discontinued operations, net of tax

24.4

(11.7

)

16.7

(27.0

)

Net earnings

463.4

519.4

1,127.4

1,096.1

Less: Net earnings attributable to noncontrolling interests

(4.6

)

(4.3

)

(12.6

)

(12.5

)

Net earnings attributable to Ingersoll-Rand plc

$

458.8

$

515.1

$

1,114.8

$

1,083.6

Amounts attributable to Ingersoll-Rand plc

ordinary shareholders:

Continuing operations

$

434.4

$

526.8

$

1,098.1

$

1,110.6

Discontinued operations

24.4

(11.7

)

16.7

(27.0

)

Net earnings

$

458.8

$

515.1

$

1,114.8

$

1,083.6

Diluted earnings (loss) per share attributable to

Ingersoll-Rand plc ordinary shareholders:

Continuing operations

$

1.78

$

2.11

$

4.48

$

4.43

Discontinued operations

0.10

(0.05

)

0.07

(0.11

)

Net earnings

$

1.88

$

2.06

$

4.55

$

4.32

Weighted-average number of common shares outstanding:

Diluted

244.6

249.5

244.8

250.9

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 2

INGERSOLL-RAND PLC

Business Review

(In millions, except percentages)

UNAUDITED

For the quarter

For the nine months

ended September 30,

ended September 30,

2019

2018

2019

2018

Climate

Net revenues

$

3,470.9

$

3,238.7

$

9,892.2

$

9,342.3

Segment operating income *

583.5

535.6

1,510.1

1,378.7

and as a % of Net revenues

16.8

%

16.5

%

15.3

%

14.8

%

Industrial

Net revenues

873.4

792.2

2,555.8

2,430.8

Segment operating income *

116.3

110.7

310.3

291.8

and as a % of Net revenues

13.3

%

14.0

%

12.1

%

12.0

%

Unallocated corporate expense

(76.6

)

(59.3

)

(228.2

)

(199.8

)

Total

Net revenues

$

4,344.3

$

4,030.9

$

12,448.0

$

11,773.1

Consolidated operating income

623.2

587.0

$

1,592.2

$

1,470.7

and as a % of Net revenues

14.3

%

14.6

%

12.8

%

12.5

%

* Segment operating income is the measure of profit and loss that the Company uses to evaluate the financial performance of the business and as the basis for performance reviews,

compensation and resource allocation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss.

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 3

INGERSOLL-RAND PLC

Reconciliation of GAAP to non-GAAP

(In millions, except per share amounts)

UNAUDITED

For the quarter ended September 30, 2019

For the nine months ended September 30, 2019

As

As

As

As

Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted

Net revenues

$

4,344.3

$

—

$

4,344.3

$

12,448.0

$

—

$

12,448.0

Operating income

623.2

61.2

(a,b,c,d)

684.4

1,592.2

139.8

(a,b,c,d)

1,732.0

Operating margin

14.3

%

15.8

%

12.8

%

13.9

%

Earnings from continuing operations before income taxes

551.9

61.2

(a,b,c,d)

613.1

1,389.9

139.8

(a,b,c,d)

1,529.7

Provision for income taxes

(112.9

)

(7.9

)

(e)

(120.8

)

(279.2

)

(19.2

)

(e)

(298.4

)

Tax rate

20.5

%

19.7

%

20.1

%

19.5

%

Earnings from continuing operations attributable to Ingersoll-Rand plc

$

434.4

$

53.3

(f)

$

487.7

$

1,098.1

$

120.6

(f)

$

1,218.7

Diluted earnings per common share

Continuing operations

$

1.78

$

0.21

$

1.99

$

4.48

$

0.50

$

4.98

Weighted-average number of common shares outstanding:

Diluted

244.6

—

244.6

244.8

—

244.8

Detail of Adjustments:

(a)

Restructuring costs

$

24.5

$

68.0

(b)

PFS acquisition-related transaction costs

0.5

12.7

(c)

PFS inventory step-up and backlog amortization

7.2

14.0

(d)

Industrial Segment separation-related costs

29.0

45.1

(e)

Tax impact of adjustments (a,b,c,d)

(7.9

)

(19.2

)

(f)

Impact of adjustments on earnings from continuing operations attributable to Ingersoll-Rand plc

$

53.3

$

120.6

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 4

INGERSOLL-RAND PLC

Reconciliation of GAAP to non-GAAP

(In millions, except per share amounts)

UNAUDITED

For the quarter ended September 30, 2018

For the nine months ended September 30, 2018

As

As

As

As

Reported

Adjustments

Adjusted

Reported

Adjustments

Adjusted

Net revenues

$

4,030.9

$

—

$

4,030.9

$

11,773.1

$

—

$

11,773.1

Operating income

587.0

20.1

(a)

607.1

1,470.7

71.6

(a)

1,542.3

Operating margin

14.6

%

15.1

%

12.5

%

13.1

%

Earnings from continuing operations before income taxes

530.0

20.1

(a,b)

550.1

1,283.0

88.2

(a,b)

1,371.2

Benefit (provision) for income taxes

1.1

(109.4

)

(c,d,e)

(108.3

)

(159.9

)

(121.4

)

(c,d,e)

(281.3

)

Tax rate

(0.2

)%

19.7

%

12.5

%

20.5

%

Earnings from continuing operations attributable to Ingersoll-Rand plc

$

526.8

$

(89.3

)

(f)

$

437.5

$

1,110.6

$

(33.2

)

(f)

$

1,077.4

Diluted earnings per common share

Continuing operations

$

2.11

$

(0.36

)

$

1.75

$

4.43

$

(0.14

)

$

4.29

Weighted-average number of common shares outstanding:

Diluted

249.5

—

249.5

250.9

—

250.9

Detail of Adjustments:

(a)

Restructuring costs

$

20.1

$

71.6

(b)

Debt redemption premium and related charges

—

16.6

(c)

Tax impact of adjustments (a,b)

(3.8

)

(17.4

)

(d)

Tax Reform non-cash measurement period adjustments

(77.1

)

(75.5

)

(e)

U.S. discrete non-cash tax adjustment

(28.5

)

(28.5

)

(f)

Impact of adjustments on earnings from continuing operations attributable to Ingersoll-Rand plc

$

(89.3

)

$

(33.2

)

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 5

INGERSOLL-RAND PLC

Reconciliation of GAAP to non-GAAP

(In millions)

UNAUDITED

For the quarter ended September 30, 2019

For the quarter ended September 30, 2018

As Reported

Margin

As Reported

Margin

Climate

Net revenues

$

3,470.9

$

3,238.7

Segment operating income

$

583.5

16.8

%

$

535.6

16.5

%

Restructuring

16.6

0.5

%

14.9

0.5

%

Adjusted operating income *

600.1

17.3

%

550.5

17.0

%

Depreciation and amortization

65.0

1.9

%

62.2

1.9

%

Other income/(expense), net

(6.4

)

(0.2

)%

(6.6

)

(0.2

)%

Adjusted EBITDA *

$

658.7

19.0

%

$

606.1

18.7

%

Industrial

Net revenues

$

873.4

$

792.2

Segment operating income

$

116.3

13.3

%

$

110.7

14.0

%

Restructuring/Other **

15.1

1.7

%

4.8

0.6

%

Adjusted operating income

131.4

15.0

%

115.5

14.6

%

Depreciation and amortization ***

27.8

3.2

%

19.8

2.5

%

Other income/(expense), net

(2.6

)

(0.3

)%

(2.0

)

(0.3

)%

Adjusted EBITDA

$

156.6

17.9

%

$

133.3

16.8

%

Corporate

Unallocated corporate expense

$

(76.6

)

$

(59.3

)

Restructuring/Other **

29.5

0.4

Adjusted corporate expense

(47.1

)

(58.9

)

Depreciation and amortization

7.7

6.7

Other income/(expense), net

1.8

0.1

Adjusted EBITDA

$

(37.6

)

$

(52.1

)

Total Company

Net revenues

$

4,344.3

$

4,030.9

Operating income

$

623.2

14.3

%

$

587.0

14.6

%

Restructuring/Other **

61.2

1.5

%

20.1

0.5

%

Adjusted operating income

684.4

15.8

%

607.1

15.1

%

Depreciation and amortization ***

100.5

2.3

%

88.7

2.2

%

Other income/(expense), net

(7.2

)

(0.2

)%

(8.5

)

(0.2

)%

Adjusted EBITDA

$

777.7

17.9

%

$

687.3

17.1

%

*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions.

**Other within Industrial includes PFS inventory step-up and backlog amortization. Other within Corporate includes PFS acquisition-related transaction costs and Industrial Segment separation-related costs.

***Depreciation and amortization excludes PFS backlog amortization of $4.4 million which has been accounted for in the Restructuring/Other line.

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 6

INGERSOLL-RAND PLC

Reconciliation of GAAP to non-GAAP

(In millions)

UNAUDITED

For the quarter

ended September 30,

2019

2018

Total Company

Adjusted EBITDA *

$

777.7

$

687.3

Less: items to reconcile adjusted EBITDA to net earnings attributable to Ingersoll-Rand plc

Depreciation and amortization ***

(100.5

)

(88.7

)

Interest expense

(64.1

)

(48.5

)

Benefit (provision) for income taxes

(112.9

)

1.1

Restructuring

(24.5

)

(20.1

)

PFS acquisition-related transaction costs

(0.5

)

—

PFS inventory step-up and backlog amortization

(7.2

)

—

Industrial Segment separation-related costs

(29.0

)

—

Discontinued operations, net of tax

24.4

(11.7

)

Net earnings attributable to noncontrolling interests

(4.6

)

(4.3

)

Net earnings attributable to Ingersoll-Rand plc

$

458.8

$

515.1

*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions.

***Depreciation and amortization excludes PFS backlog amortization of $4.4 million which has been accounted for in the PFS inventory step-up and backlog amortization line.

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 7

INGERSOLL-RAND PLC

Condensed Consolidated Balance Sheets

(In millions)

September 30,

December 31,

2019

2018

ASSETS

UNAUDITED

Cash and cash equivalents

$

830.9

$

903.4

Accounts and notes receivable, net

2,968.9

2,679.2

Inventories

1,890.6

1,677.8

Other current assets

412.7

471.6

Total current assets

6,103.1

5,732.0

Property, plant and equipment, net

1,779.1

1,730.8

Goodwill

6,712.8

5,959.5

Intangible assets, net

4,174.4

3,634.7

Other noncurrent assets

1,537.5

857.9

Total assets

$

20,306.9

$

17,914.9

LIABILITIES AND EQUITY

Accounts payable

$

1,758.8

$

1,705.3

Accrued expenses and other current liabilities

2,366.8

2,259.8

Short-term borrowings and current maturities of long-term debt

650.5

350.6

Total current liabilities

4,776.1

4,315.7

Long-term debt

4,921.9

3,740.7

Other noncurrent liabilities

3,329.8

2,793.7

Shareholders' equity

7,279.1

7,064.8

Total liabilities and equity

$

20,306.9

$

17,914.9

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 8

INGERSOLL-RAND PLC

Condensed Consolidated Statement of Cash Flows

(In millions)

UNAUDITED

For nine months

ended September 30,

2019

2018

Operating Activities

Earnings from continuing operations

$

1,110.7

$

1,123.1

Depreciation and amortization

291.8

273.0

Changes in assets and liabilities and other non-cash items

(312.7

)

(449.7

)

Net cash provided by (used in) continuing operating activities

1,089.8

946.4

Net cash provided by (used in) discontinued operating activities

(36.7

)

(49.0

)

Net cash provided by (used in) operating activities

1,053.1

897.4

Investing Activities

Capital expenditures

(186.2

)

(251.2

)

Acquisition and equity method investments, net of cash acquired, and other

(1,527.8

)

(269.4

)

Net cash provided by (used in) investing activities

(1,714.0

)

(520.6

)

Financing Activities

Short-term borrowings, net

—

(6.4

)

Long-term borrowings, net of payments

1,490.4

24.1

Dividends paid to ordinary shareholders

(383.1

)

(351.2

)

Repurchase of ordinary shares

(500.1

)

(514.1

)

Other financing activities, net

7.4

(21.3

)

Net cash provided by (used in) financing activities

614.6

(868.9

)

Effect of exchange rate changes on cash and cash equivalents

(26.2

)

(34.8

)

Net increase (decrease) in cash and cash equivalents

(72.5

)

(526.9

)

Cash and cash equivalents - beginning of period

903.4

1,549.4

Cash and cash equivalents - end of period

$

830.9

$

1,022.5

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Table 9

INGERSOLL-RAND PLC

Balance Sheet Metrics and Free Cash Flow

($ in millions)

UNAUDITED

September 30,

September 30,

December 31,

2019

2018

2018

Net Receivables

$

2,969

$

2,752

$

2,679

Days Sales Outstanding

62.4

62.3

62.8

Net Inventory

$

1,891

$

1,821

$

1,678

Inventory Turns

6.2

6.0

6.5

Accounts Payable

$

1,759

$

1,749

$

1,705

Days Payable Outstanding

54.7

58.7

56.7

-------------------------------------------------------------------------------------------------------------------------------------------------------

Nine months ended

Nine months ended

September 30, 2019

September 30, 2018

Cash flow provided by continuing operating activities

$

1,089.8

$

946.4

Capital expenditures

(186.2

)

(251.2

)

Cash payments for PFS acquisition-related transaction costs

12.2

—

Cash payments for Industrial Segment separation-related costs

15.3

—

Cash payments for restructuring

61.6

28.7

Free cash flow *

$

992.7

$

723.9

*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions.

SEE ATTACHED RELEASE FOR ADDITIONAL INFORMATION

Media:

Perri Richman

732-319-1024, [email protected]

Investors:

Zac Nagle

704-990-3913, [email protected]

Source: Ingersoll-Rand plc

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