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Ingersoll-Rand Overview

VIEWS: 8 PAGES: 23

									              Ingersoll Rand
            Sanford Bernstein
     Strategic Decisions Conference




Herb Henkel
Chairman, President and CEO




29 May 2008
Safe Harbor
This filing contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Su ch statements include, but are not
limited to, statements relating to anticipated financial and operating results, the companies' plans, objectives, expectation s and intentions and other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other s imilar expressions. Such statements are
based upon the current beliefs and expectations of the management of Ingersoll -Rand Company Limited ("IR") and Trane Inc. ("Trane") and involve a number of
significant risks and uncertainties. Actual results may differ materially from the results anticipated in these forward -looking statements. The following factors,
among others, could cause or contribute to such material differences: failure to satisfy any of the conditions of closing, in cluding the failure to obtain Trane
stockholder approval; the risks that IR's and Trane's businesses will not be integrated successfully; the risk that IR and Tr ane will not realize estimated cost
savings and synergies; costs relating to the proposed transaction; disruption from the transaction making it more difficult to maintain relationships with customers,
employees, distributors or suppliers; the level of end market activity in IR's and Trane's commercial and residential market; weather conditions that could
negatively or positively affect business and results of operations; additional developments which may occur that could affect the IR's or Trane's estimate of
asbestos liabilities and recoveries; unpredictable difficulties or delays in the development of new product technology; fluct uations in pricing of our products, the
competitive environment and related market conditions; changes in law or different interpretations of laws that may affect Tr ane's or IR's expected effective tax
rate; increased regulation and related litigation; access to capital; and actions of domestic and foreign governments. Additi onal factors that could cause IR's and
Trane's results to differ materially from those described in the forward -looking statements can be found in the 2007 Annual Report on Form 10-K of IR and the
2007 Annual Report on Form 10-K of Trane filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site
(http://www.sec.gov). Neither IR nor Trane undertakes any obligation to update any forward -looking statements to reflect circumstances or events that occur after
the date on which such statements were made.

This communication is being made in respect of the proposed merger transaction involving IR, Trane and Indian Merger Sub, Inc . In connection with the
proposed transaction, IR will file with the SEC a registration statement on Form S-4 and Trane will mail a proxy statement/prospectus to its stockholders, and
each will be filing other documents regarding the proposed transaction with the SEC as well.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectu s
will be mailed to Trane's stockholders. Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing
information about IR and Trane, without charge, at the SEC's Internet site (http://www.sec.gov). Copies of the proxy statemen t/prospectus and the filings with the
SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directi ng a request to Ingersoll-Rand
Company Limited, P.O. Box 0445, 155 Chestnut Ridge Road, Montvale, NJ 07645 Attention: Investor Relations, (201) 573 -0123, or to Trane Inc., One
Centennial Avenue, Piscataway, NJ 08855 Attention: Investor Relations, (732) 980 -6125.

IR, Trane and their respective directors and executive officers and other persons may be deemed to be participants in the sol icitation of proxies in respect of the
proposed transaction. Information regarding IR's directors and executive officers is available in IR's proxy statement for its 2008 annual meeting of stockholders
and IR's 2007 Annual Report on Form 10-K, which were filed with the SEC on April 16, 2008 and February 29, 2008, respectively, a nd information regarding
Trane's directors and executive officers is available in Trane's proxy statement for its 2007 annual meeting of stockholders and Trane's 2007 Annual Report on
Form 10-K, which were filed with the SEC on March 23, 2007 and February 20, 2008, respectively. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained i n the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become available.


                                                                                                                                                                           2
Transformational Year
• Completed portfolio transformation:
   – Closed sale of Road Development to Volvo for $1.3 billion
   – Closed sale of Bobcat, Utility Equipment & Attachments to
     Doosan for $4.9 billion
   – Announced agreement to acquire Trane
• Transformed portfolio to Diversified Industrial Company
   – Scale, global reach, diversification and growth potential
   – Potential for significantly higher margins and returns
   – Rising EPS and cash flow, potential for upward valuation

• Maintained Operations Focus … While Executing
  Significant Portfolio Transformation

          Strong operating performance for 2007
                                                                 3
Full Year 2007
                  ($ Millions)

                   9% $8,763
       $8,034
                                      • Revenue growth +9%
                                      • EPS Continuing Ops.
                                        $2.48
                Excl.
            Restructuring    12.4%
                                      • Total EPS $3.33, Up 4%
                 Operating
         12.4%                12.1%
                  Margin




        2006                 2007
                   Solid 2007 Performance                     4
Available Cash Flow
                Cash Flow From Operating Activities Minus CAPEX
($ M)

$1,000
                                                                  $931*
                               $804         $784
 $800                                                  $743
                                                                  $714
             $630
 $600


 $400


 $200


   $0
              2003             2004         2005        2006      2007
    *Excludes tax payment of $217 Million


                                                                          5
Ingersoll Rand




                 6
    Ingersoll Rand Overview
                                                         2008F Revenue
•   Strong Brands                    Climate Control                          Industrial
                                                                            Technologies
                                      Technologies
•   High Market Shares                     38%                                 34%

•   Large Installed Base
•   Powerful Distribution Networks
                                            Security
•   Growing Overseas Presence             Technologies

                                              28%
•
                                                                Asia
    Strong Cash Generation                                        11%

•   Margin Expansion Opportunity
                                     North America                             Europe

                                           57%                                   27%



                                                                       Latin America
                                                                            5%

                    $9.3 billion of Revenues
                                                                                        7
Diverse and Balanced End Markets
 Revenue by End Market
    2008 Forecast




Parts & Service                         19%
Industrial/Process                      16%    N. America 7%
Supermarkets                            14%
Commercial Construction (N. America)    14%    Institutional 8%
Truck and Trailer                        11%   N. America 4%
Rest of the World Construction            8%
Bus, Container & Other                    7%
Golf & Utility Vehicles                   6%
Residential Construction (N. America)     5%                      8
   Portfolio Transformation, 1999-2008
         Ingersoll Rand Revenues, as reported, 1999-2000, 2008PF


                                                                                                  Acquisition
                                                                            Road
($Millions)
                                                                         Development
                                                          Drill &
                  Pumps                Bearings           Dresser       Bobcat, Utility,
                   (IDP)                                   Rand          Attachments
20,000


16,000


12,000


 8,000
                                       60+ Bolt-on Acquisitions
                        Hussmann
 4,000


    0
    1999         2000        2001   200260+    2003    2004      2005
                                              Bolt-on Acquisitions        2006             2007         2008




          From Lower Growth Cyclical…to Higher Growth & Consistency

                                                                                                          9
Major Milestone in Our Transformation

                                  A leading global
                                     diversified
         +               =            industrial
                                  company with…

     • Enhanced organic growth prospects
     • More consistent earnings profile throughout
       business cycle
     • Greater critical mass in international markets

              Creating a Premier Company

                                                        10
Ingersoll Rand Portfolio Strength


         #1 US           #1 Worldwide         #1 North America
     #2 Worldwide                                display cases
                            transport
   Commercial HVAC        refrigeration       #1 North America
      Equipment                                service provider




   #1 North America     #1 North America       #1 Worldwide
      lock and door      air compressors,         golf cars
        hardware              air tools




Trane Joins a Family of Leading Market Positions...Iconic Brands
                                                                  11
Trane Overview
                                                    $7.5 Billion 2007 Sales
• Founded 1913, headquartered in NJ
• Concluded separation plan:                        Commercial
   – WABCO spin-off, Jul ‘07                         Controls,
                                                      Parts &  Residential
   – Sale of Bath & Kitchen, Oct ‘07                 Services     23%
                                                       29%
• Leading global supplier for commercial &               Commercial
 residential climate control                         Equipment & Systems
                                                            48%
• Products include large commercial chillers,
 building systems and controls, residential air
 conditioning and indoor air quality systems         Sales by Geography

• Broad Customer Base – Limited exposure to U.S.
                                                                International
 new residential construction (5% to 7% of sales)                   24%

• Premier brands: #1 or #2 Market positions
                                                          North America
• Industry leading distribution                               76%



    Leading Global Equipment, Systems and Service Business

                                                                                12
Trane’s Leading Products and Distribution
      Commercial                 Leading Global Sales and Distribution Network

                 • Equipment
                 • Controls              Over 100 countries
                 • Systems               500+ company owned
                 • Service                sales, service and
                 • Parts                  distribution locations
                 • Contracting           Strong independent
                                          commercial and residential
       Residential
                                          distribution

                 • Equipment             23,000+ associates /
                 • Controls               dealers
                 • Systems               3,300+ sales engineers
                 • Indoor Air            4,300+ service technicians
                   Quality


   Premier Distribution Network…Compounds Ingersoll Rand
                        Global Footprint

                                                                                 13
The New Ingersoll Rand




Trane         Climate Control     Industrial      Security
               Technologies     Technologies    Technologies

        ~$11 Billion              ~$3 Billion      ~$3 Billion




                                                *2008 Pro Forma


                                                           14
2008 Pro Forma Revenue Profile
   Revenue by Segment                             Revenue by Geography

     Industrial
   Technologies
       18%
                                                  International
  Security          Trane                              32%
Technologies         46%                                           North
    15%                                                           America
                                                                   68%
           Climate Control
                67%           Revenue by Type



                             Recurring
                               23%



                                  Non-Recurring
                                      77%         2008 Revenue: $17 B
                                                  - Strong Global Presence
                                                  - Leading Product Positions
                                                  - More Recurring Revenues
                                                                          15
                                    Portfolio Changes Improve Cyclical Resistance
                                                                                                                                        Target
                                                                                                                                      15%+ CAGR
(Percent EPS Decline Intra-Cycle)




                                                                                                                  + 5% to( 5%)        EPS Growth



                                                                                                 Flat to (10%)
                                                                                                                      IR including
                                                                              (15%) to (20%)                       Impact of Growth
                                                                                                                     Investments,
                                                               (30%)                               IR Portfolio
                                                                                                                      Raising Avg.
                                                                                                                        Organic
                                                                                                   After Trane
                                                                                                                      Growth Rate
                                                                                  IR Portfolio     Acquisition
                                                                               After Expanding
                                                                                   Recurring
                                                                                   Revenues
                                                             IR Portfolio              +
                                                            After Business        Expanding
                                                (53%)        Divestitures         & Non-U.S.
                                                           - Pumps                 Revenues
                                                           - Bearings            (% of sales)
                                                           - Drill, Dresser
                                     Ingersoll Rand        - Road Develop.
                                                           - Bobcat, etc.
                                     Portfolio, 2000


                                          Portfolio Transformation Achieves Diversification & Balance … Greater Consistency
                                     16
Trane Close – Timeline
Deliverable                 January   February   March   April        May   June

                                         HSR
Regulatory Clearance
                                                                 EC


10-K / S-4 Filing


SEC Review and Response

Proxy Statement Mailed to
Shareholders

Shareholder Vote


Close



        Targeting to Close Trane Acquisition in Early June
                                                                                   17
    Integration Planning
•    Integration planning underway, 14 teams formed
      –   Short-term cost reduction … maintain focus & keep businesses running smoothly
      –   Lay groundwork for multi-year continuous improvement

                                              Near-term synergies:            Multi-year, Strategic:
           Growth                          Corporate/HQ &
                                           Shared Services    $500 M illion
          Corporate/HQ                     Finance,
                                                               Cost Base        Cold Chain
                                           Human Resources
             SG&A                          IT                                   Parts & Service
                                           Legal
            Indirect                       Brand Management                     Facilities
                                           Shared Services
                                                                                Controls
                                           Procurement          $9 Billion
             Direct                                              Cost Base
                                           Direct material                      Compressors
                                            - (15 commodity teams),
                                           Indirect Cost & Logistics



              • Full-time Program Office: 10 full-time + outside resources
              • Senior level team leads – functional experts
                  –    Joint Ingersoll Rand + Trane participation

                                                                                                  18
Trane Integration – Growth Opportunities
     Revenue
    Opportunity
       2010              Parts
                          Leverage IR parts across Trane network and
                           Trane parts across IR network
       Parts

                          Service
                           High Performance Energy Services for retail
      Service               customers
                           Light Commercial opportunity
                           Leverage Trane’s Branch network


      Controls            Controls
                           Develop hardware and software control solutions
                            for Climate Control, Trane, Industrial & Security

      Cold                Cold Chain
      Chain                                                      Legend
                           Leverage Trane technology capability for
                            Industrial Refrigeration




                  Drive Dramatic Growth
                                                                                19
Cost & Revenue Synergies
Operating                     Revenue
 Income                      Synergies
($Million)                                Market and service
                                           expansion
                                          Cross-selling
                              $300M       Global Growth


                               Cost       Supplier rationalization
                              Synergy      and procurement leverage
             $125M                        Manufacturing initiatives
                                          General administrative
              Cost                         costs
             Synergy

    First Full-Year Target      2010



     $300 Million Near-Term...Planning to Execute More
                                                                 20
Creating Enterprise Value
                                Dramatic Growth
                                  • Provide Innovative Solutions for Customers
                                Operational Excellence
       VISION                     • Achieve Continuous Improvement in all Operations
                                Dual Citizenship
                                  • Engage Talents, Energy, Enthusiasm of all Ingersoll Rand People



                                                         Lean Corporate / HQ Structure
Ingersoll Rand Business
Operating System (BOS):




                                                                            Industrial Technologies



                                                                                                      Security Technologies
• Common structure & principles
                                    Climate Control


• Drive operational excellence                                                                                                Business Sectors
• Repeatable processes                                       Trane                                                            Execute Growth &
• Based on Lean Six Sigma                                                                                                       Productivity
• Sustained continuous
 improvement in productivity,
 quality, customer service

                                                      Enterprise Services (Shared Services)


            Sustainable Organic Growth, Margin Expansion,
                       Strong Cash Generation                                                                                                    21
Stronger, More Diversified Ingersoll Rand

• Portfolio of Premium Brands … $17+ Billion Global Company
• Market Leadership Positions in Climate Control, Industrial &
 Security Technologies
• Significant Revenue & Cost Synergy Opportunities
• Stronger Revenue, Earnings Growth, Cash Generation
• Time and Resources Focused on Margin Expansion and Cash
 Generation
  – Continuous Improvement
  – Disciplined Program Management


          Premier Company...Delivering Higher Returns

                                                                 22

								
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