Ingersoll Rand announces record 2006 first quarter

April 21 — Ingersoll-Rand Company Limited, a leading diversified industrial firm, today announced record earnings and revenues for the first quarter of 2006.

The company reported net earnings of $253.2 million, or diluted earnings per share (EPS) of $0.76, for the first quarter of 2006. First-quarter net earnings included $262.3 million, or EPS of $0.79 from continuing operations, as well as $9.1 million of costs, or EPS of $(0.03), from discontinued operations, which represents earnings and retained costs of divested businesses. Reported first-quarter EPS increased by 19% compared with 2005, and EPS from continuing operations increased by 18%.

Net earnings for the 2005 first quarter of $223.1 million, or EPS of $0.64, included EPS of $0.67 from continuing operations and $9.2 million of costs, or EPS of $(0.03), for discontinued operations.

“Our strong first-quarter 2006 performance once again demonstrated that executing our strategic plan delivers solid financial results,” said Herbert L. Henkel, chairman, president and chief executive officer. “All of our business segments achieved revenue and earnings growth and improved operating margins compared with the first quarter of last year. These results largely reflect the success of our innovations, which continue to generate market share gains in strong end markets, the benefits of our acquisition program, growth of highly profitable recurring revenues, and our employees’ ability to drive continuing productivity gains and operating efficiencies across our global operations.”

Additional Highlights for the 2006 First Quarter

Revenues: The company’s revenues increased by 10.3% to $2,711.0 million compared with revenues of $2,458.8 million for the 2005 first quarter. Currency had a 2% unfavorable impact on year-over-year revenue gains.

Total recurring revenues, which include revenues from parts, service, rental, attachments and used equipment, increased by 15% compared with the first quarter of 2005, and accounted for 21% of total revenues.

Operating Income and Margins: Operating income of $341.1 million for the first quarter of 2006 increased by 15% compared with the first quarter of 2005. First-quarter operating margins increased to 12.6% compared with 12.1% last year.

Interest and Other Expense: Interest expense was $34.8 million for the first quarter of 2006, compared with $36.6 million in the 2005 first quarter. Other income totaled $3.7 million for the first quarter, compared with $7.3 million in income for the first quarter of 2005. The year-over-year difference is attributable to lower interest income and foreign exchange losses in 2006.

Taxes: The company’s effective tax rate for continuing operations for the first quarter of 2006 was 15.4%, compared with 13.2% in the first quarter of 2005. The first-quarter rate reflects an expected annual rate of approximately 16.5%, adjusted for a one-time tax benefit of $3.4 million.

Options Expense: In the first quarter, the company adopted FAS 123