EX-99.2 4 v096192_ex99-2.htm Unassociated Document
Exhibit 99.2


INGERSOLL-RAND COMPANY LIMITED
Pro Forma Financial Statement Information
(Unaudited)

On February 27, 2007, Ingersoll-Rand Company Limited (the “Company”) agreed to sell its Road Development business to AB Volvo (publ) for cash proceeds of approximately $1.3 billion. The sale was completed on April 30, 2007 in all countries except for India, which closed on May 4, 2007 (the “Road Development Divestiture”). On July 29, 2007, the Company agreed to sell its Bobcat, Utility Equipment and Attachments businesses (collectively, “Compact Equipment”) to Doosan Infracore for cash proceeds of approximately $4.9 billion (the “Compact Equipment Divestiture”). The sale was completed on November 30, 2007. Accordingly, the Road Development and Compact Equipment businesses are now considered discontinued operations in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

The unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of December 31, 2006 set forth below has been presented after giving effect to the Road Development Divestiture and the Compact Equipment Divestiture (collectively, the “Transactions”) as if they occurred on December 31, 2006. The unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of September 30, 2007 set forth below has been presented after giving effect to the Compact Equipment divestiture as if it occurred on September 30, 2007. The unaudited Pro Forma Condensed Consolidated Income Statement Information for the years ending December 31, 2006, 2005 and 2004 set forth below has been presented after giving effect to the Transactions as if they had occurred on January 1, 2004 and does not assume any interest income on cash proceeds. The Company has not presented unaudited Pro Forma Condensed Consolidated Income Statement Information for any periods subsequent to December 31, 2006, as both the Compact Equipment and Road Development businesses were reported as discontinued operations in the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 2007, filed with the Securities and Exchange Commission on November 2, 2007.

The unaudited pro forma financial statement information has been derived primarily from the historical audited consolidated financial statements of the Company included in its Annual Reports on Form 10-K for the years ended December 31, 2006, 2005 and 2004, as well as the unaudited condensed consolidated financial statements of the Company included in its quarterly report on Form 10-Q for the quarterly period ended September 30, 2007. The unaudited pro forma financial statement information is based upon available information and assumptions that the Company believes are reasonable under the circumstances and were prepared to illustrate the estimated effects of the Transactions, if the Transactions occurred on the dates specified above. As the Transactions have been completed during the year, the Company has not finalized its accounting for discontinued operations for the years ended December 31, 2006, 2005, and 2004, and therefore, amounts reported in future filings with the Securities and Exchange Commission for the years ended December 31, 2006, 2005 and 2004 could differ from these pro forma estimates.

The unaudited pro forma financial statement information has been provided for informational purposes and should not be considered indicative of the financial condition or results of operations that would have been achieved had the Transactions occurred as of the periods presented. In addition, the unaudited pro forma financial statement information does not purport to indicate balance sheet data or results of operations as of any future date or for any future period. The unaudited pro forma financial statement information, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Annual Reports on Form 10-K for the years ended December 31, 2006, 2005 and 2004.



 
Pro Forma Condensed Consolidated Income Statement Information
  
For the Year Ended December 31, 2006
  
(Unaudited)
  
(In millions, except per share amounts)
  
 
  
 
  
 
  
Road
  
Compact
 
 
  
 
  
As
  
Development
  
Equipment
  
 
  
 
  
Reported (a)
  
Divestiture (b)
  
Divestiture (c)
  
Pro Forma
  
 
  
 
  
 
  
 
  
 
  
Net revenues
  
$
11,409.3
  
$
(727.2
)
$
(2,648.4
)
$
8,033.7
  
 
                  
Cost of goods sold
    
8,424.2
   
(571.4
)
  
(2,084.4
)
  
5,768.4
 
 
                  
Selling and administrative expenses
    
1,544.3
   
(71.9
)
  
(205.6
)
  
1,266.8
 
 
                  
Operating income
    
1,440.8
   
(83.9
)
  
(358.4
)
  
998.5
 
 
                  
Interest expense
    
(131.8
)
  
(1.8
)
  
-
   
(133.6
)
 
                  
Other income, net
    
5.9
   
0.1
   
(3.4
)
  
2.6
 
 
                  
Minority interests
    
(14.9
)
  
-
   
-
   
(14.9
)
 
                  
Earnings before income taxes
    
1,300.0
   
(85.6
)
  
(361.8
)
  
852.6
 
 
                  
Provision for income taxes
    
231.7
   
(22.7
)
  
(116.4
)
  
92.6
 
 
                  
Earnings from continuing operations
  
$
1,068.3
  
$
(62.9
)
$
(245.4
)
$
760.0
  
 
                  
 
                  
Basic earnings per share
                  
Continuing operations - Basic
  
$
3.34
          
$
2.38
  
Continuing operations - Diluted
  
$
3.31
          
$
2.35
  
 
                  
Weighted-average number of common
                  
shares outstanding:
                  
Basic
    
319.9
           
319.9
 
Diluted
    
323.1
           
323.1
 








INGERSOLL-RAND COMPANY LIMITED
  
Pro Forma Condensed Consolidated Income Statement Information
  
For the Year Ended December 31, 2005
  
(Unaudited)
  
(In millions, except per share amounts)
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Road
  
Compact
 
 
  
 
  
As
  
Development
  
Equipment
  
 
  
 
  
Reported (a)
  
Divestiture (b)
  
Divestiture (c)
  
Pro Forma
  
 
  
 
  
 
  
 
  
 
  
Net revenues
  
$
10,546.9
  
$
(673.2
)
$
(2,610.1
)
$
7,263.6
  
 
                  
Cost of goods sold
    
7,744.1
   
(545.6
)
  
(1,995.4
)
  
5,203.1
 
 
                  
Selling and administrative expenses
    
1,441.0
   
(67.0
)
  
(201.3
)
  
1,172.7
 
 
                  
Operating income
    
1,361.8
   
(60.6
)
  
(413.4
)
  
887.8
 
 
                  
Interest expense
    
(144.3
)
  
(1.2
)
  
0.5
   
(145.0
)
 
                  
Other income, net
    
53.0
   
6.8
   
2.9
   
62.7
 
 
                  
Minority interests
    
(12.7
)
  
-
   
-
   
(12.7
)
 
                  
Earnings before income taxes
    
1,257.8
   
(55.0
)
  
(410.0
)
  
792.8
 
 
                  
Provision for income taxes
    
204.7
   
(18.3
)
  
(125.4
)
  
61.0
 
 
                  
Earnings from continuing operations
  
$
1,053.1
  
$
(36.7
)
$
(284.6
)
$
731.8
  
 
                  
 
                  
Basic earnings per share
                  
Continuing operations - Basic
  
$
3.12
          
$
2.17
  
Continuing operations - Diluted
  
$
3.09
          
$
2.14
  
 
                  
Weighted-average number of common
                  
shares outstanding:
                  
Basic
    
337.6
           
337.6
 
Diluted
    
341.3
           
341.3
 






INGERSOLL-RAND COMPANY LIMITED
  
Pro Forma Condensed Consolidated Income Statement Information
  
For the Year Ended December 31, 2004
  
(Unaudited)
  
(In millions, except per share amounts)
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Road
  
Compact
 
 
  
 
  
As
  
Development
  
Equipment
  
 
  
 
  
Reported (a)
  
Divestiture (b)
  
Divestiture (c)
  
Pro Forma
  
 
  
 
  
 
  
 
  
 
  
Net revenues
  
$
9,393.6
  
$
(610.7
)
$
(2,119.7
)
$
6,663.2
  
 
                  
Cost of goods sold
    
6,854.0
   
(457.2
)
  
(1,613.1
)
  
4,783.7
 
 
                  
Selling and administrative expenses
    
1,419.3
   
(61.1
)
  
(187.7
)
  
1,170.5
 
 
                  
Operating income
    
1,120.3
   
(92.4
)
  
(318.9
)
  
709.0
 
 
                  
Interest expense
    
(153.1
)
  
(0.8
)
  
1.8
   
(152.1
)
 
                  
Other income, net
    
17.0
   
0.3
   
(0.8
)
  
16.5
 
 
                  
Minority interests
    
(16.0
)
  
-
   
-
   
(16.0
)
 
                  
Earnings before income taxes
    
968.2
   
(92.9
)
  
(317.9
)
  
557.4
 
 
                  
Provision for income taxes
    
138.4
   
(34.1
)
  
(101.1
)
  
3.2
 
 
                  
Earnings from continuing operations
  
$
829.8
  
$
(58.8
)
$
(216.8
)
$
554.2
  
 
                  
 
                  
Basic earnings per share
                  
Continuing operations - Basic
  
$
2.40
          
$
1.60
  
Continuing operations - Diluted
  
$
2.36
          
$
1.58
  
 
                  
Weighted-average number of common
                  
shares outstanding:
                  
Basic
    
346.5
           
346.5
 
Diluted
    
350.9
           
350.9
 











INGERSOLL-RAND COMPANY LIMITED
  
Pro Forma Condensed Consolidated Balance Sheet Information
  
At September 30, 2007
  
(Unaudited)
  
In millions
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Compact
 
 
  
 
  
   
As
  
Equipment
  
 
  
 
  
 
  
Reported (d)
  
Divestiture
  
 
  
Pro Forma
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
  
$
438.0
  
$
3,750.0
    
(e)
 
$
4,188.0
  
Marketable securities
    
0.7
   
-
         
0.7
 
Accounts and notes receivable, net
    
1,705.1
   
-
         
1,705.1
 
Inventories
    
923.0
   
-
         
923.0
 
Prepaid expenses and deferred income taxes
    
435.6
   
-
         
435.6
 
Assets held for sale
    
2,019.6
   
(2,019.6
)
        
-
 
Total current assets
    
5,522.0
   
1,730.4
         
7,252.4
 
                           
Property, plant and equipment, net
    
901.3
   
-
         
901.3
 
Goodwill
    
3,936.0
   
-
         
3,936.0
 
Intangible assets, net
    
719.5
   
-
         
719.5
 
Other assets
    
1,310.5
   
-
         
1,310.5
 
Total assets
  
$
12,389.3
  
$
1,730.4
        
$
14,119.7
  
                           
LIABILITIES AND EQUITY
                          
Current liabilities:
                          
Accounts payable
 
$
772.6
  
$
-
        
$
772.6
  
Accrued compensation and benefits
    
333.4
   
-
         
333.4
 
Accrued expenses and other current liabilities
    
690.1
   
-
         
690.1
 
Loans payable and current maturities
                         
of long-term debt
    
1,494.2
   
-
         
1,494.2
 
Liabilities held for sale
    
909.1
   
(909.1
)
        
-
 
Total current liabilities
    
4,199.4
   
(909.1
)
        
3,290.3
 
 
                          
Long-term debt
    
901.7
   
-
         
901.7
 
Postemployment and other benefit liabilities
    
909.4
   
-
         
909.4
 
Other noncurrent liabilities
    
1,184.3
   
-
         
1,184.3
 
Total liabilities
    
7,194.8
   
(909.1
)
        
6,285.7
 
                           
Total shareholders' equity
    
5,194.5
   
2,639.5
         
7,834.0
 
Total liabilities and shareholders' equity
  
$
12,389.3
  
$
1,730.4
        
$
14,119.7
  




INGERSOLL-RAND COMPANY LIMITED
  
Pro Forma Condensed Consolidated Balance Sheet Information
  
At December 31, 2006
  
(Unaudited)
  
In millions
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Compact
 
 
  
Road
  
 
  
 
  
   
As
  
Equipment
  
 
  
Development
  
 
  
 
  
 
  
Reported (d)
  
Divestiture
  
 
  
Divestiture
  
 
  
Pro Forma
  
ASSETS
                          
Current assets:
                          
Cash and cash equivalents
  
$
355.8
  
$
3,750.0
    
(e)
 
$
1,050.0
    
(f)
 
$
5,155.8
  
Marketable securities
    
0.7
   
-
         
-
         
0.7
 
Accounts and notes receivable, net
    
1,481.7
   
-
         
-
         
1,481.7
 
Inventories
    
833.1
   
-
         
-
         
833.1
 
Prepaid expenses and deferred income taxes
    
355.8
   
-
         
-
         
355.8
 
Assets held for sale
    
2,511.3
   
(1,909.4
)
        
(601.9
)
        
-
 
Total current assets
    
5,538.4
   
1,840.6
         
448.1
         
7,827.1
 
                                       
Property, plant and equipment, net
    
868.2
   
-
         
-
         
868.2
 
Goodwill
    
3,837.2
   
-
         
-
         
3,837.2
 
Intangible assets, net
    
712.8
   
-
         
-
         
712.8
 
Other assets
    
1,189.9
   
-
         
-
         
1,189.9
 
Total assets
  
$
12,146.5
  
$
1,840.6
        
$
448.1
        
$
14,435.2
  
                                       
LIABILITIES AND EQUITY
                                      
Current liabilities:
                                      
Accounts payable
 
$
757.6
  
$
-
        
$
-
        
$
757.6
  
Accrued compensation and benefits
    
306.4
   
-
         
-
         
306.4
 
Accrued expenses and other current liabilities
    
794.2
   
-
         
-
         
794.2
 
Loans payable and current maturities
                                     
of long-term debt
    
1,079.4
   
-
         
-
         
1,079.4
 
Liabilities held for sale
    
1,175.5
   
(988.2
)
        
(187.3
)
        
-
 
Total current liabilities
    
4,113.1
   
(988.2
)
        
(187.3
)
        
2,937.6
 
 
                                      
Long-term debt
    
905.2
   
-
         
-
         
905.2
 
Postemployment and other benefit liabilities
    
1,047.1
   
-
         
-
         
1,047.1
 
Other noncurrent liabilities
    
676.3
   
-
         
-
         
676.3
 
Total liabilities
    
6,741.7
   
(988.2
)
        
(187.3
)
        
5,566.2
 
                                       
Total shareholders' equity
    
5,404.8
   
2,828.8
         
635.4
         
8,869.0
 
Total liabilities and shareholders' equity
  
$
12,146.5
  
$
1,840.6
        
$
448.1
        
$
14,435.2
  



INGERSOLL-RAND COMPANY LIMITED
Notes to the Pro Forma Condensed Consolidated
Income Statements and Balance Sheet Information
(Unaudited) 


 
(a)
Represents condensed consolidated income statement information included in the Company’s Annual Report on Form 10-K for the respective period presented.

 
(b)
On February 27, 2007, the Company agreed to sell its Road Development business unit to AB Volvo (publ) for cash proceeds of approximately $1.3 billion. The sale was completed on April 30, 2007 in all countries except for India, which closed on May 4, 2007 (the “Road Development Divestiture”). The adjustments for the sale of the Road Development business give effect to the sale as if it occurred on January 1, 2004 for the unaudited condensed consolidated income statement information and December 31, 2006 for the unaudited condensed consolidated balance sheet information.

 
(c)
On July 29, 2007, the Company agreed to sell its Bobcat, Utility Equipment and Attachments businesses (collectively, “Compact Equipment”) to Doosan Infracore for cash proceeds of approximately $4.9 billion (the “Compact Equipment Divestiture”). The sale was completed on November 30, 2007. The adjustments for the sale of the Compact Equipment business give effect to the sale as if it occurred on January 1, 2004 for the unaudited condensed consolidated income statement information and September 30, 2007 and December 31, 2006 for the unaudited condensed consolidated balance sheet information for the respective period presented.

 
(d)
Represents condensed consolidated balance sheet information included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007.

 
(e)
Represents estimated net after tax proceeds received from the Compact Equipment Divestiture of approximately $3.75 billion.

 
(f)
Represents estimated net after tax proceeds received from the Road Development Divestiture of approximately $1.05 billion.