Highlights (versus prior year, unless otherwise
noted):
- Q1 continuing EPS of $0.47; adjusted
continuing EPS* of $0.57, up 14 percent
- Ongoing strength in Climate and
continued solid improvement in Industrial
- Strong Q1 bookings up 6 percent;
organic bookings* up 7 percent
- Revenues up 4 percent
- Reported operating margin down 60
bps due to planned restructuring costs; adjusted operating margin*
up 20 basis points
- Company increases low end of
full-year continuing EPS guidance by $0.05 to $4.20 to $4.35,
adjusted continuing EPS to $4.35 to $4.50
*This news release contains non-GAAP financial measures.
Definitions of the non-GAAP financial measures can be found in the
footnotes of this news release. See attached tables for additional
details and reconciliations.
Ingersoll-Rand plc (NYSE:IR), a world leader in creating
comfortable, sustainable and efficient environments, today reported
diluted earnings per share (EPS) from continuing operations of
$0.47 for the first quarter of 2017. The company reported net
earnings of $117.1 million, or EPS of $0.45, for the first quarter
of 2017. Excluding restructuring costs of ($0.10), adjusted
continuing EPS* was $0.57.
First-Quarter 2017 Results
Financial Comparisons – First-Quarter
Continuing Operations
$, millions Q1 2017
Q1 2016** Y-O-Y Change
Organic Y-O-YChange
Bookings $ 3,435 $
3,244 6 % 7 %
Net
Revenues $ 3,001 $
2,894 4 % 4 %
Operating
Income $ 215 $ 225
-5 %
Operating Margin
7.2 % 7.8 %
(0.6) PPts
Adjusted Operating Income*
$ 248 $ 234
6 %
Adjusted Operating Margin
8.3 % 8.1 %
0.2 PPts
Continuing EPS $
0.47 $ 0.48 (2 %)
Adjusted Continuing EPS $ 0.57
$ 0.50 14 %
Restructuring Cost ($32.7 )
($8.4 ) ($24.3 )
** Restated for adoption of ASU 2017-07.
See tables in news release for additional information.
“Focused execution of our business strategy enabled us to
deliver another quarter of strong financial and operational
performance,” said Michael W. Lamach, chairman and chief executive
officer. “Commercial and Residential HVAC continued to deliver our
bookings and revenue growth and our Industrial segment continued to
make steady progress with solid order growth and expanding
operating margins. Overall, our first-quarter performance was on
track and gives us confidence in our full-year 2017 EPS guidance.
We are continuing to build a stronger, more durable company over
the long term.”
Highlights from the First Quarter of 2017 (all comparisons
against the first quarter of 2016 unless otherwise noted)
- Enterprise reported and organic
revenues* were up 4 percent. Organic revenue growth in North
American operations were up 6 percent and international operations
were up 2 percent.
- Reported operating margin was down 60
basis points due to planned restructuring in the quarter. Adjusted
operating margin was up 20 basis points and was driven largely by
volume and productivity.
- Net earnings included $123.6 million,
or EPS of $0.47, from continuing operations and a loss of ($6.5)
million, or EPS of $(0.02), from discontinued operations.
- The effective tax rate was 18.4 percent
and included $15 million of benefit from adopting accounting
standard update (ASU) 2016-09 which dictates that excess tax
benefits from stock based compensation are now reported in income
tax expense starting in Q1 2017. The benefit was included in the
company’s tax guidance for 2017 and the company’s full-year tax
rate is expected to remain 21 to 22 percent.
- The company adopted ASU 2017-07 in the
first quarter which revised the reporting of pension and
postretirement expense to reclassify non-service costs from
operating costs to other income/expense. The adoption improved
operating income by approximately $8 million in both Q1 2017 and Q1
2016 and had no impact on net earnings or earnings per share.
Please see table 9 of this news release for more details.
- First-quarter results included planned
restructuring charges of $(32.7) million, or $(0.10) per share.
This charge was primarily related to a strategic decision to
consolidate three plants within regions.
First-Quarter Business Review (all comparisons against the
first quarter of 2016 unless otherwise noted)
Climate Segment: delivers energy-efficient products and
innovative energy services. It includes Trane® and American
Standard® Heating & Air Conditioning which provide heating,
ventilation and air conditioning (HVAC) systems, and commercial and
residential building services, parts, support and controls; energy
services and building automation through Trane Building Advantage™
and Nexia™; and Thermo King® transport temperature control
solutions.
$, millions Q1 2017
Q1 2016** Y-O-Y Change
Organic Y-O-YChange
Bookings $ 2,673 $
2,537 5 % 6 %
Net
Revenues $ 2,324 $
2,214 5 % 6 %
Operating
Income $ 217.3 $
217.2 0 %
Operating
Margin 9.4 %
9.8 % (0.4) PPts
Adjusted Operating
Income $ 245.3 $
219.1 12 %
Adjusted Operating
Margin 10.6 %
9.9 % 0.7 PPts
** Restated for adoption of ASU 2017-07.
See tables in news release for additional information.
- Revenue and bookings both increased 5
percent; organic revenue and bookings up 6 percent.
- Continued adjusted operating margin
expansion and share gains for Commercial and Residential HVAC.
Commercial HVAC
- Reported and organic revenue up
high-single digits with gains in applied equipment, unitary
equipment, parts and service.
- Regionally, low-teens growth in North
America led the increase in organic revenues. Asia was up
high-single digits. Europe was slightly down due to lower demand
for equipment, offsetting gains in service. The Middle East had a
high-single digits decline.
- Reported and organic bookings up
high-single digits with high-single digit increases in North
America, and double-digit increases in the Middle East and
China.
Residential HVAC
- Strong performance in the quarter with
significant improvements in revenue, bookings and adjusted
operating margins.
- Revenue and bookings up high-single
digits and market share increased.
Transport Refrigeration
- Reported revenues down mid-single
digits and organic revenues down low-single digits due to softening
trailer markets in the Americas. Marine containers and auxiliary
power units also declined in Q1.
- Bookings decreased low-single digits
primarily due to declining markets in North American trailer.
Industrial Segment: delivers products and services that
enhance energy efficiency, productivity and operations. The segment
includes compressed air and gas systems and services, power tools,
material handling systems, ARO® fluid management equipment, as well
as Club Car® golf, utility and consumer low-speed vehicles.
$, millions Q1 2017
Q1 2016** Y-O-Y Change
Organic Y-O-YChange
Bookings $ 762 $
707 8 % 9 %
Net Revenues
$ 676 $ 681
(1 %) 1 %
Operating Income
$ 65.8 $ 63.8
3 %
Operating Margin
9.7 % 9.4 % 0.3
PPts
Adjusted Operating Income
$ 70.5 $ 66.9 5 %
Adjusted Operating Margin
10.4 % 9.8 % 0.6 PPts
** Restated for adoption of ASU 2017-07.
See tables in news release for additional information.
- Strong first quarter with bookings up 8
percent and organic bookings up 9 percent.
- Organic revenue growth was the result
of significant aftermarket growth in the Compression Technologies
business and continued growth at Club Car.
- The company continues to maintain focus
on improving operating margins through driving mix to services, new
product development and cost reductions.
- Regionally, revenue growth in Asia and
Latin America was partially offset by declines in North America and
EMEA.
Compression Technologies
- Bookings were up high-single digits in
aftermarket and up mid-single digits in equipment.
- Equipment revenue was down high-single
digits from softness in heavy industrial and process end
markets.
- Focus on aftermarket parts and services
delivering mid-single digit revenue growth.
- Margins improved significantly due to
continued commercial focus and cost containment actions.
Industrial Products
- Bookings were up mid-single digits,
with solid performance in the short cycle tools and fluid
management businesses and continued weakness in material
handling.
Small electric vehicle (Club Car)
- Bookings up mid-teens. Revenue was up
mid-single digits with gains in consumer, golf, utility vehicles
and in aftermarket.
Balance Sheet and Cash Flow
$, millions Q1 2017
Q1 2016** Y-O-Y Change Cash
From Operating Activities $ (43.4 )
$ (7.6 ) $ (35.8 )
Free Cash Flow*
$ (73.4 ) $ (41.9 )
$ (31.5 )
Working Capital/Revenue*
5.8 % 6.2 % 40 bps
improvement
Cash Balance 31 March $
1,322 $ 613 $ 709
Debt Balance 31 March $ 4,072
$ 4,473 ($401 )
** Restated for adoption of ASU
2016-09.
- The company repurchased $417 million or
5.1 million shares year to date; $250 million or 3.1 million shares
were repurchased in the first quarter.
- First-quarter cash flow from operating
activities was $(43) million, consistent with the company’s
expectations and normal seasonality.
- Working capital to revenue ratio
improved by 40 basis points.
- Cash balance at March 31 increased by
$709 million to $1.32 billion.
Company Reaffirms Full-Year 2017 Guidance
- Revenues up ~2 percent; organic
revenues up ~3 percent compared with 2016.
- Continuing EPS of $4.20 to $4.35,
including EPS of $(0.15) for restructuring; adjusted continuing EPS
of $4.35 to $4.50.
- Average diluted shares of approximately
261 million including the $417 million year-to-date share
repurchase.
- GAAP effective tax rate of
approximately 21 percent to 22 percent.
- Cash flow from operating activities of
$1.4 billion to $1.5 billion. Free cash flow from $1.1 billion to
$1.2 billion.
- Capital allocation: ~$1.9 billion; $1.5
billion between share buyback and bolt-on acquisitions and ~$415
million for dividends. Year-to-date the company has spent $417
million on share buybacks and $103 million on dividends.
- Capex of ~$250 million and Corporate
G&A ~$240 million.
Investor’s Day 2017
- Ingersoll Rand’s 2017 investor’s day is
May 10. The company will webcast the event on our website at
ingersollrand.com.
This news release includes “forward-looking statements,” which
are statements that are not historical facts, including statements
that relate to the mix of and demand for our products; performance
of the markets in which we operate; our share repurchase program
including the amount of shares to be repurchased and timing of such
repurchases; our projected 2017 full-year financial performance and
targets including assumptions regarding our effective tax rate.
These forward-looking statements are based on our current
expectations and are subject to risks and uncertainties, which may
cause actual results to differ materially from our current
expectations. Such factors include, but are not limited to, global
economic conditions, the outcome of any litigation, demand for our
products and services, and tax law changes. Additional factors that
could cause such differences can be found in our Form 10-K for the
year ended December 31, 2016, Form 10-Q for the quarter ended
March 31, 2017, and other SEC filings. We assume no obligation to
update these forward-looking statements.
This news release also includes non-GAAP financial information
which should be considered supplemental to, not a substitute for,
or superior to, the financial measure calculated in accordance with
GAAP. The definitions of our non-GAAP financial information and
reconciliation to GAAP is attached to this news release.
All amounts reported within the earnings release above related
to net earnings (loss), earnings (loss) from continuing operations,
earnings (loss) from discontinued operations, and per share amounts
are attributed to Ingersoll Rand’s ordinary shareholders.
Ingersoll Rand (NYSE:IR) advances the quality of life by
creating comfortable, sustainable and efficient environments. Our
people and our family of brands — including Club Car®, Ingersoll
Rand®, Thermo King® and Trane® — work together to enhance the
quality and comfort of air in homes and buildings; transport and
protect food and perishables; and increase industrial productivity
and efficiency. We are a $13 billion global business committed to a
world of sustainable progress and enduring results. For more
information, visit ingersollrand.com.
04/26/17
(See Accompanying Tables)
- Table 1: Condensed Consolidated Income
Statement
- Table 2: Business Review
- Tables 3 - 5: Reconciliation of GAAP to
Non-GAAP
- Table 6: Condensed Consolidated Balance
Sheet
- Table 7: Condensed Consolidated
Statement of Cash Flow
- Table 8: Balance Sheet Metrics and Free
Cash Flow
- Table 9: Adoption of ASU 2017-07
*Non-GAAP measures definitions
Organic revenue is defined as GAAP net revenues adjusted
for the impact of currency and acquisitions. Organic
bookings is defined as reported orders closed/completed in the
current period adjusted for the impact of currency and
acquisitions.
- Currency impacts on net revenues and
bookings are measured by applying the prior year’s foreign currency
exchange rates to the current period’s net revenues and bookings
reported in local currency. This measure allows for a direct
comparison of operating results excluding the year-over-year impact
of foreign currency translation.
Adjusted operating margin is defined as the ratio of
adjusted operating income divided by net revenues.
Adjusted operating income is defined as GAAP operating
income plus restructuring expenses in 2017 and 2016. Please
refer to the reconciliation of GAAP to non-GAAP measures on tables
3 and 4 of the news release.
In 2017 and 2016, Adjusted continuing EPS is defined as
GAAP continuing EPS plus restructuring expenses, net of tax
impacts. Please refer to the reconciliation of GAAP to non-GAAP
measures on tables 3 and 4 of the news release.
Free cash flow in 2017 and 2016 is defined as net cash
provided by operating activities, less capital expenditures, plus
cash payments for restructuring. Please refer to the free cash flow
reconciliation on table 8 of the news release.
Working capital measures a firm’s operating liquidity
position and its overall effectiveness in managing the enterprises’
current accounts.
- Working capital is calculated by
adding net accounts and notes receivables and inventories and
subtracting total current liabilities that exclude short term debt,
dividend payables and income tax payables.
- Working capital as a percent of
revenue is calculated by dividing the working capital balance
(e.g. as of March 31) by the annualized revenue for the period
(e.g. reported revenues for the three months ended March 31)
multiplied by 4 to annualize for a full year.
Adjusted effective tax rate for Q1 2017 and Q1 2016
is defined as the ratio of income tax expense, plus or minus the
tax effect of adjustments for restructuring costs, divided by
earnings from continuing operations before income taxes plus
restructuring expenses. This measure allows for a direct
comparison of the effective tax rate between periods.
Operating leverage is defined as the ratio of the
change in adjusted operating income for the current period (e.g. Q1
2017) less the prior period (e.g. Q1 2016), divided by the change
in net revenues for the current period less the prior period.
INGERSOLL-RAND PLC Condensed Consolidated Income
Statement (In millions, except per share amounts)
UNAUDITED
For the quarter ended March 31, 2017
2016* Net revenues $ 3,000.6 $ 2,894.1
Cost of goods sold (2,126.1 ) (2,041.2 ) Selling &
administrative expenses (659.5 ) (627.5 )
Operating income 215.0 225.4 Interest expense (54.0 ) (56.7
) Other income/(expense), net (4.7 ) 1.9
Earnings before income taxes 156.3 170.6
Provision for income taxes (28.7 ) (41.9 )
Earnings from continuing operations 127.6 128.7 Discontinued
operations, net of tax (6.5 ) 26.9 Net
earnings 121.1 155.6 Less: Net earnings attributable to
noncontrolling interests (4.0 ) (3.2 ) Net
earnings attributable to Ingersoll-Rand plc $ 117.1 $ 152.4
Amounts attributable
to Ingersoll-Rand plc ordinary shareholders:
Continuing operations $ 123.6 $ 125.5 Discontinued operations
(6.5 ) 26.9 Net earnings $ 117.1 $
152.4
Diluted earnings
(loss) per share attributable to Ingersoll-Rand plc ordinary
shareholders:
Continuing operations $ 0.47 $ 0.48 Discontinued operations
(0.02 ) 0.10 $ 0.45 $ 0.58
Weighted-average number of common shares
outstanding:
Diluted 262.6 261.3 * Retrospectively restated for adoption
of ASU 2017-07, see Table 9 for additional information.
INGERSOLL-RAND PLC Business Review (In
millions, except percentages)
UNAUDITED
For the quarter ended March 31,
2017 2016**
Climate
Net revenues $ 2,324.1 $ 2,213.5 Segment operating income * 217.3
217.2 and as a % of Net revenues 9.4 % 9.8 %
Industrial
Net revenues 676.5 680.6 Segment operating income * 65.8 63.8 and
as a % of Net revenues 9.7 % 9.4 % Unallocated corporate
expense (68.1 ) (55.6 )
Total
Net revenues $ 3,000.6 $ 2,894.1 Consolidated operating income $
215.0 $ 225.4 and as a % of Net revenues 7.2 % 7.8 %
* Segment operating income is the measure of profit and loss
that the Company uses to evaluate the financial performance of the
business and as the basis for performance reviews, compensation and
resource allocation. For these reasons, the Company believes that
Segment operating income represents the most relevant measure of
segment profit and loss.
** Retrospectively restated for adoption of ASU 2017-07, see
Table 9 for additional information.
INGERSOLL-RAND PLC Reconciliation of GAAP to
non-GAAP (In millions, except per share amounts)
UNAUDITED
For the quarter ended March 31, 2017 As
As Reported Adjustments
Adjusted Net revenues $ 3,000.6 $ - $
3,000.6 Operating income 215.0 32.7 (a) 247.7 Operating
margin 7.2 % 8.3 %
Earnings from continuing operations before
income taxes
156.3 32.7 (a) 189.0 Provision for income taxes (28.7 ) (7.9 ) (b)
(36.6 ) Tax rate 18.4 % 19.4 %
Earnings from continuing operations
attributable to Ingersoll-Rand plc
$ 123.6 $ 24.8 (c) $ 148.4
Diluted earnings per
common share
Continuing operations $ 0.47 $ 0.10 $ 0.57
Weighted-average number of common shares
outstanding
Diluted 262.6 - 262.6
Detail of
Adjustments:
(a) Restructuring costs
$ 32.7
(b) Tax impact of adjustments
(7.9 )
(c) Impact of adjustments on earnings from
continuing operations attributable to Ingersoll-Rand plc
$ 24.8
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States
(GAAP). This supplemental schedule provides non-GAAP financial
information and a quantitative reconciliation of the difference
between the non-GAAP financial measures and the financial measures
calculated and reported in accordance with GAAP.
The non-GAAP financial measures should be considered
supplemental to, not a substitute for or superior to, financial
measures calculated in accordance with GAAP. They have limitations
in that they do not reflect all of the costs associated with the
operations of our businesses as determined in accordance with GAAP.
In addition, these measures may not be comparable to non-GAAP
financial measures reported by other companies.
We believe the non-GAAP financial information provides important
supplemental information to both management and investors regarding
financial and business trends used in assessing our financial
condition and results of operations.
The non-GAAP financial measures for operating income and margin,
tax rate and EPS assist investors with analyzing our business
segment results as well as with predicting future performance. In
addition, these non-GAAP financial measures are also reviewed by
management in order to evaluate the financial performance of each
segment. They are the basis for performance reviews, compensation
and resource allocation. We believe that the presentation of these
non-GAAP financial measures will permit investors to assess the
performance of the Company on the same basis as management.
As a result, one should not consider these measures in isolation
or as a substitute for our results reported under GAAP. We
compensate for these limitations by analyzing results on a GAAP
basis as well as a non-GAAP basis, prominently disclosing GAAP
results and providing reconciliations from GAAP results to non-GAAP
results.
INGERSOLL-RAND PLC Reconciliation of GAAP to
non-GAAP (In millions, except per share amounts)
UNAUDITED
For the quarter ended March 31, 2016 As
As Reported* Adjustments
Adjusted Net revenues $ 2,894.1 $ - $ 2,894.1
Operating income 225.4 8.4 (a) 233.8 Operating margin 7.8 %
8.1 %
Earnings from continuing operations before
income taxes
170.6 8.4 (a) 179.0 Provision for income taxes (41.9 ) (2.0 ) (b)
(43.9 ) Tax rate 24.5 % 24.5 %
Earnings from continuing operations
attributable to Ingersoll-Rand plc
$ 125.5 $ 6.4 (c) $ 131.9
Diluted earnings per
common share
Continuing operations $ 0.48 $ 0.02 $ 0.50
Weighted-average number of common shares
outstanding
Diluted 261.3 - 261.3
Detail of
Adjustments:
(a) Restructuring costs
$ 8.4
(b) Tax impact of adjustments
(2.0 )
(c) Impact of adjustments on earnings from
continuing operations attributable to Ingersoll-Rand plc
$
6.4
* Retrospectively restated for adoption of ASU
2017-07, see Table 9 for additional information.
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States
(GAAP). This supplemental schedule provides non-GAAP financial
information and a quantitative reconciliation of the difference
between the non-GAAP financial measures and the financial measures
calculated and reported in accordance with GAAP.
The non-GAAP financial measures should be considered
supplemental to, not a substitute for or superior to, financial
measures calculated in accordance with GAAP. They have limitations
in that they do not reflect all of the costs associated with the
operations of our businesses as determined in accordance with GAAP.
In addition, these measures may not be comparable to non-GAAP
financial measures reported by other companies.
We believe the non-GAAP financial information provides important
supplemental information to both management and investors regarding
financial and business trends used in assessing our financial
condition and results of operations.
The non-GAAP financial measures for operating income and margin,
tax rate and EPS assist investors with analyzing our business
segment results as well as with predicting future performance. In
addition, these non-GAAP financial measures are also reviewed by
management in order to evaluate the financial performance of each
segment. They are the basis for performance reviews, compensation
and resource allocation. We believe that the presentation of these
non-GAAP financial measures will permit investors to assess the
performance of the Company on the same basis as management.
As a result, one should not consider these measures in isolation
or as a substitute for our results reported under GAAP. We
compensate for these limitations by analyzing results on a GAAP
basis as well as a non-GAAP basis, prominently disclosing GAAP
results and providing reconciliations from GAAP results to non-GAAP
results.
INGERSOLL-RAND PLC Reconciliation of GAAP to
non-GAAP (In millions)
UNAUDITED
For the quarter ended March 31, 2017
For the quarter ended March 31, 2016* As Reported
Margin As Reported Margin
Climate Net revenues $ 2,324.1 $ 2,213.5 Segment
operating income $ 217.3 9.4 % $ 217.2 9.8 % Restructuring
28.0 1.2 % 1.9 0.1 % Adjusted operating income
245.3 10.6 % 219.1 9.9 % Depreciation and amortization 60.8
2.6 % 57.2 2.6 % Adjusted OI plus D&A $
306.1 13.2 % $ 276.3 12.5 %
Industrial
Net revenues $ 676.5 $ 680.6 Segment operating income $ 65.8
9.7 % $ 63.8 9.4 % Restructuring 4.7 0.7 % 3.1
0.4 % Adjusted operating income 70.5 10.4 % 66.9 9.8 %
Depreciation and amortization 19.2 2.8 % 16.3
2.4 % Adjusted OI plus D&A $ 89.7 13.2 % $ 83.2
12.2 %
Corporate Unallocated corporate expense
$ (68.1 ) $ (55.6 ) Restructuring 0.0 3.4
Adjusted corporate expense (68.1 ) (52.2 ) Depreciation and
amortization 6.7 14.5 Adjusted
corporate expense plus D&A $ (61.4 ) $ (37.7 )
Total
Company Net revenues $ 3,000.6 $ 2,894.1 Operating
income $ 215.0 7.2 % $ 225.4 7.8 % Restructuring 32.7
1.1 % 8.4 0.3 % Adjusted operating income 247.7 8.3 %
233.8 8.1 % Depreciation and amortization 86.7 2.8 %
88.0 3.0 % Adjusted OI plus D&A $ 334.4
11.1 % $ 321.8 11.1 % * Retrospectively restated for
adoption of ASU 2017-07, see Table 9 for additional information.
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States
(GAAP). This supplemental schedule provides non-GAAP financial
information and a quantitative reconciliation of the difference
between the non-GAAP financial measures and the financial measures
calculated and reported in accordance with GAAP.
The non-GAAP financial measures should be considered
supplemental to, not a substitute for or superior to, financial
measures calculated in accordance with GAAP. They have limitations
in that they do not reflect all of the costs associated with the
operations of our businesses as determined in accordance with GAAP.
In addition, these measures may not be comparable to non-GAAP
financial measures reported by other companies.
We believe the non-GAAP financial information provides important
supplemental information to both management and investors regarding
financial and business trends used in assessing our financial
condition and results of operations.
The non-GAAP financial measures of adjusted operating income,
plus depreciation and amortization, adjusted corporate expense,
plus depreciation and amortization and related margins assist
investors with analyzing our business segment results as well as
with predicting future performance. In addition, these non-GAAP
financial measures are also reviewed by management in order to
evaluate the financial performance of each segment. They are the
basis for performance reviews, compensation and resource
allocation. We believe that the presentation of these non-GAAP
financial measures will permit investors to assess the performance
of the Company on the same basis as management.
As a result, one should not consider these measures in isolation
or as a substitute for our results reported under GAAP. We
compensate for these limitations by analyzing results on a GAAP
basis as well as a non-GAAP basis, prominently disclosing GAAP
results and providing reconciliations from GAAP results to non-GAAP
results.
INGERSOLL-RAND PLC Condensed Consolidated Balance
Sheets (In millions) March
31, December 31, 2017 2016
ASSETS
UNAUDITED
Cash and cash equivalents $ 1,322.5 $ 1,714.7 Accounts and notes
receivable, net 2,199.4 2,223.0 Inventories 1,599.7 1,385.8 Other
current assets 292.4 255.8 Total current assets
5,414.0 5,579.3 Property, plant and equipment, net 1,497.7 1,511.0
Goodwill, net 5,694.1 5,658.4 Intangible assets, net 3,758.0
3,785.1 Other noncurrent assets 895.7 863.6 Total
assets $ 17,259.5 $ 17,397.4
LIABILITIES AND EQUITY
Accounts payable $ 1,378.5 $ 1,334.0 Accrued expenses and other
current liabilities 1,794.3 1,895.5 Short-term borrowings and
current maturities of long-term debt 361.3 360.8
Total current liabilities 3,534.1 3,590.3 Long-term debt 3,711.1
3,709.4 Other noncurrent liabilities 3,360.4 3,379.4 Shareholders'
Equity 6,653.9 6,718.3 Total liabilities and equity $
17,259.5 $ 17,397.4
INGERSOLL-RAND PLC
Condensed Consolidated Statement of Cash Flows (In millions)
UNAUDITED
For the quarter ended March 31, 2017
2016*
Operating Activities Earnings from
continuing operations $ 127.6 $ 128.7 Depreciation and amortization
86.7 88.0 Changes in assets and liabilities and other non-cash
items (247.6 ) (217.6 ) Net cash used in continuing
operating activities (33.3 ) (0.9 ) Net cash used in discontinued
operating activities (10.1 ) (6.7 ) Net cash used in
operating activities (43.4 ) (7.6 )
Investing
Activities Capital expenditures (35.2 ) (40.1 ) Acquisition of
businesses, net of cash acquired and other (9.4 ) -
Net cash used in investing activities (44.6 ) (40.1 )
Financing Activities Short-term borrowings (repayments), net
- 254.0 Dividends paid to ordinary shareholders (102.7 ) (82.2 )
Repurchase of ordinary shares (250.1 ) (250.1 ) Other financing
activities, net 11.3 (19.9 ) Net cash used in
financing activities (341.5 ) (98.2 ) Effect of exchange
rate changes on cash and cash equivalents 37.3
22.0 Net decrease in cash and cash equivalents (392.2 )
(123.9 ) Cash and cash equivalents - beginning of period
1,714.7 736.8 Cash and cash equivalents - end
of period $ 1,322.5 $ 612.9
* Retrospectively restated for the adoption of ASU 2016-09 on
January 1, 2017, the impact of which resulted in an improvement to
cash flow used in operating activities with a corresponding offset
to cash flow used in financing activities of $4.4M.
INGERSOLL-RAND PLC Balance Sheet Metrics and Free
Cash Flow ($ in millions)
UNAUDITED
December 31,
March 31, March 31, 2016*
2017 2016* Net Receivables $ 2,223 $ 2,199 $ 2,155
Days Sales Outstanding 60.4 66.9 67.9 Net Inventory $ 1,386
$ 1,600 $ 1,613 Inventory Turns 6.8 5.3 5.1 Accounts Payable
$ 1,334 $ 1,379 $ 1,346 Days Payable Outstanding 51.9 59.2 60.2
Forecast (b)
For the year ending
Quarter ended
Quarter ended
December 31, 2017 March 31, 2017 March 31, 2016** Cash flow
provided by (used in) operating activities (a) $ 1,360.0 $ (43.4 )
$ (7.6 ) Capital expenditures (250.0 ) (35.2 ) (40.1 ) Cash payment
for restructuring 40.0 5.2 5.8
Free cash flow $ 1,150.0 $ (73.4 ) $ (41.9 )
(a) Includes both continuing and
discontinued operations.
(b) Amounts are approximate.
*Retrospectively restated for adoption of ASU 2017-07, see Table
9 for additional information.
** Retrospectively restated for the adoption of ASU 2016-09 on
January 1, 2017, the impact of which resulted in an improvement to
cash flow provided by (used in) operating activities of $4.4M.
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States
(GAAP). This supplemental schedule provides non-GAAP financial
information and a quantitative reconciliation of the difference
between the non-GAAP financial measure and the financial measure
calculated and reported in accordance with GAAP.
The non-GAAP financial measure should be considered supplemental
to, not a substitute for or superior to, the financial measure
calculated in accordance with GAAP. It has limitations in that it
does not reflect all of the costs associated with the operations of
our businesses as determined in accordance with GAAP. In addition,
this measure may not be comparable to non-GAAP financial measures
reported by other companies.
We believe the non-GAAP financial information provides important
supplemental information to both management and investors regarding
financial and business trends used in assessing our financial
condition and cash flow.
The non-GAAP financial measure of free cash flow assists
investors with analyzing our business results as well as with
predicting future performance. In addition, this non-GAAP financial
measure is reviewed by management in order to evaluate the
financial performance of each segment as well as the Company as a
whole. It is the basis for performance reviews, compensation and
resource allocation. We believe that the presentation of this
non-GAAP financial measure will permit investors to assess the
performance of the Company on the same basis as management.
As a result, one should not consider this measure in isolation
or as a substitute for our results reported under GAAP. We
compensate for these limitations by analyzing results on a GAAP
basis as well as a non-GAAP basis, prominently disclosing GAAP
results and providing reconciliations from GAAP results to non-GAAP
results.
INGERSOLL-RAND PLC Impact to Q1 2017 and Q1 2016
for the adoption of ASU 2017-07 (1)
(In millions)
UNAUDITED
For the quarter
For the quarter ended March 31, 2017 ended March 31, 2016
Cost ofgoods sold
Selling &administrativeexpenses
Total
Cost ofgoods sold
Selling &administrativeexpenses
Total Climate (2) $ 3.6 $ 0.7 $ 4.3 $ 1.9 $
1.0 $ 2.9 Industrial 0.4 0.7 1.1 0.5 0.9 1.4
Unallocated corporate 2.5 0.3
2.8 3.4 0.4 3.8
Operating Income 6.5 1.7 8.2 5.8 2.3 8.1 Other
income/(expense), net (6.5 ) (1.7 ) (8.2 )
(5.8 ) (2.3 ) (8.1 ) Earnings before
income taxes $ - $ - $ - $ - $ -
$ -
(1) The Company adopted ASU 2017-07, Improving the Presentation
of Net Periodic Pension Cost and Net Periodic Postretirement
Benefit Cost, on January 1, 2017. This adoption requires that
components of net periodic pension and postretirement benefit cost
other than the service cost component be included in the line item
"Other income/(expense), net" in the income statement.
(2) Amounts recorded within the 2017 Cost of Goods Sold account
of Climate contains a non-cash pension curtailment loss of $2.3
million associated with a certain defined benefit plan freeze that
is effective January 1, 2022.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170426005329/en/
Ingersoll-Rand plcMedia:Misty Zelent,
704-655-5324mzelent@irco.comorInvestors and Financial
Analysts:Zac Nagle,
704-655-4469InvestorRelations@irco.com
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