Ingersoll Rand Inc. (Form: 10-Q, Received: 11/04/2022 16:10:15)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to___________

Commission File Number: 001-38095

____________________________

Ingersoll Rand Inc.

(Exact Name of Registrant as Specified in Its Charter)

____________________________


Delaware			46-2393770
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

525 Harbour Place Drive, Suite 600

Davidson, North Carolina 28036

(Address of Principal Executive Offices) (Zip Code)

(704) 655-4000

(Registrant’s Telephone Number, Including Area Code)

____________________________

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 Par Value per share	IR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

The registrant had outstanding 404,925,743 shares of Common Stock, par value $0.01 per share, as of October 28, 2022.

Table of Contents

INGERSOLL RAND INC. AND SUBSIDIARIES

FORM 10-Q

INDEX


			Page No.
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements			6
Condensed Consolidated Statements of Operations (Unaudited)			6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)			7
Condensed Consolidated Balance Sheets (Unaudited)			8
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)			9
Condensed Consolidated Statements of Cash Flows (Unaudited)			11
Note 1. Basis of Presentation and Recent Accounting Pronouncements			12
Note 2. Discontinued Operations			13
Note 3. Business Combinations			14
Note 4. Restructuring			16
Note 5. Inventories			17
Note 6. Goodwill and Other Intangible Assets			18
Note 7. Accrued Liabilities			18
Note 8. Benefit Plans			19
Note 9. Debt			20
Note 10. Stock-Based Compensation Plans			21
Note 11. Accumulated Other Comprehensive Income (Loss)			23
Note 12. Hedging Activities, Derivative Instruments and Fair Value Measurements			25
Note 13. Revenue from Contracts with Customers			28
Note 14. Income Taxes			31
Note 15. Other Operating Expense (Income), Net			31
Note 16. Contingencies			32
Note 17. Segment Results			32
Note 18. Earnings (Loss) Per Share			34
Note 19. Subsequent Events			34
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			35
Item 3. Quantitative and Qualitative Disclosures About Market Risk			50
Item 4. Controls and Procedures			50
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			51
Item 1A. Risk Factors			51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			51
Item 3. Defaults Upon Senior Securities			52
Item 4. Mine Safety Disclosures			52
Item 5. Other Information			52
Item 6. Exhibits			53
SIGNATURES			54

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and “Part II. Item 1A Risk Factors” in this Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

•The COVID-19 pandemic, including business disruptions caused by government restrictions, could have a material and adverse effect on our business, results of operations and financial condition in the future.

•We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.

•More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.

•Shareholder and customer emphasis on environmental, social, and governance responsibility may impose additional costs on us or expose us to new risks.

•Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.

•We face competition in the markets we serve, which could materially and adversely affect our operating results.

•Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.

•Acquisitions and integrating such acquisitions create certain risks and may affect our operating results.

•If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.

•Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.

•Credit and counterparty risks could harm our business.

•We may not realize all of the expected benefits of the acquisition of and merger with the Industrial business of Ingersoll-Rand plc (“Ingersoll Rand Industrial”).

•Dispositions create certain risks and may affect our operating results.

•Information systems failure or disruption, due to cyber terrorism or other actions, may adversely impact our business and result in financial loss to the Company or liability to our customers.

•Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.

•The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.

•A natural disaster, catastrophe, pandemic, geopolitical tensions or other event could adversely affect our operations.

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•Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.

•Our success depends on our executive management and other key personnel and our ability to attract and retain top talent throughout the Company.

•Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.

•The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.

•Changes in tax or other laws, regulations, or adverse determinations by taxing or other governmental authorities could increase our effective tax rate and cash taxes paid or otherwise affect our financial condition or operating results.

•Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.

•We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.

•The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.

•A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

•Environmental compliance costs and liabilities could adversely affect our financial condition.

•We face risks associated with our pension and other postretirement benefit obligations.

•Our substantial indebtedness could have important adverse consequences and adversely affect our financial condition.

•We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

•Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities. This could further exacerbate the risks to our financial condition.

•The terms of the credit agreement governing the Senior Secured Credit Facilities may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

•Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

•When we utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness, we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.

•If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.

•The Company may face risk associated with the discontinuation of and transition from currently used financial reference rates.

•The timing, number, manner and value of any shares repurchased pursuant to our share repurchase program will depend on several factors.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

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All references to “we,” “us,” “our,” the “Company” or “Ingersoll Rand” in this Quarterly Report on Form 10-Q mean Ingersoll Rand Inc. and its subsidiaries, unless the context otherwise requires.

Website Disclosure

We use our website www.irco.com as a channel of distribution of Company information. Financial and other important information regarding us is routinely accessible through and posted on our website. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Ingersoll Rand Inc. when you enroll your email address by visiting the “Investor Alerts” section of our website at investors.irco.com. The contents of our website are not, however, a part of this Quarterly Report on Form 10-Q.

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Revenues	$	1,515.7	$	1,325.0	$	4,292.6	$	3,733.6
Cost of sales	940.4		810.7		2,621.4		2,254.5
Gross Profit	575.3		514.3		1,671.2		1,479.1
Selling and administrative expenses	278.7		252.6		819.8		772.1
Amortization of intangible assets	93.8		80.3		263.6		244.8

Other operating expense, net	12.8		17.5		43.4		36.9
Operating Income	190.0		163.9		544.4		425.3
Interest expense	26.6		22.5		68.8		68.3
Loss on extinguishment of debt	—		9.0		1.1		9.0
Other income, net	(9.8)		(3.5)		(21.8)		(40.1)
Income from Continuing Operations Before Income Taxes	173.2		135.9		496.3		388.1
Provision for income taxes	30.3		2.7		104.6		25.8
Income (loss) on equity method investments	2.6		(2.2)		(2.5)		(2.9)
Income from Continuing Operations	145.5		131.0		389.2		359.4
Income (loss) from discontinued operations, net of tax	0.5		(4.2)		0.6		(88.1)
Net Income	146.0		126.8		389.8		271.3
Less: Net income attributable to noncontrolling interests	0.9		0.8		2.5		1.8
Net Income Attributable to Ingersoll Rand Inc.	$	145.1	$	126.0	$	387.3	$	269.5

Amounts attributable to Ingersoll Rand Inc. common stockholders:
Income from continuing operations, net of tax	$	144.6	$	130.2	$	386.7	$	357.6
Income (loss) from discontinued operations, net of tax	0.5		(4.2)		0.6		(88.1)
Net income attributable to Ingersoll Rand Inc.	$	145.1	$	126.0	$	387.3	$	269.5

Basic earnings (loss) per share of common stock:
Earnings from continuing operations	$	0.36	$	0.32	$	0.95	$	0.86
Loss from discontinued operations	—		(0.01)		—		(0.21)
Net earnings	0.36		0.31		0.96		0.65

Diluted earnings (loss) per share of common stock:
Earnings from continuing operations	$	0.35	$	0.31	$	0.94	$	0.84
Loss from discontinued operations	—		(0.01)		—		(0.21)
Net earnings	0.36		0.30		0.94		0.64

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; in millions)


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Comprehensive Income (Loss) Attributable to Ingersoll Rand Inc.
Net income attributable to Ingersoll Rand Inc.	$	145.1	$	126.0	$	387.3	$	269.5
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net	(207.9)		(47.6)		(448.8)		(98.3)
Unrecognized gain on cash flow hedges	19.6		—		14.2		—
Pension and other postretirement prior service cost and gain (loss), net	5.3		1.8		2.2		4.3
Total other comprehensive loss, net of tax	(183.0)		(45.8)		(432.4)		(94.0)
Comprehensive income (loss) attributable to Ingersoll Rand Inc.	$	(37.9)	$	80.2	$	(45.1)	$	175.5
Comprehensive Income (Loss) Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests	$	0.9	$	0.8	$	2.5	$	1.8
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net	(1.9)		0.2		(6.1)		(2.1)
Total other comprehensive income (loss), net of tax	(1.9)		0.2		(6.1)		(2.1)
Comprehensive income (loss) attributable to noncontrolling interests	(1.0)		1.0		(3.6)		(0.3)
Total Comprehensive Income (Loss)	$	(38.9)	$	81.2	$	(48.7)	$	175.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share amounts)


	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	1,459.5	$	2,109.6
Accounts receivable, net of allowance for credit losses of $47.8 and $42.3, respectively	1,032.3		948.6
Inventories	1,012.5		854.2
Other current assets	240.5		186.9
Assets of discontinued operations	—		15.6
Total current assets	3,744.8		4,114.9
Property, plant and equipment, net of accumulated depreciation of $386.9 and $357.7, respectively	587.7		648.6
Goodwill	5,789.0		5,981.6
Other intangible assets, net	3,533.6		3,912.7
Deferred tax assets	17.2		28.0
Other assets	553.3		468.7

Total assets	$	14,225.6	$	15,154.5
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt	$	32.8	$	38.8
Accounts payable	698.9		670.5
Accrued liabilities	791.3		741.3
Liabilities of discontinued operations	—		17.1
Total current liabilities	1,523.0		1,467.7
Long-term debt, less current maturities	2,720.1		3,401.8
Pensions and other postretirement benefits	178.1		195.1
Deferred income taxes	673.2		708.6
Other liabilities	316.2		310.1

Total liabilities	$	5,410.6	$	6,083.3
Commitments and contingencies (Note 16)	—		—
Stockholders’ equity
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 426,112,396 and 423,785,571 shares issued as of September 30, 2022 and December 31, 2021, respectively	4.3		4.3
Capital in excess of par value	9,462.7		9,408.6
Retained earnings	741.6		378.6
Accumulated other comprehensive loss	(474.0)		(41.6)
Treasury stock at cost; 21,190,495 and 16,000,364 shares as of September 30, 2022 and December 31, 2021, respectively	(983.7)		(748.4)
Total Ingersoll Rand Inc. stockholders’ equity	$	8,750.9	$	9,001.5
Noncontrolling interests	64.1		69.7
Total stockholders’ equity	$	8,815.0	$	9,071.2
Total liabilities and stockholders’ equity	$	14,225.6	$	15,154.5

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited; in millions)


	Three Month Period Ended September 30, 2022
	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Ingersoll Rand Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares Issued	Par
Balance at beginning of period	424.6	$	4.3	$	9,456.9	$	604.6	$	(291.0)	$	(997.9)	$	8,776.9	$	67.1	$	8,844.0
Net income	—	—		—		145.1		—		—		145.1		0.9		146.0
Dividends declared	—	—		—		(8.1)		—		—		(8.1)		—		(8.1)
Issuance of common stock for stock-based compensation plans	1.5	—		5.4		—		—		—		5.4		—		5.4
Purchases of treasury stock	—	—		—		—		—		(4.1)		(4.1)		—		(4.1)
Issuance of treasury stock for stock-based compensation plans	—	—		(17.5)		—		—		18.3		0.8		—		0.8
Stock-based compensation	—	—		17.9		—		—		—		17.9		—		17.9
Other comprehensive loss, net of tax	—	—		—		—		(183.0)		—		(183.0)		(1.9)		(184.9)

Dividends attributable to noncontrolling interests	—	—		—		—		—		—		—		(2.0)		(2.0)
Balance at end of period	426.1	$	4.3	$	9,462.7	$	741.6	$	(474.0)	$	(983.7)	$	8,750.9	$	64.1	$	8,815.0


	Three Month Period Ended September 30, 2021
	Common Stock			Capital in Excess of Par Value		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock		Total Ingersoll Rand Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares Issued	Par
Balance at beginning of period	421.5	$	4.2	$	9,376.0	$	(32.2)	$	(35.5)	$	(34.6)	$	9,277.9	$	68.5	$	9,346.4
Net income	—	—		—		126.0		—		—		126.0		0.8		126.8

Issuance of common stock for stock-based compensation plans	2.0	—		6.7		—		—		—		6.7		—		6.7
Purchases of treasury stock	—	—		—		—		—		(733.3)		(733.3)		—		(733.3)
Issuance of treasury stock for stock-based compensation plans	—	—		(18.3)		—		—		18.3		—		—		—
Stock-based compensation	—	—		22.1		—		—		—		22.1		—		22.1
Other comprehensive income (loss), net of tax	—	—		—		—		(45.8)		—		(45.8)		0.2		(45.6)
Divestiture of foreign subsidiaries	—	—		—		—		—		—		—		—		—
Dividends attributable to noncontrolling interests	—	—		—		—		—		—		—		(0.3)		(0.3)
Balance at end of period	423.5	$	4.2	$	9,386.5	$	93.8	$	(81.3)	$	(749.6)	$	8,653.6	$	69.2	$	8,722.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(Unaudited; in millions)


	Nine Month Period Ended September 30, 2022
	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Ingersoll Rand Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares Issued	Par
Balance at beginning of period	423.8	$	4.3	$	9,408.6	$	378.6	$	(41.6)	$	(748.4)	$	9,001.5	$	69.7	$	9,071.2
Net income	—	—		—		387.3		—		—		387.3		2.5		389.8
Dividends declared	—	—		—		(24.3)		—		—		(24.3)		—		(24.3)
Issuance of common stock for stock-based compensation plans	2.3	—		13.3		—		—		—		13.3		—		13.3
Purchases of treasury stock	—	—		—		—		—		(257.8)		(257.8)		—		(257.8)
Issuance of treasury stock for stock-based compensation plans	—	—		(20.7)		—		—		22.5		1.8		—		1.8
Stock-based compensation	—	—		61.5		—		—		—		61.5		—		61.5
Other comprehensive loss, net of tax	—	—		—		—		(432.4)		—		(432.4)		(6.1)		(438.5)

Dividends attributable to noncontrolling interests	—	—		—		—		—		—		—		(2.0)		(2.0)
Balance at end of period	426.1	$	4.3	$	9,462.7	$	741.6	$	(474.0)	$	(983.7)	$	8,750.9	$	64.1	$	8,815.0


	Nine Month Period Ended September 30, 2021
	Common Stock			Capital in Excess of Par Value		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Ingersoll Rand Inc. Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares Issued	Par
Balance at beginning of period	420.1	$	4.2	$	9,310.3	$	(175.7)	$	14.2	$	(33.3)	$	9,119.7	$	69.8	$	9,189.5
Net income	—	—		—		269.5		—		—		269.5		1.8		271.3

Issuance of common stock for stock-based compensation plans	3.4	—		19.0		—		—		—		19.0		—		19.0
Purchases of treasury stock	—	—		—		—		—		(736.5)		(736.5)		—		(736.5)
Issuance of treasury stock for stock-based compensation plans	—	—		(19.4)		—		—		20.2		0.8		—		0.8
Stock-based compensation	—	—		76.6		—		—		—		76.6		—		76.6
Other comprehensive loss, net of tax	—	—		—		—		(94.0)		—		(94.0)		(2.1)		(96.1)
Divestiture of foreign subsidiaries	—	—		—		—		(1.5)		—		(1.5)		—		(1.5)
Dividends attributable to noncontrolling interests	—	—		—		—		—		—		—		(0.3)		(0.3)
Balance at end of period	423.5	$	4.2	$	9,386.5	$	93.8	$	(81.3)	$	(749.6)	$	8,653.6	$	69.2	$	8,722.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)


	For the Nine Month Period Ended September 30,
	2022		2021
Cash Flows From Operating Activities From Continuing Operations:
Net income	$	389.8	$	271.3
Income (loss) from discontinued operations, net of tax	0.6		(88.1)
Income from continuing operations	389.2		359.4
Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:
Amortization of intangible assets	263.6		244.8
Depreciation	64.4		65.5

Non-cash restructuring charges	6.0		—
Stock-based compensation expense	62.3		65.0
Income (loss) on equity method investments	2.5		2.9
Foreign currency transaction gains, net	(12.3)		(13.6)

Non-cash adjustments to carrying value of LIFO inventories	33.0		—
Other non-cash adjustments	3.1		8.6
Changes in assets and liabilities:
Receivables	(160.1)		(43.8)
Inventories	(260.2)		(126.6)
Accounts payable	76.4		83.7
Accrued liabilities	90.2		(129.2)
Other assets and liabilities, net	(47.5)		(135.8)
Net cash provided by operating activities from continuing operations	510.6		380.9
Cash Flows From Investing Activities From Continuing Operations:
Capital expenditures	(61.1)		(41.2)
Net cash paid in business combinations	(62.5)		(809.3)
Disposals of property, plant and equipment	—		9.5
Other investing	4.1		—
Net cash used in investing activities from continuing operations	(119.5)		(841.0)
Cash Flows From Financing Activities From Continuing Operations:
Principal payments on long-term debt	(647.1)		(425.7)

Purchases of treasury stock	(257.8)		(736.5)
Cash dividends on common shares	(24.3)		—
Proceeds from stock option exercises	14.7		20.0
Payments of interest rate cap premiums	(13.4)		—
Payments of deferred and contingent acquisition consideration	(4.1)		—



Other financing	(2.8)		—
Net cash used in financing activities from continuing operations	(934.8)		(1,142.2)
Cash Flows From Discontinued Operations:
Net cash used in operating activities	(5.0)		(0.6)
Net cash provided by investing activities	4.4		1,902.5

Net cash provided by (used in) discontinued operations	(0.6)		1,901.9
Effect of exchange rate changes on cash and cash equivalents	(105.8)		(17.5)
Net increase (decrease) in cash and cash equivalents	(650.1)		282.1
Cash and cash equivalents, beginning of period	2,109.6		1,750.9
Cash and cash equivalents, end of period	$	1,459.5	$	2,033.0
Supplemental Cash Flow Information
Cash paid for income taxes	$	117.1	$	381.4
Cash paid for interest	64.2		62.5

The accompanying notes are an integral part of these condensed consolidated financial statements.

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INGERSOLL RAND INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; in millions, except share and per share amounts)

Note 1. Basis of Presentation and Recent Accounting Pronouncements

Basis of Presentation

Ingersoll Rand Inc. is a diversified, global provider of mission-critical flow creation products and industrial solutions. The accompanying condensed consolidated financial statements include the accounts of Ingersoll Rand Inc. and its majority-owned subsidiaries (collectively referred to herein as “Ingersoll Rand” or the “Company”).

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting, the instructions for Form 10-Q and Article 10 of the U.S. Securities and Exchange Commission (“SEC”) Regulation S-X. In the Company’s opinion, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). We have reclassified certain prior year amounts to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations. See Note 2 “Discontinued Operations” for information on discontinued operations.

The results of operations for the three month period ended September 30, 2022 are not necessarily indicative of future results. The novel Coronavirus (“COVID-19”) pandemic and related supply chain constraints could impact the global economy. The Company’s operating results will be subject to fluctuations based on general economic conditions, and the extent to which COVID-19 may ultimately impact its business will depend on future developments.

Recently Adopted Accounting Standard Updates (“ASU”)

In March 2020, the Financial Accounting Standards Board (the “FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provided optional expedients and exceptions for a limited time to ease the potential burden of accounting for reference rate reform on financial reporting. This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. The guidance is effective beginning on March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which explicitly clarifies which contracts, hedging relationships, and other transactions are within the scope of the optional expedients and exceptions allowed under Topic 848.

In April 2022, the Company and its lenders executed Amendment No. 8 to the Credit Agreement, the primary purpose of which was to change the reference rate for existing and new borrowings under the Credit Agreement by replacing LIBOR with the Secured Overnight Financing Rate (“SOFR”). We applied practical expedients provided in Topic 848 allowing for the changes in contractual terms to be accounted for prospectively. These modifications had no significant impact on our financial statements. Refer to Note 9 “Debt” for further information regarding the terms of the Credit Agreement. The Company will continue to assess whether other provisions of Topic 848 are applicable throughout the effective period.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The amendments in this update are effective for fiscal years beginning after December 15, 2022 for public companies. Early adoption is permitted. The adoption is not expected to have a material impact on our consolidated financial statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. The amendments in this update are effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The adoption is not expected to have a material impact on our consolidated financial statements.

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Note 2. Discontinued Operations

Discontinued operations consists of two formerly-owned businesses: Specialty Vehicle Technologies (“SVT” or “Club Car”) and High Pressure Solutions (“HPS”). The results of operations, financial positions and cash flows of these businesses are reported as discontinued operations for all periods presented in these condensed consolidated financial statements.

Specialty Vehicle Technologies

On April 9, 2021, the Company entered into an agreement to sell Club Car to private equity firm Platinum Equity Advisors, LLC (“Platinum Equity”) for $1.68 billion in cash. The sale was substantially completed on June 1, 2021 and concluded in the third quarter of 2022.

High Pressure Solutions

On February 14, 2021, the Company entered into an agreement to sell the majority interest in its High Pressure Solutions business to private equity firm American Industrial Partners. The Company received net cash proceeds of $278.3 million for its majority interest of 55%, and retained a 45% common equity interest in the newly-formed entity comprising the HPS business. This sale was substantially completed on April 1, 2021. The Company expects to maintain its minority investment in HPS indefinitely and is unable to estimate when this interest may be disposed.

Financial information of discontinued operations

The results of operations attributable to discontinued operations are summarized below:


	Specialty Vehicle Technologies				High Pressure Solutions				Total
	For the Three Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Revenues	$	—	$	4.4	$	—	$	2.6	$	—	$	7.0
Cost of sales	—		4.2		—		2.4		—		6.6
Gross Profit	—		0.2		—		0.2		—		0.4
Selling and administrative expenses	—		0.3		—		0.2		—		0.5
Amortization of intangible assets	—		—		—		—		—		—
(Gain) loss on disposal group	(2.8)		3.9		—		—		(2.8)		3.9
Other operating expense, net	2.1		1.8		0.1		1.8		2.2		3.6




Income (Loss) from Discontinued Operations Before Income Taxes	0.7		(5.8)		(0.1)		(1.8)		0.6		(7.6)
Provision (benefit) for income taxes	0.1		(1.5)		—		(1.9)		0.1		(3.4)
Income (Loss) from Discontinued Operations, Net of Tax	$	0.6	$	(4.3)	$	(0.1)	$	0.1	$	0.5	$	(4.2)

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	Specialty Vehicle Technologies				High Pressure Solutions				Total
	For the Nine Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Revenues	$	6.6	$	428.7	$	—	$	68.0	$	6.6	$	496.7
Cost of sales	6.5		319.1		—		56.8		6.5		375.9
Gross Profit	0.1		109.6		—		11.2		0.1		120.8
Selling and administrative expenses	0.1		35.6		—		5.1		0.1		40.7
Amortization of intangible assets	—		10.4		—		2.4		—		12.8
Loss (gain) on sale	(2.8)		(252.8)		—		211.7		(2.8)		(41.1)
Other operating expense, net	0.4		18.0		1.6		17.3		2.0		35.3




Income (Loss) from Discontinued Operations Before Income Taxes	2.4		298.4		(1.6)		(225.3)		0.8		73.1
Provision (benefit) for income taxes	0.5		168.2		(0.3)		(7.0)		0.2		161.2
Income (Loss) from Discontinued Operations, Net of Tax	$	1.9	$	130.2	$	(1.3)	$	(218.3)	$	0.6	$	(88.1)

The carrying amount of assets and liabilities attributable to discontinued operations are shown in the table below. There were no assets or liabilities of discontinued operations as of September 30, 2022.


	December 31, 2021


Cash and cash equivalents	$	6.2
Accounts receivable, net	2.5
Inventories	5.6
Other current assets	0.1

Property, plant and equipment, net	1.2







Total assets of discontinued operations	$	15.6




Accounts payable	$	2.2
Accrued liabilities	14.9
Total liabilities of discontinued operations	$	17.1

The significant non-cash operating items and capital expenditures reflected in cash flows of discontinued operations for the nine month periods ended September 30, 2022 and 2021 include the following:


	Specialty Vehicle Technologies				High Pressure Solutions				Total
	For the Nine Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Loss (gain) on sale	$	(2.8)	$	(252.8)	$	—	$	211.7	$	(2.8)	$	(41.1)
Depreciation and amortization	—		14.8		—		4.0		—		18.8
Stock-based compensation expense	—		8.2		—		2.7		—		10.9
Capital expenditures	—		1.6		—		0.3		—		1.9

Note 3. Business Combinations

Acquisitions in 2022

During the first quarter of 2022, the Company acquired Houdstermaatschappij Jorc B.V. (“Jorc”), a manufacturer of condensate management products, for cash consideration of $30.1 million. The Company also acquired two sales and services businesses in

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Europe for aggregate cash consideration of $7.4 million. All three businesses have been reported in the Industrial Technologies and Services segment from the date of acquisition.

During the third quarter of 2022, the Company acquired Westwood Technical Limited (“Westwood Technical”), a control and instrumentation specialist based in the United Kingdom with unique Industrial Internet of Things (IIoT) capabilities, for cash consideration of $8.1 million and contingent consideration of up to $9.3 million. The Company also acquired Holtec Gas Systems LLC (“Holtec”), an internationally recognized nitrogen generator manufacturer, for cash consideration of $12.6 million. Lastly, the Company acquired Hydro Prokav Pumps (India) Private Limited (“Hydro Prokav”), for cash consideration of $14.0 million. Westwood Technical and Hydro Prokav have been reported in the Precision and Science Technologies segment from the date of acquisition, while Holtec has been reported in the Industrial Technologies and Services segment. Only the goodwill resulting from the Holtec acquisition is expected to be deductible for tax purposes.

The following table summarizes the allocation of consideration for all businesses acquired in 2022 to the fair values of identifiable assets acquired and liabilities assumed at the acquisition dates. Initial accounting for all 2022 acquisitions is substantially complete.


	Total
Accounts receivable	$	3.9
Inventories	8.2
Other current assets	0.7
Property, plant and equipment	4.2
Goodwill	65.2
Other intangible assets	7.4
Other assets	0.3
Total current liabilities	(8.3)
Deferred tax liabilities	(0.1)

Total consideration	$	81.5

The aggregate revenue and operating income included in the condensed consolidated financial statements for these acquisitions subsequent to the dates of acquisition was $6.8 million and $1.0 million for the three month period ended September 30, 2022, respectively, and $15.9 million and $3.0 million for the nine month period then ended, respectively. The operating income of these acquired businesses includes the effects of acquisition-related accounting adjustments such as amortization of intangible assets and fair value adjustments to acquired inventory.

Acquisitions in 2021

On January 31, 2021, the Company acquired the Vacuum and Blower Systems division of Tuthill Corporation for cash consideration of $184.0 million. The business operates under the tradenames M-D Pneumatics and Kinney Vacuum Pumps and is a leader in the design and manufacture of positive displacement blowers, mechanical vacuum pumps, vacuum boosters and engineered blower and vacuum systems. The results of this business are reported within the Industrial Technologies and Services segment from the date of acquisition. The goodwill recognized is attributable to the expected cost synergies, anticipated growth of new and existing customers, and the assembled workforce. The goodwill resulting from this acquisition is expected to be deductible for tax purposes.

On July 30, 2021, the Company acquired Maximus Solutions for cash consideration of $111.0 million, net of cash acquired. The business is a provider of digital controls and IIoT production management systems for the agritech software and controls market. The results of this business are reported within the Precision and Science Technologies segment from the date of acquisition. The goodwill recognized is attributable to synergies expected from combining Maximus’s significant expertise in digital controls and IIoT systems with other brands and channels in the Precision and Science Technologies segment and from anticipated growth from existing and new customers. None of the goodwill resulting from this acquisition is expected to be deductible for tax purposes.

On August 31, 2021, the Company acquired Seepex GmbH (“Seepex”) for cash consideration of $482.1 million, net of cash acquired. The business is a global leader in progressive cavity pump solutions. Seepex is a global leader in progressive cavity pump solutions. The acquisition expands the product portfolio of the Precision and Science Technologies segment with offerings that primarily serve the water, wastewater, food and beverage, and chemical end markets. The goodwill arising from the acquisition is attributable to the expected cost synergies, anticipated growth of new and existing customers, and the assembled workforce. None of this goodwill is expected to be deductible for tax purposes.

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On October 29, 2021, the Company acquired Air Dimensions Inc. for cash consideration of $70.8 million. The business designs, manufactures and sells vacuum diaphragm pumps primarily for environmental applications. The acquisition is intended to expand the product portfolio of the Precision and Science Technologies segment and further penetrate end markets such as emission monitoring, biogas, utility and chemical processing. The goodwill arising from the acquisition is attributable to growth expected from product and channel synergies and to the assembled workforce. The goodwill resulting from this acquisition is expected to be deductible for tax purposes.

On December 1, 2021, the Company acquired the assets of Tuthill Corporation’s Pump Group for cash consideration of $84.8 million. The business is a market leader in gear and piston pump solutions. The acquisition is intended to complement existing brands and technologies in the Precision and Science Technologies segment and further penetrate high growth end markets, including life and sciences, food and beverage, medical and water and wastewater treatment. The goodwill arising from the acquisition is attributable to revenue growth and cost savings opportunities and to the assembled workforce. The majority of the goodwill resulting from this acquisition is expected to be deductible for tax purposes.

Also during 2021, the Company acquired several sales and service businesses in the Industrial Technologies and Services segment and a pump technology business and sales and service business in the Precision and Science Technologies segment. The aggregate consideration for these acquisitions was $44.6 million.

The following table summarizes the allocation of consideration to the fair values of identifiable assets acquired and liabilities assumed at the acquisition dates. Initial accounting for the acquisitions of M-D Pneumatics and Kinney Vacuum Pumps, Seepex and Maximus Solutions is complete. Initial accounting for other 2021 acquisitions is substantially complete. The remaining measurement period adjustments are not expected to be significant and will be completed in the fourth quarter of 2022.


	Seepex		M-D Pneumatics and Kinney Vacuum Pumps		Maximus Solutions		All Others
Accounts receivable	$	24.9	$	4.8	$	4.3	9.4
Inventories	42.4		3.8		2.9		10.4
Other current assets	1.9		0.2		0.2		0.3
Property, plant and equipment	40.6		16.2		2.1		15.0
Goodwill	249.0		81.5		75.9		78.9
Other intangible assets	239.2		82.5		39.5		95.9
Other assets	1.4		—		—		—
Total current liabilities	(35.1)		(3.5)		(2.4)		(4.1)
Deferred tax liabilities	(75.6)		—		(11.3)		(4.2)
Other noncurrent liabilities	(6.6)		(1.5)		(0.2)		(1.1)
Total consideration	$	482.1	$	184.0	$	111.0	200.5

The revenues included in the condensed consolidated financial statements for these acquisitions subsequent to their date of acquisition was $94.7 million and $38.0 million for the three month periods ended September 30, 2022 and 2021, respectively, and $266.4 million and $69.5 million for the nine month periods then ended, respectively. The operating income included in the condensed consolidated financial statements for these acquisitions subsequent to their date of acquisition was $9.3 million and $4.3 million for the three month periods ended September 30, 2022 and 2021, respectively, and $20.1 million and $8.3 million for the nine month periods then ended, respectively. The operating income of these acquired businesses include the effects of acquisition-related accounting adjustments such as amortization of intangible assets and fair value adjustments to acquired inventory.

Note 4. Restructuring

Restructuring Program 2020 to 2022

Subsequent to the acquisition of and merger with the Industrial business of Ingersoll-Rand plc (“Ingersoll Rand Industrial”) in the first quarter of 2020 (the “Merger”), the Company announced a restructuring program (“2020 Plan”) to create efficiencies and synergies, reduce the number of facilities and optimize operating margin within the merged Company. Through September 30, 2022, we have recognized cumulative expense related to the 2020 Plan of $124.5 million, comprised of $96.7 million, $16.3 million and $11.5 million for Industrial Technologies and Services, Precision and Science Technologies and Corporate,

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respectively. The Company expects total expense for workforce restructuring, facility consolidation and other exit and disposal activities under the 2020 Plan to be approximately $123 million to $138 million.

For the three and nine month periods ended September 30, 2022 and 2021, “Restructuring charges, net” were recognized within “Other operating expense, net” in the Condensed Consolidated Statement of Operations and consisted of the following.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Industrial Technologies and Services	$	5.7	$	1.0	$	18.0	$	5.2
Precision and Science Technologies	1.3		—		9.4		0.1
Corporate	(0.3)		0.1		0.7		5.0
Restructuring charges, net	$	6.7	$	1.1	$	28.1	$	10.3

The following table summarizes the activity associated with the Company’s restructuring programs for the three and nine month periods ended September 30, 2022 and 2021.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Balance at beginning of period	$	18.0	$	14.7	$	12.3	$	17.5
Charged to expense - termination benefits	4.1		0.2		16.6		8.8
Charged to expense - other (1)	1.4		0.9		5.5		1.5
Payments	(3.9)		(3.0)		(12.1)		(14.8)
Currency translation adjustment and other	(1.9)		(0.2)		(4.6)		(0.4)
Balance at end of period	$	17.7	$	12.6	$	17.7	$	12.6

(1)Excludes $1.2 million and $6.0 million of non-cash charges that impacted restructuring expense but not the restructuring liabilities during the three and nine month periods ended September 30, 2022, respectively.

Note 5. Inventories

Inventories as of September 30, 2022 and December 31, 2021 consisted of the following.


	September 30, 2022		December 31, 2021
Raw materials, including parts and subassemblies	$	623.7	$	506.6
Work-in-process	104.5		88.6
Finished goods	341.7		283.4
	1,069.9		878.6
LIFO reserve	(57.4)		(24.4)
Inventories	$	1,012.5	$	854.2

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Note 6. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill attributable to each reportable segment for the nine month period ended September 30, 2022 is presented in the table below.


	Industrial Technologies and Services		Precision and Science Technologies		Total
Balance at beginning of period	$	4,177.3	$	1,804.3	$	5,981.6
Acquisitions	36.3		28.9		65.2
Foreign currency translation and other(1)	(181.8)		(76.0)		(257.8)
Balance at end of period	$	4,031.8	$	1,757.2	$	5,789.0

(1)Includes measurement period adjustments.

As of both September 30, 2022 and December 31, 2021, goodwill included accumulated impairment losses of $220.6 million within the Industrial Technologies and Services segment.

Other Intangible Assets, Net

Other intangible assets as of September 30, 2022 and December 31, 2021 consisted of the following.


	September 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets
Customer lists and relationships	$	2,904.2	$	(1,178.4)	$	1,725.8	$	3,055.0	$	(1,048.3)	$	2,006.7
Technology	343.7		(111.9)		231.8		356.4		(77.8)		278.6
Tradenames	43.2		(21.0)		22.2		47.8		(19.0)		28.8
Backlog	—		—		—		8.1		(5.1)		3.0
Other	111.0		(87.4)		23.6		107.1		(76.9)		30.2
Unamortized intangible assets
Tradenames	1,530.2		—		1,530.2		1,565.4		—		1,565.4
Total other intangible assets	$	4,932.3	$	(1,398.7)	$	3,533.6	$	5,139.8	$	(1,227.1)	$	3,912.7

Intangible Asset Impairment Considerations

As of September 30, 2022 and December 31, 2021, there were no indications that the carrying value of goodwill and other intangible assets may not be recoverable.

Note 7. Accrued Liabilities

Accrued liabilities as of September 30, 2022 and December 31, 2021 consisted of the following.


	September 30, 2022		December 31, 2021
Salaries, wages and related fringe benefits	$	207.0	$	232.1
Contract liabilities	299.7		242.1
Product warranty	42.8		42.5
Operating lease liabilities	38.5		34.9
Restructuring	17.7		12.3
Taxes	33.9		41.6
Other	151.7		135.8
Total accrued liabilities	$	791.3	$	741.3

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A reconciliation of the changes in the accrued product warranty liability for the three and nine month periods ended September 30, 2022 and 2021 are as follows.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Balance at beginning of period	$	43.1	$	42.0	$	42.5	$	41.1
Product warranty accruals	4.9		4.3		14.3		14.1
Acquired warranty	—		1.9		—		2.0
Settlements	(3.5)		(3.2)		(10.8)		(12.1)
Foreign currency translation and other	(1.7)		(0.5)		(3.2)		(0.6)
Balance at end of period	$	42.8	$	44.5	$	42.8	$	44.5

Note 8. Benefit Plans

Net Periodic Benefit Cost

The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and nine month periods ended September 30, 2022 and 2021.


	Pension Benefits								Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	For the Three Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Service cost	$	1.1	$	1.6	$	0.8	$	1.1	$	—	$	—
Interest cost	2.8		2.7		1.4		1.2		0.2		0.1
Expected return on plan assets	(3.3)		(3.0)		(2.8)		(3.1)		—		—
Recognition of:
Unrecognized prior service cost	—		—		—		—		0.1		(0.1)
Unrecognized net actuarial loss	—		—		0.1		1.2		—		0.1
	0.6		1.3		(0.5)		0.4		0.3		0.1
Gain on settlement	—		(0.8)		—		—		—		—
	$	0.6	$	0.5	$	(0.5)	$	0.4	$	0.3	$	0.1


	Pension Benefits								Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	For the Nine Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Service cost	$	3.2	$	5.0	$	2.5	$	3.3	$	—	$	—
Interest cost	8.5		8.2		4.5		3.5		0.5		0.4
Expected return on plan assets	(9.8)		(9.2)		(9.0)		(9.2)		—		—
Recognition of:
Unrecognized prior service cost	—		—		0.1		0.1		0.1		(0.3)
Unrecognized net actuarial loss	—		—		0.2		3.7		—		0.1
	1.9		4.0		(1.7)		1.4		0.6		0.2
Gain on settlement	(0.9)		(0.8)		—		—		—		—
	$	1.0	$	3.2	$	(1.7)	$	1.4	$	0.6	$	0.2

The components of net periodic benefit cost other than the service cost component are included in “Other income, net” in the Condensed Consolidated Statements of Operations.

Note 9. Debt

Debt as of September 30, 2022 and December 31, 2021 is summarized as follows.


	September 30, 2022		December 31, 2021
Short-term borrowings	$	0.5	$	—
Long-term debt:


Dollar Term Loan B, due 2027(1)	1,851.0		1,865.0
Dollar Term Loan, due 2027(2)	903.7		910.5
Euro Term Loan(3)	—		670.7

Finance leases and other long-term debt	21.3		23.9
Unamortized debt issuance costs	(23.6)		(29.5)
Total long-term debt, net, including current maturities	2,752.4		3,440.6
Current maturities of long-term debt	32.3		38.8
Total long-term debt, net	$	2,720.1	$	3,401.8

(1)As of September 30, 2022, this amount is presented net of unamortized discounts of $1.5 million. As of September 30, 2022, the applicable interest rate was approximately 4.88% and the weighted-average interest rate was 2.80% for the nine month period ended September 30, 2022.

(2)As of September 30, 2022, this amount is presented net of unamortized discounts of $0.7 million. As of September 30, 2022, the applicable interest rate was approximately 4.88% and the weighted average interest rate was 2.80% for the nine month period ended September 30, 2022.

(3)The weighted average interest rate was 2.00% for the six month period prior to the loan repayment on June 30, 2022, as discussed below.

Senior Secured Credit Facilities

The Senior Secured Credit Facilities provided senior secured financing consisting of (i) a senior secured term loan facility denominated in U.S. dollars (as refinanced and otherwise modified from time to time prior to February 28, 2020, the “Original Dollar Term Loan”), (ii) a senior secured term loan facility denominated in U.S. dollars (entered into at the time of the Merger, the “Dollar Term Loan B”), (iii) a senior secured term loan facility denominated in Euros (as refinanced and otherwise modified from time to time prior to February 28, 2020, the “Euro Term Loan”) and (iv) a senior secured revolving credit facility (as refinanced and otherwise modified from time to time the “Revolving Credit Facility”). The Revolving Credit Facility is available to be drawn in U.S. dollars (“USD”), Euros (“EUR”), Great British Pounds (“GBP”) and other reasonably accepted foreign currencies, subject to certain sublimits for the foreign currencies.

See Note 11 “Debt” to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2021 for further information on the Senior Secured Credit Facilities.

On April 1, 2022, through its subsidiary, Gardner Denver, Inc., the Company entered into Amendment No. 8 to the Credit Agreement. This amendment was entered into pursuant to the terms of the Senior Secured Credit Facilities and provides for the replacement of USD LIBOR with the SOFR as the benchmark interest rate for all existing USD borrowings with LIBOR-based rates and any subsequent USD borrowings. These modifications had no significant impact on our financial statements.

On June 30, 2022, the Company repaid the Euro Term Loan outstanding principal balance of €589.1 million using cash on hand. The prepayment resulted in the write-off of unamortized debt issuance costs and unamortized issuance discount of $1.1 million which was recognized in “Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations.

As of September 30, 2022, the aggregate amount of commitments under the Revolving Credit Facility was $1,100.0 million and the capacity under the Revolving Credit Facility to issue letters of credit was $400.0 million. As of September 30, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility, no outstanding letters of credit under the Revolving Credit Facility and unused availability under the Revolving Credit Facility of $1,100.0 million.

As of September 30, 2022, we were in compliance with all covenants of our Senior Secured Credit Facilities.

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Note 10. Stock-Based Compensation Plans

The Company has outstanding stock-based compensation awards granted under the 2013 Stock Incentive Plan (“2013 Plan”) and the 2017 Omnibus Incentive Plan (as amended by the First Amendment, dated April 27, 2021, “2017 Plan”) as described in Note 18, “Stock-Based Compensation Plans” to the consolidated financial statements in its 2021 Form 10-K.

The Company’s stock-based compensation awards are generally granted in the first quarter of the year and consist of stock options, restricted stock units and performance share units. Eligible employees were also granted restricted stock units, during the three month period ended September 30, 2020, that vest ratably over two years, subject to the passage of time and the employee's continued employment during such period. In some instances, such as death, awards may vest concurrently with or following an employee's termination.

Stock-Based Compensation

Stock-based compensation expense for the nine month periods ended September 30, 2022 and 2021 are included in “Cost of sales” and “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations and are as follows.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Stock-based compensation expense recognized in:
Continuing operations	$	20.1	$	21.9	$	62.3	$	65.0
Discontinued operations	—		—		—		10.9
Total stock-based compensation expense	$	20.1	$	21.9	$	62.3	$	75.9

Stock-Based Compensation - Continuing Operations

In the nine month period ended September 30, 2022, the $62.3 million of stock-based compensation expense included expense for equity awards granted under the 2013 and 2017 Plan of $63.6 million and a decrease in the liability for stock appreciation rights (“SAR”) of $1.3 million. Of the $63.6 million of expense for equity awards granted under the 2013 Plan and 2017 Plan, $33.1 million related to the $150 million equity grant to nearly 16,000 employees worldwide made in the third quarter of 2020 (“All-Employee Equity Grant”).

As of September 30, 2022, there was $123.4 million of total unrecognized compensation expense related to outstanding stock options, restricted stock unit awards and performance stock unit awards granted to employees and non-employee directors, as well as 500,000 conditional stock options awarded during the third quarter of 2022 to our Chairman and CEO in which the service date precedes the grant date, and will be granted upon achievement of certain performance targets. These 500,000 stock options have not been included in the Stock Option Awards section below since the grant date has not occurred.

Stock Option Awards

Stock options are granted to employees with an exercise price equal to the fair value of the Company’s per share common stock on the date of grant. Stock option awards typically vest over four or five years and expire ten years from the date of grant.

A summary of the Company’s stock option (including SARs) activity for the nine month period ended September 30, 2022 is presented in the following table (underlying shares in thousands).


	Shares	Weighted-Average Exercise Price (per share)
Stock options outstanding as of December 31, 2021	6,746	$	21.76

Granted	741	53.05
Exercised or settled	(711)	20.67
Forfeited	(127)	37.49
Expired	(6)	38.19
Stock options outstanding as of September 30, 2022	6,643	25.05

Vested as of September 30, 2022	4,649	18.34

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The following assumptions were used to estimate the fair value of options granted during the nine month periods ended September 30, 2022 and 2021 using the Black-Scholes option-pricing model.


	For the Nine Month Period Ended September 30,
Assumptions	2022		2021
Expected life of options (in years)	6.3		6.3
Risk-free interest rate	1.9% - 3.1%		0.9% - 1.1%
Assumed volatility	37.1% - 38.3%		38.9% - 39.4%
Expected dividend rate	0.2	%	0.0	%

Restricted Stock Unit Awards

Restricted stock units are granted to employees and non-employee directors based on the market price of the Company’s common stock on the grant date and recognized in compensation expense over the vesting period. A summary of the Company’s restricted stock unit activity for the nine month period ended September 30, 2022 is presented in the following table (underlying shares in thousands).


	Shares	Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2021	2,677	$	34.08

Granted	551	52.33
Vested	(1,997)	34.02
Forfeited	(176)	36.67
Non-vested as of September 30, 2022	1,055	43.29

Performance Share Unit (“PSUs”) Awards

Annually, during the first quarter, the Company grants TSR PSUs to certain officers in which the number of shares issued at the end of the performance period is determined by the Company’s total shareholder return percentile rank versus the S&P 500 index for the three year performance period. The grant date fair value of these awards is determined using a Monte Carlo simulation pricing model and compensation cost is recognized straight-line over a three year period.

During the third quarter of 2022, the Company granted Special TSR PSUs to its Chairman and CEO that will become earned (but not vested) on the first date during the five year performance period on which the sum of (i) the 60-day volume-weighted average closing price of the Company’s common stock, plus (ii) the cumulative value of any dividends paid during the five year performance period equals or exceeds $81.85. The grant date fair value of these awards is determined using a Monte Carlo simulation pricing model and compensation cost is recognized straight-line over a five year period. The Company also granted its Chairman and CEO Special EPS PSUs that are eligible to vest based on the level of compounded annual growth rate of the Company’s Adjusted EPS during the five year performance period. The grant date fair value of these awards is based on the market price of the Company’s common stock on the grant date and recognized as a compensation expense over a 4.3 year period.

A summary of the Company’s performance stock unit activity for the nine month period ended September 30, 2022 is presented in the following table (underlying shares in thousands).


	Shares	Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2021	393	$	39.89
Granted	1,175	46.56
Forfeited	(29)	39.61
Non-vested as of September 30, 2022	1,539	44.99

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The following assumptions were used to estimate the fair value of performance share units granted during the nine month periods ended September 30, 2022 and 2021 using the Monte Carlo simulation pricing model.


	For the Nine Month Period Ended September 30,
Assumptions	2022		2021
Expected term (in years)	2.9 - 5.0		2.9
Risk-free interest rate	1.7% - 3.4%		0.2	%
Assumed volatility	35.0% - 36.4%		36.9	%
Expected dividend rate	0.2	%	—	%

Note 11. Accumulated Other Comprehensive Loss

The Company’s other comprehensive income (loss) consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations; (ii) realized and unrealized foreign currency gains and losses on certain hedges of net investments in foreign operations, net of income taxes; (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swap and cap contracts), net of income taxes; and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes. See Note 8 “Benefit Plans” and Note 12 “Hedging Activities, Derivative Instruments and Fair Value Measurements.”

The before tax income (loss) and related income tax effect are as follows.


	For the Three Month Period Ended September 30,
	2022						2021
	Before-Tax Amount		Tax Benefit or (Expense)		Net of Tax Amount		Before-Tax Amount		Tax Benefit or (Expense)		Net of Tax Amount
Foreign currency translation adjustments, net	$	(207.9)	$	—	$	(207.9)	$	(52.1)	$	4.5	$	(47.6)
Unrecognized gains on cash flow hedges	26.1		(6.5)		19.6		—		—		—
Pension and other postretirement benefit prior service cost and gain or loss, net	7.0		(1.7)		5.3		2.4		(0.6)		1.8
Other comprehensive loss	$	(174.8)	$	(8.2)	$	(183.0)	$	(49.7)	$	3.9	$	(45.8)


	For the Nine Month Period Ended September 30,
	2022						2021
	Before-Tax Amount		Tax Benefit or (Expense)		Net of Tax Amount		Before-Tax Amount		Tax Benefit or (Expense)		Net of Tax Amount
Foreign currency translation adjustments, net	$	(413.0)	$	(35.8)	$	(448.8)	$	(108.3)	$	10.0	$	(98.3)
Unrecognized gains on cash flow hedges	19.8		(5.6)		14.2		—		—		—
Pension and other postretirement benefit prior service cost and gain or loss, net	2.9		(0.7)		2.2		5.4		(1.1)		4.3
Other comprehensive loss	$	(390.3)	$	(42.1)	$	(432.4)	$	(102.9)	$	8.9	$	(94.0)

The tables above include only the other comprehensive loss, net of tax, attributable to Ingersoll Rand Inc. Other comprehensive income (loss), net of tax, attributable to noncontrolling interest holders was $(1.9) million and $0.2 million for the three month periods ended September 30, 2022 and 2021, respectively, and $(6.1) million and $(2.1) million for the nine month periods ended September 30, 2022 and 2021, respectively, and related entirely to foreign currency translation adjustments.

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Changes in accumulated other comprehensive income (loss) by component for the nine month periods ended September 30, 2022 and 2021 are presented in the following table net of tax.


	Foreign Currency Translation Adjustments, Net		Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Total
Balance as of December 31, 2021	$	(29.9)	$	—	$	(11.7)	$	(41.6)
Other comprehensive income (loss) before reclassifications	(444.5)		12.3		2.6		(429.6)
Amounts reclassified from accumulated other comprehensive loss	(4.3)		1.9		(0.4)		(2.8)
Other comprehensive income (loss)	(448.8)		14.2		2.2		(432.4)

Balance as of September 30, 2022	$	(478.7)	$	14.2	$	(9.5)	$	(474.0)


	Foreign Currency Translation Adjustments, Net		Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Total
Balance as of December 31, 2020	$	74.6	$	—	$	(60.4)	$	14.2
Other comprehensive income (loss) before reclassifications	(98.3)		—		2.2		(96.1)
Amounts reclassified from accumulated other comprehensive loss	—		—		2.1		2.1
Other comprehensive income (loss)	(98.3)		—		4.3		(94.0)
Divestiture of foreign subsidiaries	(1.5)		—		—		(1.5)
Balance as of September 30, 2021	$	(25.2)	$	—	$	(56.1)	$	(81.3)

Reclassifications out of accumulated other comprehensive income (loss) for the nine month periods ended September 30, 2022 and 2021 are presented in the following table.


Amount Reclassified from Accumulated Other Comprehensive Loss
Details about Accumulated Other Comprehensive Loss Components	For the Nine Month Period Ended September 30,				Affected Line(s) in the Statement Where Net Income is Presented
	2022		2021
Cash flow hedges (interest rate swaps and caps)	$	2.5	$	—	Interest expense
Benefit for income taxes	(0.6)		—		Provision for income taxes
Cash flow hedges (interest rate swaps and caps), net of tax	$	1.9	$	—

Net investment hedges	$	(5.7)	$	—	Interest expense
Provision for income taxes	1.4		—		Provision for income taxes
Net investment hedges, net of tax	$	(4.3)	$	—

Amortization of defined benefit pension and other postretirement benefit items(1)	$	(0.5)	$	2.8	Cost of sales and Selling and administrative expenses
Provision (benefit) for income taxes	0.1		(0.7)		Provision for income taxes
Amortization of defined benefit pension and other postretirement benefit items, net of tax	$	(0.4)	$	2.1

Total reclassifications for the period, net of tax	$	(2.8)	$	2.1

(1)These components are included in the computation of net periodic benefit cost. See Note 8 “Benefit Plans” for additional details.

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Note 12. Hedging Activities, Derivative Instruments and Fair Value Measurements

Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates and foreign currency exchange rates. The Company selectively uses derivative financial instruments (“derivatives”), including cross-currency interest rate swap and foreign currency forward contracts and interest rate swap and cap contracts, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively. The Company does not purchase or hold derivatives for trading or speculative purposes.

The Company’s exposure to interest rate risk results primarily from its variable-rate borrowings. The Company manages its debt centrally, considering tax consequences and its overall financing strategies. The Company manages its exposure to interest rate risk by using interest rate caps and pay-fixed swaps as cash flow hedges of variable rate debt in order to adjust the relative fixed and variable proportions.

A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the United States in currencies other than the USD. Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. The USD, the EUR, GBP, Chinese Renminbi and Indian rupee are the principal currencies in which the Company and its subsidiaries enter into transactions. The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities and earnings into USD. The Company manages this exposure by having certain U.S. subsidiaries borrow in currencies other than the USD or utilizing cross-currency interest rate swaps as net investment hedges.

The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances at least quarterly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.

Derivative Instruments

The following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.


September 30, 2022
Derivative Classification		Notional Amount(1)		Fair Value(1) Other Current Assets		Fair Value(1) Other Assets		Fair Value(1) Accrued Liabilities		Fair Value(1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash flow	$	528.5	$	5.6	$	7.8	$	—	$	—
Interest rate cap contracts	Cash flow	1,000.0		4.6		13.9		—		—
Cross-currency interest rate swap contracts	Net investment	1,054.2		20.2		46.1		—		—
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair value	$	22.8	$	0.4	$	—	$	—	$	—
Foreign currency forwards	Fair value	—		—		—		—		—


December 31, 2021
Derivative Classification		Notional Amount(1)		Fair Value(1) Other Current Assets		Fair Value(1) Other Assets		Fair Value(1) Accrued Liabilities		Fair Value(1) Other Liabilities


Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	22.1	$	—	$	—	$	—	$	—
Foreign currency forwards	Fair Value	19.3		—		—		0.2		—

(1)Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

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Payments of interest rate cap premiums are classified as financing cash flows in the Condensed Consolidated Statements of Cash Flows. All other cash flows related to derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows.

There were no off-balance sheet derivative instruments as of September 30, 2022 or December 31, 2021.

Interest Rate Swap and Cap Contracts Designated as Cash Flow Hedges

As of September 30, 2022, the Company was the fixed rate payor on two interest rate swap contracts that effectively fix the SOFR-based index used to determine the interest rates charged on a total of $528.5 million of the Company’s SOFR-based variable rate borrowings. These contracts carry a fixed rate of 3.2% and expire in 2025. These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted SOFR-based interest payments. Based on SOFR-based swap yield curves as of September 30, 2022, the Company expects to reclassify gains of $5.7 million out of accumulated other comprehensive income (“AOCI”) into earnings during the next 12 months.

As of September 30, 2022, the Company entered into three interest rate cap contracts that effectively limit the SOFR-based index used to determine the interest rates charged on a total of $1,000.0 million of the Company’s SOFR-based variable rate borrowings to 4.0% and expire in 2025. These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted SOFR-based interest payments. As of September 30, 2022, the Company expects to reclassify $1.7 million of expense out of AOCI into earnings during the next 12 months.

Gains on derivatives designated as cash flow hedges included in the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine month periods ended September 30, 2022 and 2021 are as presented in the table below.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Gain recognized in OCI on derivatives	$	23.7	$	—	$	17.1	$	—
Loss reclassified from AOCI into income (effective portion)(1)	(2.4)		—		(2.5)		—

(1)Losses on derivatives reclassified from AOCI into income were included within “Interest expense” in the Condensed Consolidated Statements of Operations.

Cross-Currency Interest Rate Swap Contracts Designated as Net Investment Hedges

As of September 30, 2022, the Company was the fixed rate payor on two cross-currency interest rate swap contracts that replace a fixed rate of 3.2% on a total of $528.5 million with a fixed rate of 1.6% on a total of €500.0 million. These contracts expire in 2025. These contracts have been designated as net investment hedges of our Euro denominated subsidiaries and require an exchange of the notional amounts at maturity.

As of September 30, 2022, the Company entered into three cross-currency interest rate swap contracts where we receive SOFR on a total of $525.7 million and pay EURIBOR on a total of €500.0 million. These contracts expire in 2025. These contracts have been designated as net investment hedges of our Euro denominated subsidiaries and require an exchange of the notional amounts at maturity.

Gains on derivatives designated as net investment hedges included in the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine month periods ended September 30, 2022 and 2021 are as presented in the table below.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Gain recognized in OCI on derivatives	$	65.9	$	—	$	71.9	$	—
Gain reclassified from AOCI into income (effective portion)(1)	5.6		—		5.7		—

(1)Gains on derivatives reclassified from AOCI into income were included within “Interest expense” in the Condensed Consolidated Statements of Operations.

Foreign Currency Forwards Not Designated as Hedging Instruments

The Company had three foreign currency forward contracts outstanding as of September 30, 2022 with notional amounts ranging from $5.4 million to $10.2 million. These contracts are used to hedge the change in fair value of recognized foreign currency

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denominated assets or liabilities caused by changes in currency exchange rates. The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included within “Other operating expense, net” in the Condensed Consolidated Statements of Operations. The Company’s foreign currency forward contracts are subject to master netting arrangements or agreements between the Company and each counterparty for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract with that certain counterparty. It is the Company’s practice to recognize the gross amounts in the Condensed Consolidated Balance Sheets. The amount available to be netted is not material.

The Company’s gains (losses) on derivative instruments not designated as accounting hedges and total net foreign currency losses for the three and nine month periods ended September 30, 2022 and 2021 were as follows.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Foreign currency forward contracts gains (losses)	$	(0.1)	$	(2.4)	$	3.0	$	(2.5)
Total foreign currency transaction gains (losses), net	6.7		(1.1)		12.3		13.6

Foreign Currency Denominated Debt Designated as a Net Investment Hedge

In February 2020, the Company designated its Euro Term Loan, which had a principal balance at that time of €601.2 million, as a hedge of the Company's net investment in subsidiaries with a functional currency of euro. This loan was repaid in June 2022 and the hedge has been discontinued. See Note 9 “Debt” for further discussion of the repayment of the Euro Term Loan.

The Company’s gains (losses), net of income tax, associated with changes in the value of debt for the three and nine month periods ended September 30, 2022 and 2021 were as follows.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Gain, net of income tax, recorded through other comprehensive income	$	—	$	12.2	$	36.4	$	25.4

Fair Value Measurements

A financial instrument is defined as cash or cash equivalents, evidence of an ownership interest in an entity, or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instrument from another party. The Company’s financial instruments consist primarily of cash and cash equivalents, trade accounts receivables, trade accounts payables, deferred compensation assets and obligations, derivatives and debt instruments. The carrying values of cash and cash equivalents, trade accounts receivables, trade accounts payables, and variable rate debt instruments are a reasonable estimate of their respective fair values.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or more advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows.

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.

Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities as of the reporting date.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021.


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Financial Assets
Trading securities held in deferred compensation plan(1)	$	11.3	$	—	$	—	$	11.3
Interest rate swaps(2)	—		13.4		—		13.4
Interest rate caps(3)	—		18.5		—		18.5
Cross-currency interest rate swaps(4)	—		66.3		—		66.3
Foreign currency forwards(5)	—		0.4		—		0.4
Total	$	11.3	$	98.6	$	—	$	109.9
Financial Liabilities
Deferred compensation plans(1)	$	18.3	$	—	$	—	$	18.3




Total	$	18.3	$	—	$	—	$	18.3


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial Assets
Trading securities held in deferred compensation plan(1)	$	12.0	$	—	$	—	$	12.0


Foreign currency forwards(5)	—		—		—		—
Total	$	12.0	$	—	$	—	$	12.0
Financial Liabilities
Deferred compensation plan(1)	$	22.4	$	—	$	—	$	22.4


Foreign currency forwards(5)	—		0.2		—		0.2
Total	$	22.4	$	0.2	$	—	$	22.6

(1)Based on the quoted price of publicly traded mutual funds and other equity securities which are classified as trading securities and accounted for using the mark-to-market method.

(2)Measured as the present value of all expected future cash flows based on the SOFR-based swap yield curves as of September 30, 2022. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

(3)Measured as the present value of all expected future cash flows that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market volatilities and interest rate curves.

(4)Measured as the present value of all expected future cash flows on each leg of the contracts. The model utilizes inputs of observable market data including interest yield curves and foreign currency exchange rates. The present value calculation uses cross-currency basis-adjusted discount factors that have been adjusted to reflect the credit quality of the Company and its counterparties.

(5)Based on calculations that use readily observable market parameters at their basis, such as spot and forward rates.

At September 30, 2022 and December 31, 2021, we did not have any significant non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis.

Note 13. Revenue from Contracts with Customers

Overview

The Company recognizes revenue when the Company has satisfied its obligation and control is transferred to the customer. The amount of revenue recognized includes adjustments for any variable consideration, such as rebates, sales discounts, liquidated damages, etc., which are included in the transaction price, and allocated to each performance obligation. The variable consideration is estimated throughout the course of the contract using the Company’s best estimates.

The majority of the Company’s revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered.

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The Company has certain long duration engineered to order (“ETO”) contracts that require highly engineered solutions designed to customer specific applications. For contracts where the contractual deliverables have no alternative use and the contract termination clauses provide for the recovery of cost plus a reasonable margin, revenue is recognized over time based on the Company’s progress in satisfying the contractual performance obligations, generally measured as the ratio of actual costs incurred to date to the estimated total costs to complete the contract. For contracts with termination provisions that do not provide for recovery of cost and a reasonable margin, revenue is recognized at a point in time, generally at shipment or delivery to the customer. Identification of performance obligations, determination of alternative use, assessment of contractual language regarding termination provisions, and estimation of total project costs are all significant judgments required in the application of ASC 606.

Contractual specifications and requirements may be modified. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. In the event a contract modification is for goods or services that are not distinct in the contract, and therefore, form part of a single performance obligation that is partially satisfied as of the modification date, the effect of the contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized on a cumulative catch-up basis.

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Sales commissions are generally due at either collection of payment from customers or recognition of revenue. Applying the practical expedient from ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations.

Disaggregation of Revenue

The following tables provide disaggregated revenue by reportable segment for the three and nine month periods ended September 30, 2022 and 2021.


	Industrial Technologies and Services				Precision and Science Technologies				Total
	Three Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Primary Geographic Markets
United States	$	494.5	$	395.0	$	140.4	$	109.0	$	634.9	$	504.0
Other Americas	83.2		69.1		7.7		6.5		90.9		75.6
Total Americas	577.7		464.1		148.1		115.5		725.8		579.6
EMEIA	347.9		337.2		109.1		93.5		457.0		430.7
Asia Pacific	274.0		269.4		58.9		45.3		332.9		314.7
Total	$	1,199.6	$	1,070.7	$	316.1	$	254.3	$	1,515.7	$	1,325.0
Product Categories
Original equipment	$	723.7	$	638.4	$	257.0	$	210.2	$	980.7	$	848.6
Aftermarket	475.9		432.3		59.1		44.1		535.0		476.4
Total	$	1,199.6	$	1,070.7	$	316.1	$	254.3	$	1,515.7	$	1,325.0
Pattern of Revenue Recognition
Revenue recognized at point in time(1)	$	1,099.6	$	980.4	$	315.1	$	252.9	$	1,414.7	$	1,233.3
Revenue recognized over time(2)	100.0		90.3		1.0		1.4		101.0		91.7
Total	$	1,199.6	$	1,070.7	$	316.1	$	254.3	$	1,515.7	$	1,325.0

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	Industrial Technologies and Services				Precision and Science Technologies				Total
	Nine Month Period Ended September 30,
	2022		2021		2022		2021		2022		2021
Primary Geographic Markets
United States	$	1,378.2	$	1,140.0	$	410.4	$	310.2	$	1,788.6	$	1,450.2
Other Americas	237.5		195.9		23.1		13.5		260.6		209.4
Total Americas	1,615.7		1,335.9		433.5		323.7		2,049.2		1,659.6
EMEIA	1,023.0		992.9		324.0		256.7		1,347.0		1,249.6
Asia Pacific	751.0		703.2		145.4		121.2		896.4		824.4
Total	$	3,389.7	$	3,032.0	$	902.9	$	701.6	$	4,292.6	$	3,733.6
Product Categories
Original equipment	$	2,035.7	$	1,790.8	$	730.2	$	587.4	$	2,765.9	$	2,378.2
Aftermarket	1,354.0		1,241.2		172.7		114.2		1,526.7		1,355.4
Total	$	3,389.7	$	3,032.0	$	902.9	$	701.6	$	4,292.6	$	3,733.6
Pattern of Revenue Recognition
Revenue recognized at point in time(1)	$	3,122.1	$	2,788.2	$	899.3	$	698.7	$	4,021.4	$	3,486.9
Revenue recognized over time(2)	267.6		243.8		3.6		2.9		271.2		246.7
Total	$	3,389.7	$	3,032.0	$	902.9	$	701.6	$	4,292.6	$	3,733.6

(1)Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when product delivery has occurred and services have been rendered.

(2)Revenues primarily from long duration ETO product contracts and certain contracts for delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

Performance Obligations

As of September 30, 2022, for contracts with an original duration greater than one year, the Company expects to recognize revenue in the future related to unsatisfied (or partially satisfied) performance obligations of $542.7 million in the next twelve months and $472.6 million in periods thereafter. The performance obligations that are unsatisfied (or partially satisfied) are primarily related to orders for goods or services that were placed prior to the end of the reporting period and have not been delivered to the customer, on-going work on ETO contracts where revenue is recognized over time and service contracts with an original duration greater than one year.

Contract Balances

The following table provides the contract balances as of September 30, 2022 and December 31, 2021 presented in the Condensed Consolidated Balance Sheets.


	September 30, 2022		December 31, 2021
Accounts receivable, net	$	1,032.3	$	948.6
Contract assets	70.5		60.8
Contract liabilities - current	299.7		242.1
Contract liabilities - noncurrent	1.1		1.4

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The allowance for credit losses for the three and nine month periods ended September 30, 2022 and 2021 consisted of the following.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Balance at beginning of the period	$	45.2	$	49.3	$	42.3	$	50.9

Provision charged to expense	4.6		0.6		11.3		2.2
Write-offs, net of recoveries	(0.3)		(0.3)		(1.8)		(3.0)
Foreign currency translation and other	(1.7)		0.3		(4.0)		(0.2)
Balance at end of the period	$	47.8	$	49.9	$	47.8	$	49.9

Note 14. Income Taxes

The following table summarizes the Company’s provision for income taxes and effective income tax provision rate for the three and nine month periods ended September 30, 2022 and 2021.


	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2022			2021			2022			2021
Income before income taxes	$	173.2		$	135.9		$	496.3		$	388.1
Provision for income taxes	$	30.3		$	2.7		$	104.6		$	25.8
Effective income tax provision rate	17.5		%	2.0		%	21.1		%	6.6		%

The increase in the provision for income taxes and increase in the effective income tax provision rate for the three month period ended September 30, 2022 when compared to the same three month period of 2021 is primarily due to an increase in the pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rates. In addition, in the three month period ended September 30, 2021, there were additional benefits due to a larger windfall tax deduction and the utilization of excess foreign tax credits as a result of restructuring activities during the third quarter of 2021.

The increase in the provision for income taxes and increase in the effective income tax provision rate for the nine month period ended September 30, 2022 when compared to the same nine month period of 2021 is primarily due to an increase in the pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rates. In addition, in the nine month period ended September 30, 2021, there was a reduction of a significant unrecognized tax reserve related to a non-recurring item as a result of the lapse of the limitation on statutes, a benefit associated with the final settlement on the Merger, and a restructuring benefit recognized through the third quarter of 2021.

Note 15. Other Operating Expense (Income), Net

The components of “Other operating expense, net” for the three and nine month periods ended September 30, 2022 and 2021 were as follows.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021

Foreign currency transaction losses (gains), net	$	(6.7)	$	1.1	$	(12.3)	$	(13.6)
Restructuring charges, net(1)	6.7		1.1		28.1		10.3

Acquisition and other transaction related expenses(2)	12.1		14.0		25.0		37.6
Other, net	0.7		1.3		2.6		2.6
Total other operating expense, net	$	12.8	$	17.5	$	43.4	$	36.9

(1)See Note 4 “Restructuring.”

(2)Represents costs associated with successful and abandoned acquisitions, including third-party expenses and post-closure integration costs.

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Note 16. Contingencies

The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. The Company believes that such proceedings, lawsuits and administrative actions will not materially adversely affect its operations, financial condition, liquidity or competitive position. For further description of the Company’s contingencies, reference is made to Note 21, “Contingencies” in the notes to consolidated financial statements in the Company’s 2021 Form 10-K.

Asbestos and Silica Related Litigation

The Company believes that the pending and future asbestos and silica-related lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity. “Accrued liabilities” and “Other liabilities” of the Condensed Consolidated Balance Sheets include a total litigation reserve of $130.3 million and $136.9 million as of September 30, 2022 and December 31, 2021, respectively, with regards to potential liability arising from the Company’s asbestos-related litigation. Asbestos related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company’s consolidated financial position, results of operation or liquidity.

The Company has entered into a series of agreements with certain of its or its predecessors’ legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica-related lawsuits filed against the Company. The Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $143.5 million and $145.1 million as of September 30, 2022 and December 31, 2021, respectively, which was included in “Other assets” in the Condensed Consolidated Balance Sheets. The amounts recorded by the Company for asbestos-related liabilities and insurance recoveries are based on currently available information and assumptions that the Company believes are reasonable based on an evaluation of relevant factors. The actual liabilities or insurance recoveries could be higher or lower than those recorded if actual results vary significantly from the assumptions.

Environmental Matters

The Company has been identified as a potentially responsible party (“PRP”) with respect to several sites designated for cleanup under U.S. federal “Superfund” or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. The Company has undiscounted accrued liabilities of $15.2 million and $12.9 million as of September 30, 2022 and December 31, 2021, respectively, on its Condensed Consolidated Balance Sheets to the extent costs are known or can be reasonably estimated for its remaining financial obligations in relation to environmental matters and does not anticipate that any of these matters will result in material additional costs beyond amounts accrued. Based upon consideration of currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to these matters.

Note 17. Segment Results

A description of the Company’s two reportable segments is presented below.

In the Industrial Technologies and Services segment, the Company designs, manufactures, markets and services a broad range of compression and vacuum equipment as well as fluid transfer equipment, loading systems, power tools and lifting equipment. The Company’s compression and vacuum products are used worldwide in industrial manufacturing, transportation, chemical processing, food and beverage production, energy, environmental and other applications. In addition to equipment sales, the Company offers a broad portfolio of service options tailored to customer needs and complete range of aftermarket parts, air treatment equipment, controls and other accessories. The Company’s engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials. The Company’s power tools and lifting equipment are used by customers in industrial manufacturing, vehicle maintenance, energy and other markets for precision fastening, bolt removal, grinding, sanding, drilling, demolition and the safe and efficient lifting, positioning and movement of loads. The Company sells its products primarily through independent distributors worldwide and also sells directly to the customer.

In the Precision and Science Technologies segment, the Company designs, manufactures and markets a broad range of specialized positive displacement pumps, fluid management equipment and aftermarket parts for medical, laboratory, industrial manufacturing, water and wastewater, chemical processing, energy, food and beverage, agriculture and other markets. The Company’s products are used for a diverse set of applications including precision dosing of chemicals and supplements, blood dialysis, oxygen therapy, food processing, fluid transfer and dispensing, spray finishing and coating, mixing, high-pressure air and

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gas management and others. The Company sells primarily through a broad global network of specialized and national distributors and original equipment manufacturers (“OEM”) who integrate the Company’s products into their devices and systems.

The Chief Operating Decision Maker (“CODM”) evaluates the performance of the Company’s reportable segments based on, among other measures, Segment Adjusted EBITDA. Management closely monitors the Segment Adjusted EBITDA of each reportable segment to evaluate past performance and actions required to improve profitability. Inter-segment sales and transfers are not significant. Administrative expenses related to the Company’s corporate offices and shared service centers in North America and Europe, which includes transaction processing, accounting and other business support functions, are allocated to the business segments. Certain administrative expenses, including senior management compensation, treasury, internal audit, tax compliance, certain information technology, and other corporate functions, are not allocated to the business segments.

The following table provides summarized information about the Company’s operations by reportable segment and reconciles Segment Adjusted EBITDA to Income from Continuing Operations Before Income Taxes for the three and nine month periods ended September 30, 2022 and 2021.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Revenue
Industrial Technologies and Services	$	1,199.6	$	1,070.7	$	3,389.7	$	3,032.0
Precision and Science Technologies	316.1		254.3		902.9		701.6


Total Revenue	$	1,515.7	$	1,325.0	$	4,292.6	$	3,733.6
Segment Adjusted EBITDA
Industrial Technologies and Services	$	314.0	$	272.9	$	853.4	$	743.0
Precision and Science Technologies	92.0		75.5		254.8		213.8


Total Segment Adjusted EBITDA	$	406.0	$	348.4	$	1,108.2	$	956.8
Less items to reconcile Segment Adjusted EBITDA to Income from Continuing Operations Before Income Taxes:
Corporate expenses not allocated to segments	$	29.9	$	34.7	$	93.6	$	107.0
Interest expense	26.6		22.5		68.8		68.3
Depreciation and amortization expense (a)	114.2		101.5		325.4		307.3

Restructuring and related business transformation costs (b)	7.2		3.1		30.9		12.5
Acquisition and other transaction related expenses and non-cash charges (c)	12.1		14.4		27.0		39.2
Stock-based compensation (d)	27.1		29.8		69.3		72.9
Foreign currency transaction losses (gains), net	(6.7)		1.1		(12.3)		(13.6)
Loss on extinguishment of debt	—		9.0		1.1		9.0
Adjustments to LIFO inventories	33.0		—		33.0		—
Gain on settlement of post-acquisition contingencies (e)	(6.2)		—		(6.2)		(30.1)
Other adjustments (f)	(4.4)		(3.6)		(18.7)		(3.8)
Income from Continuing Operations Before Income Taxes	173.2		135.9		496.3		388.1
Provision for income taxes	30.3		2.7		104.6		25.8
Income (loss) on equity method investments	2.6		(2.2)		(2.5)		(2.9)
Income from Continuing Operations	145.5		131.0		389.2		359.4
Income (loss) from discontinued operations, net of tax	0.5		(4.2)		0.6		(88.1)
Net Income	$	146.0	$	126.8	$	389.8	$	271.3

a)Depreciation and amortization expense excludes $0.8 million and $1.0 million of depreciation of rental equipment for the three month periods ended September 30, 2022 and 2021, respectively, and excludes $2.6 million and $3.0 million for the nine month periods ended September 30, 2022 and 2021, respectively.

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b)Restructuring and related business transformation costs consist of the following.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Restructuring charges	$	6.7	$	1.1	$	28.1	$	10.3
Facility reorganization, relocation and other costs	0.5		2.0		2.8		2.0
Other, net	—		—		—		0.2
Total restructuring and related business transformation costs	$	7.2	$	3.1	$	30.9	$	12.5

c)Represents costs associated with successful and abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

d)Represents stock-based compensation expense recognized for the three and nine month periods ended September 30, 2022 of $20.1 million and $62.3 million, respectively, and increased by $7.0 million for the three and nine month periods ended September 30, 2022, due to costs associated with employer taxes related to the All-Employee Equity Grant.

Represents stock-based compensation expense recognized for the three and nine month periods ended September 30, 2021 of $21.9 million and $65.0 million, respectively, and increased by $7.9 million for the three and nine month periods ended September 30, 2021, due to costs associated with employer taxes related to the All-Employee Equity Grant.

e)Represents gains from settling post-acquisition contingencies related to the Merger outside of the measurement period.

f)Includes (i) pension and other postemployment (“OPEB”) plan costs other than service cost, (ii) interest income on cash and cash equivalents and (iii) other miscellaneous adjustments.

Note 18. Earnings (Loss) Per Share

The number of weighted-average shares outstanding used in the computations of basic and diluted earnings (loss) per share are as follows.


	For the Three Month Period Ended September 30,		For the Nine Month Period Ended September 30,
	2022	2021	2022	2021

Average shares outstanding
Basic	404.0	412.3	405.4	417.1
Diluted	408.5	418.5	410.3	423.7

For the three month periods ended September 30, 2022 and 2021, 2.3 million and 0.7 million, respectively, of anti-dilutive shares were not included in the computation of diluted earnings per share. For the nine month periods ended September 30, 2022 and September 30, 2021, 2.1 million and 0.7 million of anti-dilutive shares were not included in the computation of diluted earnings per share, respectively.

Note 19. Subsequent Events

On October 3, 2022, the Company acquired Dosatron International L.L.C. and Dilution Solutions L.L.C. (collectively, “Dosatron International”) for a base purchase price of $90 million with additional contingent consideration of up to $15 million. The business is a leading technology solutions provider of water powered dosing pumps and systems in North America, with an established presence in attractive end markets including hydroponics, horticulture, animal health, food safety and sanitation, and water treatment. Dosatron International will be reported within the Precision and Science Technologies segment.

On October 6, 2022, the Company entered into an agreement to acquire SPX FLOW’s Air Treatment business for approximately $525 million. The business is a leading manufacturer of reliable and energy efficient desiccant and refrigerated dryers, filtration systems and purifiers for dehydration in compressed air. This transaction is expected to close late in the fourth quarter of 2022 or early in the first quarter of 2023, subject to regulatory approvals and customary closing conditions. Upon closing, the Air Treatment business will be reported within the Industrial Technologies and Services segment.

On October 25, 2022, the Company entered into an agreement to acquire Everest Blowers Private Limited and Everest Blower Systems Private Limited (collectively, “Everest Group”) for an all-cash upfront purchase price of approximately $72 million with additional potential consideration based on achievement of financial targets of up to approximately $17 million. Everest Group is a leading domestic manufacturer of blowers and vacuum systems in India. This transaction is expected to close in the fourth quarter of 2022, subject to regulatory approvals and customary closing conditions. Upon closing, Everest Group will be reported within the Industrial Technologies and Services segment.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and this Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.

Overview

Our Company

Ingersoll Rand is a global market leader with a broad range of innovative and mission-critical air, fluid, energy and medical technologies, providing services and solutions to increase industrial productivity and efficiency. We manufacture one of the broadest and most complete ranges of compressor, pump, vacuum and blower products in our markets, which, when combined with our global geographic footprint and application expertise, allows us to provide differentiated product and service offerings to our customers. Our products are sold under a collection of premier, market-leading brands, including Ingersoll Rand, Gardner Denver, Nash, CompAir, Thomas, Milton Roy, Seepex, Elmo Rietschle, ARO, Robuschi, Emco Wheaton and Runtech Systems, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.

We operate with two reportable segments: Industrial Technologies and Services and Precision and Science Technologies. See Note 17 “Segment Results” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for a description of our reportable segments.

Items Affecting our Business, Industry and End Markets

The COVID-19 Pandemic and Related Supply Chain Disruptions

We continue to assess and actively manage the impact of the COVID-19 pandemic on our global operations and also the operations of our suppliers and customers. In order to position ourselves to fulfill demand, we continue to monitor the supply chain closely and are taking proactive steps to ensure continuity of supply. We are adhering to all state and country mandates and guidelines wherever we operate. We have taken certain actions to reduce costs and preserve cash given the uncertain environment. The substantial majority of our production sites have remained fully operational this year. Certain facilities, including several manufacturing sites in China, have recently experienced interruptions in production due to outbreaks of COVID-19 infections and subsequent government restrictions. These interruptions have contributed to component shortages and other supply chain constraints that may limit our ability to fulfill customer orders within desired lead times, both directly in the Asia Pacific region and indirectly in other regions. The degree to which the pandemic will continue to impact our operations, and the operations of our customers and suppliers remains uncertain. See “The COVID-19 pandemic could have a material and adverse effect on our business, results of operations and financial condition in the future” in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and this Form 10-Q.

General Economic Conditions

Our financial results closely follow changes in the industries and end-markets we serve. Demand for most of our products depends on the level of new capital investment and planned and unplanned maintenance expenditures by our customers. The level of capital expenditures depends, in turn, on the general economic conditions as well as access to capital at reasonable cost.

The ongoing conflict between Russia and Ukraine and the related sanctions and export controls have adversely affected economic conditions in Eastern Europe and certain global industry sectors dependent on those countries. We have limited physical operations and sales in Russia and Ukraine and, to date; have not experienced a material adverse impact on our results of operations or financial condition. Further escalation or prolonged conflict may amplify several of the risks identified in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Foreign Currency Fluctuations

A significant portion of our revenues, approximately 56% for the nine month period ended September 30, 2022, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the

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United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion.

Factors Affecting the Comparability of our Results of Operations

Key factors affecting the comparability of our results of operations are summarized below.

Acquisitions

Part of our strategy for growth is to acquire complementary businesses that provide access to new technologies or geographies or expand our offerings. While acquisitions, as discussed further in Note 3, are not individually significant or significant in the aggregate, they may be relevant when comparing our results from period to period.

See Note 3 “Business Combinations” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further discussion of these acquisitions.

Restructuring and Other Business Transformation Initiatives

We continue to execute business transformation initiatives. A key element of those initiatives are restructuring programs within our Industrial Technologies and Services and Precision and Science Technologies segments, as well as at the Corporate level. Restructuring charges, program related facility reorganization, relocation and other costs, and related capital expenditures were impacted most significantly.

Subsequent to the acquisition of and merger with Ingersoll Rand Industrial in first quarter of 2020 (the “Merger”), we announced a restructuring program (“2020 Plan”) to drive efficiencies and synergies, reduce the number of facilities and optimize operating margin within the merged Company. For the nine month period ended September 30, 2022 and 2021, $28.1 million and $10.3 million, respectively, were charged to expense related to this restructuring program. Through September 30, 2022, we recognized expense related to the 2020 Plan of $96.7 million, $16.3 million and $11.5 million for Industrial Technologies and Services, Precision and Science Technologies and Corporate, respectively.

How We Assess the Performance of Our Business

We manage operations through the two business segments described above. In addition to our consolidated GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.

We believe Adjusted EBITDA and Adjusted Net Income are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. We believe that the adjustments applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future. Adjusted Net Income is defined as net income (loss) including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions.

We use Free Cash Flow to review the liquidity of our operations. We measure Free Cash Flow as cash flows from operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments and to service our debt. Free Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.

Management and our board of directors regularly use these measures as tools in evaluating our operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measures under GAAP. In addition, we believe that Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.

Adjusted EBITDA, Adjusted Net Income and Free Cash Flow should not be considered as alternatives to net income (loss) or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a

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measure of our liquidity. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.

See “Non-GAAP Financial Measures” below for reconciliation information.

Results of Continuing Operations

Consolidated results should be read in conjunction with the segment results section herein and Note 17 “Segment Results” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q, which provides more detailed discussions concerning certain components of our Condensed Consolidated Statements of Operations. All intercompany accounts and transactions have been eliminated within the consolidated results.

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The following table presents selected Condensed Consolidated Results of Operations of our business for the three and nine month periods ended September 30, 2022 and 2021.


	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2022			2021			2022			2021
Condensed Consolidated Statement of Operations:
Revenues	$	1,515.7		$	1,325.0		$	4,292.6		$	3,733.6
Cost of sales	940.4			810.7			2,621.4			2,254.5
Gross profit	575.3			514.3			1,671.2			1,479.1
Selling and administrative expenses	278.7			252.6			819.8			772.1
Amortization of intangible assets	93.8			80.3			263.6			244.8

Other operating expense, net	12.8			17.5			43.4			36.9
Operating income	190.0			163.9			544.4			425.3
Interest expense	26.6			22.5			68.8			68.3
Loss on extinguishment of debt	—			9.0			1.1			9.0
Other income, net	(9.8)			(3.5)			(21.8)			(40.1)
Income before income taxes	173.2			135.9			496.3			388.1
Provision for income taxes	30.3			2.7			104.6			25.8
Income (loss) on equity method investments	2.6			(2.2)			(2.5)			(2.9)
Income from Continuing Operations	145.5			131.0			389.2			359.4
Income (loss) from discontinued operations, net of tax	0.5			(4.2)			0.6			(88.1)
Net income	146.0			126.8			389.8			271.3
Less: Net income attributable to noncontrolling interests	0.9			0.8			2.5			1.8
Net income attributable to Ingersoll Rand Inc.	$	145.1		$	126.0		$	387.3		$	269.5

Percentage of Revenues:
Gross profit	38.0		%	38.8		%	38.9		%	39.6		%
Selling and administrative expenses	18.4		%	19.1		%	19.1		%	20.7		%
Operating income	12.5		%	12.4		%	12.7		%	11.4		%
Income from Continuing Operations	9.6		%	9.9		%	9.1		%	9.6		%
Adjusted EBITDA	24.8		%	23.7		%	23.6		%	22.8		%

Other Financial Data:
Adjusted EBITDA (1)	$	376.1		$	313.7		$	1,014.6		849.8
Adjusted Net Income (1)	253.1			238.6			676.8			601.4
Cash flows - operating activities	274.4			146.1			510.6			380.9
Cash flows - investing activities	(54.0)			(608.8)			(119.5)			(841.0)
Cash flows - financing activities	(20.0)			(1,132.1)			(934.8)			(1,142.2)
Free Cash Flow (1)	252.6			130.8			449.5			339.7

(1)See the “Non-GAAP Financial Measures” section for a reconciliation to comparable GAAP measure.

Revenues

Revenues for the three month period ended September 30, 2022 were $1,515.7 million, an increase of $190.7 million, or 14.4%, compared to $1,325.0 million for the same three month period in 2021. The increase in revenues was primarily due to higher pricing of $120.3 million, higher organic volumes of $117.6 million, and acquisitions of $52.6 million, partially offset by unfavorable impact of foreign currencies of $99.8 million. The percentage of consolidated revenues derived from aftermarket parts and services was 35.3% in the three month period ended September 30, 2022 compared to 36.0% in the same three month period in 2021.

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Revenues for the nine month period ended September 30, 2022 were $4,292.6 million, an increase of $559.0 million, or 15.0%, compared to $3,733.6 million for the same nine month period in 2021. The increase in revenues was primarily due to higher pricing of $289.6 million, higher organic volumes of $267.7 million, and acquisitions of $196.4 million, partially offset by unfavorable impact of foreign currencies of $194.7 million. The percentage of consolidated revenues derived from aftermarket parts and services was 35.6% in the nine month period ended September 30, 2022 compared to 36.3% in the same nine month period in 2021.

Gross Profit

Gross profit for the three month period ended September 30, 2022 was $575.3 million, an increase of $61.0 million, or 11.9%, compared to $514.3 million for the same three month period in 2021, and as a percentage of revenues was 38.0% for the three month period ended September 30, 2022 and 38.8% for the same three month period in 2021. The increase in gross profit is primarily due to higher pricing, higher organic volumes, and acquisitions discussed above. The decrease in gross profit as a percentage of revenues is primarily due to LIFO reserve adjustments and changes in product margin mix.

Gross profit for the nine month period ended September 30, 2022 was $1,671.2 million, an increase of $192.1 million, or 13.0%, compared to $1,479.1 million for the same nine month period in 2021, and as a percentage of revenues was 38.9% for the nine month period ended September 30, 2022 and 39.6% for the same nine month period in 2021. The increase in gross profit is primarily due to higher pricing, higher organic volumes, and acquisitions discussed above. The decrease in gross profit as a percentage of revenues is primarily due to LIFO reserve adjustments and changes in product margin mix.

Selling and Administrative Expenses

Selling and administrative expenses were $278.7 million for the three month period ended September 30, 2022, an increase of $26.1 million, or 10.3%, compared to $252.6 million for the same three month period in 2021. The increase in selling and administrative expenses was mainly from businesses acquired in the second half of 2021, partially offset by lower incentive compensation expense. Selling and administrative expenses as a percentage of revenues decreased to 18.4% for the three month period ended September 30, 2022 from 19.1% in the same three month period in 2021.

Selling and administrative expenses were $819.8 million for the nine month period ended September 30, 2022, an increase of $47.7 million, or 6.2%, compared to $772.1 million for the same nine month period in 2021. The increase in selling and administrative expenses was mainly from businesses acquired in the second half of 2021, partially offset by lower incentive compensation expense. Selling and administrative expenses as a percentage of revenues decreased to 19.1% for the nine month period ended September 30, 2022 from 20.7% in the same nine month period in 2021.

Amortization of Intangible Assets

Amortization of intangible assets was $93.8 million for the three month period ended September 30, 2022, an increase of $13.5 million, compared to $80.3 million in the same three month period in 2021. The increase was primarily due to acquisitions completed in the second half of 2021.

Amortization of intangible assets was $263.6 million for the nine month period ended September 30, 2022, an increase of $18.8 million, compared to $244.8 million in the same nine month period in 2021. The increase was primarily due to acquisitions completed in the second half of 2021.

Other Operating Expense, Net

Other operating expense, net was $12.8 million for the three month period ended September 30, 2022, a decrease of $4.7 million, compared to $17.5 million in the same three month period in 2021. The decrease in expense was primarily due to lower foreign currency transaction gains, net of $7.8 million and lower acquisition and other transaction related expenses and non-cash charges of $1.9 million, partially offset by higher restructuring charges of $5.6 million.

Other operating expense, net was $43.4 million for the nine month period ended September 30, 2022, an increase of $6.5 million, compared to $36.9 million in the same nine month period in 2021. The increase was primarily due to higher restructuring charges of $17.8 million and lower foreign currency transaction gains, net of $1.3 million, partially offset by lower acquisition and other transaction related expenses and non-cash charges of $12.6 million.

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Interest Expense

Interest expense was $26.6 million for the three month period ended September 30, 2022, an increase of $4.1 million, compared to $22.5 million in the same three month period in 2021. The increase was primarily due to an increase in the weighted-average interest rate, partially offset by the prepayment of the Euro Term Loan on June 30, 2022, the prepayment of the Dollar Term Loan Series A on September 30, 2021 and the interest rate derivative contracts discussed in Note 12 “Hedging Activities, Derivative Instruments and Fair Value Measurements” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. The weighted average interest rate was approximately 4.0% for the three month period ended September 30, 2022 and 2.0% in the same three month period in 2021.

Interest expense was $68.8 million for the nine month period ended September 30, 2022, an increase of $0.5 million, compared to $68.3 million in the same nine month period in 2021. The increase was primarily due to an increase in the weighted-average interest rate, mostly offset by the prepayment of the Dollar Term Loan Series A on September 30, 2021, the prepayment of the Euro Term Loan on June 30, 2022, and the interest rate derivative contracts discussed in Note 12 “Hedging Activities, Derivative Instruments and Fair Value Measurements” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. The weighted average interest rate was approximately 2.7% for the nine month period ended September 30, 2022 and 2.0% in the same period in 2021.

Other Income, Net

Other income, net was $9.8 million and $3.5 million in the three month periods ended September 30, 2022 and 2021, respectively. The increase was primarily due a gain from settling post-acquisition contingencies related to the Merger in the 2022 period and an increase in interest income from holdings of cash and cash equivalents.

Other income, net was $21.8 million and $40.1 million in the nine month periods ended September 30, 2022 and 2021, respectively. The decrease was primarily due to a lower gain from settling post-acquisition contingencies in the 2022 period compared to the 2021 period, partially offset by an increase in interest income from holdings of cash and cash equivalents.

Provision for Income Taxes

The provision for income taxes was $30.3 million resulting in a 17.5% effective income tax provision rate for the three month period ended September 30, 2022, compared to a provision for income taxes of $2.7 million resulting in a 2.0% effective income tax provision rate in the same three month period in 2021. The increase in the tax provision for the three month period ended September 30, 2022 is primarily due to an increase in the pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rates. In addition, in the three month period ended September 30, 2021, there were additional benefits due to a larger windfall tax deduction and the utilization of excess foreign tax credits as a result of restructuring activities during the third quarter of 2021.

The provision for income taxes was $104.6 million resulting in a 21.1% effective income tax provision rate for the nine month period ended September 30, 2022, compared to a provision for income taxes of $25.8 million resulting in a 6.6% effective income tax provision rate in the same nine month period in 2021. The increase in the tax provision for the nine month period ended September 30, 2022 is primarily due to an increase in the pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rates. In addition, in the nine month period ended September 30, 2021, there was a reduction of a significant unrecognized tax reserve related to a non-recurring item as a result of the lapse of the limitation on statutes, a benefit associated with the final settlement on the Merger, and a restructuring benefit recognized through the third quarter of 2021.

Net Income

Net income was $146.0 million for the three month period ended September 30, 2022 compared to net income of $126.8 million in the same three month period in 2021. The increase in net income was primarily due to higher gross profit on increased revenues, partially offset by higher provision for income taxes and higher selling and administrative expenses.

Net income was $389.8 million for the nine month period ended September 30, 2022 compared to net income of $271.3 million in the same nine month period in 2021. The increase in net income was primarily due to higher gross profit on increased revenues, lower loss from discontinued operations, net of tax, partially offset by higher provision for income taxes, higher selling and administrative expenses and lower other income, net.

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Adjusted EBITDA

Adjusted EBITDA increased $62.4 million to $376.1 million for the three month period ended September 30, 2022 compared to $313.7 million in the same three month period in 2021. Adjusted EBITDA as a percentage of revenues increased 110 basis points to 24.8% for the three month period ended September 30, 2022 from 23.7% for the same three month period in 2021. The increase in Adjusted EBITDA was primarily due to higher pricing of $120.3 million and higher organic sales volume of $47.5 million, partially offset by unfavorable cost inflation and product mix of $70.1 million and the unfavorable impact of foreign currencies of $23.7 million. The increase in Adjusted EBITDA as a percentage of revenues is primarily attributable to higher pricing and volume, partially offset by unfavorable cost inflation and product mix.

Adjusted EBITDA increased $164.8 million to $1,014.6 million for the nine month period ended September 30, 2022 compared to $849.8 million in the same nine month period in 2021. Adjusted EBITDA as a percentage of revenues increased 80 basis points to 23.6% for the nine month period ended September 30, 2022 from 22.8% for the same nine month period in 2021. The increase in Adjusted EBITDA was primarily due to higher pricing of $289.6 million and higher organic sales volume of $107.4 million, partially offset by unfavorable cost inflation and product mix of $187.4 million and the unfavorable impact of foreign currencies of $46.8 million. The increase in Adjusted EBITDA as a percentage of revenues is primarily attributable to higher pricing and volume, partially offset by unfavorable cost inflation and product mix.

Adjusted Net Income

Adjusted Net Income increased $14.5 million to $253.1 million for the three month period ended September 30, 2022 compared to $238.6 million in the same three month period in 2021. The increase was primarily due to increased Adjusted EBITDA, partially offset by a higher income tax provision, as adjusted.

Adjusted Net Income increased $75.4 million to $676.8 million for the nine month period ended September 30, 2022 compared to $601.4 million in the same nine month period in 2021. The increase was primarily due to increased Adjusted EBITDA, partially offset by an increased income tax provision, as adjusted.

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Non-GAAP Financial Measures

Set forth below are the reconciliations of Net Income to Adjusted EBITDA and Adjusted Net Income and Cash Flows from Operating Activities to Free Cash Flow.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Net Income	$	146.0	$	126.8	$	389.8	$	271.3
Less: Income (loss) from discontinued operations	0.6		(7.6)		0.8		73.1
Less: Income tax benefit (provision) from discontinued operations	(0.1)		3.4		(0.2)		(161.2)
Income from Continuing Operations, Net of Tax	145.5		131.0		389.2		359.4
Plus:
Interest expense	26.6		22.5		68.8		68.3
Provision for income taxes	30.3		2.7		104.6		25.8
Depreciation expense (a)	20.4		21.2		61.8		62.5
Amortization expense (b)	93.8		80.3		263.6		244.8

Restructuring and related business transformation costs (c)	7.2		3.1		30.9		12.5
Acquisition and other transaction related expenses and non-cash charges (d)	12.1		14.4		27.0		39.2
Stock-based compensation (e)	27.1		29.8		69.3		72.9
Foreign currency transaction losses (gains), net	(6.7)		1.1		(12.3)		(13.6)
Loss (income) on equity method investments	(2.6)		2.2		2.5		2.9
Loss on extinguishment of debt	—		9.0		1.1		9.0
Adjustments to LIFO inventories	33.0		—		33.0		—
Gain on settlement of post-acquisition contingencies (f)	(6.2)		—		(6.2)		(30.1)
Other adjustments (g)	(4.4)		(3.6)		(18.7)		(3.8)
Adjusted EBITDA	$	376.1	$	313.7	$	1,014.6	$	849.8
Minus:
Interest expense	$	26.6	$	22.5	$	68.8	$	68.3
Income tax provision, as adjusted (h)	70.0		27.2		194.8		104.8
Depreciation expense	20.4		21.2		61.8		62.5
Amortization of non-acquisition related intangible assets	9.0		4.2		15.4		12.8
Interest income on cash and cash equivalents	(3.0)		—		(3.0)		—
Adjusted Income from Continuing Operations, Net of Tax	$	253.1	$	238.6	$	676.8	$	601.4
Free Cash Flow from Continuing Operations:
Cash flows from operating activities from continuing operations	$	274.4	$	146.1	$	510.6	$	380.9
Minus:
Capital expenditures	21.8		15.3		61.1		41.2
Free Cash Flow from Continuing Operations	$	252.6	$	130.8	$	449.5	$	339.7

(a)Depreciation expense excludes $0.8 million and $1.0 million of depreciation of rental equipment for the three month periods ended September 30, 2022 and 2021, respectively, and excludes $2.6 million and $3.0 million for the nine month periods ended September 30, 2022 and 2021, respectively.

(b)Represents $84.8 million and $76.1 million of amortization of intangible assets arising from the Merger and other acquisitions (customer relationships, technology, tradenames and backlog) and $9.0 million and $4.2 million of amortization of non-acquisition related intangible assets, in each case, for the three month periods ended September 30, 2022 and 2021, respectively.

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Represents $248.2 million and $232.0 million of amortization of intangible assets arising from the Merger and other acquisitions (customer relationships, technology, tradenames and backlog) and $15.4 million and $12.8 million of amortization of non-acquisition related intangible assets, in each case, for the nine month periods ended September 30, 2022 and 2021, respectively.

(c)Restructuring and related business transformation costs consisted of the following.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Restructuring charges	$	6.7	$	1.1	$	28.1	$	10.3
Facility reorganization, relocation and other costs	0.5		2.0		2.8		2.0
Other, net	—		—		—		0.2
Total restructuring and related business transformation costs	$	7.2	$	3.1	$	30.9	$	12.5

(d)Represents costs associated with successful and/or abandoned acquisitions and divestitures, including third-party expenses, post-closure integration costs, and non-cash charges and credits arising from fair value purchase accounting adjustments.

(e)Represents stock-based compensation expense recognized for the three and nine month periods ended September 30, 2022 of $20.1 million and $62.3 million, respectively, and increased by $7.0 million for the three and nine month periods ended September 30, 2022, due to costs associated with employer taxes related to the All-Employee Equity Grant.

(f)Represents gains from settling post-acquisition contingencies related to the Merger outside of the measurement period.

(g)Includes (i) pension and other postemployment (“OPEB”) plan costs other than service cost, (ii) interest income on cash and cash equivalents and (iii) other miscellaneous adjustments.

(h)Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items. The tax effect of pre-tax items excluded from Adjusted Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances. The adjusted amounts are then used to calculate an adjusted provision for the quarter.

The income tax provision, as adjusted for each of the periods presented below consisted of the following.


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Provision for income taxes	$	30.3	$	2.7	$	104.6	$	25.8
Tax impact of pre-tax income adjustments	37.5		24.8		84.9		69.4
Discrete tax items	2.2		(0.3)		5.3		9.6
Income tax provision, as adjusted	$	70.0	$	27.2	$	194.8	$	104.8

Segment Results

We classify our business into two segments: Industrial Technologies and Services and Precision and Science Technologies. Our Corporate operations are not discussed separately as any results that had a significant impact on operating results are included in the “Results of Operations” discussion above.

We evaluate the performance of our segments based on Segment Revenues and Segment Adjusted EBITDA. Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.

The segment measurements provided to and evaluated by the chief operating decision maker are described in Note 17 “Segment Results” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Segment Results for the Three and Nine Month Periods Ended September 30, 2022 and 2021

The following tables display Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our Segments.

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Industrial Technologies and Services Segment Results


	For the Three Month Period Ended September 30,						Percent Change
	2022			2021			2022 vs. 2021
Segment Revenues	$	1,199.6		$	1,070.7		12.0	%
Segment Adjusted EBITDA	$	314.0		$	272.9		15.1	%
Segment Margin	26.2		%	25.5		%	70	bps

Segment Revenues for the three month period ended September 30, 2022 were $1,199.6 million, an increase of $128.9 million, or 12.0%, compared to $1,070.7 million in the same three month period in 2021. The increase in Segment Revenues was due to higher pricing of $100.2 million or 9.4%, higher organic volumes of $98.6 million or 9.2%, and acquisitions of $7.6 million or 0.7%, partially offset by unfavorable impact of foreign currencies of $77.5 million or 7.2%. The percentage of Segment Revenues derived from aftermarket parts and service was 39.7% in the three month period ended September 30, 2022 compared to 40.4% in the same three month period in 2021.

Segment Adjusted EBITDA for the three month period ended September 30, 2022 was $314.0 million, an increase of $41.1 million, or 15.1%, from $272.9 million in the same three month period in 2021. Segment Adjusted EBITDA Margin increased 70 basis points to 26.2% from 25.5% in 2021. The increase in Segment Adjusted EBITDA was primarily due to higher pricing of $100.2 million or 36.7%, higher organic sales volume of $38.9 million or 14.3%, and acquisitions of $1.4 million or 0.5%, partially offset by unfavorable cost inflation and product mix of $59.1 million or 21.7%, unfavorable impact of foreign currencies of $19.0 million or 7.0%, and higher selling and administrative costs of $17.7 million or 6.5%.


	For the Nine Month Period Ended September 30,						Percent Change
	2022			2021			2022 vs. 2021
Segment Revenues	$	3,389.7		$	3,032.0		11.8	%
Segment Adjusted EBITDA	$	853.4		$	743.0		14.9	%
Segment Margin	25.2		%	24.5		%	70	bps

Segment Revenues for the nine month period ended September 30, 2022 were $3,389.7 million, an increase of $357.7 million, or 11.8%, compared to $3,032.0 million in the same nine month period in 2021. The increase in Segment Revenues was due to higher pricing of $244.0 million or 8.0%, higher organic volumes of $235.8 million or 7.8%, and acquisitions of $27.9 million or 0.9%, partially offset by unfavorable impact of foreign currencies of $150.0 million or 4.9%. The percentage of Segment Revenues derived from aftermarket parts and service was 39.9% in the nine month period ended September 30, 2022 compared to 40.9% in the same nine month period in 2021.

Segment Adjusted EBITDA for the nine month period ended September 30, 2022 was $853.4 million, an increase of $110.4 million, or 14.9%, from $743.0 million in the same nine month period in 2021. Segment Adjusted EBITDA Margin increased 70 basis points to 25.2% from 24.5% in 2021. The increase in Segment Adjusted EBITDA was primarily due to higher pricing of $244.0 million or 32.8%, higher organic sales volume of $92.9 million or 12.5%, and acquisitions of $5.6 million or 0.8%, partially offset by unfavorable cost inflation and product mix of $155.5 million or 20.9%, unfavorable impact of foreign currencies of $36.9 million or 5.0%, and higher selling and administrative costs of $34.6 million or 4.7%.

Precision and Science Technologies Segment Results


	For the Three Month Period Ended September 30,						Percent Change
	2022			2021			2022 vs. 2021
Segment Revenues	$	316.1		$	254.3		24.3	%
Segment Adjusted EBITDA	$	92.0		$	75.5		21.9	%
Segment Margin	29.1		%	29.7		%	(60)	bps

Segment Revenues for the three month period ended September 30, 2022 were $316.1 million, an increase of $61.8 million, or 24.3%, compared to $254.3 million in the same three month period in 2021. The increase in Segment Revenues was primarily due to acquisitions of $45.0 million or 17.7%, higher pricing of $20.1 million or 7.9% and higher organic volume of $19.0 million or

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7.5%, partially offset by unfavorable impact of foreign currencies of $22.3 million or 8.8%. The percentage of Segment Revenues derived from aftermarket parts and service was 18.7% in the three month period ended September 30, 2022 compared to 17.3% in the same three month period in 2021.

Segment Adjusted EBITDA for the three month period ended September 30, 2022 was $92.0 million, an increase of $16.5 million, or 21.9%, from $75.5 million in the same three month period in 2021. Segment Adjusted EBITDA Margin decreased 60 basis points to 29.1% from 29.7% in 2021. The increase in Segment Adjusted EBITDA was primarily due to higher pricing of $20.1 million or 26.6%, acquisitions of $10.1 million or 13.4% and higher organic sales volume of $8.6 million or 11.4%, partially offset by unfavorable cost inflation and product mix of $11.2 million or 14.8%, unfavorable impact of foreign currencies of $6.2 million or 8.2% and higher selling and administrative costs of $3.8 million or 5.0%.


	For the Nine Month Period Ended September 30,						Percent Change
	2022			2021			2022 vs. 2021
Segment Revenues	$	902.9		$	701.6		28.7	%
Segment Adjusted EBITDA	$	254.8		$	213.8		19.2	%
Segment Margin	28.2		%	30.5		%	(230)	bps

Segment Revenues for the nine month period ended September 30, 2022 were $902.9 million, an increase of $201.3 million, or 28.7%, compared to $701.6 million in the same nine month period in 2021. The increase in Segment Revenues was due to acquisitions of $168.5 million or 24.0%, higher pricing of $45.6 million or 6.5%, and higher organic volumes of $31.9 million or 4.5%, partially offset by unfavorable impact of foreign currencies of $44.7 million or 6.4%. The percentage of Segment Revenues derived from aftermarket parts and service was 19.1% in the nine month period ended September 30, 2022 compared to 16.3% in the same nine month period in 2021.

Segment Adjusted EBITDA for the nine month period ended September 30, 2022 was $254.8 million, an increase of $41.0 million, or 19.2%, from $213.8 million in the same nine month period in 2021. Segment Adjusted EBITDA Margin decreased 230 basis points to 28.2% from 30.5% in 2021. The increase in Segment Adjusted EBITDA was primarily due to higher pricing of $45.6 million or 21.3%, acquisitions of $36.8 million or 17.2%, and higher organic sales volume of $14.5 million or 6.8%, partially offset by unfavorable cost inflation and product mix of $31.6 million or 14.8%, unfavorable impact of foreign currencies of $12.8 million or 6.0%, and higher selling and administrative costs of $8.8 million or 4.1%.

Orders

Industrial Technologies and Services Segment

The mission-critical nature of our Industrial Technologies and Services segment products across manufacturing processes drives a demand environment and outlook that are correlated with global and regional industrial production, capacity utilization and long-term GDP growth. In the third quarter of 2022, we had $1,355.2 million of orders in our Industrial Technologies and Services segment, an increase of 10.1% over the third quarter of 2021.

Precision and Science Technologies Segment

In 2021 and into early 2022, the Precision and Science Technologies segment has seen increased demand for certain of our products used in processes or systems to mitigate the impact of COVID-19, particularly related to life science and specialty applications. In the second quarter of 2022, we have seen a modest reduction in COVID-19 related demand for these products although it remains above pre-pandemic levels. In the third quarter of 2022, we had $299.3 million of orders in our Precision and Science Technologies segment, an increase of 12.4% over the third quarter of 2021. The increase was due to acquisitions of 18.0% and higher organic orders of 2.8%, partially offset by the unfavorable impact of foreign currencies of 8.4%.

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Results of Discontinued Operations

Results of Discontinued Operations - SVT

The components of Income (Loss) from Discontinued Operations attributable to SVT are summarized below:


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Revenues	$	—	$	4.4	$	6.6	$	428.7
Cost of sales	—		4.2		6.5		319.1
Gross profit	—		0.2		0.1		109.6
Selling and administrative expenses	—		0.3		0.1		35.6
Amortization of intangible assets	—		—		—		10.4
(Gain) loss on sale	(2.8)		3.9		(2.8)		(252.8)
Other operating expense, net	2.1		1.8		0.4		18.0



Income (loss) before income taxes	0.7		(5.8)		2.4		298.4
Provision (benefit) for income taxes	0.1		(1.5)		0.5		168.2
Income (Loss) from Discontinued Operations	$	0.6	$	(4.3)	$	1.9	$	130.2

The change in income from discontinued operations for the three and nine month periods ended September 30, 2022 compared to the same three and nine month periods in 2021 is primarily due to the substantial completion of the sale of SVT on June 1, 2021.

Results of Discontinued Operations - HPS

The components of Income (Loss) from Discontinued Operations attributable to HPS are summarized below:


	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2022		2021		2022		2021
Revenues	$	—	$	2.6	$	—	$	68.0
Cost of sales	—		2.4		—		56.8
Gross profit	—		0.2		—		11.2
Selling and administrative expenses	—		0.2		—		5.1
Amortization of intangible assets	—		—		—		2.4
Loss on disposal group	—		—		—		211.7
Other operating expense, net	0.1		1.8		1.6		17.3



Loss before income taxes	(0.1)		(1.8)		(1.6)		(225.3)
Benefit for income taxes	—		(1.9)		(0.3)		(7.0)
Income (Loss) from Discontinued Operations	$	(0.1)	$	0.1	$	(1.3)	$	(218.3)

The change in results from discontinued operations for the three and nine month periods ended September 30, 2022 compared to the same three and nine month periods in 2021 is primarily due to the substantial completion of the sale of HPS on April 1, 2021. The remaining activities mainly represent expenses incurred to finalize separation and fulfill transition services.

Liquidity and Capital Resources

Our investment resources include cash on hand, cash generated from operations and borrowings under our Revolving Credit Facility. We also have the ability to seek additional secured and unsecured borrowings, subject to Credit Agreement restrictions.

As of September 30, 2022, we had $1,100.0 million of unused availability under the Revolving Credit Facility.

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See the description of these line-of-credit resources in Note 11 “Debt” to the consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2021 and Note 9 “Debt” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

As of September 30, 2022, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing.

Liquidity

A substantial portion of our liquidity needs arise from debt service requirements, and from the ongoing cost of operations, working capital and capital expenditures.


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	1,459.5	$	2,109.6

Short-term borrowings and current maturities of long-term debt	$	32.8	$	38.8
Long-term debt	2,720.1		3,401.8
Total debt	$	2,752.9	$	3,440.6

We can increase the borrowing availability under the Senior Secured Credit Facilities by up to $1,600.0 million in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans plus an additional amount so long as we do not exceed a specified senior secured leverage ratio. We can incur additional secured indebtedness under the term loan facilities if certain specified conditions are met under the credit agreement governing the Senior Secured Credit Facilities. Our liquidity requirements are significant primarily due to debt service requirements. See Note 11 “Debt” to the consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2021 and Note 9 “Debt” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Secured Credit Facilities. Our principal uses of cash will be to provide working capital, meet debt service requirements, fund capital expenditures, dividend payments, and finance strategic plans, including possible acquisitions. We may also seek to finance capital expenditures under capital leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. In the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings. As market conditions warrant, we may from time to time, seek to repay loans that we have borrowed, including the borrowings under the Senior Secured Credit Facilities. Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future. Our business may not generate sufficient cash flows from operations or future borrowings may not be available to us under our Revolving Credit Facility in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to do so depends on, among other factors, prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change in control, we could be required to repay or refinance our indebtedness. We may not be able to refinance any of our indebtedness, including the Senior Secured Credit Facilities, on commercially reasonable terms or at all. Any future acquisitions, joint ventures, or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

We may from time to time repurchase shares of our common stock in the open market at prevailing market prices (including through Rule 10b5-1 plans), in privately negotiated transactions, a combination thereof or through other transactions. The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of our stock, general market and economic conditions, our liquidity requirements, applicable legal requirement and other business considerations.

A substantial portion of our cash is in jurisdictions outside of the United States. We do not assert ASC 740-30 (formerly APB 23) indefinite reinvestment of our historical non-U.S. earnings or future non-U.S. earnings. The Company records a deferred foreign tax liability to cover all estimated withholding, state income tax and foreign income tax associated with repatriating all non-U.S. earnings back to the United States. Our deferred income tax liability as of September 30, 2022 was $52.9 million which primarily consisted of withholding taxes.

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Working Capital


	September 30, 2022		December 31, 2021
Net Working Capital:
Current assets of continuing operations:
Current assets	$	3,744.8	$	4,114.9
Less: Assets of discontinued operations	—		15.6
Current assets of continuing operations	3,744.8		4,099.3
Current liabilities of continuing operations:
Current liabilities	1,523.0		1,467.7
Less: Liabilities of discontinued operations	—		17.1
Current liabilities of continuing operations	1,523.0		1,450.6
Net working capital of continuing operations	$	2,221.8	$	2,648.7

Operating Working Capital:
Accounts receivable	$	1,032.3	$	948.6
Plus: Inventories (excluding LIFO reserve)	1,069.9		878.6
Plus: Contract assets	70.5		60.8
Less: Accounts payable	698.9		670.5
Less: Contract liabilities (current)	299.7		242.1
Operating working capital	$	1,174.1	$	975.4

Net working capital of continuing operations decreased $426.9 million to $2,221.8 million as of September 30, 2022 from $2,648.7 million as of December 31, 2021. Operating working capital increased $198.7 million to $1,174.1 million as of September 30, 2022 from $975.4 million as of December 31, 2021. The increase in operating working capital is primarily due to higher inventories, accounts receivable and contract assets, partially offset by higher accounts payable and contract liabilities.

The increase in accounts receivable was primarily due to increased revenues and seasonal changes in collection timing. The increase in contract assets was primarily due to the timing of revenue recognition and billing on our overtime contracts. The increase in inventories was primarily due to additions to inventory due to increased demand for certain products. The increase in accounts payable was primarily due to the timing of vendor cash disbursements. The increase in contract liabilities was primarily due to the timing of customer milestone payments for in-process engineered to order contracts.

Cash Flows

The following table reflects the major categories of cash flows for the nine month periods ended September 30, 2022 and 2021, respectively.


	For the Nine Month Period Ended September 30,
	2022		2021
Cash flows provided by (used in) continuing operations:
Cash flows provided by operating activities	$	510.6	$	380.9
Cash flows used in investing activities	(119.5)		(841.0)
Cash flows used in financing activities	(934.8)		(1,142.2)
Net cash provided by (used in) discontinued operations	(0.6)		1,901.9
Free cash flow(1)	449.5		339.7

(1)See the “Non-GAAP Financial Measures” section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.

Operating Activities

Cash provided by operating activities increased $129.7 million to $510.6 million for the nine month period ended September 30, 2022 from $380.9 million in the same nine month period in 2021. This increase is primarily attributable to a decrease in cash paid for income taxes of $264.3 million, partially offset by cash outflows for operating working capital to support the orders increase.

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The decrease in cash paid for taxes is primarily due to a taxable gain realized on the sale of Club Car in the 2021 period. Net cash provided by continuing operations also includes the receipt of a $49.5 million payment from Trane Technologies in the third quarter of 2021 upon finalizing post-closing steps of the Merger.

Investing Activities

Cash used in investing activities included capital expenditures of $61.1 million and $41.2 million for the nine month periods ended September 30, 2022 and 2021, respectively. Net cash paid in a business combination was $62.5 million and $809.3 million in the nine month periods ended September 30, 2022 and 2021, respectively.

Financing Activities

Cash used in financing activities of $934.8 million for the nine month period ended September 30, 2022 primarily reflected repayments of long term debt of $647.1 million, purchases of treasury stock of $257.8 million, cash dividends on common stock of $24.3 million, and payments of interest rate cap premiums of $13.4 million, partially offset by proceeds from stock option exercises of $14.7 million.

Cash used in financing activities of $1,142.2 million for the nine month period ended September 30, 2021 primarily reflected repayments of long-term debt of $425.7 million and purchases of treasury stock of $736.5 million, partially offset by proceeds from stock option exercises of $20.0 million.

Discontinued Operations

Cash provided by (used in) discontinued operations decreased $1,902.5 million to $(0.6) million for the nine month period ended September 30, 2022 from $1,901.9 million in the same nine month period in 2021, primarily due to the sales being substantially completed in the second quarter of 2021. Cash used in discontinued operations for the nine month period ended September 30, 2022 related primarily to separation related expenses.

Free Cash Flow

Free cash flow increased $109.8 million to $449.5 million in the nine month period ended September 30, 2022 from $339.7 million in the same nine month period in 2021 due to increased cash provided by operating activities, partially offset by higher capital expenditures.

Critical Accounting Estimates

Management has evaluated the accounting estimates used in the preparation of the Company’s condensed consolidated financial statements and related notes and believe those estimates to be reasonable and appropriate. Certain of these accounting estimates require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the section “Critical Accounting Estimates” of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 1 “Summary of Significant Accounting Policies” of “Item 8. Financial Statements and Supplementary Data” included in our annual report on Form 10-K for the fiscal year ended December 31, 2021.

Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 16 “Contingencies” to the condensed consolidated financial statements included elsewhere in this Form 10-Q. We believe that as of September 30, 2022, there have been no material changes to the environmental matters disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2021.

Recent Accounting Pronouncements

The information set forth in Note 1 “Basis of Presentation and Recent Accounting Pronouncements” to our condensed consolidated financial statements under Part 1, Item 1 “Financial Statements” under the heading “Recently Issued Accounting Pronouncements” is incorporated herein by reference.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to interest rate risk as a result of our variable-rate borrowings. We manage our exposure to interest rate risk by using interest rate swap and cap contracts, from time to time, as cash flow hedges of our variable rate debt in order to adjust the relative fixed and variable portions.

In addition, we are exposed to foreign currency risks that arise from our global business operations. Changes in foreign currency exchange rates affect the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany loans with foreign subsidiaries and transactions denominated in currencies other than a subsidiary’s functional currency. While future changes in foreign currency exchange rates are difficult to predict, our revenues and earnings may be adversely affected if the U.S. dollar further strengthens.

We seek to minimize our exposure to foreign currency risks through a combination of normal operating activities, including by conducting our international business operations primarily in their functional currencies to match expenses with revenues, and the use of cross currency interest rate swap contracts and foreign currency forward exchange contracts. In addition, to mitigate the risk arising from entering into transactions in currencies other than our functional currencies, we typically settle intercompany trading balances at least quarterly.

As of September 30, 2022, there have been no material changes to our market risk assessment previously disclosed in the annual report on Form 10-K for the fiscal year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 16 “Contingencies” to our Condensed Consolidated Financial Statements under Part I, Item 1 “Financial Statements,” is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Except as set forth below, as of September 30, 2022, there have been no material changes to our risk factors included in our annual report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”).

In light of escalating geopolitical tensions occurring subsequent to the filing of our Annual Report, we are supplementing the risk factors discussed in our Annual Report by expanding the following risk factor to emphasize our material cash balances in China. The update to the risk factor below should be read in conjunction with the other risk factors contained in our Annual Report.

More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.

For the year ended December 31, 2021, approximately 61% of our revenues were from customers in countries outside of the United States. We have manufacturing facilities in Germany, the United Kingdom, China, Italy, India and other countries. We intend to continue to expand our international operations to the extent that suitable opportunities become available. Non-U.S. operations and United States export sales could be adversely affected as a result of: political or economic instability in certain countries; differences in foreign laws, including increased difficulties in protecting intellectual property and uncertainty in enforcement of contract rights; credit risks; currency fluctuations, in particular, changes in currency exchange rates between the U.S. dollar, Euro, British Pound and the Chinese Renminbi; exchange controls; changes in and uncertainties with respect to tariffs and import/export trade restrictions (including changes in United States trade policy toward other countries, such as the imposition of tariffs and the resulting consequences), as well as other changes in political policy in the United States, China, the U.K. and certain European countries (including the impacts of the U.K.’s national referendum resulting in the U.K.’s withdrawal from the European Union); royalty and tax increases; nationalization of private enterprises, especially in China where we hold material cash balances; civil unrest and protests, strikes, acts of terrorism, war or other armed conflict; shipping products during times of crisis or war; and other factors inherent in foreign operations.

In addition, our expansion into new countries may require significant resources and the efforts and attention of our management and other personnel, which will divert resources from our existing business operations. As we expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these risks associated with our international operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Company Purchases

The following table contains detail related to the repurchase of our common stock based on the date of trade during the three month period ended September 30, 2022.


2022 Third Quarter Months	Total Number of Shares Purchased(1)	Average Price Paid Per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(3)	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3)
July 1, 2022 - July 31, 2022	444	$	42.08	—	$	500,000,236
August 1, 2022 - August 31, 2022	915	$	49.55	—	$	500,000,236
September 1, 2022 - September 30, 2022	92,354	$	43.94	91,243	$	495,998,472

(1)Includes shares of common stock surrendered to us to satisfy tax withholding obligations in connection with the vesting of certain restricted stock units, comprised of 444 shares in the period from July 1, 2022 to July 31, 2022, 915 shares in the period from August 1, 2022 to August 31, 2022, and 1,111 shares in the period from September 1, 2022 to September 30, 2022.

(2)The average price paid per share includes brokerage commissions.

(3)On August 24, 2021, our Board of Directors approved a share repurchase program which authorized the repurchase of up to $750.0 million of the Company's outstanding common stock. The authorization does not have any expiration date.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following is a list of all exhibits filed or furnished as part of this report.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosures other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual statement of affairs as of the date they were made or at any other time.


Exhibit No.						Description
2.1						Agreement and Plan of Merger, dated as of April 30, 2019, by and among Ingersoll-Rand plc, Gardner Denver Holdings, Inc., Ingersoll-Rand U.S. HoldCo, Inc. and Charm Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Ingersoll-Rand plc on May 6, 2019).
2.2						Separation and Distribution Agreement, dated as of April 30, 2019, by and between Ingersoll-Rand plc and Ingersoll-Rand U.S. HoldCo, Inc. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Ingersoll-Rand plc on May 6, 2019).
2.3						Securities Purchase Agreement, dated as of April 9, 2021, by and among Ingersoll Rand Inc., Club Car, LLC and MajorDrive Holdings IV, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on April 12, 2021).
10.1†						Employment Agreement, dated September 1, 2022, between Ingersoll Rand Inc. and Vicente Reynal.
10.2†						Performance Stock Unit Grant Notice and Agreement, dated September 1, 2022, between Ingersoll Rand Inc. and Vicente Reynal.
31.1						Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Scheme Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).

† Identifies exhibits that consists of a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: November 4, 2022	INGERSOLL RAND INC.

	By:	/s/ Michael J. Scheske
	Name: Michael J. Scheske
	Vice President and Chief Accounting Officer (Principal Accounting Officer)

Exhibit 10.1

Employment Agreement

Vicente Reynal

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of September 1, 2022, by and between Ingersoll Rand Inc., a Delaware corporation (the “Company”) and Vicente Reynal (“Executive”, and, together with the Company, collectively, the “Parties”).

WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue such employment, pursuant to the terms and conditions set forth in this Agreement; and

WHEREAS, Executive acknowledges that (i) Executive’s employment with the Company will provide Executive with trade secrets of, and confidential information concerning the Company, its subsidiaries and affiliates (collectively, the “Company Group”) and (ii) the covenants contained in this Agreement are essential to protect the business and goodwill of the Company Group.

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the Parties hereby agree as follows:

1.Employment and Term. The Company hereby agrees to continue to employ Executive, and Executive hereby accepts such continued employment commencing on September 1, 2022 (the “Effective Date”) and ending on the fifth anniversary of the Effective Date (the “Initial Term”), but shall be automatically renewed on the same terms and conditions set forth herein for additional one-year periods (each an “Extension Date”, and together with the Initial Term, the “Term”), unless the Company or Executive provides the other party hereto ninety (90) days prior written notice before the expiration of the Initial Term or the next Extension Date that the Term shall not be so extended. Upon Executive’s termination of employment with the Company for any reason, Executive shall immediately resign all positions and directorships, if any, with the Company Group.

2.Position and Duties.

(a)Position. During the Term, Executive shall serve as Chief Executive Officer and shall report directly to the Board of Directors of the Company (the “Board”). For so long as Executive is employed as the Company’s Chief Executive Officer, the Board or a committee of the Board, as applicable, will nominate Executive for re-election as Chairman of the Board or, if the Board (or a committee thereof) determines in its sole discretion that the positions of Chief Executive Officer and Chairman of the Board may not be held by the same individual, otherwise as a member of the Board. In addition, Executive shall serve in such other officer and/or director positions with any affiliate of the Company (for no additional compensation) as may be determined by the Board (excluding Executive) from time to time.

(b)Duties. Executive shall have the powers, authorities, and duties of management usually vested in the office of Chief Executive Officer of an entity of a similar size and nature to the Company. Executive shall devote Executive’s full business time and attention to the performance of Executive’s duties hereunder and shall not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services, either directly or indirectly; provided, that, nothing herein shall preclude Executive from (i) serving on the board of directors of one for-profit company as previously disclosed to and approved by the Board; (ii) serving on civic or charitable boards or committees; and (iii) managing personal investments, so long as all such activities described in clauses (i) through (iii) above do not materially interfere with the performance of Executive’s duties and responsibilities under this Agreement.

3.Compensation; Equity Participation.

(a)Base Salary. During the Term, Executive’s base salary shall be at the rate of $1,100,000 per annum, payable in regular installments in accordance with the Company’s usual payroll practices. Executive’s annual base salary shall be subject to annual review for increase by the Board (or a duly authorized committee of the Board); provided, that the Board may decrease Executive’s Base Salary only if such reduction is made as part of and consistent with an across the board temporary salary reductions instituted in response to significant economic hardship and applicable to the Company’s senior executive officers generally (such annual base salary as may be increased or decreased from time to time, the “Base Salary”).

(b)Annual Bonus. With respect to each fiscal year of the Company ending during the Term and subject to the achievement of the applicable performance goals based on Company and individual performance, Executive shall be eligible to earn an annual incentive bonus (the “Annual Bonus”) under the Company’s management incentive program for senior executives, with a target bonus equal to 150% of the Base Salary (the “Target Bonus”). The Annual Bonus, if any, earned for each fiscal year shall be paid to Executive on a date that is no later than two and one-half months following the end of the fiscal year of the Company for which such Annual Bonus relates.

(c)Annual Equity Grants. Executive will continue to be eligible for annual grants under the Company’s Amended and Restated 2017 Omnibus Incentive Plan (the “2017 Plan”) as determined by the compensation committee of the Board (the “Compensation Committee”) consistent with past practice; provided, that nothing in this Section 3(c) shall prevent the Compensation Committee from changing the composition of the equity instruments that are awarded to Executive so long as such changes are generally applicable to all other senior executives of the Company.

(d)Special Stock Option Grants. For each of fiscal years 2022 through 2026, if the Company’s Adjusted EPS (as defined below) growth in any such fiscal year is at least 12% over the Company’s Adjusted EPS for the prior fiscal year, Executive shall be granted, subject to his continued employment with the Company Group on the date of grant, a stock option to purchase 100,000 shares of the Company’s common stock with an exercise price equal to the closing price of such stock on the date of grant (the “Special Option Grant”). If the Adjusted EPS goal as described herein is achieved for any given fiscal year, the stock option shall be granted in the following fiscal year on the same date on which the Company grants its annual long-term incentive plan grants to its other senior executives generally. Each Special Option Grant shall be subject to the terms of the 2017 Plan (or any successor plan thereto) and an option award agreement substantially in the form attached hereto as Exhibit A. For purposes of this Section 3(d), “Adjusted EPS” means the Company’s adjusted diluted net income per share, as reported in the Company’s public filings (or if not so reported, as determined by the Board or a committee thereof in good faith) and modified to reflect an effective tax rate (“ETR”) equal to the ETR applied in the determination of the Adjusted EPS Base Amount set forth in the Performance Stock Unit (Special CEO Grant) Notice dated as of September 1, 2022, as may be equitably adjusted by the Board (or a committee thereof), in its reasonable discretion if it determines such adjustment is necessary to prevent enlargement or diminution of the benefits or potential benefits to be provided under this Section 3(d), as such adjustment is approved by the Compensation Committee.

4.Employee Benefits; Vacation; Expense Reimbursement; Indemnification.

(a)Employee Benefits. During the Term, Executive shall be able to participate in employee benefit plans and perquisite and fringe benefit programs of the Company on a basis no less favorable than such benefits and perquisites provided by the Company from time to time to the Company’s other senior executives.

(b)Vacation. Executive shall be eligible for twenty (20) days of annual vacation in accordance with the Company’s vacation policy as applicable to senior executives of the Company.

(c)Expense Reimbursement. Executive shall be entitled to receive prompt reimbursement for all travel and business expenses reasonably incurred and accounted for by Executive, (in accordance with the policies and procedures established from time to time by the Company) in performing services hereunder.

(d)Indemnification; D&O Coverage. The Company Group and their respective successors and/or assigns, will indemnify, defend and hold harmless Executive to the fullest extent permitted by the certificate of incorporation and by-laws of the Company with respect to any claims that may be brought against Executive arising out of any action taken or not taken in Executive’s capacity as an officer or director of any member of the Company Group. In addition, Executive shall be covered as an insured in respect of Executive’s activities as an officer, director of any member of the Company Group by the directors and officers liability policy of the Company.

(e)Company Aircraft. For each fiscal year of the Company during the Term, Executive shall be eligible to make personal use of the Company’s aircraft for an amount of time that does not result in the Company incurring more than $200,000 in aggregate incremental costs (as determined by the Company for purposes of Item 402 of SEC Regulation S-K).

5.Termination of Employment. The Term and Executive’s employment hereunder may be terminated under the following circumstances:

(a)Death. The Term and Executive’s employment hereunder shall terminate upon Executive’s death. Upon the termination of the Term and Executive’s employment hereunder as a result of this Section 5(a), Executive’s estate shall receive (i) any unpaid Base Salary accrued through the date of termination, (ii) any accrued but unpaid vacation pay, (iii) any vested or accrued benefits provided for under the applicable terms of applicable Company employee benefit plans or arrangements in accordance with such terms, (iv) any unreimbursed expenses in accordance with Section 4(c), and (v) any earned but unpaid Annual Bonus for any fiscal year preceding the fiscal year in which the termination occurs, in each case, paid to Executive within fifteen (15) days following the date of termination, unless earlier payment is required by applicable law (such amounts, and the applicable terms of payment, are hereafter referred to as the “Accrued Amounts”).

(b)Disability. The Company may terminate the Term and Executive’s employment hereunder for Disability. “Disability” shall mean a condition entitling Executive to receive benefits under a long-term disability plan of the Company Group in which the Executive is eligible to participate, or, in the absence of such a plan, the complete and permanent inability of Executive by reason of illness or accident to perform the duties of Executive as set forth in Section 2(b). Any determination of whether Disability exists in the absence of a long-term disability plan shall be made by the Board in its sole and absolute discretion. Upon any termination of the Term and Executive’s employment hereunder pursuant to this Section 5(b), Executive shall receive the Accrued Amounts.

(c)Termination for Cause; Voluntary Termination.

At any time during the Term, (i) the Company may immediately terminate the Term and Executive’s employment hereunder for Cause by written notice; and (ii) Executive may terminate the Term and Executive’s employment hereunder “voluntarily” (that is, other than by death, Disability or for Good Reason, in accordance with Section 5(a), 5(b) or 5(d), respectively); provided, that Executive will be required to give the Company at least sixty (60) days’ advance written notice of any such termination. Upon the termination of the Agreement and Executive’s employment hereunder pursuant to this Section 5(c), Executive shall have no further rights to any compensation or any other benefits under this Agreement other than the Accrued Amounts.

“Cause” shall mean Executive’s: (A) material breach of the Company Group’s policies, the terms of which have previously been provided to or made available to Executive and are applicable to senior executives of the Company; (B) act of theft, misappropriation, embezzlement, fraud or similar conduct involving the Company Group; (C) failure to act in accordance with any specific lawful instructions given to Executive by the Board in connection with the performance of his duties hereunder, which failure continues beyond ten (10) business days after a written demand for substantial performance is delivered to Executive by the Board (the “Cure Period”); (D) willful or grossly negligent conduct that results in damage of a material nature to the business or property of the Company Group and which is not fully cured during the Cure Period (if, in the Board’s reasonable judgment, such damage can be cured); or (E) intentional misconduct.

(d)Termination for Good Reason or Without Cause.

i.At any time during the Term, (A) Executive may terminate the Term and Executive’s employment hereunder for Good Reason; and (B) the Company may terminate the Term and Executive’s employment hereunder without Cause (that is, other than by death, Disability or for Cause, in accordance with Section 5(a), 5(b) or 5(c), respectively). Upon the termination of the Term and Executive’s employment hereunder pursuant to this Section 5(d), Executive shall receive the Accrued Amounts. In addition, subject to Executive’s continued material compliance with the provisions of Sections 6, 7, 8 and 11(m) of this Agreement and Executive’s execution, delivery and non-revocation of an effective release of claims against the Company Group substantially in the form attached hereto as Exhibit B (the “Release”), which Release must be executed (and not revoked) by Executive within sixty (60) days following the date of Executive’s termination (the “Release Period”), Executive shall be entitled to (x) cash severance (the “Severance Payment”) equal to one times (1.0x) the Base Salary, which Severance Payment shall be payable in accordance with the Company’s usual payroll practices in equal installments over the twelve (12)-month period following the date of termination, with the first such installment to be paid on the first payroll date after the release becomes effective; and (y) if Executive and any of Executive’s eligible dependents, in each case, who participate in the Company’s medical, dental, vision and prescription drug plans as of the date of

termination, timely elect COBRA coverage under such plans, the Company shall pay directly, or reimburse Executive for, a portion of such COBRA premiums (on a monthly basis) equal to the employer portion of the premium for active employees for a period of twelve (12) months following the date of termination; provided, that if and to the extent that any benefit described in this clause (y) is not or cannot be paid or provided under any Company plan or program without adverse tax consequences to the Company, then the Company shall pay Executive a monthly payment in an amount equal to the Company’s cost of providing such benefit. The reimbursement of such premiums (or the monthly payment, if applicable) provided under clause (y) of this Section 5(d) shall cease to be effective as of the date Executive becomes eligible for coverage under the medical, dental, vision and prescription drug insurance plans of a subsequent employer with respect to the corresponding benefit provided hereunder.

ii.409A Compliance. Notwithstanding the foregoing, to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if the Release Period spans two (2) calendar years, the Severance Payment shall commence on the first regularly scheduled payroll date that occurs in the second calendar year (and, the first installment of the Severance Payment shall include all installment payments that would otherwise have been paid prior to such date).

iii.Definition of Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence, without Executive’s written consent, of any of the following events: (i) a material diminution in Executive’s authority, duties or responsibilities or the assignment to Executive of any material duties inconsistent with the customary duties of Executive’s position hereunder (provided that, if the Company ceases to be a publicly traded entity, such fact shall not constitute a change in Executive’s existing position); (ii) the relocation of the offices at which Executive is principally employed to a location which is more than fifty (50) miles from the offices at which Executive is principally employed immediately prior to such relocation; (iii) the failure of the Board or a committee thereof, as applicable, to nominate Executive for re-election as a member of the Board or the failure to appoint the Executive as Chairman of the Board while he is a member of the Board unless the Board, or such committee, as applicable, determines that the positions of Chief Executive Officer and Chairman of the Board may not be held by the same individual; (iv) a material breach by the Company or any other member of the Company Group of this Agreement or any other material agreement to which Executive and the Company or a member of the Company Group are now or hereafter become parties; or (v) except as is specifically provided in the proviso to Section 3(a), a reduction in Executive’s Base Salary or Target Bonus, provided, that nothing herein shall be construed to guarantee an Annual Bonus for any fiscal year if the applicable performance targets are not met; and provided, further, that it shall not constitute Good Reason if the Company makes an appropriate pro rata adjustment to the applicable Annual Bonus payable and the Target Bonus in the event of a change in the fiscal year. In order for Executive to resign with Good Reason, Executive shall provide written notice to the Company of the existence of any such condition within ninety (90) days of the initial existence of such condition and the Company fails to remedy the condition within thirty (30) days of receipt of such notice (the “Good Reason Cure Period”); provided, further, that Executive must actually terminate employment no later than thirty (30) days following the end of such Good Reason Cure Period, if the Good Reason condition remains uncured.

(e)Notice of Termination. Any purported termination of Executive’s employment by the Company or by Executive shall be communicated by written notice of termination to the other Party in accordance with Section 11(e) hereof. Such notice shall indicate the specific termination provision in this Agreement being relied upon and shall, to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

6.Non-Competition; Non-Solicitation; No Hire. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company Group and accordingly agrees as follows:

(a)Non-Competition.

(i) During Executive’s employment with the Company Group and for a period of two (2) years following the date Executive ceases to be employed by the Company Group (the “Restricted Period”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with the Company Group in the Business, the business of any then current or prospective client or customer with

whom Executive (or his direct reports) had personal contact or dealings on behalf of the Company during the one-year period preceding Executive’s termination of employment.

(i) During the Restricted Period, Executive will not directly or indirectly: (A) engage in the Business in any geographical area where the Company Group engages in the Business; (B) enter the employ of, or render any services to any Person engaged in the Business, except where such employment or services do not relate in any manner to the Business; (C) acquire a financial interest in, or otherwise become actively involved with, any Person engaged in the Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or (D) intentionally and adversely interfere with, or attempt to adversely interfere with, business relationships between the members of the Company Group and any of their clients, customers, suppliers, partners, members or investors.

(ii) Notwithstanding the foregoing, Executive may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

(b)Non-Solicitation of Business Relationships. During both the Term and the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly: (i) solicit or encourage any employee of the Company Group to leave the employment of the Company Group; (ii) hire any employee who was employed by the Company Group as of the date of Executive’s termination of employment with the Company or who left the employment of the Company Group coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company; or (ii) encourage any consultant or independent contractor of the Company Group to cease working with the Company Group:

(c)For purposes of this Agreement, “Business” shall mean shall mean the business of the design, manufacture, distribution and marketing of air and gas compressors, blowers, pumps and fluid transfer systems and related activities, and any other business activity in which the Company and its subsidiaries may, after the date of this Agreement, become engaged, or take substantial steps to engage.

7.Confidentiality; Intellectual Property.

(a)Confidentiality.

i.Executive will not at any time (whether during or after the Term) (x) retain or use for the benefit, purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisors who are bound by confidentiality obligations or otherwise in performance of Executive’s duties hereunder and pursuant to customary industry practice), any non-public, proprietary or confidential information—including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals—concerning the past, current or future business, activities and operations of the Company Group and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board. For the purposes of clarity, the Ingersoll Rand Execution Excellence and all its components and all processes, content and materials in any medium relating thereto shall be deemed to be Confidential Information and shall not be subject to the exceptions set forth in clause (a) or (b) of Section 7(a)(ii) below.

ii.“Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation of which Executive has knowledge; or (c) required by law to be disclosed; provided that with respect to subsection (c) Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and reasonably cooperate with any attempts by the Company to obtain a protective order or similar treatment.

iii.Upon termination of Executive’s employment with the Company Group for any reason, Executive shall (A) cease and not thereafter commence use of any Confidential Information (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company Group; (B) make reasonable efforts to promptly destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) that to the best of Executive’s knowledge are in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company Group, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and Executive may retain his address book (or other form of contact information) to the extent it does not contain Confidential Information, as well as materials relating to Executive’s relationship with the Company and the termination thereof; and (C) notify and reasonably cooperate with the Company (as reasonably requested by the Company) regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

iv.Nothing in this Agreement shall prohibit or impede Executive from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation; provided, that in each case such communications and disclosures are consistent with applicable law. Executive does not need the prior authorization of (or to give notice to) the Company regarding any such communication or disclosure. Executive understands and acknowledges that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (A) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of the law; or (B) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Executive understands and acknowledges further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Notwithstanding the foregoing, under no circumstance is Executive authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product without the prior written consent of the Company’s General Counsel.

(b)Intellectual Property.

i.If Executive creates, invents, designs, develops, contributes to or improves any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with third parties, prior to Executive’s employment by the Company, that are relevant to or implicated by such employment (“Prior Works”), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.

ii.If Executive creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive’s employment by the Company and within the scope of such employment and with the use of any Company resources (“Company Works”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

iii.Executive shall take all reasonably requested actions and execute all reasonably requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works.

If the Company is unable for any other reason, after reasonable attempt, to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and in Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts required in connection with the foregoing.

iv.Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive shall comply with all relevant policies and guidelines of the Company that are from time to time previously disclosed to Executive, including regarding the protection of Confidential Information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version from time to time previously disclosed to Executive.

8.Non-Disparagement. Following the termination of Executive’s employment with the Company Group for any reason Executive hereby agrees not to defame or disparage any member of the Company Group or any executive, manager, director, or officer of any member of the Company Group in any medium to any person. Notwithstanding the preceding, Executive may confer in confidence with Executive’s legal representative and make truthful statements as required by law or legal process, or to enforce this Agreement.

9.Restrictive Covenants Generally. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in Sections 6, 7, and 8 to be reasonable (the “Covenants”) if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. The restrictions contained in Sections 6, 7 and 8 supersede all prior agreements between Executive and the Company (or any predecessor) on the same subjects.

10.Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the Covenants would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of a material breach of any of the Covenants, in addition to any remedies at law, the Company shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and, in the case of a breach or threatened breach of any of the Covenants, seek equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available; provided, that in the event a court of competent jurisdiction issues a final judgment (not subject to appeal) or a final arbitration award or decision is issued that Executive did not materially breach any of the Covenants (or any other restrictive covenant to which Executive is subject in any other agreement with any member of the Company Group), the Company shall be required to pay Executive any payments or benefits that the Company had previously withheld either pursuant to this Section 10 or because Executive was terminated for Cause if such termination was solely the result of such an alleged Covenant (or other restrictive covenant) breach.

11.Miscellaneous.

(a)Executive’s Representations. Executive hereby represents and warrants to the Company that Executive’s acceptance of continued employment with the Company has not breached, and the performance of Executive’s duties hereunder will not breach, any duty owed by Executive to any prior employer or other person or entity. Executive further represents and warrants to the Company that (i) Executive has read this Agreement in its entirety, fully understands the terms of this Agreement, has had the opportunity to consult with counsel prior to executing this Agreement and is signing the Agreement voluntarily and with full knowledge of its significance; (ii) the execution, delivery and performance of this Agreement by Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound; (iii) Executive is not a party to or bound by an employment agreement, non-compete agreement or confidentiality agreement with any previous employer or other person or entity which would

be violated or otherwise interfere in any material respect with the performance of his duties hereunder; and (iv) Executive shall not use any confidential information or trade secrets of any person or party other than the Company Group in connection with the performance of his duties hereunder, except with valid written consent of such other person or party.

(b)Mitigation. Executive shall have no duty to mitigate his damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any other compensation except as specifically provided herein.

(c)Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and an officer of the Company (other than Executive) duly authorized by the Board to execute such amendment, waiver or discharge. No waiver by any Party of any breach of any other Party of, or compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(d)Successors and Assigns.

i.This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

ii.This Agreement shall inure to the benefit of and be binding upon the Company and its successors and, other than as set forth in Section 11(d)(iii), shall not be assignable by the Company without the prior written consent of Executive (which shall not be unreasonably withheld).

iii.The Agreement shall be assignable by the Company to, and only to (A) any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or (B) if Executive is performing substantial services for a subsidiary of the Company and all or substantially all of the business or assets of such subsidiary are sold to an unaffiliated third party, to the subsidiary of the Company being sold or to the successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of such subsidiary, with such assignment to be effective upon the consummation of such sale. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any such subsidiary or successors aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

(e)Notice. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if delivered by overnight courier service, or if mailed by registered mail, return receipt requested, postage prepaid, addressed to the respective addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt; provided, that (i) notices sent by personal delivery or overnight courier shall be deemed given when delivered; (ii) notices sent by facsimile transmission shall be deemed given upon the sender’s receipt of confirmation of complete transmission; and (iii) notices sent by registered mail shall be deemed given two (2) days after the date of deposit in the mail.

If to Executive, to such address as shall most currently appear on the records of the Company.

If to the Company, to:

Ingersoll Rand Inc.

525 Harbor Place Drive, Suite 600

Davidson, North Carolina 28036

Attention: General Counsel

With a copy, which shall not constitute notice, to:

Simpson, Thacher & Bartlett LLP

2475 Hanover Street

Palo Alto, CA 94304

Attention: Tristan Brown

Facsimile No.: (650) 251-5002

(f)GOVERNING LAW; CONSENT TO JURISDICTION; JURY TRIAL WAIVER. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. ANY ACTION TO ENFORCE THIS AGREEMENT MUST BE BROUGHT IN, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN DELAWARE COUNTY, DELAWARE. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION. EACH PARTY TO THIS AGREEMENT WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM.

(g)Compliance with Code Section 409A. This Agreement is intended to comply with, or be exempt from, the requirements of Section 409A of the Code, and shall be interpreted and construed consistently with such intent. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the first business day to occur following the date that is six (6) months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code), which initial payment will include the payments and benefits that would have been paid to Executive during such six (6) month period but for the delay required by Section 409A of the Code; and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. In the event that payments under this Agreement are deferred pursuant to this Section 11(g) in order to prevent any accelerated tax or additional tax under Section 409A of the Code, then such payments shall be paid at the time specified under this Section 11(g) without any interest thereon. The Company shall consult with Executive in good faith regarding the implementation of this Section 11(g); provided, that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect thereto. Notwithstanding anything to the contrary herein, to the extent required by Section 409A of the Code, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean separation from service. For purposes of Section 409A of the Code, Executive’s right to receive any installment payment under this Agreement shall be treated as a right to receive a series of separate and distinct payments. Notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code, (A) the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year; (B) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last

day of the calendar year following the calendar year in which the applicable expense is incurred; and (C) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

(h)Severability of Invalid or Unenforceable Provisions. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

(i)Advice of Counsel and Construction. Each Party acknowledges that such Party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each Party.

(j)Entire Agreement; Effectiveness of Agreement. This Agreement constitutes the entire agreement between the parties as of the Effective Date and supersedes all previous agreements and understandings between the parties with respect to the subject matter hereof.

(k)Withholding Taxes. The Company shall be entitled to withhold from any payment due to Executive hereunder any amounts required to be withheld by applicable tax laws or regulations.

(l)Section Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.

(m)Cooperation. During the Term and at any time thereafter, Executive agrees to reasonably cooperate (with due regard given to Executive’s other commitments), (i) with the Company in the defense of any legal matter not adverse to Executive and involving any matter that arose during Executive’s employment with the Company or any other member of the Company Group; and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the Company or any other member of the Company Group, in each case, relating to Executive’s employment period and not adverse to Executive. The Company will reimburse Executive for any reasonable travel and out-of-pocket costs and expenses incurred by Executive in providing such cooperation.

(n)Survival. Sections 4(d), 5, 6, 7, 8, 9, 10 and 11(b) though (h), (j), (k), and (m) shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Term or of Executive’s employment with the Company or any other member of the Company Group.

(o)Legal Fees. The Company shall reimburse Executive for reasonable, documented legal fees incurred by Executive in connection with the review, negotiation, and execution of this Agreement, as well as the agreements evidencing the Special Option Grant and the special restricted stock unit grant to be entered into concurrently herewith, which reimbursement shall not exceed $20,000.

(p)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

[Signature page follows.]

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

Ingersoll Rand Inc.

By: /s/ Andrew Schiesl

Name: Andrew Schiesl

Title: Senior Vice President, General

Counsel, Chief Compliance

Officer, and Secretary

Executive

/s/ Vicente Reynal

Vicente Reynal

EXHIBIT A

FORM OF STOCK OPTION AGREEMENT

FINAL FORM

OPTION GRANT NOTICE
UNDER THE
INGERSOLL RAND INC.
AMENDED AND RESTATED 2017 OMNIBUS INCENTIVE PLAN

Ingersoll Rand Inc. (the “Company”), pursuant to its Amended and Restated 2017 Omnibus Incentive Plan (the “Plan”), hereby grants to the Participant set forth below the number of Options (each Option representing the right to purchase one share of Common Stock) at an Exercise Price per share as set forth below. The Options are subject to all of the terms and conditions as set forth herein, in the Global Award Agreement (attached hereto or previously provided to the Participant in connection with a prior grant), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.


Participant:			Vicente Reynal
Date of Grant:			[Insert Date of Grant]
Vesting Commencement Date:			[Insert Vesting Commencement Date]
Number of Options:			[Insert No. of Options Granted]
Option Exercise Price:			[Insert Exercise Price]
Option Period Expiration Date:			Ten years from Date of Grant
Type of Option:			Nonqualified Stock Option
Vesting Schedule:			Provided the Participant has not undergone a Termination prior to such anniversary, 100% of the Options shall become vested and exercisable on the fifth anniversary of the Vesting Commencement Date.
			In the event of the Participant’s Termination, all vesting with respect to the Options shall cease and all unvested Options shall be forfeited by the Participant for no consideration as of the date of such Termination; provided, that in the event of the Participant’s Qualifying Termination or a termination due to the Participant’s death or Disability, the number of Options that shall become vested and exercisable on the date of such Termination shall be determined as if the Vesting Schedule above is instead 20% of the Options vesting on each of the first through fifth anniversaries of the Vesting Commencement Date; provided, further, solely in the event of the Participant’s death or Disability, the Participant shall immediately vest in additional 20% of the Options as of the date of such death or Disability.
			In the event of Change in Control in which the Options are not assumed by the successor to the Company in connection with such Change in Control, all unvested Options shall immediately vest as of the date of the consummation of such Change in Control; provided, that the Participant remains continuously employed through such date.
			If the Option is assumed in connection with a Change in Control and there is a Qualifying Termination or a Termination due to the Participant’s death or Disability during the two-year period following such Change in Control, all unvested Options shall immediately vest as of the date of such Termination.
Definitions:			“Cause” has the meaning set forth in the Participant’s employment agreement with the Service Recipient.
			“Disability” has the meaning set forth in the Participant’s employment agreement with the Service Recipient.
			“Good Reason” has the meaning set forth in the Participant’s employment agreement with the Service Recipient.
			“Qualifying Termination” means a Termination by the Company without Cause or by the Participant with Good Reason.

* * *

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS OPTION GRANT NOTICE, THE GLOBAL AWARD AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF OPTIONS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS OPTION GRANT NOTICE, THE GLOBAL AWARD AGREEMENT AND THE PLAN.

INGERSOLL RAND INC. PARTICIPANT1

________________________________ ________________________________
By:
Title:

1 To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute the Participant’s signature hereof.

GLOBAL AWARD AGREEMENT
UNDER THE
INGERSOLL RAND INC.
AMENDED AND RESTATED 2017 OMNIBUS INCENTIVE PLAN

Pursuant to the Option Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Global Award Agreement (this “Award Agreement”) and the Ingersoll Rand Inc. Amended and Restated 2017 Omnibus Incentive Plan (the “Plan”), Ingersoll Rand Inc. (the “Company”) and the Participant agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.

1.Grant of Options. Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Options provided in the Grant Notice (with each Option representing the right to purchase one share of Common Stock), at an Exercise Price per share as provided in the Grant Notice (Options are referred to herein as “Awards”). The Company may make one or more additional grants of Options to the Participant under this Award Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Award Agreement to the extent provided therein. The Company reserves all rights with respect to the granting of additional Options hereunder and makes no implied promise to grant additional Options.

2.Vesting. Subject to the conditions contained herein and the Plan, the Options shall vest as provided in the Grant Notice.

3.Exercise and Vesting of Options Following Termination. In the event of Participant’s Termination (a) by the Company for Cause, all outstanding Options granted pursuant to the Grant Notice shall immediately terminate and expire; (b) due to death, Disability or the Participant's Qualifying Termination, each outstanding unvested Option granted pursuant to the Grant Notice shall vest in accordance with the schedule set forth in the Grant Notice and shall remain exercisable for one year thereafter (but in no event beyond the expiration of the Option Period); and (c) for any reason other than as set forth in this Section 3, each outstanding unvested Option granted pursuant to this Grant Notice (after taking into account any accelerated vesting described in the Vesting Schedule of the Grant Notice) shall immediately terminate and expire and each outstanding vested Option shall remain exercisable for 90 days thereafter (but in no event beyond the expiration of the Option Period).

4.Method of Exercising Options. The Options may be exercised by the delivery of notice of the number of Options that are being exercised accompanied by payment in full of the Exercise Price applicable to the Options so exercised. Such notice shall be delivered either (x) in writing to the Company at its principal office or at such other address as may be established by the Committee, to the attention of the Company Secretary; or (y) to a third-party plan administrator as may be arranged for by the Company or the Committee from time to time for purposes of the administration of outstanding Options under the Plan, in the case of either (x) or (y), as communicated to the Participant by the Company from time to time. Payment of the aggregate Exercise Price shall be made using either the method described in Section 7(d)(i) or Section 7(d)(ii)(C) of the Plan.

5.Issuance of Shares Upon Exercise of Options. Following the exercise of an Option hereunder, as promptly as practical after receipt of such notification and full payment of such Exercise Price and any required income or other tax withholding amount (as provided in Section 9 hereof), the Company shall issue or transfer, or cause such issue or transfer, to the Participant the number of shares with respect to which the Options have been so exercised, and shall either (a) deliver, or cause to be delivered, to the Participant a certificate or certificates therefor, registered in the Participant’s name or (b) cause such shares to be credited to the Participant’s account at the third-party plan administrator.

6.Company; Participant.

(a) The term “Company” as used in this Award Agreement with reference to employment shall include the Company and its Subsidiaries.

(b) Whenever the word “Participant” is used in any provision of this Award Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Options may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.

7.Non-Transferability. The Options are not transferable by the Participant except to Permitted Transferees in accordance with applicable laws and Section 14(b) of the Plan. Except as otherwise provided herein, no assignment or transfer of the Options, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Options shall terminate and become of no further effect.

8.No Rights as Stockholder. The Participant or a Permitted Transferee of the Options shall have no rights as a stockholder with respect to any share of Common Stock covered by an Option until the Participant or the Permitted Transferee shall have become the holder of record or the beneficial owner of such Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant or the Permitted Transferee shall become the holder of record or the beneficial owner thereof.

9.Tax Withholding.

(a)The Participant shall be required to pay to the Company an amount equal to the amount of any income, employment and/or other applicable taxes that are statutorily required to be withheld in respect of the Options.

(b)The Participant shall satisfy the maximum income, employment and/or other applicable taxes that are permitted to be withheld with respect to the Options by having the Company withhold from the shares of Common Stock otherwise issuable or deliverable to, or that would otherwise be retained by, the Participant upon the grant, exercise, vesting or settlement of the Award, as applicable, a number of shares of Common Stock with an aggregate Fair Market Value equal to an amount not in excess of such maximum withholding liability (or portion thereof).

(c)The Participant acknowledges that, regardless of any action taken by the Company, or, if different, the Participant’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participants (the “Tax-Related Items”), is and remains the Participant’s responsibility. The Participant further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspects of the Awards, including but not limited to, the grant, exercise, vesting or settlement of the Award, as applicable, the subsequent sale of shares of Common Stock acquired under the Plan and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Awards to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(d)Since the obligations for Tax-Related Items will be satisfied by withholding in shares of Common Stock, for tax purposes, the Participant is deemed to have been issued the full number of shares of Common Stock, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.

10.Notice. Every notice or other communication relating to this Award Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Company Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records. Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.

11.No Right to Continued Service. This Award Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company.

12.Binding Effect. This Award Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

13.Waiver and Amendments. Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Award Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

14.Restrictive Covenants; Clawback/Forfeiture.

(a)The Options granted hereunder shall be subject to the Participant’s continued compliance with any restrictive covenants between the Participant and the Company or any of its Affiliates.

(b)Notwithstanding anything to the contrary contained herein or in the Plan, if the Participant has engaged in or engages in any Detrimental Activity, then the Committee may, in its sole discretion, take actions permitted under the Plan, including: (i) cancel the Options; or (ii) require that the Participant forfeit any gain realized on the exercise of the Options or the disposition of any shares of Common Stock received upon the exercise of the Options, and repay such gain to the Company. In addition, if the Participant receives any amount in excess of what the Participant should have received under the terms of this Award Agreement for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), the Participant shall be required to repay any such excess amount to the Company. Without limiting the foregoing, all Options shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with applicable law. For purposes of this Award Agreement, “Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of any member of the Company Group; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Service Recipient for Cause; or (iii) a breach by the Participant of any restrictive covenant by which such Participant is bound, including, without limitation, the covenants set forth in the Participant’s employment agreement with the Service Recipient.

(c)The Participant hereby acknowledges and agrees that the Options are subject to clawback and repayment as set forth in Section 14(v) of the Plan.

15.Language. By electing to accept this Award Agreement, the Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is sufficiently proficient in English so as to allow the Participant, to understand the terms and conditions of this Award Agreement. If the Participant has received this Award Agreement or any other documentation related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

16.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Awards and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

17.Insider Trading/Market-Abuse Laws. The Participant may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the shares of Common Stock are listed and in applicable jurisdictions, including the Participant’s country and the designated broker’s country, which may affect the Participant’s ability to accept, acquire, sell or otherwise dispose of the shares of Common Stock, rights to the shares of Common Stock (i.e., Options) or rights linked to the value of the shares of Common Stock under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited from (i) disclosing inside information to any third party, including fellow employees and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company

insider trading policy. The Participant acknowledges that it is the Participant’s responsibility to comply with any applicable restrictions and the Participant should speak with the Participant’s personal advisor on this matter.

18.Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

19.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan or Participant’s acquisition or sale of shares of Common Stock. The Participant understands and agrees that the Participant should consult with his or her own personal legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.

20.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. Further, the parties hereto shall be entitled to rely on delivery of a facsimile or other electronic copy of this Award Agreement, and delivery by either party of such facsimile or electronic copy shall be legally effective to create a valid and binding agreement between the parties in accordance with the terms hereof.

21.Governing Law and Venue. This Award Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Award Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Award Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.

22.Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Award Agreement (including the Grant Notice), the Plan shall govern and control.

EXHIBIT B

GENERAL RELEASE

THIS GENERAL RELEASE, dated as of [_____ ], 20__ (this “Agreement”), is entered into by and between Vicente Reynal (“Executive”) and Ingersoll Rand Inc., a Delaware corporation, (the “Company”).

WHEREAS, Executive is currently employed by the Company; and

WHEREAS, Executive’s employment with the Company will terminate effective as of [_____ ], 20__.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and other good and valuable consideration, Executive and the Company hereby agree as follows:

1.Executive shall be provided severance pay and other benefits (the “Severance Benefits”) in accordance with the terms and conditions of Section 5(d)(i) of the employment agreement by and among Executive and the Company, dated as of September 1, 2022 (the “Employment Agreement”); provided, that no such Severance Benefits shall be paid or provided if Executive revokes this Agreement pursuant to Section 4 below.

2.Executive, for and on behalf of himself and Executive’s heirs, successors, agents, representatives, executors and assigns, hereby waives and releases any common law, statutory or other complaints, claims, demands, expenses, damages, liabilities, charges or causes of action (each, a “Claim”) arising out of or relating to Executive’s employment or termination of employment with, Executive’s serving in any capacity in respect of, or Executive’s status at any time as a holder of any securities of, any of the Company and any of its subsidiaries or affiliates (together, the “Company Group”), both known and unknown, in law or in equity, which Executive may now have or ever had against any member of the Company Group or any equityholder, agent, representative, administrator, trustee, attorney, insurer, fiduciary, employee, director or officer of any member of the Company Group, including their successors and assigns (collectively, the “Company Releasees”), including, without limitation, any claim for any severance benefit which might have been due Executive under any previous agreement executed by and between any member of the Company Group and Executive, and any complaint, charge or cause of action arising out of his employment with the Company Group under the Age Discrimination in Employment Act of 1967 (“ADEA,” a law which prohibits discrimination on the basis of age against individuals who are age 40 or older), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974, the Family Medical Leave Act, the Equal Pay Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Rehabilitation Act of 1973, and the Worker Adjustment and Retraining Notification Act of 1988, all as amended; and all other applicable federal, state and local statutes, ordinances and regulations. By signing this Agreement, Executive acknowledges that Executive intends to waive and release any rights known or unknown Executive may have against the Company Releasees under these and any other laws; provided, that Executive does not waive or release Claims (i) with respect to claims arising from any breach by the Company Group of this Agreement or Executive’s right to enforce this Agreement or those provisions of the Employment Agreement that expressly survive the termination of Executive’s employment with the Company Group; (ii) with respect to any vested right Executive may have under any employee pension or welfare benefit plan or any bonus plan or policy of the Company Group; (iii) any rights to indemnification (including the advancement of legal fees) or expense reimbursement under the Employment Agreement, any agreement between Executive and any member of the Company Group or the limited liability company agreement or other organization document of any member of the Company Group, or pursuant to any director’s and officer’s liability insurance policy, in the future or previously in force; (iv) rights of Executive for expense reimbursement from the Company; (v) any rights Executive may have to workers’ compensation benefits or to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985; (vi) any right of Executive in his capacity as an equityholder of Company securities, including, but not limited to, rights under the agreements evidencing the annual equity grants, and the Special Option Grant and the grant of special restricted stock units entered into concurrently with the Employment Agreement; or (vii) claims that may not be waived by law and any claims arising after the date this Agreement is signed. For the avoidance of doubt, the Claims released or waived pursuant to this paragraph shall not be deemed to relate to or include the rights and coverage of Executive under any directors and officers and other such insurance policies of any member of the Company Group.

THIS MEANS THAT, BY SIGNING THIS AGREEMENT, EXECUTIVE WILL HAVE WAIVED ANY RIGHT EXECUTIVE MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST THE COMPANY RELEASEES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS AGREEMENT, EXCEPT WITH RESPECT

TO ANY CLAIM NOT WAIVED OR RELEASED AS CONTEMPLATED BY THE PRECEDING PARAGRAPH. Notwithstanding the above, nothing in this AGREEMENT shall prevent Executive from (i) initiating or causing to be initiated on hIS behalf any complaint, charge, claim or proceeding against ANY MEMBER OF the Company GROUP before any local, state or federal agency, court or other body challenging the validity of the waiver of hIS claims under ADEA contained in this AGREEMENT (but no other portion of such waiver); or (ii) initiating or participating in (but not benefiting from) an investigation or proceeding conducted by the Equal Employment Opportunity Commission with respect to ADEA.

3.Executive acknowledges that Executive has been given twenty-one (21) days from the date of receipt of this Agreement to consider all of the provisions of this Agreement and, to the extent he has not used the entire 21-day period prior to executing this Agreement, Executive does hereby knowingly and voluntarily waive the remainder of said 21-day period. EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY AND FULLY UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE COMPANY RELEASEES, AS DESCRIBED HEREIN AND THE OTHER PROVISIONS HEREOF. EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

4.Executive shall have seven (7) days from the date of Executive’s execution of this Agreement to revoke the release, including with respect to all claims referred to herein (including, without limitation, any and all claims arising under ADEA). If Executive revokes the Agreement, Executive will be deemed not to have accepted the terms of this Agreement.

5.Each party and its counsel have reviewed this Agreement and has been provided the opportunity to review this Agreement and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Release shall be construed as a whole, and according to their fair meaning, and not strictly for or against either party.

[Signature Page to General Release Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

Ingersoll Rand Inc.

By:

Name:

Title:

Executive

Vicente Reynal

Exhibit 10.2

PERFORMANCE STOCK UNIT (SPECIAL CEO GRANT) GRANT NOTICE
UNDER THE
INGERSOLL RAND INC.
AMENDED AND RESTATED 2017 OMNIBUS INCENTIVE PLAN

Ingersoll Rand Inc. (the “Company”), pursuant to its Amended and Restated 2017 Omnibus Incentive Plan (the “Plan”), hereby grants to the Participant set forth below the number of Performance Stock Units (at target) set forth below. The Performance Stock Units are subject to all of the terms and conditions as set forth herein, in the Global Award Agreement (PSUs) attached hereto (the “Award Agreement”), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.


Participant:			Vicente Reynal
Date of Grant:			September 1, 2022
Number of Performance Stock Units Subject to Award:			1,000,000

Performance-Vesting Provisions:

TSR PSUs:

250,000 of the total number of Performance Stock Units granted hereunder (the “TSR PSUs”) shall become earned (but not vested) on the first date during the TSR Performance Period on which the sum of (i) the 60-day volume-weighted average closing price of the Common Stock, plus (ii) the cumulative value of any dividends paid during the TSR Performance Period through and including such date equals or exceeds the TSR Target Price. The “TSR Target Price” is $81.85 (i.e., the absolute stock price equivalent to a 5-year compounded annual growth rate of 12% in the Company’s stock price from the Grant Date Price to the end of the TSR Performance Period).

The TSR PSUs, if earned, shall vest on the last day of the TSR Performance Period subject to the Participant’s continuous service with the Service Recipient on such vesting date. Any TSR PSUs that do not vest because the performance-vesting condition described above has not been achieved by such date are automatically forfeited effective as of the last day of the TSR Performance Period.

If the performance-vesting condition described in the second paragraph hereof is achieved prior to the last day of the TSR Performance Period and the Participant’s continuous service with the Service Recipient terminates due to the Participant’s death or Disability occurring on or after the date on which such performance-vesting condition was achieved and before the last day of the TSR Performance Period, then all of the TSR PSUs shall vest on the date of such Termination.

If the performance-vesting condition described in the second paragraph hereof is achieved prior to the last day of the TSR Performance Period and the Participant’s continuous service with the Service Recipient terminates due to the Participant’s Qualifying Termination occurring on or after the date on which such performance-vesting condition was achieved and before the last day of the TSR Performance Period, then the number of TSR PSUs that shall vest shall be prorated based on the number of days the Participant remained in continuous service with the Service Recipient from the Date of Grant through the date of such Qualifying Termination.

For the avoidance of doubt, if the Participant’s continuous service with the Service Recipient terminates for any reason during the TSR Performance Period prior to the date on which the performance-vesting condition described in the second paragraph hereof has been achieved, the TSR PSUs shall automatically be forfeited effective as of the date of such Termination.

EPS PSUs:

The remaining 750,000 of the total number of Performance Stock Units granted hereunder (the “EPS PSUs”) shall be eligible to vest based on the level of compounded annual growth rate of the Company’s Adjusted EPS during the EPS Performance Period as compared to the Adjusted EPS Base Amount (as defined on Exhibit A). Any EPS PSUs

that do not vest because the applicable performance-vesting conditions described herein are not achieved shall automatically be forfeited effective as of the last day of the EPS Performance Period.

◦250,000 of the EPS PSUs shall vest if the Company’s Adjusted EPS for fiscal year 2026 is at least the First Adjusted EPS Hurdle Amount (as defined on Exhibit A) (i.e., the compounded annual growth rate for the EPS Performance Period is at least 10% over the Adjusted EPS Base Amount);

◦An additional 250,000 of the EPS PSUs (i.e., 500,000 of the total EPS PSUs) shall vest if the Company’s Adjusted EPS for fiscal year 2026 is at least the Second Adjusted EPS Hurdle Amount (as defined on Exhibit A) (i.e., the compounded annual growth rate for the EPS Performance Period is at least 12% over the Adjusted EPS Base Amount); and

◦The remaining 250,000 of the EPS PSUs (i.e., all of the EPS PSUs) shall vest if the Company’s Adjusted EPS for fiscal year 2026 is at least the Third Adjusted EPS Hurdle Amount (as defined on Exhibit A) (i.e., the compounded annual growth rate for the EPS Performance Period is at least 15% over the Adjusted EPS Base Amount).

The number of EPS PSUs that vest, if any, shall be based on the Company’s Adjusted EPS for fiscal year 2026 as determined by the Committee following the end of the EPS Performance Period, which vesting shall occur on the date on which the Committee certifies the actual Adjusted EPS for fiscal year 2026 (which certification will occur as soon as practicable, but in no event more than 60 days, following the end of the EPS Performance Period) (the “EPS PSU Vesting Date”). Such vesting shall also be subject to and require either (i) the Participant’s continuous service with the Service Recipient on the EPS PSU Vesting Date; (ii) a Qualifying Termination that occurs after the expiration of the EPS Performance Period and before the EPS PSU Vesting Date; or (iii) the Participant’s Termination due to death or Disability that occurs after the expiration of the EPS Performance Period and before the EPS PSU Vesting Date. For the avoidance of doubt, if the Participant is terminated for Cause or resigns without Good Reason after the expiration of the EPS Performance Period and before the EPS PSU Vesting Date, all of the EPS PSUs shall be automatically forfeited on the date of such Termination. Any EPS PSUs that do not vest because the applicable performance-vesting conditions described above are not achieved are automatically forfeited effective as of the last day of the EPS Performance Period.

In the event of the Participant’s Termination due to death, Disability or a Qualifying Termination prior to the end of the EPS Performance Period, then the above calculation with respect to the EPS PSUs will be conducted as though (i) the last day of the EPS Performance Period was the date on which such Termination occurs and (ii) the Company’s Adjusted EPS shall be the Adjusted EPS for the last four (4) completed fiscal quarters during the EPS Performance Period prior to the date of such Termination (or, if there are not four (4) completed fiscal quarters at the time of such Termination, then all of the EPS PSUs shall be automatically forfeited on the date of such Termination). The number of EPS PSUs, if any, resulting from such calculation shall become vested on the date of Termination, or, if later, the date on which the Committee certifies the actual Adjusted EPS for the last four (4) completed fiscal quarters of the Company during the EPS Performance Period prior to the date such Termination occurs (which certification will occur as soon as practicable, but in no event more than 60 days, following the date of Termination); provided, that, solely in the case of a Qualifying Termination, the number of EPS PSUs that become vested shall be prorated by the number of days the Participant was in continuous service with the Service Recipient from the Date of Grant through the date of such Qualifying Termination. For the avoidance of doubt, (x) if the Participant’s employment with the Company is terminated for any reason other than due to death, Disability or a Qualifying Termination, all of the EPS PSUs shall be automatically forfeited on the date of such Termination and (y) following a Termination due to death, Disability or a Qualifying Termination, any EPS PSUs that do not vest in accordance with this paragraph shall automatically be forfeited.

Change in Control Vesting Where Change in Control Occurs After Expiration of Applicable Performance Period (or, for TSR PSUs, After the Date on Which the Performance Goal Was Achieved).

If a Change in Control occurs (i) following the date on which the above-described performance- vesting condition for the TSR PSUs is achieved, then the TSR PSUs will become fully vested immediately prior to the closing of such Change in Control, and (ii) following the expiration of the EPS Performance Period but prior to the EPS PSU

Vesting Date, then the EPS PSUs shall vest on the closing of the Change in Control based on the level at which the applicable performance goals are achieved (as described above) so long as the Participant remains in continuous service with the Service Recipient through the date of such Change in Control.

Change in Control Vesting Where Change in Control Occurs Prior to Expiration of Applicable Performance Period (or, for TSR PSUs, Before the Date on Which the Performance Goal Was Achieved)

In the event of a Change in Control prior to the expiration of the EPS Performance Period for the EPS PSUs and prior to the date on which the applicable performance goal is achieved for the TSR PSUs, and the PSUs are assumed in accordance with Section 12(b) of the Plan, the PSUs shall remain outstanding and the Committee shall make such proportionate adjustments, if any, as it deems equitable, to such PSUs, which may include adjustments to the applicable performance measures, in order to prevent any substantial dilution or enlargement of the rights intended to be granted hereunder. In the event of the Participant’s Termination due to death or Disability or a Qualifying Termination following such Change in Control but prior to the expiration of the TSR Performance Period or EPS Performance Period, as applicable, any PSUs that remain unvested as of such date shall become vested in full on the date of such Termination.

If the PSUs are not assumed in connection with a Change in Control, subject to the Participant’s continuous service with the Service Recipient though the date of such Change in Control, the following provisions shall apply:

TSR PSUs: If a Change in Control occurs during the TSR Performance Period and prior to the date on which the above-described performance-vesting condition for the TSR PSUs is achieved, then the TSR Performance Period shall end on the date of the Change in Control and (i) if the sum of (A) the price per share of Common Stock payable in connection with such Change in Control, plus (B) the cumulative value of any dividends paid during the TSR Performance Period through and including the date of the Change in Control equals or exceeds the TSR Target Price, the TSR PSUs shall vest immediately prior to the closing of such Change in Control, and (ii) if sum of (A) the price per share of Common Stock payable in connection with such Change in Control, plus (B) the cumulative value of any dividends paid during the TSR Performance Period through and including the date of the Change in Control is less than the TSR Target Price, all of the TSR PSUs shall automatically be forfeited immediately prior to the closing of such Change in Control.

EPS PSUs: If a Change in Control occurs during the EPS Performance Period, then the above calculation with respect to the EPS PSUs will be conducted as though (i) the last day of the EPS Performance Period was the date of the Change in Control and (ii) the Company’s Adjusted EPS shall be measured based on the last four (4) completed fiscal quarters (or, if there is not four (4) completed fiscal quarters at the time of such Change in Control, then all of the EPS PSUs shall be forfeited upon the consummation of the Change in Control). The number of EPS PSUs, if any, resulting from such calculation shall become vested on the date of the consummation of such Change in Control. Any EPS PSUs that do not vest in accordance with this paragraph shall automatically be forfeited upon the closing of the Change in Control.

Definitions:

“Adjusted EPS” means the Company’s adjusted diluted net income per share, as reported in the Company’s public filings and modified to reflect an effective tax rate (“ETR”) equal to the ETR applied in the determination of the Adjusted EPS Base Amount, as may be equitably adjusted by the Compensation Committee in its reasonable discretion if the Compensation Committee determines such adjustment to be necessary to prevent enlargement or diminution of the benefits or potential benefits intended to be provided pursuant to the Award Agreement.

“Cause” shall have the meaning ascribed to such term in the Participant’s employment agreement with the Company dated as of September 1, 2022.

“EPS Performance Period” means the period beginning on January 1, 2022 and ending on December 31, 2026.

“Grant Date Price” means $46.45, which is the volume weighted average closing price of the Common Stock on the New York Stock Exchange for the 60 trading days immediately preceding the Date of Grant.

“Good Reason” shall have the meaning ascribed to such term in the Participant’s employment agreement with the Company dated as of September 1, 2022.

“TSR Performance Period” means the period beginning on Date of Grant and ending on the fifth anniversary of the Date of Grant.

“Qualifying Termination” means a Termination by the Company without Cause or by the Participant for Good Reason.

* * *

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS PERFORMANCE STOCK UNIT (SPECIAL CEO GRANT) GRANT NOTICE, THE GLOBAL AWARD AGREEMENT (PSUs) AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF PERFORMANCE STOCK UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS PERFORMANCE STOCK UNIT GRANT NOTICE, THE GLOBAL AWARD AGREEMENT (PSUs) AND THE PLAN.

INGERSOLL RAND INC. PARTICIPANT1

/s/ Andrew Schiesl /s/ Vicente Reynal
By: Andrew Schiesl
Title: Senior Vice President, General

Counsel, Chief Compliance

Officer, and Secretary

GLOBAL AWARD AGREEMENT (PSUs)
UNDER THE
INGERSOLL RAND INC.
AMENDED AND RESTATED 2017 OMNIBUS INCENTIVE PLAN

Pursuant to the Performance Stock Unit (Special CEO Grant) Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Global Award Agreement (PSUs) (this “Award Agreement”) and the Ingersoll Rand Inc. Amended and Restated 2017 Omnibus Incentive Plan (the “Plan”), Ingersoll Rand Inc. (the “Company”) and the Participant agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan.

1.Grant of Performance Stock Units. Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Performance Stock Units provided in the Grant Notice (with each Performance Stock Unit representing an unfunded, unsecured right to receive one share of Common Stock) (Performance Stock Units are referred to herein as “Awards”) on the Vesting Date (as defined below).

2.Vesting. Except as otherwise specified in this Award Agreement and the Plan, the Performance Stock Units will vest on the date(s) provided in the Grant Notice (the “Vesting Date”). Any Performance Stock Units which have not vested as of the date of the Participant’s Termination shall thereupon be forfeited immediately and without any further action by the Company.

3.Settlement of Performance Stock Units. The provisions of Section 9(d)(ii) of the Plan are hereby incorporated by reference and made a part hereof; provided, that, in no event will settlement occur more than 60 days following the Vesting Date.

4.Company; Participant.

(a)The term “Company” as used in this Award Agreement with reference to employment shall include the Company and its Subsidiaries.

(b)Whenever the word “Participant” is used in any provision of this Award Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Performance Stock Units may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.

5.Non-Transferability. The Performance Stock Units are not transferable by the Participant except to Permitted Transferees in accordance with applicable laws and Section 14(b) of the Plan. Except as otherwise provided herein, no assignment or transfer of the Performance Stock Units, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Performance Stock Units shall terminate and become of no further effect.

6.No Rights as Stockholder. The Participant or a Permitted Transferee of the Performance Stock Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a Performance Stock Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof.

7.Tax Withholding.

(b)The Participant shall satisfy the maximum income, employment and/or other applicable taxes that are permitted to be withheld with respect to the Performance Stock Units by having the Company

withhold from the shares of Common Stock otherwise issuable or deliverable to, or that would otherwise be retained by, the Participant upon the grant, vesting or settlement of the Award, as applicable, a number of shares of Common Stock with an aggregate Fair Market Value equal to an amount not in excess of such maximum withholding liability (or portion thereof).

(c)The Participant acknowledges that, regardless of any action taken by the Company, or, if different, the Participant’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participants (the “Tax-Related Items”), is and remains the Participant’s responsibility. The Participant further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspects of the Awards, including but not limited to, the grant, vesting or settlement of the Award, as applicable, the subsequent sale of shares of Common Stock acquired under the Plan and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Awards to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

8.Notice. Every notice or other communication relating to this Award Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Company Secretary, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records. Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.

9.No Right to Continued Service. This Award Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Company.

10.Binding Effect. This Award Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

11.Waiver and Amendments. Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Award Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

12.Restrictive Covenants; Clawback/Forfeiture.

(a)The Performance Stock Units granted hereunder shall be subject to Participant’s continued compliance with any restrictive covenants between the Participant and the Company or any of its Affiliates.

(b)Notwithstanding anything to the contrary contained herein or in the Plan, if the Participant has engaged in or engages in any Detrimental Activity, then the Committee may, in its sole discretion, take actions permitted under the Plan, including: (i) cancel the Performance Stock Units; or (ii) require that the Participant forfeit any gain realized on the vesting of the Performance Stock Units and repay such gain to the Company. In addition, if the Participant receives any amount in excess of what the Participant should have received under the terms of this Award Agreement for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), the Participant shall be required to repay any such excess amount to the Company. Without limiting the foregoing, all Performance Stock Units shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with applicable law. “Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of any member of the Company Group; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Service Recipient for Cause; or (iii) a breach by the Participant of any restrictive covenant by which such Participant is bound.

(c)The Participant hereby acknowledges and agrees that the Options are subject to clawback and repayment as set forth in Section 14(v) of the Plan.

13.Language. By electing to accept this Award Agreement, the Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is sufficiently proficient in English so as to allow the Participant, to understand the terms and conditions of this Award Agreement. If the Participant has received this Award Agreement or any other documentation related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

14.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Awards and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

15.Insider Trading/Market-Abuse Laws. The Participant may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the shares of Common Stock are listed and in applicable jurisdictions, including the Participant’s country and the designated broker’s country, which may affect the Participant’s ability to accept, acquire, sell or otherwise dispose of the shares of Common Stock, rights to the shares of Common Stock (i.e., Performance Stock Units) or rights linked to the value of the shares of Common Stock under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited from (i) disclosing inside information to any third party, including fellow employees and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant acknowledges that it is the Participant’s responsibility to comply with any applicable restrictions and the Participant should speak with the Participant’s personal advisor on this matter.

16.Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

17.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan or Participant’s acquisition or sale of shares of Common Stock. The Participant understands and agrees that the Participant should consult with his or her own personal legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.

18.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. Further, the parties hereto shall be entitled to rely on delivery of a facsimile or other electronic copy of this Award Agreement, and delivery by either party of such facsimile or electronic copy shall be legally effective to create a valid and binding agreement between the parties in accordance with the terms hereof.

19.Governing Law and Venue. This Award Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Award Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Award Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.

20.Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Award Agreement (including the Grant Notice), the Plan shall govern and control.

21.Section 409A. It is intended that the Performance Stock Units granted hereunder shall be exempt from Section 409A of the Code pursuant to the “short-term deferral” rule applicable to such section, as set forth in the regulations or other guidance published by the Internal Revenue Service thereunder.

Exhibit 31.1

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Vicente Reynal, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2022 of Ingersoll Rand Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 4, 2022

			/s/ Vicente Reynal
			Vicente Reynal
			Chief Executive Officer and Director
			(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Vikram U. Kini, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2022 of Ingersoll Rand Inc.;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 4, 2022

			/s/ Vikram U. Kini
			Vikram U. Kini
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ingersoll Rand Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vicente Reynal, Chief Executive Officer and Director of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.


Date: November 4, 2022

			/s/ Vicente Reynal
			Vicente Reynal
			Chief Executive Officer and Director
			(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ingersoll Rand Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vikram U. Kini, Vice President and Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.


Date: November 4, 2022

			/s/ Vikram U. Kini
			Vikram U. Kini
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)