Form 10 k (Mark One) X annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934 For the fiscal year ended December 31, 2004

 

 

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2002
		IR-		IR-	Other			IR-Limited
In millions		Limited	New Jersey		Subsidiaries			Consolidated
Net cash provided by operating activities		$ 170.1		$ 412.9		$   (96.6)			$  486.4
Cash flows from investing activities:
Capital expenditures		-		(19.7)		(86.9)			(106.6)
Proceeds from sale of property, plant and equipment		-		6.8		34.0			40.8
Investments and acquisitions, net of cash		-		(2.8)		(109.9)			(112.7)
Cash invested in or advances to equity companies		-		-		(2.3)			(2.3)
Net cash provided by (used in) investing activities		-		(15.7)		(165.1)			(180.8)
Cash flows from financing activities:
Net change in debt		-		(172.5)		(48.7)			(221.2)
Proceeds from the exercise of stock options		36.7		-		-			36.7
Dividends paid		(206.8)		7.6		84.4			(114.8)
Net cash used in financing activities		(170.1)		(164.9)		35.7			(299.3)
Net cash (used in) provided by discontinued operations		-		(46.7)		236.9			190.2
Effect of exchange rate changes on cash and
cash equivalents		-		-		2.8			2.8
Net increase (decrease) in cash and cash equivalents		-		185.6		13.7			199.3
Cash and cash equivalents - beginning of period		-		23.4		62.5			85.9
Cash and cash equivalents - end of period		-		$ 209.0		$    76.2			$  285.2

 Note 15 - Subsequent Event
On January 21, 2005, the Company completed the acquisition of the remaining 70% interest in Italy-based CISA S.p.A. ("CISA") for approximately Euro 202 million in cash and the assumption of Euro 190 million of debt. The acquisition was not deemed a material business combination as defined under SFAS No. 141, "Business Combinations."  CISA manufactures an array of security and safety products, including electronic locking systems, cylinders, door closers, and panic hardware, and also markets safes and padlocks. 

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has assessed the effectiveness of internal control over financial reporting as of December 31, 2004. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control - Integrated Framework. Management concluded that based on its assessment, the Company's internal control over financial reporting was effective as of December 31, 2004. Management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report.

/S/ Herbert L. Henkel                                                                /S/ Timothy R. McLevish
Herbert L. Henkel                                                                    Timothy R. McLevish
Chairman, President and                                                           Senior Vice President and
Chief Executive Officer                                                             Chief Financial Officer


Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Ingersoll-Rand Company Limited:

We have completed an integrated audit of Ingersoll-Rand Company Limited's (successor company to Ingersoll-Rand Company) 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders' equity and cash flows present fairly, in all material respects, the financial position of Ingersoll-Rand Company Limited and its subsidiariesat December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 4 to the consolidated financial statements, on January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets."

Internal control over financial reporting

Also, in our opinion, management's assessment, included in the accompanying Managements' Report on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2004based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria.  Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control - Integrated Framework issued by the COSO.  The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting.  Our responsibility is to express opinions on management's assessment and on the effectiveness of the Company's internal control over financial reporting based on our audit.  We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP
Florham Park, New Jersey
March 14, 2005

 

 

 

 

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