First Quarter 2005 Results

1
First Quarter2005 Results

• April 21, 2005

2
Safe Harbor
Todays presentation includes forward looking
statements that involve risks. Please refer to
Form 10K for the year 2004 for details and
factors that may influence results.
2
3
First Quarter Results

• Continuing EPS 1.33, total EPS 1.28
• Exceeded EPS guidance
• Continuing EPS up 45
• Revenue growth 16
• Double-digit growth each month
• Bobcat, Club Car, Construction Technologies and
  Industrial Technologies had strong results
• Executing strategies
• Innovation and recurring revenue growth
• Reducing cyclical profile
• Improving productivity and lowering costs

Capitalizing on Improving Markets
4
Ingersoll-Rand Revenue by Business

• of Total Revenue
• 1984 1994 2004
• Business Sold
• Automotive Components 19 25 -
• Mining and Process 44 31 -
• 63 56 -
• Climate Control Technologies - - 30
• Bobcat and Club Car - - 24
• 54
• Security Technologies 11 11 19
• Industrial Technologies 18 21 16
• Construction Technologies 8 12 11
• 37 44 46
• 100 100 100

Primarily Pumps, Dresser-Rand, Drills and
Underground Mining Equipment
Substantial Upgrade of Portfolio
5
2004 Revenue from Continuing Operations
Climate Control Technologies 30
Construction Technologies 11
Industrial Technologies 16
Bobcat and Club Car 24
Security Technologies 19
10 Billion Diversified Industrial Company
6
Innovation
Target 250 in Net Revenue From Innovation in 2005
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Wal-Mart Supply Agreement

• Supply agreement to become Wal-Marts primary
  display case supplier in the United States
• Covers two-year period beginning June 2005
• First shipments in first quarter of 2006
• Next step Become supplier of refrigeration
  systems
• Continuation of goal to become key partner with
  Wal-Mart

8
First Quarter Recurring Revenue
Millions
5
466
442
387
356
2004
2005
2002
2003
Recurring Revenue Increased 5 Compared to 2004
9
Acquisitions of CISA and ITO

• CISA - Italy based
• Founded 1926
• Manufactures and sells a wide array of security
  products
• Electronic locking systems and cylinders
• Door openers and closers
• Safes and padlocks
• 2004 Revenues 270 million, operating margin
  approximately 15
• ITO Turkey based
• Markets and sells mechanical locks and
  architectural hardware
• Products sold in Eastern Europe and Middle East

Expand World-class Portfolio of Security Products
10
Superay

• Pneumatic tool manufacturer in China
• High-quality, cost competitive products built in
  emerging markets for local and international
  customers
• Production tripled since initial investment in
  2002
• Leverage Superays manufacturing and engineering
  to expand presence in China

Expand Presence In Chinas High-growth Markets
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Operational Excellence
First Quarter Operating Margin
1.5 Point Gain
10.6
2004
Progressing Toward 15 Target
12
Balance Sheet
Debt to Capital
25.9
2005 1Q
2.0
Total Debt ( Bil)
Maintained Strong Balance Sheet in First Quarter
2005
13
Cash Deployment

• Repurchased 3 million shares during the first
  quarter
• Repurchased an additional 2.5 million shares in
  April
• 2.5 million shares available for repurchase
• Expect to complete purchase of remaining shares
  during 2005

Deploying Cash to Create Shareholder Value
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First Quarter 2005

• Excellent first quarter, expecting excellent year
• Positioned to deliver
• Profitable growth
• Strong cash flow
• Deploying cash to generate value for shareholders
• Diversified business portfolio and lean business
  model will dampen impact of future market cycles

Successfully Executing Sound Long-term Strategy
15
First Quarter 2005 Results
16
Revenues
First Quarter Year-Over-Year Growth, Excludes CISA
26
14
13
12
7
Asia Pacific
Latin America
Europe
North America
Total Ingersoll-Rand
Revenue Gains in All Geographic Regions
17
Bobcat Club Car

• Bobcat
• Revenue up more than 30
• Strong North American markets
• New Product Introductions
• Aftermarket and attachments
• Club Car
• Revenue up 23
• Strong growth for Precedent
• Introduction of 4x4 Vehicle
• Operating Margin Improvement
• Volume leverage
• New Product margins
• Operational Improvement programs
• Component cost and availability challenges

Millions
661
30
506
Operating Margins
16.4
14.4
2005
2004
18
Climate Control Technologies
Millions

• Climate Control Americas
• Revenue up 3
• Continued strength in transport
• Display case volume remains weak
• Climate Control International
• Revenue down 4
• Strong European truck and bus
• Lower trailer and display case volume
• Improved Asia bus business
• Operating Margin Improvement
• Improved product mix
• Productivity improvement

639
638
Operating Margins
9.4
9.1
2005
2004
19
Construction Technologies
Millions

• Road Development
• Revenue up 22
• Strong North America and European markets
• National Accounts growth
• Utility Equipment
• Revenue up 22
• Strength in North America
• Operating Margin Improvement
• Volume leverage
• Productivity improvement program
• Adverse impact of material cost and availability

270
22
220
Operating Margins
9.5
8.4
2005
2004
20
Industrial Technologies
Millions

• Air Solutions
• Revenue up 20
• Recurring revenue up 14
• Strong North American markets
• New Product growth
• Productivity Solutions
• Revenue up 13
• Growth in industrial markets and vehicle service
  business
• Operating margin improvement
• Revenue leverage and cost control
• New product margins
• Productivity improvement

403
17
343
Operating Margins
11.7
9.8
2005
2004
21
Security Technologies
Millions

• Revenue up 17 (5 ex CISA)
• Solid North American residential and commercial
  growth at 6
• Integrated Systems Solutions growth in North
  America
• Operating Margins
• North America remains strong
• Productivity offset material cost inflation
• Costs related to manufacturing sourcing
  footprint transition
• CISA purchase accounting and integration cost

22
Security Technologies Margin
Millions
Q1 2005 CISA CISA Mfg/Sourcing Q1
2005 Reported Operations Acquisition Footprint Ad
justed
Revenue 485.8 65.6 420.2 OI
69.1 11.1 (8.6) (6.7) 73.3 OI
14.2 16.9 17.4
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Balance Sheet Indicators
2005
2004
Inventory Turns Receivables (DSO) Payables
(DPO) Total Debt Debt to Capital Capital
Expenditures Depreciation and Amortization
5.0 64 40 2.0 B 26 29 M 52 M
5.7 63 39 2.3 B 33 22 M 42 M
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2005 Earnings Outlook Second Quarter
Second Quarter EPS Continuing Operations 1.60 -
1.70 Discontinued Operations (0.05) Total
Operations 1.55 - 1.65
Continuing Operations Improvement of 18 to 25
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2005 Earnings Outlook Full Year
Full Year EPS Continuing Operations 5.75 -
5.95 Discontinued Operations (0.20) Total
Operations 5.55 5.75
Full Year 2005 EPS of 5.55 to 5.75
26
Proven Source. Proven Solutions.