10-Q

FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-985

INGERSOLL-RAND COMPANY LIMITED

(Exact name of registrant as specified in its charter)

Bermuda (State or other jurisdiction of incorporation or organization)	75-2993910 (I.R.S. Employer Identification No.)
Clarendon House 2 Church Street Hamilton HM 11, Bermuda (Address of principal executive offices)

(441) 295-2838

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Exchange Act). Yes x  No o

The number of Class A common shares outstanding as of July 29, 2005 was 168,657,230.

INGERSOLL-RAND COMPANY LIMITED
FORM 10-Q
INDEX
PART I	FINANCIAL INFORMATION
	Item 1 - Financial Statements
	Condensed Consolidated Income Statement for the three and six months ended
	June 30, 2005 and 2004
	Condensed Consolidated Balance Sheet at June 30, 2005 and December 31,
	2004
	Condensed Consolidated Statement of Cash Flows for the six months
	ended June 30, 2005 and 2004
	Notes to Condensed Consolidated Financial Statements
	Item 2 - Management's Discussion and Analysis of Financial Condition
	and Results of Operations
	Item 3 - Quantitative and Qualitative Disclosures about Market Risk
	Item 4 - Controls and Procedures
PART II	OTHER INFORMATION
	Item 1 - Legal Proceedings
	Item 2 - Unregistered Sales of Securities and Use of Proceeds
	Item 4 - Submission of Matters to a Vote of Security Holders
	Item 6 - Exhibits
SIGNATURES
CERTIFICATIONS

2

Part I - FINANCIAL INFORMATION

Item 1 - Financial Statements

INGERSOLL-RAND COMPANY LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENT
	Three months ended						Six months ended
	June 30,						June 30,
In millions, except per share amounts	2005			2004			2005			2004
Net revenues	$	2,759.5		$	2,444.4		$	5,218.3		$	4,566.6
Cost of goods sold		2,019.1			1,783.0			3,829.8			3,337.6
Selling and administrative expenses		361.3			342.7			712.5			684.9
Operating income		379.1			318.7			676.0			544.1
Interest expense		(37.7	)		(39.7	)		(74.2	)		(80.4	)
Other income (expense), net		10.2			(1.5	)		17.4			(4.9	)
Earnings before income taxes		351.6			277.5			619.2			458.8
Provision for income taxes		59.8			38.3			95.1			56.9
Earnings from continuing operations		291.8			239.2			524.1			401.9
Discontinued operations, net of tax		(6.4	)		47.0			(15.6	)		63.8
Net earnings	$	285.4		$	286.2		$	508.5		$	465.7
Basic earnings per common share:
Earnings from continuing operations	$	1.72		$	1.38		$	3.07		$	2.31
Discontinued operations, net of tax		(0.03	)		0.27			(0.09	)		0.37
Net earnings	$	1.69		$	1.65		$	2.98		$	2.68
Diluted earnings per common share:
Earnings from continuing operations	$	1.71		$	1.36		$	3.03		$	2.28
Discontinued operations, net of tax		(0.04	)		0.27			(0.09	)		0.36
Net earnings	$	1.67		$	1.63		$	2.94		$	2.64
Dividends per common share	$	0.25		$	0.19		$	0.50		$	0.38

See accompanying notes to condensed consolidated financial statements.

3

INGERSOLL-RAND COMPANY LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET
In millions	June 30, 2005			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	915.6		$	1,703.7
Accounts and notes receivable, net		1,786.1			1,498.4
Inventories		1,210.8			1,058.8
Prepaid expenses and deferred income taxes		360.2			348.8
Total current assets		4,272.7			4,609.7
Property, plant and equipment, net		1,073.0			1,013.2
Goodwill		4,464.3			4,211.0
Intangible assets, net		792.5			618.2
Other assets		950.3			962.5
Total assets	$	11,552.8		$	11,414.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	772.7		$	684.0
Accrued expenses and other current liabilities		1,076.2			1,146.6
Accrued compensation and benefits		364.8			433.5
Current maturities of long-term debt and loans payable		983.9			612.8
Total current liabilities		3,197.6			2,876.9
Long-term debt		1,189.7			1,267.6
Postemployment and other benefit liabilities		1,036.3			1,018.1
Other noncurrent liabilities		570.9			518.2
Total liabilities		5,994.5			5,680.8
Shareholders' equity:
Class A common shares		168.6			173.1
Other shareholders' equity		5,539.8			5,497.9
Accumulated other comprehensive income		(150.1	)		62.8
Total shareholders' equity		5,558.3			5,733.8
Total liabilities and shareholders' equity	$	11,552.8		$	11,414.6

See accompanying notes to condensed consolidated financial statements.

4

INGERSOLL-RAND COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
	Six months ended June 30,
In millions	2005			2004
Cash flows from operating activities:
Earnings from continuing operations		524.1			401.9
Adjustments to arrive at net cash used in operating activities:
Depreciation and amortization		98.0			87.0
Changes in other assets and liabilities, net		(451.9	)		(271.2	)
Other, net		(45.8	)		33.3
Net cash provided by operating activities		124.4			251.0
Cash flows from investing activities:
Capital expenditures		(58.2	)		(43.8	)
Acquisitions, net of cash		(412.0	)		(21.2	)
Proceeds from business disposition		3.7			196.5
Proceeds from sale of property, plant and equipment		9.0			27.2
Other, net		4.5			2.3
Net cash (used in) provided by investing activities		(453.0	)		161.0
Cash flows from financing activities:
Decrease in short-term borrowings		(21.9	)		(6.1	)
Proceeds from long-term debt		300.4			1.1
Payments of long-term debt		(151.2	)		(252.0	)
Net change in debt		127.3			(257.0	)
Dividends paid		(85.3	)		(66.1	)
Proceeds from exercise of stock options		69.5			90.9
Redemption of preferred stock of subsidiary		(63.3	)		-
Purchase of treasury shares		(478.6	)		(215.8	)
Net cash used in financing activities		(430.4	)		(448.0	)
Net cash used in discontinued operations		(17.9	)		(5.1	)
Effect of exchange rate changes on cash and cash equivalents		(11.2	)		(1.9	)
Effect of change in fiscal year end of business		-			(23.8	)
Net decrease in cash and cash equivalents		(788.1	)		(66.8	)
Cash and cash equivalents - beginning of period		1,703.7			417.2
Cash and cash equivalents - end of period	$	915.6		$	350.4

See accompanying notes to condensed consolidated financial statements.

5

INGERSOLL-RAND COMPANY LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, which include normal recurring adjustments, necessary to present fairly the consolidated unaudited financial position, results of operations and cash flows for all periods presented.

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Ingersoll-Rand Company Limited (the Company or IR-Limited) Annual Report on Form 10-K for the year ended December 31, 2004. The accompanying condensed consolidated financial statements restate the three and six months ended June 30, 2004, previously presented in order to report the Company’s Dresser-Rand business unit as discontinued operations.

Note 2 - Incentive Stock Plans

Under the Company’s incentive stock plans, approved in 1995 and 1998, key employees have been granted options to purchase Class A common shares. The Company continues to account for these plans under the recognition and measurement principles of APB No. 25, “Accounting for Stock Issued to Employees.” Accordingly, no compensation expense is recognized for employee stock options since options granted are at prices not less than fair market value at the date of grant. The plans also authorize stock appreciation rights and stock awards, which result in compensation expense. Additionally, the Company maintains a shareholder-approved Management Incentive Unit Award Plan, which results in compensation expense. Compensation expense is recognized as a result of vesting and the Company’s Class A common share price. Fluctuations in the Company’s Class A common share price increase or decrease compensation expense.

The following table is presented in accordance with Statement of Financial Accounting Standard (SFAS) No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure” and illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation:

6

	Three months					Six months
	ended June 30,					ended June 30,
In millions, except per share amounts	2005			2004		2005			2004
Net earnings, as reported	$	285.4		$	286.2	$	508.5		$	465.7
Add (Deduct): Stock-based employee compensation
(income) expense included in reported net
income, net of tax		(4.4	)		0.7		(7.2	)		11.0
Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of tax		4.0			7.8		8.6			24.0
Pro forma net earnings	$	277.0		$	279.1	$	492.7		$	452.7
Basic earnings per share:
As reported	$	1.69		$	1.65	$	2.98		$	2.68
Pro forma		1.64			1.61		2.88			2.60
Diluted earnings per share:
As reported	$	1.67		$	1.63	$	2.94		$	2.64
Pro forma		1.62			1.59		2.85			2.56

Note 3 - Inventories

Inventories are stated at cost, which is not in excess of market. Most U.S. manufactured inventories, excluding the Climate Control Technologies segment, are valued on the last-in, first-out (LIFO) method. All other inventories are valued using the first-in, first-out (FIFO) method. The composition of inventories is as follows:

In millions	June 30, 2005		December 31, 2004
Raw materials and supplies	$	422.2	$	359.4
Work-in-process		223.9		190.1
Finished goods		668.8		612.3
		1,314.9		1,161.8
Less - LIFO reserve		104.1		103.0
Total	$	1,210.8	$	1,058.8

Note 4 - Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the six months ended June 30, 2005, is as follows:

	Climate			Compact
	Control			Vehicle			Construction			Industrial			Security
In millions	Technologies			Technologies			Technologies			Technologies			Technologies			Total
Balance at December 31, 2004	$	2,618.7		$	801.4		$	101.3		$	119.4		$	570.2		$	4,211.0
Acquisitions		0.6			1.1			14.0			20.9			340.5			377.1
Translation adjustments		(60.8	)		(3.5	)		(1.2	)		(4.4	)		(53.9	)		(123.8	)
Balance at June 30, 2005	$	2,558.5		$	799.0		$	114.1		$	135.9		$	856.8		$	4,464.3

7

In January 2005, the Company acquired the remaining 70% interest in CISA, S.p.A. for $267.3 million in cash and the assumption of $244.4 million of debt. The Company is commencing its acquisition integration plan, which will include such actions as facility closures and severance that will result in recording additional goodwill. This plan will be finalized during the third quarter of 2005. Additionally, the Company may record adjustments to goodwill from the finalization of estimates.

The following table sets forth the gross amount and accumulated amortization of the Company’s intangible assets:

	June 30, 2005				December 31, 2004
	Gross		Accumulated		Gross		Accumulated
In millions	amount		amortization		amount		amortization
Customer relationships	$	476.8	$	51.2	$	384.9	$	44.5
Software		146.4		73.9		141.6		61.3
Trademarks		93.0		3.3		12.1		6.5
Other		87.6		38.1		71.6		35.1
Total amortizable intangible assets		803.8		166.5		610.2		147.4
Total indefinite lived intangible assets - trademarks		155.2		-		155.4		-
Total	$	959.0	$	166.5	$	765.6	$	147.4

Intangible asset amortization expense for the three months ended June 30, 2005 and 2004 was $14.8 million and $7.4 million, respectively. Intangible asset amortization expense for the six months ended June 30, 2005 and 2004 was $26.6 million and $16.7 million, respectively. Estimated intangible asset amortization expense for each of the next five fiscal years is expected to be $48.9 million in 2006, $34.7 million in 2007, $29.3 million in 2008, $25.8 million in 2009, and $23.6 million in 2010.

Note 5 - Weighted-Average Common Shares

Information on basic and diluted shares is as follows:

	Three months ended				Six months ended
	June 30,				June 30,
In millions	2005		2004		2005		2004
Weighted-average number of basic shares		169.3		173.1		170.8		173.8
Shares issuable under incentive stock plans		1.8		2.2		2.0		2.3
Weighted-average number of diluted shares		171.1		175.3		172.8		176.1

Diluted earnings per share computations for the three months ended June 30, 2005 and 2004 excluded the weighted-average effect of the assumed exercise of approximately 2.9 million and 0.1 million shares issuable under stock benefit plans, respectively. Excluded for the six months ended June 30, 2004 were 0.1 million shares. These shares were excluded because the effect on the computation of earnings per share would be anti-dilutive.

Note 6 - Comprehensive Income

The components of comprehensive income are as follows:

8

	Three months ended						Six months ended
	June 30,						June 30,
In millions	2005			2004			2005			2004
Net earnings	$	285.4		$	286.2		$	508.5		$	465.7
Other comprehensive income:
Foreign currency translation adjustment		(128.3	)		(21.1	)		(219.0	)		(26.3	)
Change in fair value of derivatives qualifying
as cash flow hedges, net of tax		0.5			1.7			6.1			12.4
Comprehensive income	$	157.6		$	266.8		$	295.6		$	451.8

Included in accumulated other comprehensive income at June 30, 2005, is a $2.5 million gain related to the fair value of foreign currency derivatives qualifying as cash flow hedges, all of which is expected to be reclassified to earnings over the twelve-month period ending June 30, 2006. Additionally, an $8.6 million loss, related to an interest rate derivative qualified as a cash flow hedge of the forecasted issuance of debt, is included in accumulated other comprehensive income at June 30, 2005. During the next twelve months, $0.9 million is expected to be reclassified to earnings, with the total being reclassified over the next 10 years. The actual amounts that will be reclassified to earnings over the next twelve months may vary from these amounts as a result of changes in market conditions. No amounts were reclassified to earnings during the quarter in connection with forecasted transactions that were no longer considered probable of occurring.

Note 7- Commitments and Contingencies

The Company is involved in various litigations, claims and administrative proceedings, including environmental and product liability matters. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that the liability, which may result from these legal matters, would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

In assessing its potential environmental liability, the Company bases its estimates on current laws and regulations and current remediation technologies. The Company does not discount its liability or assume any insurance recoveries.

Ingersoll-Rand Company (IR-New Jersey), a Company subsidiary, is a defendant in numerous asbestos-related lawsuits in state and federal courts. In virtually all of the suits a large number of other companies have also been named as defendants. The claims against IR-New Jersey generally allege injury caused by exposure to asbestos contained in certain of IR-New Jersey’s products. Although IR-New Jersey was neither a producer nor a manufacturer of asbestos, some of its formerly manufactured products utilized asbestos-containing components, such as gaskets, purchased from third-party suppliers.

All claims resolved to date have been dismissed or settled. For the six months ended June 30, 2005, total costs for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $7.7 million as compared to $7.9 million for the six months ended June 30, 2004. The Company performs a thorough analysis, updated periodically, of its actual and potential asbestos liabilities projected seven years in the future. Based upon such analysis, the Company believes that its reserves and insurance are adequate to cover its asbestos liabilities, and that these liabilities are not likely to have a material effect on its financial position, results of operations, liquidity or cash flows.

9

Legislation currently under consideration in Congress concerns pending and future asbestos-related personal injury claims. It is uncertain what effect, if any, passage of such legislation would have upon the Company’s financial position, results of operations or cash flows.

The Company sells product on a continuous basis under various arrangements through institutions that provide leasing and product financing alternatives to retail and wholesale customers. Under these arrangements, the Company is contingently liable for loan guarantees and residual values of equipment of approximately $5.7 million, including consideration of ultimate net loss provisions. The risk of loss to the Company is minimal, and historically, only immaterial losses have been incurred relating to these arrangements since the fair value of the underlying equipment that serves as collateral is generally in excess of the contingent liability. Management believes these guarantees will not adversely affect the condensed consolidated financial statements.

The Company has remained contingently liable for approximately $25.7 million relating to performance bonds associated with prior sale of products of IDP, which the Company divested in 2000. The acquirer of IDP is the primary obligor under these performance bonds. However, should the acquirer default under these arrangements the Company would be required to satisfy these financial obligations. The Company estimates that $11.9 million of the obligation will expire during the second half of 2005. The remainder extends through 2008.

The Company is contingently liable for customs duties in certain non-U.S. countries which totaled $6.7 million at June 30, 2005. These amounts are not accrued as the Company intends on exporting the product to another country for final sale.

In connection with the disposition of certain businesses and facilities, the Company has indemnified the purchasers for the expected cost of remediation of environmental contamination, if any, existing on the date of disposition. Such expected costs are accrued when environmental assessments are made or remedial efforts are probable and the costs can be reasonably estimated.

The following table represents the changes in the product warranty liability for the six months ended June 30, 2005:

In millions
Beginning balance	$	190.5
Reductions for payments		(45.2	)
Accruals for warranties issued during the period		39.4
Changes to accruals related to preexisting warranties		4.3
Acquisitions		0.5
Translation		(4.0	)
Ending balance	$	185.5

Note 8 - Postretirement Benefits Other Than Pensions

The Company sponsors several postretirement plans that cover certain eligible employees. These plans provide for health care benefits, and in some instances, life insurance benefits. Postretirement health plans generally are contributory and contributions are adjusted annually. Life insurance plans for retirees are primarily noncontributory. The Company funds the postretirement benefit costs principally on a pay-as-you-go basis. The components of net periodic postretirement benefits cost for the three and six months ended June 30, were as follows:

10

	Three months ended				Six months ended
	June 30,				June 30,
In millions	2005		2004		2005		2004
Service cost	$	2.5	$	2.6	$	4.9	$	5.3
Interest cost		13.5		14.1		27.0		29.0
Net amortization and deferral losses		2.6		2.2		5.1		5.9
Net postretirement benefit expense	$	18.6	$	18.9	$	37.0	$	40.2

Note 9 - Pension Plans

The Company has noncontributory pension plans covering substantially all U.S. employees. In addition, certain non-U.S. employees in other countries are covered by pension plans. The Company’s pension plans for U.S. non-collectively bargained employees provide benefits on a modest final average pay formula. The Company’s U.S. collectively bargained pension plans principally provide benefits based on a flat benefit formula. Non-U.S. plans provide benefits based on an earnings formula and years of service. In addition, the Company maintains other supplemental benefit plans for officers and other key employees. The components of the Company’s pension related costs for the three and six months ended June 30, include the following:

	June 30,						June 30,
In millions	2005			2004			2005			2004
Service cost	$	13.3		$	12.7		$	26.0		$	26.3
Interest cost		40.3			44.9			80.4			89.9
Expected return on plan assets		(53.0	)		(56.0	)		(107.6	)		(111.9	)
Net amortization of unrecognized:
Prior service costs		2.0			2.1			4.2			4.3
Transition amount		0.3			0.2			0.5			0.4
Plan net losses		6.2			5.5			11.1			10.9
Net pension cost		9.1			9.4			14.6			19.9
Curtailment/settlement losses		-			0.6			2.1			0.6
Net pension cost after curtailments/settlements	$	9.1		$	10.0		$	16.7		$	20.5

A settlement loss was recorded in the first quarter of 2005 as a result of lump sum distributions under supplemental benefit plans for officers and other key employees. The curtailment loss in the second quarter of 2004 relates to a non-U.S. location included in the sale of Drilling Solutions.

The Company made required contributions of $15.9 million to its pension plans during the six months ended June 30, 2005. The Company contributed $17.0 million in required contributions and $40.0 million in discretionary contributions to its pension plans during the six months ended June 30, 2004.

Note 10 - Business Segment Information

During the first quarter of 2005, the Company realigned its internal organization and operating segments to reflect its diversified structure and to promote greater transparency of results. The former Infrastructure segment has been disaggregated into two segments - the Compact Vehicle Technologies segment (formerly named the Bobcat and Club Car segment in the first quarter) and the Construction Technologies segment. Dresser-Rand (formerly its own reportable segment), which was sold in 2004, is now shown in discontinued operations. The prior year segment results have been presented to conform to these changes.

11

A summary of operations by reportable segment is as follow:

	Three months ended						Six months ended
	June 30,						June 30,
In millions	2005			2004			2005			2004
Net revenues
Climate Control Technologies	$	728.0		$	727.3		$	1,367.4		$	1,364.8
Compact Vehicle Technologies		726.7			604.1			1,387.3			1,110.6
Construction Technologies		343.1			282.4			612.6			502.5
Industrial Technologies		432.2			388.0			835.7			731.4
Security Technologies		529.5			442.6			1,015.3			857.3
Total	$	2,759.5		$	2,444.4		$	5,218.3		$	4,566.6
Operating income (loss)
Climate Control Technologies	$	83.7		$	91.5		$	143.9		$	149.5
Compact Vehicle Technologies		117.2			98.6			225.7			171.7
Construction Technologies		41.8			37.1			67.5			55.6
Industrial Technologies		59.1			43.3			106.4			77.1
Security Technologies		94.9			62.6			163.9			134.7
Unallocated corporate expense		(17.6	)		(14.4	)		(31.4	)		(44.5	)
Total	$	379.1		$	318.7		$	676.0		$	544.1

No significant changes in long-lived assets by geographic area have occurred since December 31, 2004.

Note 11 - IR New Jersey

IR-Limited has guaranteed all of the issued public debt securities of a wholly owned subsidiary, IR-New Jersey, while certain debt of IR-Limited is guaranteed by IR-New Jersey. The guarantees are full and unconditional, and no other subsidiary of the Company guarantees the securities. The following condensed consolidated financial information for IR-Limited, IR-New Jersey, and all their other subsidiaries is included so that separate financial statements of IR-New Jersey are not required to be filed with the U.S. Securities and Exchange Commission.

The condensed consolidating financial statements present IR-Limited and IR-New Jersey investments in their subsidiaries using the equity method of accounting. Intercompany investments in the non-voting Class B common shares are accounted for on the cost method and are reduced by intercompany dividends.

12

Condensed Consolidating Income Statement
For the three months ended June 30, 2005
	IR-			IR-			Other			Consolidating			IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments			Consolidated
Net revenues	$	-		$	440.5		$	2,319.0		$	-		$	2,759.5
Cost of goods sold		-			334.5			1,684.6			-			2,019.1
Selling and administrative expenses		-			76.5			284.8			-			361.3
Operating income		-			29.5			349.6			-			379.1
Equity earnings in affiliates (net of tax)		289.9			158.8			98.0			(546.7	)		-
Interest expense		(1.9	)		(26.6	)		(9.2	)		-			(37.7	)
Intercompany interest and fees		(2.3	)		(93.6	)		95.9			-			-
Other income (expense), net		(0.3	)		7.7			2.8			-			10.2
Earnings before income taxes		285.4			75.8			537.1			(546.7	)		351.6
(Benefit) provision for income taxes		-			(26.0	)		85.8			-			59.8
Earnings (loss) from continuing operations		285.4			101.8			451.3			(546.7	)		291.8
Discontinued operations, net of tax		-			(4.0	)		(2.4	)		-			(6.4	)
Net earnings	$	285.4		$	97.8		$	448.9		$	(546.7	)	$	285.4

Condensed Consolidating Income Statement
For the six months ended June 30, 2005
	IR-			IR-			Other			Consolidating			IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments			Consolidated
Net revenues	$	-		$	811.0		$	4,407.3		$	-		$	5,218.3
Cost of goods sold		-			628.0			3,201.8			-			3,829.8
Selling and administrative expenses		-			151.2			561.3			-			712.5
Operating income		-			31.8			644.2			-			676.0
Equity earnings in affiliates (net of tax)		530.2			275.2			138.1			(943.5	)		-
Interest expense		(1.9	)		(54.4	)		(17.9	)		-			(74.2	)
Intercompany interest and fees		(20.5	)		(192.0	)		212.5			-			-
Other income (expense), net		0.7			27.7			(11.0	)		-			17.4
Earnings before income taxes		508.5			88.3			965.9			(943.5	)		619.2
(Benefit) provision for income taxes		-			(58.1	)		153.2			-			95.1
Earnings (loss) from continuing operations		508.5			146.4			812.7			(943.5	)		524.1
Discontinued operations, net of tax		-			(8.4	)		(7.2	)		-			(15.6	)
Net earnings	$	508.5		$	138.0		$	805.5		$	(943.5	)	$	508.5

13

Condensed Consolidating Income Statement
For the three months ended June 30, 2004
	IR-			IR-			Other			Consolidating			IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments			Consolidated
Net revenues	$	-		$	362.6		$	2,081.8		$	-		$	2,444.4
Cost of goods sold		-			280.9			1,502.1			-			1,783.0
Selling and administrative expenses		(0.1	)		76.5			266.3			-			342.7
Operating income		0.1			5.2			313.4			-			318.7
Equity earnings in affiliates (net of tax)		288.3			185.2			153.4			(626.9	)		-
Interest expense		(0.2	)		(31.7	)		(7.8	)		-			(39.7	)
Intercompany interest and fees		(1.0	)		(89.4	)		90.4			-			-
Other income (expense), net		(1.0	)		29.5			(30.0	)		-			(1.5	)
Earnings before income taxes		286.2			98.8			519.4			(626.9	)		277.5
(Benefit) provision for income taxes		-			(29.4	)		67.7			-			38.3
Earnings (loss) from continuing operations		286.2			128.2			451.7			(626.9	)		239.2
Discontinued operations, net of tax		-			25.2			21.8			-			47.0
Net earnings	$	286.2		$	153.4		$	473.5		$	(626.9	)	$	286.2

Condensed Consolidating Income Statement
For the six months ended June 30, 2004
	IR-			IR-			Other			Consolidating			IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments			Consolidated
Net revenues	$	-		$	662.6		$	3,904.0		$	-		$	4,566.6
Cost of goods sold		-			520.9			2,816.7			-			3,337.6
Selling and administrative expenses		-			162.7			522.2			-			684.9
Operating income		-			(21.0	)		565.1			-			544.1
Equity earnings in affiliates (net of tax)		471.0			288.9			166.9			(926.8	)		-
Interest expense		(0.2	)		(64.9	)		(15.3	)		-			(80.4	)
Intercompany interest and fees		(2.7	)		(182.2	)		184.9			-			-
Other income (expense), net		(2.4	)		36.0			(38.5	)		-			(4.9	)
Earnings before income taxes		465.7			56.8			863.1			(926.8	)		458.8
(Benefit) provision for income taxes		-			(89.9	)		146.8			-			56.9
Earnings (loss) from continuing operations		465.7			146.7			716.3			(926.8	)		401.9
Discontinued operations, net of tax		-			20.2			43.6			-			63.8
Net earnings	$	465.7		$	166.9		$	759.9		$	(926.8	)	$	465.7

14

Condensed Consolidating Balance Sheet
June 30, 2005
							Other			Consolidating			IR-Limited
In millions	IR-Limited			IR-New Jersey			Subsidiaries			Adjustments			Consolidated
Current assets:
Cash and cash equivalents	$	6.7		$	203.9		$	705.0		$	-		$	915.6
Accounts and notes receivable, net		0.2			344.6			1,441.3			-			1,786.1
Inventories, net		-			203.3			1,007.5			-			1,210.8
Prepaid expenses and deferred income taxes		-			89.5			270.7			-			360.2
Accounts and notes receivable affiliates		50.3			4,196.0			19,213.6			(23,459.9	)		-
Total current assets		57.2			5,037.3			22,638.1			(23,459.9	)		4,272.7
Investment in affiliates		6,736.9			11,165.5			24,129.4			(42,031.8	)		-
Property, plant and equipment, net		-			236.9			836.1			-			1,073.0
Intangible assets, net		-			157.3			5,099.5			-			5,256.8
Other assets		2.0			660.5			287.8			-			950.3
Total assets	$	6,796.1		$	17,257.5		$	52,990.9		$	(65,491.7	)	$	11,552.8
Current liabilities:
Accounts payable and accruals	$	6.1		$	604.2		$	1,603.4		$	-		$	2,213.7
Current maturities of long-term debt and loans payable		-			893.9			90.0			-			983.9
Accounts and note payable affiliates		928.6			5,226.7			17,304.6			(23,459.9	)		-
Total current liabilities		934.7			6,724.8			18,998.0			(23,459.9	)		3,197.6
Long-term debt		298.9			660.6			230.2			-			1,189.7
Notes payable affiliates		-			3,647.4			-			(3,647.4	)		-
Other noncurrent liabilities		4.2			1,119.1			483.9			-			1,607.2
Total liabilities		1,237.8			12,151.9			19,712.1			(27,107.3	)		5,994.5
Shareholders' equity:
Class A common shares		179.9			-			(11.3	)		-			168.6
Class B common shares		135.3			-			-			(135.3	)		-
Common shares		-			-			2,362.8			(2,362.8	)		-
Other shareholders' equity		9,974.7			5,785.8			35,364.2			(45,584.9	)		5,539.8
Accumulated other comprehensive income		171.4			(225.6	)		11.3			(107.2	)		(150.1	)
		10,461.3			5,560.2			37,727.0			(48,190.2	)		5,558.3
Less: Contra account		(4,903.0	)		(454.6	)		(4,448.2	)		9,805.8			-
Total shareholders' equity		5,558.3			5,105.6			33,278.8			(38,384.4	)		5,558.3
Total liabilities and equity	$	6,796.1		$	17,257.5		$	52,990.9		$	(65,491.7	)	$	11,552.8

15

Condensed Consolidating Balance Sheet
December 31, 2004
							Other			Consolidating			IR-Limited
In millions	IR-Limited			IR-New Jersey			Subsidiaries			Adjustments			Consolidated
Current assets:
Cash and cash equivalents	$	236.8		$	844.1		$	622.8		$	-		$	1,703.7
Accounts and notes receivable, net		1.1			265.3			1,232.0			-			1,498.4
Inventories, net		-			152.7			906.1			-			1,058.8
Prepaid expenses and deferred income taxes		0.2			88.9			259.7			-			348.8
Accounts and notes receivable affiliates		51.7			1,757.7			17,064.3			(18,873.7	)		-
Total current assets		289.8			3,108.7			20,084.9			(18,873.7	)		4,609.7
Investment in affiliates		6,759.6			10,938.1			15,773.8			(33,471.5	)		-
Property, plant and equipment, net		-			239.4			773.8			-			1,013.2
Intangible assets, net		-			151.4			4,677.8			-			4,829.2
Other assets		-			649.5			313.0			-			962.5
Total assets	$	7,049.4		$	15,087.1		$	41,623.3		$	(52,345.2	)	$	11,414.6
Current liabilities:
Accounts payable and accruals	$	5.0		$	481.1		$	1,778.0		$	-		$	2,264.1
Current maturities of long-term debt and loans payable		-			546.3			66.5			-			612.8
Accounts and note payable affiliates		1,310.6			3,525.0			14,038.1			(18,873.7	)		-
Total current liabilities		1,315.6			4,552.4			15,882.6			(18,873.7	)		2,876.9
Long-term debt		-			1,048.3			219.3			-			1,267.6
Notes payable affiliates		-			3,647.4			-			(3,647.4	)		-
Other noncurrent liabilities		-			434.5			1,101.8			-			1,536.3
Total liabilities		1,315.6			9,682.6			17,203.7			(22,521.1	)		5,680.8
Shareholders' equity:
Class A common shares		178.4			-			(5.3	)		-			173.1
Class B common shares		135.3			-			-			(135.3	)		-
Common shares		-			-			2,362.8			(2,362.8	)		-
Other shareholders' equity		10,006.3			6,051.6			26,386.6			(36,946.6	)		5,497.9
Accumulated other comprehensive income		384.2			(186.5	)		185.5			(320.4	)		62.8
		10,704.2			5,865.1			28,929.6			(39,765.1	)		5,733.8
Less: Contra account		(4,970.4	)		(460.6	)		(4,510.0	)		9,941.0			-
Total shareholders' equity		5,733.8			5,404.5			24,419.6			(29,824.1	)		5,733.8
Total liabilities and equity	$	7,049.4		$	15,087.1		$	41,623.3		$	(52,345.2	)	$	11,414.6

16

Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2005
	IR-			IR-			Other			Consolidating		IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments		Consolidated
Net cash (used in) provided by operating activities	$	(381.4	)	$	(587.2	)	$	1,093.0		$	-	$	124.4
Cash flows from investing activities:
Capital expenditures		-			(11.1	)		(47.1	)		-		(58.2	)
Acquisitions, net of cash		-			-			(412.0	)		-		(412.0	)
Proceeds from business disposition		-			-			3.7			-		3.7
Proceeds from sale of property, plant and
equipment		-			1.5			7.5			-		9.0
Other, net		-			-			4.5			-		4.5
Net cash used in investing activities		-			(9.6	)		(443.4	)		-		(453.0	)
Cash flows from financing activities:
Net change in debt		298.0			(40.2	)		(130.5	)		-		127.3
Redemption of preferred stock of subsidiary		(63.3	)		-			-			-		(63.3	)
Dividends (paid) received		(152.9	)		5.8			61.8			-		(85.3	)
Proceeds from the exercise of stock options		69.5			-			-			-		69.5
Purchase of treasury shares		-			-			(478.6	)		-		(478.6	)
Net cash (used in) provided by financing activities		151.3			(34.4	)		(547.3	)		-		(430.4	)
Net cash used in discontinued operations		-			(9.0	)		(8.9	)		-		(17.9	)
Effect of exchange rate changes on cash and
cash equivalents		-			-			(11.2	)		-		(11.2	)
Net (decrease) increase in cash and cash equivalents		(230.1	)		(640.2	)		82.2			-		(788.1	)
Cash and cash equivalents - beginning of period		236.8			844.1			622.8			-		1,703.7
Cash and cash equivalents - end of period	$	6.7		$	203.9		$	705.0		$	-	$	915.6

17

Condensed Consolidating Statement of Cash Flows
For the six months ended June 30, 2004
	IR-			IR-			Other			Consolidating		IR-Limited
In millions	Limited			New Jersey			Subsidiaries			Adjustments		Consolidated
Net cash (used in) provided by operating activities	$	(133.5	)	$	145.7		$	238.8		$	-	$	251.0
Cash flows from investing activities:
Capital expenditures		-			(9.7	)		(34.1	)		-		(43.8	)
Acquisitions, net of cash		-			-			(21.2	)		-		(21.2	)
Proceeds from business disposition		-			189.0			7.5			-		196.5
Proceeds from sale of property, plant and
equipment		-			17.7			9.5			-		27.2
Other, net		-			-			2.3			-		2.3
Net cash provided by (used in) investing activities		-			197.0			(36.0	)		-		161.0
Cash flows from financing activities:
Net change in debt		-			(250.8	)		(6.2	)		-		(257.0	)
Dividends (paid) received		(117.5	)		4.4			47.0			-		(66.1	)
Proceeds from the exercise of stock options		90.9			-			-			-		90.9
Purchase of treasury shares		-			-			(215.8	)		-		(215.8	)
Net cash used in financing activities		(26.6	)		(246.4	)		(175.0	)		-		(448.0	)
Net cash (used in) provided by discontinued operations		-			(9.2	)		4.1			-		(5.1	)
Effect of exchange rate changes on cash and
cash equivalents		-			-			(1.9	)		-		(1.9	)
Effect of change in fiscal year end of business		-			-			(23.8	)		-		(23.8	)
Net (decrease) increase in cash and cash equivalents		(160.1	)		87.1			6.2			-		(66.8	)
Cash and cash equivalents - beginning of period		160.5			104.1			152.6			-		417.2
Cash and cash equivalents - end of period	$	0.4		$	191.2		$	158.8		$	-	$	350.4

Note 12 - Subsequent Event

On August 3, 2005 the board of directors of the Company approved a 2-for-1 split of the Company’s Class A and Class B common shares. The split of the Company’s shares will be effected in the form of a stock distribution and will be payable September 1, 2005, to shareholders of record on August 16, 2005.

The following table represents the pro forma effect of the stock split on earnings per common share:

	Three months ended June 30, 2005						Three months ended June 30, 2004				Six months ended June 30, 2005						Six months ended June 30, 2004
	As reported			Pro forma			As reported		Pro forma		As reported			Pro forma			As reported		Pro forma
Basic earnings per common share:
Earnings from continuing operations	$	1.72		$	0.86		$	1.38	$	0.69	$	3.07		$	1.53		$	2.31	$	1.16
Discontinued operations, net of tax		(0.03	)		(0.02	)		0.27		0.14		(0.09	)		(0.04	)		0.37		0.18
Net earnings	$	1.69		$	0.84		$	1.65	$	0.83	$	2.98		$	1.49		$	2.68	$	1.34
Diluted earnings per common share:
Earnings from continuing operations	$	1.71		$	0.85		$	1.36	$	0.68	$	3.03		$	1.52		$	2.28	$	1.14
Discontinued operations, net of tax		(0.04	)		(0.02	)		0.27		0.14		(0.09	)		(0.05	)		0.36		0.18
Net earnings	$	1.67		$	0.83		$	1.63	$	0.82	$	2.94		$	1.47		$	2.64	$	1.32

18

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

INGERSOLL-RAND COMPANY LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary and Outlook

Ingersoll-Rand Company Limited (IR or the Company) is a leading innovation and solutions provider with strong brands and leading positions within its markets. The Company’s business segments are Climate Control Technologies, Compact Vehicle Technologies, Construction Technologies, Industrial Technologies and Security Technologies. The Company’s diverse product portfolio encompasses such leading industrial and commercial brands as Thermo King® transport temperature control equipment, Hussmann® commercial and retail refrigeration equipment, Ingersoll-Rand® industrial and construction equipment, Bobcat® compact construction equipment, Club Car® golf cars and utility vehicles and Schlage® locks and security solutions. In addition, IR offers products and services under many other premium brands for customers in industrial and commercial markets.

The Company seeks to drive shareholder value through three areas of emphasis: Dramatic Growth, by developing innovative solutions that improve our customers’ operations; Operational Excellence, by fostering a culture of continuous improvement and cost consciousness; and Dual Citizenship, by encouraging our employees’ active collaboration with colleagues across business units and geographic regions to achieve superior business outcomes. IR has transformed its portfolio to become a more diversified company with strong growth prospects by divesting cyclical, low-growth, asset intensive businesses, and improving efficiencies, capabilities and products and services for its high-potential businesses. The Company expects to pursue bolt-on acquisitions, stock buybacks and dividend enhancements with the cash flow generated from operations and divestitures.

The following significant events occurred during the first six months of 2005:

· In January, the Company completed the acquisition of the remaining 70% interest in Italy-based CISA S.p.A. (CISA) for approximately $267 million in cash and the assumption of approximately $244 million of debt. CISA manufactures an array of security products, including electronic locking systems, cylinders, door closers, and panic hardware, and also markets safes and padlocks. In April, the Company acquired the remaining 20% interest in Shanghai Ingersoll-Rand Compressor Company Limited (SIRC) for approximately $26 million, which was a joint venture established in 1987. SIRC manufactures a wide range of products and components for IR and provides the Company with a network of company-owned distribution centers located in most major cities in China to sell, install and service IR products. In May, the Company acquired Security One Systems for approximately $31 million, a security systems integrator located in Florida. Security One provides security design solutions including access control, closed circuit TV, video surveillance and alarm monitoring. In May, the Company purchased Baumaschinen Bensheim GmbH, a German construction equipment dealer, for approximately $14 million. During the six months ended June 30, 2005, the Company also made several smaller acquisitions.

· During the first six months of 2005, the Company repurchased 6.0 million Class A common shares at a cost of approximately $478.6 million.

Revenues for the second quarter of 2005 were $2,759.5 million, a 13% increase compared with net revenues of $2,444.4 million in 2004. With the exception of Climate Control Technologies, all of the Company's business segments experienced double-digit revenue growth in the quarter compared to the 2004 second quarter: Compact Vehicle Technologies (20%), Construction Technologies (21%), Industrial Technologies (11%) and Security Technologies (20%). Climate Control Technologies revenues were comparable from period to period.

19

Revenues for the first half of 2005 were $5,218.3 million, a 14% increase compared with net revenues of $4,566.6 million in the first half of 2004. With the exception of Climate Control Technologies, all of the Company's business segments experienced double-digit revenue growth during the six months ended June 30, 2005 compared to the same period in 2004: Compact Vehicle Technologies (25%), Construction Technologies (22%), Industrial Technologies (14%) and Security Technologies (18%). Climate Control Technologies revenues were comparable from period to period.

For the three-month and six-month periods ended June 30, 2005, all of the Company’s business segments, except Climate Control Technologies, reported improved operating income compared to 2004. These improved results were mostly attributable to increased volumes and product mix, improved pricing and acquisitions, while material cost inflation and manufacturing inefficiencies due to material availability continue to impact the Company’s margins. Productivity improvements also increased year-to-date operating income.

The Company reported second quarter 2005 net earnings of $285.4 million, or diluted earnings per share of $1.67. Earnings from continuing operations for the second quarter of 2005 increased by 22% compared to 2004. The Company reported net earnings of $508.5 million, or diluted earnings per share of $2.94, for the six months ended June 30, 2005. Earnings from continuing operations for the first half of 2005 increased by 30% compared to the first half of 2004. The Company benefited from higher volumes and favorable product mix, foreign currency exchange gains and reduced interest expense. The Company’s debt-to-capital ratio of 27.9% at June 30, 2005 was higher than the 24.3% at December 31, 2004 due to the issuance of $300 million of long-term debt during the second quarter.

Results of Operations - Three Months Ended June 30, 2005 and 2004

Earnings from continuing operations for the second quarter of 2005 were $291.8 million, or diluted earnings per share of $1.71, compared with $239.2 million and $1.36 diluted earnings per share in the comparable quarter of 2004.

	Three months ended June 30,
Dollar amounts in millions	2005			2004
Net revenues	$	2,759.5		$	2,444.4
Cost of goods sold		2,019.1			1,783.0
Selling and administrative expenses		361.3			342.7
Operating income	$	379.1		$	318.7
Operating margin		13.7	%		13.0	%

Net Revenues

Revenues for the second quarter of 2005 increased by approximately 13% over the comparable quarter of 2004. Higher volumes and product mix accounted for approximately 8% of the increase, while acquisitions and improved pricing accounted for 3% and 2%, respectively. Revenues increased by 10% or more in the North America, Europe and Latin America regions. The Company continues to increase recurring revenues, which includes revenues derived from installation, parts and service.

Cost of Goods Sold

Cost of goods sold in the second quarter of 2005 was 73.2% of revenue as compared to 72.9% in 2004. The slight increase was mainly due to higher material cost and manufacturing inefficiencies due to the availability of material from suppliers.

20

Selling and Administrative Expenses

Selling and administrative expenses in the second quarter of 2005 were 13.1% of revenues as compared to 14.0% in 2004. The decrease in the ratio was primarily due to higher revenue and lower costs from stock-based liability programs. The favorable settlement of certain product-related litigation also decreased the 2005 expenses. These benefits were partially offset by higher expenses due to acquisitions. The selling and administrative expenses during the second quarter of 2004 were reduced by the gain on the sale of corporate real estate of approximately $13.0 million.

Operating Income

Operating income for the second quarter of 2005 increased by approximately 19%. The increase was mainly due to higher volumes, product mix and improved pricing. These positive effects were partially offset by increased material costs and additional costs associated with operational improvement programs.

Interest Expense

Interest expense for the second quarter of 2005 was $37.7 million, a decrease of $2.0 million from the second quarter of 2004. The decrease is primarily attributable to lower year-over-year average debt levels and lower interest rates.

Other Income (Expense), net

Other income (expense), net includes foreign exchange activities, equity in earnings of partially owned affiliates, minority interests, and other miscellaneous income and expense items. Other income (expense), net aggregated to $10.2 million of income in the second quarter of 2005 as compared with $1.5 million of expense in 2004. The change is primarily due to favorable foreign currency exchange gains ($6.6 million), lower minority interest charges ($4.4 million) and higher interest income ($3.0 million). These increases were partially offset by lower earnings from equity investments ($2.1 million).

Provision for Income Taxes

The Company’s second quarter 2005 provision for income taxes was $59.8 million, as compared to $38.3 million in 2004. The Company’s effective tax rate of 17% for the second quarter of 2005 is higher than the 13.8% in the second quarter of 2004. The 2005 rate increase is due to an increase in the 2005 earnings outlook, especially in higher tax jurisdictions, and tax benefits of $8.8 million in the second quarter of 2004.

Discontinued Operations

Discontinued operations, net of tax, for the second quarter of 2005 amounted to expense of $6.4 million compared to $47.0 million of income for the second quarter of 2004. The second quarter of 2004 included $37.0 million of gain from the sale of Drilling Solutions, and the results of operations for other divested businesses for the period owned by the Company. In addition, retained costs, mainly related to environmental costs, as well as legal fees, were higher in the second quarter of 2005.

Results of Operations - Six Months Ended June 30, 2005 and 2004

Earnings from continuing operations for the six months ended June 30, 2005 were $524.1 million, or diluted earnings per share of $3.03, compared with $401.9 million and $2.28 diluted earnings per share in the comparable period of 2004.

21

	Six months ended June 30,
Dollar amounts in millions	2005			2004
Net revenues	$	5,218.3		$	4,566.6
Cost of goods sold		3,829.8			3,337.6
Selling and administrative expenses		712.5			684.9
Operating income	$	676.0		$	544.1
Operating margin		13.0	%		11.9	%

Net Revenues

Revenues for the six months ended June 30, 2005 increased by approximately 14% over the comparable period of 2004. Higher volumes and product mix accounted for approximately 9% of the increase, while acquisitions and improved pricing accounted for 3% and 2%, respectively. The Company continues to make progress in increasing recurring revenues, which includes revenues derived from installation, parts and service.

Cost of Goods Sold

Cost of goods sold for the six months ended June 30, 2005 was 73.4% of revenues as compared to 73.1% in 2004. The slight increase was mainly due to higher material costs and manufacturing inefficiencies due to the availability of material from suppliers.

Selling and Administrative Expenses

Selling and administrative expenses for the six months ended June 30, 2005 were 13.7% of revenues as compared to 15.0% in 2004. The decrease in the ratio was primarily due to higher revenue and lower stock-based liability program costs. The favorable settlement of certain product-related litigation also decreased the 2005 expenses. These benefits were partially offset by higher expenses due to acquisitions. The selling and administrative expenses during the first half of 2004 were reduced by the gain on the sale of corporate real estate of approximately $13.0 million.

Operating Income

Operating income for the six months ended June 30, 2005 increased by approximately 24%. The increase was mainly due to higher volumes, product mix, pricing and improved productivity. These positive effects were partially offset by increased material costs and productivity investment costs.

Interest Expense

Interest expense for the six months ended June 30, 2005 was $74.2 million, a decrease of $6.2 million from 2004. The decrease is primarily attributable to lower year-over-year average debt levels and lower interest rates.

Other Income (Expense), net

Other income (expense), net, aggregated $17.4 million of income for the six months ended June 30, 2005, as compared with $4.9 million of expense in 2004. The change is primarily due to favorable foreign currency exchange gains ($12.1 million), higher interest income ($10.4 million) and lower minority interest charges ($3.2 million), partially offset by lower income from equity investments ($2.3 million) in the current period.

Provision for Income Taxes

The Company’s provision for income taxes for the six months ended June 30, 2005 was $95.1 million, as compared to $56.9 million in 2004. The Company’s effective tax rate of 15.4% is higher for the six months ended June 30, 2005, compared to 12.4% for the six months ended June 30, 2004, due to an increase in the 2005 earnings outlook, especially in the higher tax jurisdictions, and tax benefits of $8.8 million during the first half of 2004.

22

Discontinued Operations

Discontinued operations, net of tax, for the first half of 2005 amounted to expense of $15.6 million compared to $63.8 million of income for the first half of 2004. The first half of 2004 included $19.4 million (after tax) recorded for claims filed under the Continued Dumping and Subsidy Offset Act of 2000, $37.0 million for the gain on the sale of Drilling Solutions, and the results of operations for divested businesses for the period owned by the Company. In addition, retained costs, mainly related to Dresser-Rand, were higher in the first half of 2005.

Review of Business Segments

During the first quarter of 2005, the Company realigned its internal organization and operating segments to reflect its diversified structure and to promote greater transparency of results. The former Infrastructure segment has been disaggregated into two segments - the Compact Vehicle Technologies segment (formerly named the Bobcat and Club Car segment in the first quarter) and the Construction Technologies segment. Dresser-Rand, which was sold in 2004, was previously its own reportable segment and is now shown in discontinued operations. The prior year segment results have been presented to conform to these changes.

Climate Control Technologies

Climate Control Technologies provides solutions to transport, preserve, store and display temperature-sensitive products by engaging in the design, manufacture, sale and service of transport temperature control units, HVAC systems, refrigerated display merchandisers, beverage coolers, and walk-in storage coolers and freezers.

During the quarter, the North American operations had flat revenues as strong volume in the truck and trailer business and growth in installation and service business were offset by a decline in display case shipments. International revenues were also flat as European truck and bus markets increases were mostly offset by a decline in the trailer and supermarket display case markets, compared to the second quarter of 2004.

	Three months ended						Six months ended
	June 30,						June 30,
Dollar amounts in millions	2005			2004			2005			2004
Net revenues	$	728.0		$	727.3		$	1,367.4		$	1,364.8
Operating income		83.7			91.5			143.9			149.5
Operating margin		11.5	%		12.6	%		10.5	%		11.0	%

Climate Control Technologies’ revenues for the second quarter of 2005 were comparable to 2004. Increases from the effects of currency and improved pricing were offset by lower volumes and product mix. Operating income and margins for the second quarter of 2005 were lower than 2004. Higher material costs of $13 million decreased operating income, as well as a decrease of $13 million due to lower volume and product mix. These negative effects were partially offset by improved pricing and productivity which increased operating income by $10 million and $2 million, respectively, as well as decreased costs from stock-based liability programs.

23

Climate Control Technologies’ revenues for the first half of 2005 were comparable to 2004. Increases from the effects of currency and improved pricing were offset by lower volumes and product mix. Operating income and margins for the first half of 2005 were lower than 2004. Higher material costs of $27 million decreased operating income, as well as a decrease of $15 million due to lower volume and product mix. These negative effects were partially offset by improved pricing and productivity which increased operating income by $18 million and $11 million, respectively, as well as decreased costs from stock-based liability programs.

Compact Vehicle Technologies

The Compact Vehicle Technologies segment is engaged in the design, manufacture, sale and service of skid-steer loaders, mini-excavators and golf and utility vehicles. This segment includes the Bobcat and Club Car brands.

During the quarter, Bobcat revenues increased by 27% compared to last year’s second quarter due to new product introductions, strong North American markets and higher aftermarket parts and attachments sales. Club Car revenues increased by 2% compared with the second quarter of 2004 as continued strength in the Precedent golf car, new product sales and an increase in service parts business helped to counteract a stagnant golf market.

	Three months ended						Six months ended
	June 30,						June 30,
Dollar amounts in millions	2005			2004			2005			2004
Net revenues	$	726.7		$	604.1		$	1,387.3		$	1,110.6
Operating income		117.2			98.6			225.7			171.7
Operating margin		16.1	%		16.3	%		16.3	%		15.5	%

Compact Vehicle Technologies’ revenues for the second quarter of 2005 increased by approximately 20% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 18% of the increase. The remaining 2% increase was mostly due to improved pricing. Operating income for the second quarter of 2005 also increased significantly, while operating margins declined slightly. Higher volumes and product mix contributed $32 million and improved pricing increased operating income by $10 million from the prior year comparable quarter. These positive effects were partially offset by higher material costs of $11 million and manufacturing inefficiencies of $11 million due to material availability from suppliers.

Compact Vehicle Technologies’ revenues for the first half of 2005 increased by approximately 25% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 22% of the increase. The remaining 3% increase was mostly due to improved pricing. Operating income and margins for the first half of 2005 also increased. Higher volumes and product mix improved operating income by $73 million, while improved pricing also added $27 million during the period. These positive effects were partially offset by higher material costs of $41 million and manufacturing inefficiencies due to material availability from suppliers.

Construction Technologies

Construction Technologies is engaged in the design, manufacture, sale and service of road construction and repair equipment, portable power products, general-purpose construction equipment and light towers. It is comprised of the Utility Equipment and Road Development businesses.

24

Road Development revenues increased by 23%, compared to the second quarter of 2004, as a result of strong North American market and improved National Rental Accounts business. Utility equipment also had a revenue increase of 18% due to higher sales in North America and Europe. Operating income and margins improved reflecting higher volumes and product mix and improved pricing during the second quarter of 2005.

	Three months ended						Six months ended
	June 30,						June 30,
Dollar amounts in millions	2005			2004			2005			2004
Net revenues	$	343.1		$	282.4		$	612.6		$	502.5
Operating income		41.8			37.1			67.5			55.6
Operating margin		12.2	%		13.1	%		11.0	%		11.1	%

Construction Technologies’ revenues for the second quarter of 2005 increased by approximately 21% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 16% of the increase. The remaining increase was mainly due to improved pricing, which accounted for approximately 4% of the change. Operating income increased during the period, while operating margins declined. Higher volumes and product mix increased operating income by $9 million, and improved pricing added $11 million during the quarter. These positive effects were partially offset by higher material costs of $8 million and manufacturing inefficiencies of $4 million due to material availability from suppliers.

Construction Technologies’ revenues for the first half of 2005 increased by approximately 22% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 16% of the increase. The remaining increase was due to improved pricing, which accounted for approximately 4%, and the effects of currency translation. Operating income increased, while the operating margins stayed relatively flat for the first half of 2005, compared to 2004. Higher volumes and product mix increased operating income by $18 million, while improved pricing added $19 million during the period. These positive effects were partially offset by higher material costs of $18 million and productivity investment costs of $3 million.

Industrial Technologies

Industrial Technologies is focused on providing solutions to enhance customers’ industrial and energy efficiency, mainly by engaging in the design, manufacture, sale and service of compressed air systems, tools, fluid power production and energy generation systems.

Industrial Technologies’ revenues and operating income benefited from higher volumes and product mix in the Air Solutions and Productivity Solutions businesses during the second quarter of 2005, compared to the quarter ended June 30, 2004. Air Solutions revenues increased 13% due to strong North American and European markets and increased revenues from new product introductions. Productivity Solutions improvement came mainly from growth in the vehicle service business.

	Three months ended						Six months ended
	June 30,						June 30,
Dollar amounts in millions	2005			2004			2005			2004
Net revenues	$	432.2		$	388.0		$	835.7		$	731.4
Operating income		59.1			43.3			106.4			77.1
Operating margin		13.7	%		11.2	%		12.7	%		10.5	%

25

Industrial Technologies’ revenues for the second quarter of 2005 increased by approximately 11% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 8% of the increase. The remaining increase was mostly due to improved pricing. Operating income and margins for the second quarter of 2005 also increased significantly. Higher volumes and product mix increased operating income by $9 million, while improved pricing also contributed $8 million to the increase.

Industrial Technologies’ revenues for the first half of 2005 increased by approximately 14% compared to 2004. The increase was mainly attributable to higher volumes and product mix, which accounted for approximately 11% of the increase. The remaining increase was mostly due to improved pricing. Operating income and margins for the first half of 2005 also increased significantly. Higher volumes and product mix increased operating income by $18 million, while improved pricing also contributed $15 million to the increase.

Security Technologies

Security Technologies is engaged in the design, manufacture, sale and service of mechanical and electronic security products, biometric access control systems and security and scheduling software.

Security Technologies’ revenues and operating income benefited from strong growth in its integrated solutions business for the second quarter of 2005. North American sales improved over the second quarter of 2004, due to the continued strength in the residential and commercial businesses. International sales improved slightly, without the effect of acquisitions.

	Three months ended						Six months ended
	June 30,						June 30,
Dollar amounts in millions	2005			2004			2005			2004
Net revenues	$	529.5		$	442.6		$	1,015.3		$	857.3
Operating income		94.9			62.6			163.9			134.7
Operating margin		17.9	%		14.1	%		16.1	%		15.7	%

Security Technologies’ revenues for the second quarter of 2005 increased by approximately 20% compared to 2004. The increase was mainly attributable to acquisitions, which increased revenues by 15%. The majority of the remaining increase was due to improved pricing and higher volume and product mix, partially offset by a divestiture in December of 2004. Operating income and margins also increased significantly during the period. Improved pricing, productivity and acquisitions increased operating income by $16 million, $4 million and $3 million, respectively. The favorable settlement of certain product-related litigation also increased operating income for the second quarter of 2005. These increases were partially offset by higher material costs of $5 million, unfavorable product mix and volumes of $5 million and productivity investment costs of $5 million. Operating income for the second quarter of 2004 was lowered by litigation expense of $11 million, as well as a plant closure and the discontinuance of a plumbing fixture product line of $7 million.

Security Technologies’ revenues for the first half of 2005 increased by approximately 18% compared to 2004. The increase was mainly attributable to the acquisition of CISA, which increased revenues by 15%. The majority of the remaining increase was due to improved pricing and higher volumes and product mix. Operating income and margins also improved as compared to 2004. Improved pricing, productivity and acquisitions increased operating income by $28 million, $11 million and $5 million, respectively. The favorable settlement of certain product-related litigation also increased operating income for the first half of 2005. These increases were partially offset by higher material costs of $14 million, unfavorable product mix and volumes of $13 million and productivity investment costs of $10 million. Operating income for the first half of 2004 was lowered by litigation expense of $11 million, as well as a plant closure and the discontinuance of a plumbing fixture product line of $7 million.

26

Liquidity and Capital Resources

The Company’s primary source for liquidity has been operating cash flow. Net cash provided by operating activities for the six months ended 2005 and 2004 was $124.4 million and $251.0 million, respectively. The decrease in net cash from operating activities for the first half of 2005 is primarily attributable to higher accounts receivable and lower accrued liabilities, partially offset by higher earnings in 2005.

Net cash used in investing activities in the first half of 2005 was $453.0 million, compared to net cash provided by investing activities for the first half of 2004 of $161.0 million. Cash paid for acquisitions included the $267.3 million for the CISA acquisition during the first quarter of 2005. The six month period ended June 30, 2004 included cash from dispositions of approximately $200 million, mainly from Drilling Solutions.

Net cash used in financing activities in the first half of 2005 was $430.4 million compared to $448.0 million in 2004. During the second quarter of 2005, the Company issued $300 million of long-term debt. The Company repurchased $478.6 million of Class A common shares in the first half of 2005, compared to $215.8 million in the same period in 2004. The Company made approximately $80 million of additional debt repayments during the first half of 2004, compared to the first half of 2005. During the second quarter of 2005, the Company repurchased the preferred shares of a subsidiary. A payment of $63.3 million was made to an unrelated third party holder of the shares. The Company has fully consolidated this subsidiary since its inception.

The Company’s debt-to-total capital ratio at June 30, 2005 was 27.9%, compared to 24.3% at December 31, 2004. The increase in the ratio is due to the issuance of $300 million of long-term debt during the second quarter. The Company's public debt has no financial covenants and its $2.0 billion revolving credit lines have a debt-to-total capital covenant of 65%, which is calculated excluding non-cash items. As of June 30, 2005, the Company’s debt-to-total capital ratio was significantly beneath this limit.

The Company’s working capital was $1,075.1 million at June 30, 2005, compared to $1,732.8 million at December 31, 2004. The change was due primarily to a lower cash balance at June 30, 2005 resulting from acquisitions, share repurchases and dividend payments, and an increase in current maturities of long-term debt. This decrease was partially offset by an increase in accounts receivable from increased sales and a planned increase in inventory due to expected sales volumes and continued material availability concerns.

Environmental and Asbestos Matters

The Company is a party to environmental lawsuits and claims, and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. It is identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites.  For all sites there are other PRPs and, in most instances, the Company's site involvement is minimal.

In estimating its liability, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable.  The ability of other PRPs to participate has been taken into account, based generally on the parties' financial condition and probable contributions on a per site basis.  Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.

27

Although uncertainties regarding environmental technology, U.S. federal and state laws and regulations and individual site information make estimating the liability difficult, management believes that the total liability for the cost of remediation and environmental lawsuits and claims will not have a material effect on the financial condition, results of operations, liquidity or cash flows of the Company for any year.  It should be noted that when the Company estimates its liability for environmental matters, such estimates are based on current technologies, and the Company does not discount its liability or assume any insurance recoveries.

Ingersoll-Rand Company (IR-New Jersey), a Company subsidiary, is a defendant in numerous asbestos-related lawsuits in state and federal courts.  In virtually all of the suits a large number of other companies have also been named as defendants.  The claims against IR-New Jersey generally allege injury caused by exposure to asbestos contained in certain of IR-New Jersey's products.  Although IR-New Jersey was neither a producer nor a manufacturer of asbestos, some of its formerly manufactured products utilized asbestos-containing components, such as gaskets, purchased from third-party suppliers.

All claims resolved to date have been dismissed or settled. For the six months ended June 30, 2005, total costs for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $7.7 million as compared to $7.9 million for the six months ended June 30, 2004.  The Company performs a thorough analysis, updated periodically, of its actual and potential asbestos liabilities projected seven years into the future. Based upon such analysis, the Company believes that its reserves and insurance are adequate to cover its asbestos liabilities, and that these liabilities are not likely to have a material adverse effect on its financial position, results of operations, liquidity or cash flows.

Legislation currently under consideration in Congress concerns pending and future asbestos-related personal injury claims. It is uncertain what effect, if any, passage of such legislation would have upon the Company’s financial position, results of operations or cash flows.

New Accounting Standards

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4” (SFAS 151). SFAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and spoilage should be recognized as current-period charges and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. SFAS 151 is effective for fiscal years beginning after June 15, 2005. The Company does not expect the adoption of SFAS 151 to have a material impact on its consolidated financial position and results of operations.

In December 2004, the FASB issued SFAS No. 123 (Revised 2004), “Share Based Payment” (SFAS 123(R)). SFAS 123(R) is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation,” which supersedes APB No. 25, “Accounting for Stock Issued to Employees,” and amends SFAS No. 95, “Statement of Cash Flows.” SFAS 123(R) requires companies to recognize compensation expense in the income statement for an amount equal to the fair value of the share-based payment issued. This applies to all transactions involving the issuance of equity by a company in exchange for goods and services, including employees. In accordance with a recently issued U.S. Securities and Exchange Commission rule, the Company will delay implementation of SFAS 123(R) until January 1, 2006. The Company is evaluating the transition applications and the impact the adoption of SFAS 123(R) will have on its consolidated financial position, results of operations and cash flows.

28

In December 2004, the FASB released Financial Staff Position 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (FSP 109-2). The American Jobs Creation Act (the Act) provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated in either an enterprise’s last tax year that began before the enactment date, or the first tax year that begins during the one-year period beginning on the date of enactment. FSP 109-2 allows for time for enterprises beyond the financial reporting period of enactment to evaluate the effect of the Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS No. 109. The evaluation of the effects of the repatriation provision will be completed within a reasonable period of time following the publication of the additional guidance.The Company is considering the impact of repatriation on a range of earnings of up to $525 million, and the corresponding income taxes may be as much as approximately $65 million. The resulting income tax, if any, will be provided in the Company’s financial statements in the quarter in which the evaluation and approvals have been completed.

In March 2005, the FASB issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (FIN 47). FIN 47 requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated. The Interpretation also clarifies that the term Conditional Asset Retirement Obligation refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective for the Company on December 31, 2005. The Company is evaluating the impact the adoption of FIN 47 will have on its consolidated financial position, results of operations and cash flows.

In June 2005, the FASB issued Staff Position No. FAS 143-1 “Accounting for Electronic Equipment Waste Obligations” (FSP 143-1), which provides guidance on the accounting for obligations associated with the Directive on Waste Electrical and Electronic Equipment (the WEEE Directive), which was adopted by the European Union. FSP 143-1 provides guidance on how to account for the effects of the WEEE Directive with respect to historical waste and waste associated with products on the market on or before August 13, 2005. FSP 143-1 is required to be applied to the later of the first reporting period ending after June 8, 2005 or the date of the adoption of the WEEE Directive into law by the applicable European Union member country. At this point, the Directive has not yet been adopted into law by the European Union member countries in which we have significant operations. Accordingly, we do not expect to fully apply this guidance until the third quarter of 2005, the expected period of implementation of the WEEE Directive by European Union member countries. We are currently evaluating the effect that the adoption of FSP 143-1 will have on our results of operations and financial condition.

Safe Harbor Statement

Information provided by the Company in reports such as this report on Form 10-Q, in press releases and in statements made by employees in oral discussions, to the extent the information is not historical fact, constitutes “forward looking statements” within the meaning of regulations under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements by their nature involve risk and uncertainty.

The Company cautions that a variety of factors, including but not limited to the following, could cause business conditions, results, performance or achievements to differ from those expected by the Company: changes in the rate of economic growth in the United States and in other major international economies; significant changes in trade, monetary and fiscal policies worldwide; tax legislation; currency fluctuations among the U.S. dollar and other currencies; political factors or changes; demand for Company products and services; distributor inventory levels; failure to achieve the Company’s productivity targets; and competitor actions including unanticipated pricing actions or new product introductions.

29

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

For a discussion of the Company’s risk factors and uncertainties, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in the Company’s Annual Report incorporated by reference in Form 10-K for the period ended December 31, 2004.

Item 4 - Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2005, the Company’s disclosure controls and procedures are effective in ensuring that all material information required to be filed in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported when required.

There has been no change in the Company’s internal control over financial reporting that occurred during the second quarter of 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1 - Legal Proceedings

In the normal course of business, the Company is involved in a variety of lawsuits, claims and legal proceedings, including commercial and contract disputes, employment matters, product liability claims, environmental liabilities and intellectual property disputes.  In the opinion of the Company, pending legal matters are not expected to have a material adverse effect on the results of operations, financial condition, liquidity or cash flows.

By letter dated August 1, 2005, the Michigan Department of Environmental Quality ("DEQ") has assessed stipulated penalties of $120,000 against the Company for an alleged violation of a DEQ Administrative Order of Consent ("AOC").  The AOC governs the Company's environmental investigation and cleanup obligations related to the McCoy Creek Industrial Park, Buchanan, Michigan. The Company believes it has valid defenses against the penalty and is seeking to resolve this matter through the informal dispute resolution process provided in the AOC.

As previously reported, on November 10, 2004, the SEC issued an Order directing that a number of public companies, including the Company, provide information relating to their participation in transactions under the United Nations’ Oil For Food Program.  Upon receipt of the Order, the Company undertook a thorough review of its participation in the Program and has provided the SEC with information responsive to the Order. The Company will continue to cooperate fully with the SEC in this matter.

See also the discussion under Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Environmental and Asbestos Matters and also Part I, Item 1, Note 7 to the Consolidated Condensed Financial Statements.

30

Item 2 - Unregistered Sales of Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases by the Company of its Class A common shares during the quarter ended June 30, 2005:

							Maximum number
					Total number of		of shares still
	Total number		Average		shares purchased		available to be
	of shares		price paid		as part of the		purchased under
Period	purchased		per share		program		the program
4/01/2005 - 4/30/2005		3,000,000	$	78.64		3,000,000		2,000,000
5/01/2005 - 5/31/2005		-		-		-		2,000,000
6/01/2005 - 6/30/2005		-		-		-		2,000,000
Total		3,000,000				3,000,000

Item 4 - Submission of Matters to a Vote of Security Holders

The Annual General Meeting of Shareholders of the Company was held on June 1, 2005. The items voted upon by the Company’s shareholders included nominations to elect four members of IR’s board of directors, the appointment of independent auditors, and amendments to the company’s bye-laws eliminating the classification of the board of directors and cumulative voting in the election of the directors. The shareholders voted as follows on the following matters:

The elections of each director of the Third Class to hold office for three years were approved by the following votes: A.C Berzin was approved by a vote of 133,636,665 shares voting for and 1,979,465 shares withheld; H.L. Henkel was approved by a vote of 132,713,741 shares voting for and 2,902,389 shares withheld; H.W. Lichtenberger was approved by a vote of 132,793,995 shares voting for and 2,822,135 shares withheld; and T.L. White was approved by a vote of 104,576,431 shares voting for and 31,039,699 shares withheld.

The reappointment of the Company’s independent accountants, PricewaterhouseCoopers, was approved by a vote of 132,652,334 shares voting for, 1,924,839 shares voting against, and 1,038,957 shares abstaining.

A proposal to amend bye-law 10 of the bye-laws to eliminate the classification of the board of directors was approved by a vote of 121,731,602 shares voting for, 1,855,132 voting against, 1,355,245 shares abstaining, and 10,674,151 shares not voting.

A proposal to amend bye-law 10 of the bye-laws to eliminate cumulative voting in the election of directors was approved by a vote of 108,821,413 shares voting for, 14,765,154 shares voting against, 1,355,412 shares abstaining, and 10,674,151 shares not voting.

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Item 6 - Exhibits

(a) Exhibits

Exhibit No.	Description
3 (ii)	Amended and Restated Bye-Laws, dated June 1, 2005. Filed herewith.
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32

INGERSOLL-RAND COMPANY LIMITED

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INGERSOLL-RAND COMPANY LIMITED

(Registrant)

Date: August 4, 2005	By:	/s/ Timothy R. McLevish
		Timothy R. McLevish, Senior Vice President
		and Chief Financial Officer
		Principal Financial Officer

 

Date: August 4, 2005	By:	/s/ Richard W. Randall
		Richard W. Randall, Vice President and
		Controller
		Principal Accounting Officer

33

EX-3.(II)

Exhibit 3 (ii)

A M E N D E D   A N D   R E S T A T E D

B Y E - L A W S

O F

I N G E R S O L L - R A N D   C O M P A N Y   L I M I T E D

Adopted June 1, 2005

A M E N D E D   A N D   R E S T A T E D

B Y E - L A W S

O F

I N G E R S O L L - R   A N D   C O M P A N Y   L I M I T E D

Adopted June 1, 2005

TABLE OF CONTENTS

	Page
INTERPRETATION	1
1.    Interpretation	1
BOARD OF DIRECTORS	3
2.    Board of Directors	3
3.    Management of the Company	3
4.    Power to Authorise Specific Actions	3
5.    Power to Appoint Attorney	3
6.    Power to Delegate to a Committee	3
7.    Power to Appoint and Dismiss Employees	4
8.    Power to Borrow and Charge Property	4
9.    Exercise of Power to Purchase Shares of or Discontinue the Company	4
10.  Election of Directors	4
11.  Defects in Appointment of Directors	5
12.  Removal of Directors	5
13.  Vacancies on the Board	5
14.  Notice of Meetings of the Board	6
15.  Quorum at Meetings of the Board	6
16.  Meetings of the Board	6
17.  Unanimous Written Resolutions of Directors	6
18.  Contracts and Disclosure of Directors’ Interests	7
19.  Remuneration of Directors	7
OFFICERS	7
20.  Officers of the Company	7
21.  Appointment and Authority of Officers	7
22.  Duties of Officers	8
23.  Chairman of Meetings	8
24.  Register of Directors and Officers	8
MINUTES	8
25.  Obligations of Board to Keep Minutes	8
INDEMNITY	8
26.  Indemnification of Directors and Officers of the Company	8
MEETINGS	10
27.  Annual General Meeting	10
28.  Special General Meetings	10
29.  Accidental Omission of Notice of General Meeting	10
30.  Meeting Called on Requisition of Members	10
31.  Short Notice	11
32.  Postponement of Meetings	11
33.  Quorum for General Meeting	11
34.  Adjournment of Meetings	11
35.  Attendance at Meetings	11
36.  Unanimous Written Resolutions of Members	11
37.  Attendance of Directors	12
38.  Presiding Officer at Meetings	12

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39.  Voting at Meetings	12
40.  Seniority of Joint Holders Voting	12
41.  Instrument of Proxy	13
42.  Representation of Corporations at Meetings	13
SHARE CAPITAL AND SHARES	13
43.  Authorised Share Capital	13
44.  Power to Issue Shares	15
45.  Variation of Rights, Alteration of Share Capital and Purchase of Shares of the Company	15
46.  Registered Holder of Shares	16
47.  Death of a Joint Holder	16
48.  Certificated or Uncertificated Shares	16
REGISTER OF MEMBERS	16
49.  Contents of Register of Members	16
50.  Inspection of Register of Members	17
51.  Transactions with Interested Members	17
52.  Record Dates	17
53.  Scrutineers	17
TRANSFER OF SHARES	18
54.  Instrument of Transfer	18
55.  Restriction on Transfer	18
56.  Transfers by Joint Holders	18
TRANSMISSION OF SHARES	18
57.  Representative of Deceased Member	18
58.  Registration on Death or Bankruptcy	18
59.  Dividend Entitlement of Transferee	19
DIVIDENDS AND OTHER DISTRIBUTIONS	19
60.  Declaration of Dividends by the Board	19
CAPITALISATION	19
61.  Issue of Bonus Shares	19
ACCOUNTS AND FINANCIAL STATEMENTS	19
62.  Records of Account	19
63.  Fiscal Year	19
64.  Financial Statements	19
AUDIT	20
65.  Appointment of Auditor	20
66.  Remuneration of Auditor	20
67.  Vacation of Office of Auditor	20
68.  Access to Books of the Company	20
69.  Report of the Auditor	20
NOTICES	20
70.  Notices to Members of the Company	20
SEAL OF THE COMPANY	20
71.  The Seal	20
72.  Manner in Which Seal is to be Affixed	21
WINDING-UP	21
73.  Winding-up/Distribution by Liquidator	21
ALTERATION OF BYE-LAWS	21
74.  Alteration of Bye-laws	21

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AMENDED AND RESTATED

BYE-LAWS

OF

INGERSOLL-RAND COMPANY LIMITED

A Bermuda Limited Liability Company

INTERPRETATION

1. Interpretation

(1) In these Bye-laws the following words and expressions shall, where not inconsistent with the context and not defined in the text, have the following meanings respectively:

(a) “Act” means the Companies Act 1981, as amended from time to time;

(b) “Auditor” includes any individual, general or limited partnership, corporation, firm, association or company (including a limited liability company);

(c) A person is a “beneficial owner” of any shares of the Company:

(i) which it has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; and

(ii) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (i) above), by any other person with which it has any agreement, arrangement or understanding with respect to the acquisition, holding, voting or disposition of shares or of any material part of the assets of the Company or of it, or which is its “affiliate” or “associate” as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the United States Securities Exchange Act of 1934 (or any successor rule or regulation);

(d) “Board” means the Board of Directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the Directors present at a meeting of Directors at which there is a quorum;

(e) “Business Combination” means:

(i) any amalgamation, merger or consolidation of the Company or one of its subsidiaries with an Interested Member or with any person that is, or would be after such amalgamation, merger or consolidation, an affiliate or associate of an Interested Member;

(ii) any transfer or other disposition to or with an Interested Member or any affiliate or associate of an Interested Member of all or any material part of the assets of the Company or one of its subsidiaries; and

(iii) any issuance or transfer of shares of the Company upon conversion of or in exchange for the securities or assets of any Interested Member, or with any person that is, or would be after such amalgamation, merger or consolidation, an affiliate or associate of an Interested Member;

(f) “Company” means the company for which these Bye-laws are approved and confirmed;

(g) “Director” means a director of the Company;

(h) “Interested Member” means any Member that:

(i) is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the voting shares of the Company then in issue; or

(ii) is an affiliate or associate of the Company and at any time within the five-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the shares then in issue of the Company. For the purpose of determining whether a Member is an Interested Member, the number of voting shares of the Company then in issue shall include shares deemed to be beneficially owned by such Member, but shall not include any other unissued voting shares of the Company which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise;

(i) “Member” means the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons as the context so requires;

(j) “Notice” means written notice as further defined in these Bye-laws unless otherwise specifically stated;

(k) “Officer” means any person appointed by the Board to hold an office in the Company;

(l) “Person” means any individual, general or limited partnership, corporation, firm, association, trust, estate, company (including a limited liability company) or any other entity or organisation or bodies of persons whether corporate or otherwise, including a government, a political subdivision or agency or instrumentality thereof;

(m) “Register of Directors and Officers” means the Register of Directors and Officers referred to in these Bye-laws;

(n) “Register of Members” means the Register of Members referred to in these Bye-laws;

(o) “Resident Representative” means any person appointed to act as resident representative and includes any deputy or assistant resident representative; and

(p) “Secretary” means the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary.

(2) In these Bye-laws, where not inconsistent with the context:

(a) words denoting the plural number include the singular number and vice versa;

(b) words denoting the masculine gender include the feminine gender;

(c) the word:

(i) “may” shall be construed as permissive;

(ii) “shall” shall be construed as imperative; and

(d) unless otherwise provided herein words or expressions defined in the Act shall bear the same meaning in these Bye-laws.

(3) Expressions referring to writing or written shall, unless the contrary intention appears, include cable, telex, telecopier, facsimile, printing, computer generated email, lithography, photography and other modes of representing words in legible and non-transitory form.

(4) Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.

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BOARD OF DIRECTORS

2. Board of Directors

The business of the Company shall be managed by the Board.

3. Management of the Company

(1) In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by statute or by these Bye-laws, expressly required to be exercised by the Company in general meeting, subject, nevertheless, to these Bye-laws, the provisions of any statute and to such directions as may be prescribed by the Company in general meeting.

(2) No regulation or alteration to these Bye-laws made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made.

(3) The Board may procure that the Company pay all expenses incurred in promoting and organising the Company.

4. Power to Authorise Specific Actions

The Board may from time to time and at any time authorise any person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any agreement, document or instrument on behalf of the Company.

5. Power to Appoint Attorney

The Board, or any duly authorised committee, may from time to time and at any time by power of attorney appoint any person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney. Such attorney may, if so authorised under the seal of the Company, execute any deed or instrument under such attorney’s personal seal with the same effect as the affixation of the seal of the Company.

6. Power to Delegate to a Committee

(1) The Board may delegate any or all of its powers to a committee or committees appointed by the Board which may consist partly or entirely of non-Directors and every such committee shall conform to such directions as the Board shall impose on them; provided that a committee appointed by the Board shall not have the power to set its or its members’ remuneration. The meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board.

(2) The Board, by the affirmative vote of a majority of the entire Board, may appoint from their number an executive committee of which committee a majority of committee members shall constitute a quorum; and to such extent as shall be provided in these Bye-laws and as may be permitted by law, such committee shall have and may exercise any or all of the powers of the Board.

(3) The Board, by the affirmative vote of a majority of the entire Board, may appoint any other standing committees and such standing committees shall have and may exercise such powers as may be conferred and authorised by these Bye-laws or by the Board and as may be permitted by law.

(4) Each committee of the Board shall keep complete, accurate minutes and records of all actions taken by such committee, prepare such minutes and records in a timely fashion and promptly distribute all such minutes and records to each member of the Board at the meeting of the Board next ensuing.

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7. Power to Appoint and Dismiss Employees

The Board may appoint, suspend or remove any Officer, manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties. Nothing contained in this Bye-law shall be construed to limit the Officers or any other Company official from being able to exercise these same powers to the extent they are duly authorised to do so.

8. Power to Borrow and Charge Property

The Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking and property, or any part thereof, and may issue debentures, debenture shares and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party. Nothing contained in this Bye-law shall be construed to limit the Officers or any other Company official from being able to exercise these same powers to the extent they are duly authorised to do so.

9. Exercise of Power to Purchase Shares of or Discontinue the Company

(1) The Board may exercise all the powers of the Company to purchase all or any part of its own shares pursuant to Section 42A of the Act.

(2) The Board may exercise all the powers of the Company to discontinue the Company to a named country or jurisdiction outside Bermuda pursuant to Section 132G of the Act.

10. Election of Directors

(1) The Board shall consist of not less than three and not more than twenty Directors or such number in excess thereof as the Members may from time to time determine. The initial Directors shall be elected or appointed at the statutory meeting of the Company and thereafter, except in the case of casual vacancy, Directors shall be elected or appointed at the annual general meeting or at any special general meeting called for that purpose. Directors shall hold office for such term as the Members may determine or, in the absence of such determination, until the next annual general meeting or until their successors are elected or appointed or their office is otherwise vacated. Any general meeting may authorise the Board to fill any vacancy left unfilled at a general meeting. The number of Directors to be elected at any time within the minimum and maximum limitations specified herein shall be determined from time to time by the Board pursuant to a resolution adopted by the affirmative vote of a majority of the Board then in office. Any vacancy on the Board within the minimum and maximum limitations specified in this Bye-law may be filled by a majority of the Board then in office; provided that a quorum is present. During the existence of a vacancy on the Board the remaining Directors shall have full power to act; provided that a quorum is present. The holders of Class A Common Shares (as defined hereinafter) shall be entitled at all meetings of the Members at which Directors are elected to one vote for each such share held by them as described in this Bye-Law. The holders of Class B Common Shares (as defined hereinafter) shall not be entitled to vote for the election of Directors.

(2) Directors may be removed without cause only upon the affirmative vote of the holders of at least 80% of the shares of the Company entitled to vote for the election of Directors. Directors may be removed for cause only upon the affirmative vote of the holders of at least 66 ²/3% of the shares of the Company entitled to vote for the election of Directors; provided that any meeting convened and held to consider the removal of a Director shall be convened and held in accordance with Bye-law 12.

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(3) Notwithstanding subparagraph (1) of this Bye-law, any Member entitled to vote for the election of Directors at a meeting or to express a consent in writing without a meeting may nominate a person or persons for election as a Director only if written notice of such Member’s intent to make such nomination is given to the Secretary of the Company, either by personal delivery, mail or facsimile not later than (a) with respect to an election to be held at an annual general meeting of Members, 90 days in advance of the anniversary of the immediately preceding annual general meeting or if the date of the annual general meeting of Members occurs more than 30 days before or 60 days after the anniversary of such immediately preceding annual general meeting, not later than the close of business on the seventh day following the date on which notice of such meeting is given to Members and (b) in the case of any Member who wishes to nominate a person or persons for election as a Director pursuant to consents in writing by Members without a meeting (to the extent election by such consents is permitted under applicable law and these Bye-laws), 60 days in advance of the date on which materials soliciting such consents are first mailed to Members or, if no such materials are required to be mailed under applicable law, 60 days in advance of the date on which the first such consent in writing is executed. Each such notice shall set forth the name and address of the Member who intends to make the nomination and of the person or persons to be nominated for election as a Director, a representation that the Member is a holder of record of shares of the Company entitled to vote at such meeting or to express such consent in writing and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice or to execute such a consent in writing to elect such person or persons as a Director, a description of all arrangements or understandings between the Member and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations for election as a Director are to be made by the Member, such other information regarding each nominee proposed by such Member as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the United States Securities and Exchange Commission if such nominee had been nominated, or was intended to be nominated, for election as a Director by the Board, and the consent of each nominee to serve as a Director if so elected. The Board may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedures.

11. Defects in Appointment of Directors

All bona fide acts taken at any meeting of the Board or by a committee of the Board or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director.

12. Removal of Directors

(1) Subject to Bye-law 10(4) and any provision to the contrary in these Bye-laws, the Members may, at any special general meeting convened and held in accordance with these Bye-laws, remove a Director; provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than fourteen days before the meeting and at such meeting such Director shall be entitled to be heard on the motion for such Director’s removal.

(2) A vacancy on the Board created by the removal of a Director under the provisions of subparagraph (1) of this Bye-law may be filled by the Members at the meeting at which such Director is removed and, in the absence of such election or appointment, the Board may fill the vacancy in accordance with Bye-law 13.

13. Vacancies on the Board

(1) Subject to any requirements of these Bye-laws with respect to the filling of vacancies among additional Directors elected by a class or classes of shares, if the office of any Director becomes vacant, the remaining Directors may, by a majority vote, elect a successor who shall hold office until the next succeeding annual general meeting of the Members and until his or her successor shall have been elected and qualified.

(2) The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by these Bye-laws as the quorum necessary for the transaction of business at meetings of the Board pursuant to Bye-law 15, the continuing Directors or Director may act for the purpose of (i) summoning a general meeting of the Company or (ii) preserving the assets of the Company.

(3) The office of Director shall be vacated if the Director:

(a) is removed from office pursuant to these Bye-laws or is prohibited from being a Director by law;

5

(b) is or becomes bankrupt or makes any arrangement or composition with his or her creditors generally;

(c) is or becomes of unsound mind or dies; or

(d) resigns his or her office by notice in writing to the Company.

14. Notice of Meetings of the Board

(1) Notice of a regular meeting of the Board shall be deemed to be duly given to a Director if it is given to such Director verbally in person or by telephone or otherwise communicated or sent to such Director by mail, courier service, cable, telex, telecopier, facsimile, printing, computer generated email or other mode of representing words in a legible and non-transitory form at such Director’s last known address or any other address given by such Director to the Company for this purpose at least two days before the proposed date of the meeting, but a failure of the Secretary to send such notice shall not invalidate any proceedings of the Board at such meeting.

(2) Notice of a special meeting of the Board shall be deemed to be duly given to a Director if it is sent to such Director by mail at least two days before the proposed date of the meeting, or given to such Director verbally in person or by telephone or otherwise communicated or sent to such Director by mail, courier service, cable, telex, telecopier facsimile, printing, computer generated email or other mode of representing words in a legible and non-transitory form, at such Director’s last known address or any other address given by such Director to the Company for this purpose at least one day before the proposed date of the meeting, but such notice may be waived by any Director. At any special meeting at which every Director shall be present, even without notice, any business may be transacted.

15. Quorum at Meetings of the Board

The quorum necessary for the transaction of business at all meetings of the Board shall be a majority of the Directors then in office. If at any meeting of the Board there be less than a quorum present, a majority of those present or any Director solely present may adjourn the meeting from time to time without further notice.

16. Meetings of the Board

(1) Regular meetings of the Board shall be held at such times and intervals as the Board may from time to time determine.

(2) Special meetings of the Board shall be held on the requisition of the Chairman, if one is appointed, the Deputy Chairman, if one is appointed, the President, or by 33 ¹/3% of the Directors then in office.

(3) Directors may participate in any meeting of the Board by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

(4) Unless a greater number is expressly required by law or these Bye-laws, the affirmative votes of a majority of the votes cast by the Directors present at a meeting at which a quorum is in attendance shall be the act of the Board or a committee thereof, as appropriate. At any time that these Bye-laws provide that Directors elected by the holders of a class or series of shares shall have more or less than one vote per Director on any matter, every reference in these Bye-laws to a majority or other proportion of Directors shall refer to a majority or other proportion of the votes of such Directors.

17. Unanimous Written Resolutions of Directors

A resolution in writing signed by all the Directors then in office, which may be in counterparts, shall be as valid as if it had been passed at a meeting of the Board duly called and constituted, such resolution to be effective on the date on which the last Director signs the resolution.

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18. Contracts and Disclosure of Directors’ Interests

(1) Any Director, or any firm, partner or any company with whom any Director is associated, may act in a professional capacity for the Company and such Director or such Director’s firm, partner or such company shall be entitled to remuneration for professional services as if such Director were not a Director; provided that nothing herein contained shall authorise a Director or Director’s firm, partner or such company to act as Auditor of the Company.

(2) A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest as required by the Act.

(3) Following a declaration being made pursuant to this Bye-law, the Director concerned may be counted in the quorum at such meeting and, unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested.

(4) Any contract or other transaction to which the Company or any subsidiary of the Company is a party and in which one or more Directors has a direct or indirect interest that is material to such Director or Directors shall be authorized, approved, or ratified by affirmative vote of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum; provided that no such contract or other transaction shall be void or voidable solely by reason of such interest, or solely because such Director or Directors are present at the meeting of the Board or committee which authorizes or approves the contract or transaction, or solely because his or their votes are counted for such purpose, if any one of the following is true: (A) the contract or other transaction is fair and reasonable as to the Company or the subsidiary of the Company at the time it is authorized, approved or ratified; or (B) the fact of the interest is disclosed or known to the Board or committee and the Board or committee authorizes, approves, or ratifies the contract or transaction by unanimous written consent, provided at least one director so consenting is disinterested, or by affirmative vote of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum; or (C) the fact of the interest is disclosed or known to the Members, and they authorize, approve or ratify the contract or transaction.

19. Remuneration of Directors

The remuneration (if any) of the Directors shall be determined by the Board from time to time. The Directors may also be paid all travel, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board, any committee appointed by the Board, general meetings of the Company, or in connection with the business of the Company or their duties as Directors generally; provided that nothing contained herein shall be construed to preclude any Director from serving the Company in any other capacity or receiving compensation therefor.

OFFICERS

20. Officers of the Company

The Officers of the Company shall consist of a President and a Vice President or a Chairman and a Deputy Chairman, such additional Vice Presidents or Deputy Chairmen as the Board may from time to time determine, a Secretary and such additional Officers, including a Chief Executive Officer, as the Board may from time to time determine all of whom shall be deemed to be Officers for the purposes of these Bye-laws. A person may hold any number of offices simultaneously; provided that the same person may not hold the offices of President and Vice President, or Chairman and Deputy Chairman, simultaneously.

21. Appointment and Authority of Officers

(1) The Board shall, as soon as possible after the statutory meeting of Members and after each annual general meeting, appoint a President and a Vice President or a Chairman and a Deputy Chairman who shall be Directors. Any vacancy arising in the position of President or Chairman shall be filled by the Board at such time and in such manner as the Board shall determine. Such Vice President or Deputy Chairman shall have such duties and responsibilities as provided in these Bye-laws or as may be determined by the Board from time to time.

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(2) The Secretary and additional Officers, if any, shall be appointed by the Board from time to time. The Chief Executive Officer shall have the authority to appoint and remove assistant officers (who shall not be deemed to be Officers for the purposes of these Bye-laws) with such authority as the Chief Executive Officer shall deem appropriate.

22. Duties of Officers

The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.

23. Chairman of Meetings

Unless otherwise agreed by a majority of those attending and entitled to attend and vote thereat, the Chairman, if one is appointed, or, in the absence of a Chairman, the Deputy Chairman, if one is appointed, or, in the absence of the Deputy Chairman, the President, shall act as chairman at any general meeting, or in the absence of any of the foregoing Officers, a chairman shall be appointed or elected by those present at the meeting and entitled to vote.

24. Register of Directors and Officers

The Board shall cause to be kept in one or more books at the registered office of the Company a Register of Directors and Officers and shall enter therein the particulars required by the Act.

MINUTES

25. Obligations of Board to Keep Minutes

(1) The Board shall cause minutes to be duly entered in books provided for the purpose:

(a) of all elections and appointments of Officers;

(b) of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and

(c) of all resolutions and proceedings of general meetings of the Members, meetings of the Board and meetings of committees appointed by the Board.

(2) Minutes prepared in accordance with the Act and these Bye-laws shall be kept by the Secretary at the registered office of the Company.

INDEMNITY

26. Indemnification of Directors and Officers of the Company

(1) The Company shall indemnify any person who was, is or is threatened to be made a party to a Proceeding (as hereinafter defined) by reason of the fact that he or she (a) is or was a Director or Officer of the Company or (b) while a Director or Officer of the Company, is or was serving at the request of the Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, general or limited partnership, firm, association, trust, estate, company (including a limited liability company) or any other entity or organisation or employee benefit plan or other enterprise, to the fullest extent permitted under Bermuda law, as the same exists or may hereafter be amended. Such right shall be a contract right and as such shall run to the benefit of any Director or Officer who is elected and accepts the position of Director or Officer of the Company or elects to continue to serve as a Director or Officer of the Company while this Bye-law is in effect. Any repeal or amendment of this Bye-law shall be prospective only and shall not limit the rights of any such Director or Officer or the obligations of the Company with respect to any claim arising from or related to the services of such Director or Officer in any of the foregoing capacities prior to any such repeal or amendment to this Bye-law. Such right shall include the right to be paid by the Company expenses incurred in defending any such Proceeding in advance of its final disposition to the maximum extent permitted under Bermuda law, as the same exists or may hereafter be amended; provided that to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the Director or Officer is not entitled to be indemnified under this Bye-law or otherwise. If a claim for indemnification or advancement of expenses hereunder is not paid in full by the Company within 60 days after a written claim has been received by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim, and if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim. It shall be a defense to any such action that such indemnification or advancement of costs of defense are not permitted under Bermuda law, but the burden of proving such defense shall be on the Company. Neither the failure of the Company (including the Board or any committee thereof, independent legal counsel or Members) to have made its determination prior to the commencement of such action that indemnification of, or advancement of costs of defense to, the claimant is permissible in the circumstances nor an actual determination by the Company (including the Board or any committee thereof, independent legal counsel or Members) that such indemnification or advancement is not permissible shall be a defense to the action or create a presumption that such indemnification or advancement is not permissible. In the event of the death of any person having a right of indemnification under the foregoing provisions, such right shall inure to the benefit of his or her heirs, executors, administrators and personal representatives.

8

Except as otherwise provided in this subparagraph (1), the Company shall be required to indemnify a Director or Officer in connection with a Proceeding (or part thereof) commenced by such person only if the commencement of such Proceeding (or part thereof) by the person was authorised by the Board.

(2) The Company may additionally indemnify any employee or agent of the Company to the fullest extent permitted by law.

(3) The rights conferred on any person indemnified by this Bye-law shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Memorandum of Association of the Company, these Bye-laws, agreement, vote of the Members or disinterested Directors or otherwise.

(4) The Company’s obligation, if any, to indemnify or to advance expenses to any person indemnified who was or is serving at its request as a Director or Officer or otherwise of another person described in subparagraph (1) shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other person.

(5) This Bye-law shall not limit the right of the Company, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than persons authorised for indemnification under this Bye-law when and as authorised by appropriate corporate action.

(6) The indemnity provided by this Bye-law 26 shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.

(7) “Proceeding,” for purposes of this Bye-law 26, means any threatened, pending or completed action, suit, claim or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit, claim or proceeding, and any inquiry or investigation that could lead to such an action, suit, claim or proceeding.

(8) Each Member agrees to exempt a Director or Officer from any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his or her duties with or for the Company; provided that such waiver shall not extend to any matter in respect of any fraud or dishonesty which may attach to such Director or Officer.

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MEETINGS

27. Annual General Meeting

(1) The annual general meeting of the Company shall be held in each year other than the year of organisation at such time and place as the Board shall appoint. Notice of such meeting shall be given to each Member not less than five nor more than sixty days prior to such meeting stating the date, place and time at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.

(2) At any annual general meeting only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board or (b) by any Member entitled to vote at such meeting who complies with the procedures set forth in this Bye-law. Any Member entitled to vote at such meeting may propose business to be included in the agenda of such meeting only if written notice of such Member’s intent is given to the Secretary of the Company, either by personal delivery or mail or by facsimile, not later than 90 days in advance of the anniversary of the immediately preceding annual general meeting or if the date of the annual general meeting of Members occurs more than 30 days before or 60 days after the anniversary of such immediately preceding annual meeting, not later than the close of business on the seventh day following the date on which notice of such meeting is given to Members. A Member’s notice to the Secretary shall set forth in writing as to each matter such Member proposes to bring before the annual general meeting (a) a brief description of the business desired to be brought before the annual general meeting and the reasons for conducting such business at the annual general meeting, (b) the name and address, as they appear on the Company’s books, of the Members proposing such business, (c) the class and number of shares of the Company which are beneficially owned by the Member and (d) any material interest of the Member in such business. Notwithstanding anything in these Bye-laws to the contrary, no business shall be conducted at an annual general meeting except in accordance with the procedures set forth in this subparagraph. The Officer of the Company or other person presiding at the annual general meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this subparagraph, and, if such Officer or other person should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

28. Special General Meetings

The Chairman, if one is appointed, the President or the Board by vote of a majority of the Board may convene a special general meeting of the Company whenever in its judgement such a meeting is necessary. Notice of such meeting shall be given to each Member not less than five nor more than sixty days prior to such meeting stating the date, time, place and the nature of the business to be considered at the meeting. Special general meetings may be held at such place as may from time to time be designated by the Board and stated in the notice of the meeting. In any special general meeting of the Company only such business shall be conducted as is set forth in the notice thereof.

29. Accidental Omission of Notice of General Meeting

The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

30. Meeting Called on Requisition of Members

Notwithstanding anything herein, the Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital of the Company as at the date of the deposit carries the right to vote in general meetings of the Company, forthwith proceed to convene a special general meeting of the Company and the provisions of Section 74 of the Act shall apply; provided that for any question proposed for consideration at any such special general meeting to be approved shall require the affirmative vote of the holders of not less than 66 ²/3% of the shares entitled to vote thereon.

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31. Short Notice

A general meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and vote thereat in the case of an annual general meeting and (ii) a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.

32. Postponement of Meetings

The Secretary may postpone any general meeting called in accordance with the provisions of these Bye-laws (other than a meeting requisitioned under Bye-law 30 of these Bye-laws); provided that notice of postponement is given to each Member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of these Bye-laws.

33. Quorum for General Meeting

(1) In any general meeting of the Company, except as otherwise expressly required by the Act or by these Bye-laws, two or more persons present in person and representing in person or by proxy a majority of the shares then in issue entitled to vote at any meeting shall form a quorum for the transaction of business; provided that if the Company shall at any time have only one Member, one Member present in person or by proxy shall form a quorum for the transaction of business in any general meeting of the Company held during such time. If the holders of the number of shares necessary to constitute a quorum shall fail to attend in person or by proxy at the time and place fixed by these Bye-laws for an annual general meeting, a majority in interest of the Members present, in person or by proxy, may adjourn from time to time without notice other than announcement at the meeting until the holders of the amount of shares requisite to constitute a quorum shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

(2) Whenever the holders of any class or series of shares are entitled to vote separately on a specified item of business, the presence in person or by proxy of the holders of record of the shares of such class or series entitled to cast a majority of the votes thereon shall constitute a quorum for the transaction of such specified item of business.

34. Adjournment of Meetings

The chairman of a general meeting may, with the consent of a majority of the Members, in any general meeting at which a quorum is present (and shall if so directed), adjourn the meeting. Unless the meeting is adjourned to a specific date and time, fresh notice of the date, time and place for the resumption of the adjourned meeting shall be given to each Member in accordance with the provisions of these Bye-laws.

35. Attendance at Meetings

Members may participate in any general meeting by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

36. Unanimous Written Resolutions of Members

(1) Subject to subparagraph (6), any action which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members of the Company, may, without a meeting and without any previous notice being required, be done by resolution in writing signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, all the Members who at the date of the resolution would be entitled to attend the meeting and vote on the resolution.

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(2) A resolution in writing may be signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, all the Members, or any class thereof, in as many counterparts as may be necessary.

(3) For the purposes of this Bye-law, the date of the resolution is the date when the resolution is signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of, the last Member to sign and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date.

(4) A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in a general or special meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.

(5) A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of Sections 81 and 82 of the Act.

(6) This Bye-law shall not apply to:

(a) a resolution passed pursuant to Section 89(5) of the Act; or

(b) a resolution passed for the purpose of removing a Director before the expiration of his or her term of office under these Bye-laws.

37. Attendance of Directors

The Directors of the Company shall be entitled to receive notice of, and to attend and be heard in any general meeting.

38. Presiding Officer at Meetings

At all meetings of Members, unless otherwise determined by the Board, the Chairman, if one is appointed, or, in the absence of a Chairman, the Deputy Chairman, if one is appointed, or, in the absence of the Deputy Chairman, the President, shall preside and the Secretary shall act as secretary of the meeting.

39. Voting at Meetings

Except as otherwise expressly required by the Act or these Bye-laws, any question proposed for the consideration of the Members at any general meeting at which a quorum is in attendance shall be decided by the affirmative vote of a majority of the votes cast by ballot by the Members in person or by proxy appointed by instrument in writing subscribed by such Member or by his or her duly authorised attorney and delivered to the chairman of the meeting. In the case of an equality of votes the resolution shall fail. Directors shall be elected as set forth in Bye-law 10.

Without limiting the generality of the foregoing, any amalgamation, merger or consolidation of the Company with another entity or the sale, lease or exchange of all or substantially all of the assets of the Company shall, except as otherwise expressly provided in these Bye-laws, require the approval of Members by way of an affirmative vote of a majority of the votes cast by the Members in person or by proxy appointed by instrument in writing subscribed by such Member or by his or her duly authorised attorney and delivered to the chairman of the meeting. Prior to any votes being cast in connection with such resolutions, the chairman of the meeting may demand a poll which shall be by way of ballot.

40. Seniority of Joint Holders Voting

In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

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41. Instrument of Proxy

The instrument appointing a proxy shall be in writing in the form as may be prescribed by the Board from time to time, under the hand of the appointor or of the appointor’s attorney duly authorised in writing, or if the appointor is a corporation, either under its seal, or under the hand of a duly authorised officer or attorney. The decision of the chairman of any general meeting as to the validity of any instrument of proxy shall be final.

42. Representation of Corporations at Meetings

A corporation which is a Member may, by written instrument, authorise such person as it thinks fit to act as its representative at any meeting of the Members and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member. Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he or she thinks fit as to the right of any person to attend and vote in general meetings on behalf of a corporation that is a Member.

SHARE CAPITAL AND SHARES

43. Authorised Share Capital

(1) The authorised share capital of the Company is US$1,175,010,000, consisting of (1) 1,175,000,000 common shares of the par value of US$1.00 per share, which common shares consist of (a) 600,000,000 Class A common shares (“Class A Common Shares”) and 575,000,000 Class B common shares (“Class B Common Shares”), and (2) 10,000,000 preference shares of the par value of US$0.001 per share (“Preference Shares”), with any series of Preference Shares being designated from time to time pursuant to subparagraph (4) of this Bye-law.

(2) Subject to these Bye-laws, the holders of Class A Common Shares shall:

(a) subject to Bye-law 43(3)(b), be entitled to such dividends as the Board may, in its discretion, from time to time declare and pay out of funds legally available for the payment of dividends;

(b) in the event of a liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, after payment in full has been made to the holders of the Preference Shares of the amounts to which they are respectively entitled or sufficient sums have been set apart for the payment thereof, be entitled to receive ratably any and all surplus assets remaining to be paid or distributed;

(c) subject to any required Preference Share class votes, be entitled to one vote per Class A Common Share held by them and shall vote together as a single class on all matters submitted to a vote of the Members with the holders of (i) Preference Shares (but only to the extent the holders of Preference Shares shall be entitled to vote with respect to the applicable series of Preference Shares or under the Act) and (ii) Class B Common Shares (but only to the extent the holders of Class B Common Shares shall be entitled to vote under the Act);

(d) generally be entitled to enjoy all of the rights attaching to Class A Common Shares; and

(e) not be entitled to any preemptive or preferential rights to subscribe for or purchase any shares of any class or series of shares of the Company, now or hereafter authorised, or any series convertible into, or warrants or other evidences of optional rights to purchase or subscribe for, shares of any class or series of the Company, now or hereafter authorised.

(3) Subject to these Bye-laws, the holders of Class B Common Shares shall have all of the rights of the holders of Class A Common Shares, except that:

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(a) the holders of Class B Common Shares shall not be entitled to vote, except as to matters for which the Act specifically requires voting rights for otherwise nonvoting shares;

(b) if a dividend or other distribution in cash, shares or other property is declared or paid on Class A Common Shares, a like dividend or other distribution in kind and amount shall also be declared and paid on Class B Common Shares;

(c) the holders of Class B Common Shares shall have the right to convert their shares into Class A Common Shares on a one-for-one basis in the following circumstances:

(i) to satisfy the obligations of the Company or its subsidiaries or affiliated companies to issue Class A Common Shares with regard to the exercise of share options, grants or purchases of shares pursuant to share incentive plans, employee share purchase plans, dividend reinvestment plans or other stock-based compensation, retirement or deferred compensation plans sponsored by the Company or its subsidiaries or affiliated companies; or

(ii) as consideration for any acquisition of stock or assets of a third party;

(d) in the event of the transfer of Class B Common Shares to any person other than a wholly-owned, direct or indirect, subsidiary of the Company, Class B Common Shares so transferred shall automatically be converted into Class A Common Shares on a one-for-one basis, subject to adjustment for share divisions or other recapitalization events; and

(e) the holders of Class B Common Shares shall have the right upon written notice to require the Company, subject to Section 42A of the Act, to purchase for cash the number of Class B Common Shares stated in such notice at the fair market value per Class A Common Share on the date of such notice. Any such purchase shall be settled within 180 calendar days of the day such notice is given and shall include simple interest from the date of the notice to but not including the payment date at a rate equal to the prime rate charged by the Chase Manhattan Bank or its successor. For purposes of this paragraph, the fair market value per Class A Common Share, as of any date, means the average of the high and low sales prices of a Class A Common Share as reported on the New York Stock Exchange composite tape on the applicable date, or if no sales of Class A Common Shares were made on the New York Stock Exchange on that date, the average of the high and low prices as reported on the composite tape for the most recent preceding day on which sales of Class A Common Shares were made. No dividends shall be declared on any Class B Common Shares for which notice has been given under this paragraph.

(4) The Board is empowered to cause the Preference Shares to be issued from time to time as shares of one or more series of Preference Shares, and in the resolution or resolutions providing for the issue of shares of each particular series, before issuance, the Board is expressly authorised to fix:

(a) the distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except as otherwise provided by the Board in creating such series) or decreased (but not below the number of shares thereof then in issue) from time to time by resolution of the Board;

(b) the rate of dividends payable on shares of such series, whether or not and upon what conditions dividends on shares of such series shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate;

(c) the terms, if any, on which shares of such series may be redeemed, including without limitation, the redemption price or prices for such series, which may consist of a redemption price or scale of redemption prices applicable only to redemption in connection with a sinking fund (which term as used herein shall include any fund or requirement for the periodic purchase or redemption of shares), and the same or a different redemption price or scale of redemption prices applicable to any other redemption;

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(d) the terms and amount of any sinking fund provided for the purchase or redemption of shares of such series;

(e) the amount or amounts which shall be paid to the holders of shares of such series in case of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary;

(f) the terms, if any, upon which the holders of shares of such series may convert shares thereof into shares of any other class or classes or of any one or more series of the same class or of another class or classes;

(g) the voting rights, full or limited, if any, of the shares of such series; and whether or not and under what conditions the shares of such series (alone or together with the shares of one or more other series having similar provisions) shall be entitled to vote separately as a single class, for the election of one or more additional Directors of the Company in case of dividend arrearages or other specified events, or upon other matters;

(h) whether or not the holders of shares of such series, as such, shall have any preemptive or preferential rights to subscribe for or purchase shares of any class or series of shares of the Company, now or hereafter authorised, or any securities convertible into, or warrants or other evidences of optional rights to purchase or subscribe for, shares of any class or series of the Company, now or hereafter authorised;

(i) whether or not the issuance of additional shares of such series, or of any shares of any other series, shall be subject to restrictions as to issuance, or as to the preferences, rights and qualifications of any such other series; and

(j) such other rights, preferences and limitations as may be permitted to be fixed by the Board of the Company under the laws of Bermuda as in effect at the time of the creation of such series.

(5) Subject to these Bye-laws and except to the extent otherwise provided for in a series of Preference Shares in its designation, the Preference Shares shall be of equal rank and be identical in all respects. The Board is authorised to change the designations, rights, preferences and limitations of any series of Preference Shares theretofore established, no shares of which have been issued.

44. Power to Issue Shares

(1) Subject to these Bye-laws and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to issue any unissued shares of the Company on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Board may from time to time prescribe.

(2) The Board shall, in connection with the issue of any share, have the power to pay such commission and brokerage as may be permitted by law.

(3) Unless otherwise permitted by law, the Company shall not give, whether directly or indirectly, whether by means of loan, guarantee, provision of security or otherwise, any financial assistance for the purpose of a purchase or subscription made or to be made by any person of or for any shares in the Company, but nothing in this Bye-law shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.

45. Variation of Rights, Alteration of Share Capital and Purchase of Shares of the Company

(1) Subject to the provisions of Sections 42 and 43 of the Act and except as otherwise expressly set forth in these Bye-laws, any Preference Shares may be issued or converted into shares that, at a determinable date or at the option of the Company, are liable to be redeemed on such terms and in such manner as the Company before the issue or conversion may by resolution of the Members determine.

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(2) If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of 75% of the shares then in issue of that class or with the sanction of a resolution passed by a majority of the votes cast in a separate general meeting of the holders of the shares of the class in accordance with Section 47(7) of the Act. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

(3) The Company may from time to time by resolution of the Members change the currency denomination of, increase, alter or reduce its share capital in accordance with the provisions of Sections 45 and 46 of the Act. Where, on any alteration of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit including, without limiting the generality of the foregoing, the issue to Members, as appropriate, of fractions of shares and/or arranging for the sale or transfer of the fractions of shares of Members.

(4) The Company may from time to time purchase its own shares in accordance with the provisions of Section 42A of the Act.

46. Registered Holder of Shares

(1) The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not be bound to recognise any equitable or other claim to, or interest in, such share on the part of any other person.

(2) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by direct deposit to the bank account designated by the Member for such purpose and cheque or draft sent through the post directed to the Member at such Member’s address in the Register of Members or, in the case of joint holders, to such address of the holder first named in the Register of Members, or to such person and to such address as the holder or joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.

47. Death of a Joint Holder

Where two or more persons are registered as joint holders of a share or shares then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to the said share or shares and the Company shall, subject to Bye-law 58, recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.

48. Certificated or Uncertificated Shares

(1) The shares of the Company may be issued in certificated or uncertificated form. The Board shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of such certificated or uncertificated shares of the Company.

(2) Promptly after uncertificated shares have been registered as issued, the Company or its transfer agent shall send to the registered owner thereof a written statement containing a description of the issue of which such shares are a part, the number of shares registered, the date of registration and such other information as may be required or appropriate.

REGISTER OF MEMBERS

49. Contents of Register of Members

(1) The Board shall cause to be kept in one or more books a Register of its Members and shall enter therein the particulars required by the Act which are as follows:

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(a) the name and address of each Member, the number and, where appropriate, the class or series of shares held by such Member and the amount paid on such shares;

(b) the date on which each person was entered in the Register as a Member; and

(c) the date on which any person ceased to be a Member.

(2) Subject to the Act, the Company may keep an overseas or local or other branch register of Members resident in any place, and the Board may make and vary such regulations as it determines in respect of the keeping of any such register and maintaining a registration office in connection therewith.

50. Inspection of Register of Members

The Register of Members and, if applicable, any branch register of Members shall be open to inspection at the registered office of the Company and, if applicable, any registration office, on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection. The Register of Members and, if applicable, any branch register of Members may, after notice has been given by advertisement in an appointed newspaper to that effect, be closed for any time or times not exceeding in the whole thirty days in each year.

51. Transactions with Interested Members

(1) The Company may not engage, at any time, in any Business Combination with any Interested Member unless the Business Combination receives the affirmative vote of the holders of 80% of the shares then in issue of all classes of shares of the Company entitled to vote, considered for the purposes of this provision as one class.

(2) Interested Member status of a Member is determined as of the date of any action taken by the Board with respect to such transaction or as of any record date for the determination of Members entitled to notice and to vote with respect thereto or immediately prior to the consummation of such transaction. Any determination made in good faith by the Board, on the basis of information at the time available to it, as to whether any person is an Interested Member, shall be conclusive and binding for all purposes of these Bye-laws.

(3) The provisions of subparagraph (1) of this Bye-law shall not apply to (a) any Business Combination with an Interested Member that has been approved by the Board or (b) any agreement for the amalgamation, merger or consolidation of any subsidiary of the Company with the Company or with another subsidiary of the Company if (i) the provisions of this subparagraph shall not be changed or otherwise affected by or by virtue of the amalgamation, merger or consolidation and (ii) the holders of greater than 50% of the voting power of the Company or the subsidiary, as appropriate, immediately prior to the amalgamation, merger or consolidation continue to hold greater than 50% of the voting power of the amalgamated company immediately following the amalgamation, merger or consolidation.

52. Record Dates

Notwithstanding any other provision of these Bye-laws, the Board may fix any date as the record date for:

(a) determining the Members entitled to receive any dividend; and

(b) determining the Members entitled to receive notice of and to vote in any general meeting of the Company; provided, that such record date shall not be more than sixty days before the date of such dividend or such general meeting, as the case may be.

53. Scrutineers

(1) One or more scrutineers may be appointed by the Board to act at any meeting of Members, or, if the Board fails to act, the chairman of the meeting may appoint a scrutineer or scrutineers. A scrutineer may or may not be a Member, but shall not be a candidate for the office of Director.

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(2) The scrutineer or scrutineers shall determine the number of shares then in issue and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all Members.

(3) Each scrutineer, before entering upon the discharge of the duties described in Bye-law 53(2), shall be sworn faithfully to execute the duties of a scrutineer at such meeting with strict impartiality, and according to the best of such person’s ability.

TRANSFER OF SHARES

54. Instrument of Transfer

An instrument of transfer shall be in the form as may be prescribed by the Board from time to time. The Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been transferred to the transferee in the Register of Members.

55. Restriction on Transfer

(1) The Board shall refuse to register the transfer of a share unless such transfer is in accordance with the Bye-laws and all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained.

(2) If the Board refuses to register a transfer of any share, the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.

56. Transfers by Joint Holders

The joint holders of any share or shares may transfer such share or shares to one or more of such joint holders, and the surviving holder or holders of any share or shares previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.

TRANSMISSION OF SHARES

57. Representative of Deceased Member

In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder (as set forth in Bye-law 58), shall be the only persons recognised by the Company as having any title to the deceased Member’s interest in the shares. Subject to the provisions of Section 52 of the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may in its absolute discretion decide as being properly authorised to deal with the shares of a deceased Member.

58. Registration on Death or Bankruptcy

Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Company may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in the form as may be prescribed by the Board. On the presentation thereof to the Company, accompanied by such evidence as the Company may require to prove the title of the transferor, the transferee shall be registered as a Member but the Company shall, in either case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member’s death or bankruptcy, as the case may be.

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59. Dividend Entitlement of Transferee

A person becoming entitled to a share by reason of the death or bankruptcy or winding-up of a Member shall be entitled to the same dividends and other advantages to which he or she would be entitled if he or she were the registered holder of the share. However, the Company may determine to withhold the payment of any dividend payable or other advantages in respect of such share until such person shall become the registered holder of the share or shall have effectually transferred such share, but, subject to the requirements of these Bye-laws being met, such a person may vote at meetings.

DIVIDENDS AND OTHER DISTRIBUTIONS

60. Declaration of Dividends by the Board

The Board may, subject to these Bye-laws and in accordance with Section 54 of the Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by them or the class or series of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets.

CAPITALISATION

61. Issue of Bonus Shares

The Board may resolve to capitalise any part of the amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.

ACCOUNTS AND FINANCIAL STATEMENTS

62. Records of Account

The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:

(a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;

(b) all sales and purchases of goods by the Company; and

(c) the assets and liabilities of the Company.

Such records of account shall be kept at the registered office of the Company or, subject to Section 83(2) of the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.

63. Fiscal Year

The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31st December in each year.

64. Financial Statements

Subject to any rights to waive laying of accounts pursuant to Section 88 of the Act, financial statements as required by the Act shall be laid before the Members in general meeting.

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AUDIT

65. Appointment of Auditor

Subject to Section 88 of the Act, in the annual general meeting or in a subsequent special general meeting in each year, an independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company. Such Auditor may be a Member but no Director, Officer or employee of the Company shall, during his or her continuance in office, be eligible to act as an Auditor of the Company.

66. Remuneration of Auditor

The remuneration of the Auditor shall be fixed by the Company in general meeting or in such manner as the Members may determine.

67. Vacation of Office of Auditor

If the office of Auditor becomes vacant by the resignation or death of the Auditor, or by the Auditor becoming incapable of acting by reason of illness or other disability at a time when the Auditor’s services are required, the Board shall, as soon as practicable, convene a special general meeting to fill the vacancy thereby created.

68. Access to Books of the Company

The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers of the Company for any information in their possession relating to the books or affairs of the Company.

69. Report of the Auditor

(1) Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to Section 88 of the Act, the accounts of the Company shall be audited at least once in every year.

(2) The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the Auditor shall be submitted to the Members in general meeting pursuant to Bye-law 64.

(3) The generally accepted auditing standards referred to in subparagraph (2) of this Bye-law may be those of a country or jurisdiction other than Bermuda. If so, the financial statements and the report of the Auditor must disclose this fact and name such country or jurisdiction.

NOTICES

70. Notices to Members of the Company

A notice may be given by the Company to any Member either by delivering it to such Member in person or by sending it to such Member’s address in the Register of Members or to such other address given for the purpose. For the purposes of this Bye-law, a notice may be sent by mail, courier service, cable, telex, telecopier, facsimile, printing, computer generated email or other mode of representing words in a legible and non-transitory form.

SEAL OF THE COMPANY

71. The Seal

The seal of the Company shall be in such form as the Board may from time to time determine. The Board may adopt one or more duplicate seals for use outside Bermuda.

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72. Manner in Which Seal is to be Affixed

The seal of the Company shall not be affixed to any instrument except attested by the signature of a Director and the Secretary or any two Directors, or any person appointed by the Board for the purpose; provided that any Director, Officer or Resident Representative, may affix the seal of the Company attested by such Director, Officer or Resident Representative’s signature to any authenticated copies of these Bye-laws, the organisation documents of the Company, the minutes of any meetings or any other documents required to be authenticated by such Director, Officer or Resident Representative.

WINDING-UP

73. Winding-up/Distribution by Liquidator

If the Company shall be wound up, the liquidator may, with the sanction of a resolution of the Members, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he or she deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.

ALTERATION OF BYE-LAWS

74. Alteration of Bye-laws

No Bye-law shall be rescinded, altered or amended and no new Bye-law shall be made until the same has been approved by a resolution of the Board and by a resolution of the Members.

* * * * * *

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Herbert L. Henkel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ingersoll-Rand Company Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2005	/s/ Herbert L. Henkel
	Herbert L. Henkel
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Timothy R. McLevish, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ingersoll-Rand Company Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2005	/s/ Timothy R. McLevish
	Timothy R. McLevish
	Principal Financial Officer

EX-32

Exhibit 32

Section 1350 Certifications

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Ingersoll-Rand Company Limited (the Company), does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2005 (the Form 10-Q) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Herbert L. Henkel

Herbert L. Henkel

Chief Executive Officer

August 4, 2005

/s/ Timothy R. McLevish

Timothy R. McLevish

Chief Financial Officer

August 4, 2005