Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)

		
X	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the fiscal year ended December 31, 2018
or

		
—	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the transition period from               to           
Commission File No. 001-34400
INGERSOLL-RAND PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)

	
			
Ireland	 	98-0626632	
(State or other jurisdiction of incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
170/175 Lakeview Dr.
Airside Business Park
Swords, Co. Dublin
Ireland
(Address of principal executive offices)
Registrant’s telephone number, including area code: +(353) (0) 18707400
Securities registered pursuant to Section 12(b) of the Act:

			
Title of each class	 	Name of each exchange on which registered	
Ordinary Shares,	 	New York Stock Exchange	
Par Value $1.00 per Share	 	 	
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES    X        NO         
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES              NO   X  
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   X       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   X       NO         
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]
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   X  	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 Act). YES               NO   X  
The aggregate market value of ordinary shares held by nonaffiliates on June 30, 2018 was approximately $ 21.9 billion based on the closing price of such stock on the New York Stock Exchange.
The number of ordinary shares outstanding as of February 1, 2019 was 242,168,631 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement to be filed within 120 days of the close of the registrant’s fiscal year in connection with the registrant’s Annual General Meeting of Shareholders to be held June 6, 2019 are incorporated by reference into Part II and Part III of this Form 10-K.

Table of Contents

INGERSOLL-RAND PLC

Form 10-K
For the Fiscal Year Ended December 31, 2018
TABLE OF CONTENTS

	
				
 	 	 	Page	
Part I	Item 1.	Business	3	
 	 	 	 	
 	Item 1A.	Risk Factors	9	
 	 	 	 	
 	Item 1B.	Unresolved Staff Comments	15	
 	 	 	 	
 	Item 2.	Properties	15	
 	 	 	 	
 	Item 3.	Legal Proceedings	16	
 	 	 	 	
 	Item 4.	Mine Safety Disclosures	17	
 	 	 	 	
Part II	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17	
 	 	 	 	
 	Item 6.	Selected Financial Data	19	
 	 	 	 	
 	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20	
 	 	 	 	
 	Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	35	
 	 	 	 	
 	Item 8.	Financial Statements and Supplementary Data	37	
 	 	 	 	
 	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38	
 	 	 	 	
 	Item 9A.	Controls and Procedures	38	
 	 	 	 	
 	Item 9B.	Other Information	38	
 	 	 	 	
Part III	Item 10.	Directors, Executive Officers and Corporate Governance	39	
 	 	 	 	
 	Item 11.	Executive Compensation	39	
 	 	 	 	
 	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	39	
 	 	 	 	
 	Item 13.	Certain Relationships and Related Transactions, and Director Independence	39	
 	 	 	 	
 	Item 14.	Principal Accountant Fees and Services	39	
 	 	 	 	
Part IV	Item 15.	Exhibits and Financial Statement Schedules	40	
 	 	 	 	
 	Item 16.	Form 10-K Summary	52	
 	 	 	 	
 	Signatures	 	53	

Table of Contents

CAUTIONARY STATEMENT FOR FORWARD LOOKING STATEMENTS
Certain statements in this report, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements.
Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, share or debt repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on our forward-looking statements. You are advised to review any further disclosures we make on related subjects in materials we file with or furnish to the SEC. Forward-looking statements speak only as of the date they are made and are not guarantees of future performance. They are subject to future events, risks and uncertainties - many of which are beyond our control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from our expectations and projections. We do not undertake to update any forward-looking statements.
Factors that might affect our forward-looking statements include, among other things:

•	overall economic, political and business conditions in the markets in which we operate;	
		
•	the demand for our products and services;	
		
•	competitive factors in the industries in which we compete;	
		
•	changes in tax laws and requirements (including tax rate changes, new tax laws, new and/or revised tax law interpretations and any legislation that may limit or eliminate potential tax benefits resulting from our incorporation in a non-U.S. jurisdiction, such as Ireland);	
		
•	trade protection measures such as import or export restrictions and requirements, the imposition of tariffs and quotas or revocation or material modification of trade agreements;	
		
•	the outcome of any litigation, governmental investigations, claims or proceedings;	
		
•	the outcome of any income tax audits or settlements;	
		
•	interest rate fluctuations and other changes in borrowing costs;	
		
•	other capital market conditions, including availability of funding sources;	
		
•	currency exchange rate fluctuations, exchange controls and currency devaluations;	
		
•	availability of and fluctuations in the prices of key commodities;	
		
•	impairment of our goodwill, indefinite-lived intangible assets and/or our long-lived assets;	
		
•	climate change, changes in weather patterns, natural disasters and seasonal fluctuations;	
		
•	the impact of potential information technology or data security breaches; and	
		
•	the strategic acquisition or divestiture of businesses, product lines and joint ventures;	
Some of the significant risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described more fully in Part I, Item 1A “Risk Factors.” You should read that information in conjunction with “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report and our Consolidated Financial Statements and related notes in Part II, Item 8 “Financial Statements and Supplementary Data” of this report. We note such information for investors as permitted by the Private Securities Litigation Reform Act of 1995.

2

Table of Contents

PART I
Item 1.        BUSINESS
Overview
Ingersoll-Rand plc (Plc or Parent Company), a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, we, our, the Company) is a diversified, global company that provides products, services and solutions to enhance the quality, energy efficiency and comfort of air in homes and buildings, transport and protect food and perishables and increase industrial productivity and efficiency. Our business segments consist of Climate and Industrial, both with strong brands and highly differentiated products within their respective markets. We generate revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Ingersoll-Rand ® , Trane ® , Thermo King ® , American Standard ® , ARO ® , and Club Car ® .
To achieve our mission of being a world leader in creating comfortable, sustainable and efficient environments, we continue to focus on growth by increasing our recurring revenue stream from parts, services, controls, used equipment and rentals; and to continuously improve the efficiencies and capabilities of the products and services of our businesses. We also continue to focus on operational excellence strategies as a central theme to improving our earnings and cash flow.
Business Segments
Our business segments provide products, services and solutions used to increase the efficiency and productivity of both industrial and commercial operations and homes, as well as improve the health and comfort of people around the world.
Our business segments are as follows:
Climate
Our Climate segment delivers energy-efficient products and innovative energy services. It includes Trane ® and American Standard ® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage and Nexia; and Thermo King ® transport temperature control solutions. This segment had 2018 net revenues of $ 12,343.8 million .
Industrial
Our Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes compressed air and gas systems and services, power tools, material handling systems, ARO ® fluid management equipment, as well as Club Car ® golf, utility and consumer low-speed vehicles. This segment had 2018 net revenues of $ 3,324.4 million .

3

Table of Contents

Products and Services
Our principal products and services by business segment include the following:

			
Climate	
Aftermarket and OEM parts and supplies	  	Ice energy storage solutions	
Air conditioners	 	Indoor air quality	
Air exchangers	 	Industrial refrigeration	
Air handlers	 	Installation contracting	
Airside and terminal devices	 	Large commercial unitary	
Auxiliary power units	 	Light commercial unitary	
Building management systems	 	Motor replacements	
Bus and rail HVAC systems	 	Multi-pipe HVAC systems	
Chillers	 	Package heating and cooling systems	
Coils and condensers	 	Performance contracting	
Container refrigeration systems and gensets	  	Rail refrigeration systems	
Control systems	  	Refrigerant reclamation	
Cryogenic refrigeration systems	  	Repair and maintenance services	
Diesel-powered refrigeration systems	 	Rental services	
Ductless systems	  	Self-powered truck refrigeration systems	
Energy management services	  	Service agreements	
Facility management services	  	Temporary heating and cooling systems	
Furnaces	  	Thermostats/controls	
Geothermal systems	  	Trailer refrigeration systems	
Heat pumps	  	Transport heater products	
Home automation	  	Unitary systems (light and large)	
Humidifiers	 	Vehicle-powered truck refrigeration systems	
Hybrid and non-diesel transport refrigeration solutions	 	Water source heat pumps	

			
Industrial	
Air treatment and air separation systems	 	Fluid power components	
Aftermarket and OEM parts and supplies	 	Installation contracting	
Aftermarket controls, parts, accessories and consumables	 	Power tools (air, cordless and electric)	
Airends	 	Precision fastening systems	
Blowers	 	Pumps (diaphragm and piston)	
Compressors (centrifugal, reciprocating, and rotary)	 	Rental services	
Dryers	 	Rough terrain (AWD) vehicles	
Engine starting systems	 	Service agreements	
Ergonomic material handling systems	 	Service break/fix	
Filters	 	Utility and consumer low-speed vehicles	
Fluid handling systems	 	Visage® mobile golf information systems	
Golf vehicles	 	Winches (air, electric and hydraulic)	
Hoists (air, electric and manual)	 	 	
These products are sold primarily under our name and under other names including American Standard, ARO, Club Car, Nexia, Thermo King and Trane.
Acquisitions and Equity Investments
In May 2018, we completed our investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi). The joint venture, reported within the Climate segment, focuses on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries.

4

Table of Contents

In January 2018, we acquired 100% of the outstanding stock of ICS Group Holdings Limited (ICS Cool Energy). The acquired business, reported within the Climate segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. It also sells, permanently installs and services high performance temperature control systems for all types of industrial processes.
During 2017, we acquired several businesses, including channel acquisitions, that complement existing products and services. Acquisitions within the Climate segment primarily consisted of independent dealers which support the ongoing strategy to expand our distribution network in North America. Other acquisitions within the segment strengthen our product portfolio. Acquisitions within the Industrial segment primarily consisted of a telematics business which builds upon our growing portfolio of connected assets. In addition, other acquisitions within the segment expand sales and service channels across the globe.
Competitive Conditions
Our products and services are sold in highly competitive markets throughout the world. Due to the diversity of these products and services and the variety of markets served, we encounter a wide variety of competitors that vary by product line and services. They include well-established regional or specialized competitors, as well as larger U.S. and non-U.S. corporations or divisions of larger companies.
The principal methods of competition in these markets relate to price, quality, delivery, service and support, technology and innovation. We believe that we are one of the leading manufacturers in the world of HVAC systems and services, air compression systems, transport temperature control products, power tools, and golf, utility and consumer low-speed vehicles.
Distribution
Our products are distributed by a number of methods, which we believe are appropriate to the type of product. U.S. sales are made through branch sales offices, distributors and dealers across the country. Non-U.S. sales are made through numerous subsidiary sales and service companies with a supporting chain of distributors throughout the world.
Operations by Geographic Area
Approximately 36% of our net revenues in 2018 were derived outside the U.S. and we sold products in more than 100 countries. Therefore, the attendant risks of manufacturing or selling in a particular country, such as currency devaluation, nationalization and establishment of common markets, may have an adverse impact on our non-U.S. operations.
Customers
We have no customer that accounted for more than 10% of our consolidated net revenues in 2018 , 2017 or 2016 . No material part of our business is dependent upon a single customer or a small group of customers; therefore, the loss of any one customer would not have a material adverse effect on our results of operations or cash flows.
Raw Materials
We manufacture many of the components included in our products, which requires us to employ a wide variety of commodities. Principal commodities, such as steel, copper and aluminum, are purchased from a large number of independent sources around the world. We believe that available sources of supply will generally be sufficient for the foreseeable future. There have been no commodity shortages which have had a material adverse effect on our businesses.
Working Capital
We manufacture products that must be readily available to meet our customers’ rapid delivery requirements. Therefore, we maintain an adequate level of working capital to support our business needs and our customers’ requirements. Such working capital requirements are not, however, in the opinion of management, materially different from those experienced by our major competitors. We believe our sales and payment terms are competitive in and appropriate for the markets in which we compete.
Seasonality
Demand for certain of our products and services is influenced by weather conditions. For instance, sales in our commercial and residential HVAC businesses historically tend to be seasonally higher in the second and third quarters of the year because this represents spring and summer in the U.S. and other northern hemisphere markets, which are the peak seasons for sales of air conditioning systems and services. Therefore, results of any quarterly period may not be indicative of expected results for a full year and unusual weather patterns or events could negatively or positively affect certain segments of our business and impact overall results of operations.

5

Table of Contents

Research and Development
We engage in research and development activities in an effort to introduce new products, enhance existing product effectiveness, improve ease of use and reliability as well as expand the various applications for which our products may be appropriate. In addition, we continually evaluate developing technologies in areas that we believe will enhance our business for possible investment or acquisition. We anticipate that we will continue to make significant expenditures for research and development activities as we look to maintain and improve our competitive position.
Patents and Licenses
We own numerous patents and patent applications, and are licensed under others. Although in aggregate we consider our patents and licenses to be valuable to our operations, we do not believe that our business is materially dependent on a single patent or license or any group of them. In our opinion, engineering, production skills and experience are more responsible for our market position than our patents and/or licenses.
Backlog
Our approximate backlog of orders, believed to be firm, at December 31 , was as follows:

									
In millions	 	2018	 	2017	
Climate	 	$	2,914.4		 	$	1,972.4		
Industrial	 	514.8		 	525.6		
Total	 	$	3,429.2		 	$	2,498.0		
These backlog figures are based on orders received. While the major portion of our products are built in advance of order and either shipped or assembled from stock, orders for specialized machinery or specific customer application are submitted with extensive lead times and are often subject to revision and deferral, and to a lesser extent cancellation or termination. We expect to ship a majority of the December 31, 2018 backlog during 2019 .
Environmental Matters
We continue to be dedicated to environmental and sustainability programs to minimize the use of natural resources, and reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, we are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.
We are sometimes a party to environmental lawsuits and claims and have received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. We have also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, our involvement is minimal.
In estimating our liability, we have assumed that we will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based on our understanding of the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.
For a further discussion of our potential environmental liabilities, see Note 20 to the Consolidated Financial Statements.
Asbestos-Related Matters
Certain of our wholly-owned subsidiaries and former companies are named as defendants in asbestos-related lawsuits in state and federal courts. In many of the lawsuits, a large number of other companies have also been named as defendants. The vast majority of those claims allege injury caused by exposure to asbestos contained in certain historical products, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
See also the discussion under Part I, Item 3, "Legal Proceedings," and Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Contingent Liabilities," as well as further detail in Note 20 to the Consolidated Financial Statements.
Employees
As of December 31, 2018 , we employed approximately 49,000 people throughout the world.

6

Table of Contents

Available Information
We file annual, quarterly, and current reports, proxy statements, and other documents with the SEC under the Securities Exchange Act of 1934.
This Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on our Internet website (http://www.ingersollrand.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The Board of Directors of the Company has also adopted and posted in the Investor Relations section of the Company’s website our Corporate Governance Guidelines and charters for each of the Board’s standing committees. The contents of the Company’s website are not incorporated by reference in this report.

7

Table of Contents

Executive Officers of the Registrant
The following is a list of executive officers of the Company as of February 12, 2019 .

					
Name and Age	  	Date of
Service as
an Executive
Officer	 	Principal Occupation and
Other Information for Past Five Years	
Michael W. Lamach (55)	  	2/16/2004	 	Chairman of the Board (since June 2010) and Chief Executive Officer (since February 2010)	
 	 	 	 	 	
Susan K. Carter (60)	 	10/2/2013	  	Senior Vice President and Chief Financial Officer (since October 2013)	
 	 	 	 	 	
David S. Regnery (56)	 	9/5/2017	 	Executive Vice President (since September 2017); Vice President, President of Commercial HVAC, North America and EMEA (2013 to 2017)	
 	 	 	 	 	
Marcia J. Avedon (57)	 	2/7/2007	 	Senior Vice President, Human Resources, Communications and Corporate Affairs (since June 2013); Senior Vice President, Human Resources and Communications (2007 - 2013)	
 	 	 	 	 	
Paul A. Camuti (57)	 	8/1/2011	 	Senior Vice President, Innovation and Chief Technology Officer (since August 2011)	
 	 	 	  	 	
Maria C. Green (66)	 	11/2/2015	 	Senior Vice President and General Counsel (since November 2015); Senior Vice President, General Counsel and Secretary, Illinois Tool Works Inc. (a global manufacturer of a diversified range of industrial products and equipment), (2012-2015)	
 	 	 	 	 	
Keith A. Sultana (49)
	 	10/12/2015
	 	Senior Vice President, Global Operations and Integrated Supply Chain (since October 2015); Vice President, Global Procurement (January 2015 to October 2015); Vice President, Global Integrated Supply Chain (GISC) for Climate Solutions (May 2010 to December 2014)	
 	 	 	 	 	
Christopher J. Kuehn (46)	 	6/1/2015	 	Vice President and Chief Accounting Officer (since June 2015); Vice President, Corporate Controller and Chief Accounting Officer , Whirlpool Corporation (a global manufacturer and marketer of major home appliances), (2012-2015)	
No family relationship exists between any of the above-listed executive officers of the Company. All officers are elected to hold office for one year or until their successors are elected and qualified.

8

Table of Contents

Item 1A .     RISK FACTORS
Our business, financial condition, results of operations, and cash flows are subject to a number of risks that could cause the actual results and conditions to differ materially from those projected in forward-looking statements contained in this Annual Report on Form 10-K. The risks set forth below are those we consider most significant. We face other risks, however, that we do not currently perceive to be material which could cause actual results and conditions to differ materially from our expectations. You should evaluate all risks before you invest in our securities. If any of the risks actually occur, our business, financial condition, results of operations or cash flows could be adversely impacted. In that case, the trading price of our ordinary shares could decline, and you may lose all or part of your investment.
Our global operations subject us to economic risks.
Our global operations are dependent upon products manufactured, purchased and sold in the U.S. and internationally. These activities are subject to risks that are inherent in operating globally, including:

•	changes in local laws and regulations or imposition of currency restrictions and other restraints;	

•	limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings;	

•	sovereign debt crises and currency instability in developed and developing countries;	

•	trade protection measures such as import or export restrictions and requirements, the imposition of burdensome tariffs and quotas or revocation or material modification of trade agreements;	

•	difficulty in staffing and managing global operations;	

•	difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;	

•	national and international conflict, including war, civil disturbances and terrorist acts; and	

•	recessions, economic downturns, slowing economic growth and social and political instability.	
These risks could increase our cost of doing business internationally, increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, limit our ability to sell products in certain markets and have a material adverse impact on our results of operations, financial condition, and cash flows.
We face significant competition in the markets that we serve and our growth is dependent, in part, on the development, commercialization and acceptance of new products and services.
The markets that we serve are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. There has been consolidation and new entrants (including non-traditional competitors) within our industries and there may be future consolidation and new entrants which could result in increased competition and significantly alter the dynamics of the competitive landscape in which we operate. Due to our global footprint we are competing worldwide with large companies and with smaller, local operators who may have customer, regulatory or economic advantages in the geographies in which they are located. In addition, some of our competitors may employ pricing and other strategies that are not traditional.
In addition, we must develop and commercialize new products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business. The development and commercialization of new products and services require a significant investment of resources and an anticipation of the impact of new technologies and the ability to compete with others who may have superior resources. We cannot provide any assurance that any new product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new product or service will be accepted by our current and future markets.  Failure to develop new products and services that are accepted by these markets could have a material adverse impact on our competitive position, results of operations, financial condition, and cash flows.
The capital and credit markets are important to our business.
Instability in U.S. and global capital and credit markets, including market disruptions, limited liquidity and interest rate volatility, or reductions in the credit ratings assigned to us by independent rating agencies could reduce our access to capital markets or increase the cost of funding our short and long term credit requirements. In particular, if we are unable to access capital and credit markets on terms that are acceptable to us, we may not be able to make certain investments or fully execute our business plans and strategies.
Our suppliers and customers are also dependent upon the capital and credit markets. Limitations on the ability of customers, suppliers or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to

9

Table of Contents

insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of our products and services and cause delays in the delivery of key products from suppliers.
Currency exchange rate fluctuations and other related risks may adversely affect our results.
We are exposed to a variety of market risks, including the effects of changes in currency exchange rates. See Part II Item 7A, "Quantitative and Qualitative Disclosure About Market Risk."
We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
Many of our non-U.S. operations have a functional currency other than the U.S. dollar, and their results are translated into U.S. dollars for reporting purposes. Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency.
We use derivative instruments to hedge those material exposures that cannot be naturally offset. The instruments utilized are viewed as risk management tools, involve little complexity and are not used for trading or speculative purposes. To minimize the risk of counter party non-performance, derivative instrument agreements are made only through major financial institutions with significant experience in such derivative instruments.
We also face risks arising from the imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation.
Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operations or financial condition.
We are currently and may in the future become involved in legal proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities. Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects and asbestos-related matters) that cannot be predicted with certainty. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against the total aggregate amount of losses sustained as a result of such proceedings and contingencies. As required by generally accepted accounting principles in the United States, we establish reserves based on our assessment of contingencies. Subsequent developments in legal proceedings and other events could affect our assessment and estimates of the loss contingency recorded as a reserve and we may be required to make additional material payments, which could have a material adverse impact on our liquidity, results of operations, financial condition, and cash flows.
Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents or business partners.
We are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-bribery, export and import compliance, anti-trust and money laundering, due to our global operations. We cannot provide assurance our internal controls will always protect us from the improper conduct of our employees, agents and business partners. Any violations of law or improper conduct could damage our reputation and, depending on the circumstances, subject us to, among other things, civil and criminal penalties, material fines, equitable remedies (including profit disgorgement and injunctions on future conduct), securities litigation and a general loss of investor confidence, any one of which could have a material adverse impact on our business prospects, financial condition, results of operations, cash flows, and the market value of our stock.
We may be subject to risks relating to our information technology systems.
We rely extensively on information technology systems, some of which are supported by third party vendors including cloud services, to manage and operate our business. We are also investing in new information technology systems that are designed to continue improving our operations. If these systems cease to function properly, if these systems experience security breaches or disruptions or if these systems do not provide the anticipated benefits, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.

10

Table of Contents

Security breaches or disruptions of our technology systems, infrastructure or products could negatively impact our business and financial results.
Our information technology systems, networks and infrastructure and technology embedded in certain of our control products may be subject to cyber attacks and unauthorized security intrusions. It is possible for such vulnerabilities to remain undetected for an extended period. Like other large companies, certain of our information technology systems have been subject to computer viruses, malicious codes, unauthorized access, phishing efforts, denial-of-service attacks and other cyber attacks and we expect to be subject to similar attacks in the future. The methods used to obtain unauthorized access, disable or degrade service, or sabotage systems are constantly changing and evolving. Despite having instituted security policies and business continuity plans, and implementing and regularly reviewing and updating processes and procedures to protect against unauthorized access, the ever-evolving threats mean we must continually evaluate and adapt our systems and processes, and there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data. Hardware, software or applications we develop or obtain from third parties may contain defects in design or manufacture or other problems that could unexpectedly result in security breaches or disruptions. Our systems, networks and certain of our control products may also be vulnerable to system damage, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events. Any of these incidents could cause significant harm to our business by negatively impacting our business operations, compromising the security of our proprietary information or the personally identifiable data relating to our customers, employees and business partners and exposing us to litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities. Such events could have a material adverse impact on our results of operations, financial condition and cash flows and could damage our reputation which could adversely affect our business. Our insurance coverage may not be adequate to cover all the costs related to a cybersecurity attack or disruptions resulting from such attacks. Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. In addition, data privacy and protection laws are evolving and present increasing compliance challenges, which increase our costs, affect our competitiveness and can expose us to substantial fines or other penalties.
Commodity shortages and price increases could adversely affect our financial results.
We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, required for the manufacture of our products. A disruption in deliveries from our suppliers or decreased availability of commodities could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. We believe that available sources of supply will generally be sufficient for our needs for the foreseeable future. Nonetheless, the unavailability of some commodities could have a material adverse impact on our results of operations and cash flows.
Volatility in the prices of these commodities or the impact of inflationary increases could increase the costs of our products and services. We may not be able to pass on these costs to our customers and this could have a material adverse impact on our results of operations and cash flows. Conversely, in the event there is deflation, we may experience pressure from our customers to reduce prices. There can be no assurance that we would be able to reduce our costs (through negotiations with suppliers or other measures) to offset any such price concessions which could adversely impact results of operations and cash flows. While we may use financial derivatives or supplier price locks to hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and could experience lower margins in periods of declining commodity prices. In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases.
Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality. If these suppliers encounter financial or operating difficulties, we might not be able to quickly establish or qualify replacement sources of supply.
We may be required to recognize impairment charges for our goodwill and other indefinite-lived intangible assets.
At December 31, 2018 , the net carrying value of our goodwill and other indefinite-lived intangible assets totaled $ 6.0 billion and $ 2.7 billion , respectively. In accordance with generally accepted accounting principles, we periodically assess these assets to determine if they are impaired. Significant negative industry or economic trends, disruptions to our business, unexpected significant changes or planned changes in use of the assets, divestitures and sustained market capitalization declines may result in recognition of impairments to goodwill or other indefinite-lived assets. Any charges relating to such impairments could have a material adverse impact on our results of operations in the periods recognized.
Global climate change and related regulations could negatively affect our business.
Refrigerants are essential to many of our products and there is a growing awareness and concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies are being considered to curtail their use. As regulations reduce the use of the current class of widely used refrigerants, our next generation solutions are being adopted globally, with sales in 32 countries to date. Our climate commitment requires us to fully transition out of current refrigerants

11

Table of Contents

by 2030 without compromising safety or energy efficiency. Additionally, we committed to increase energy efficiency and reduce the greenhouse gas footprint of our operations by 35 percent by 2020, which we achieved in 2018, two years early. While we are committed to pursuing these sustainable solutions, there can be no assurance that our commitments will be successful, that our products will be accepted by the market, that proposed regulation or deregulation will not have a negative competitive impact or that economic returns will match the investment that we are making in new product development.
Concerns regarding global climate change have resulted in the Kigali amendment to the Montreal Protocol, pursuant to which countries have agreed to a scheduled phase down of certain high global warming potential refrigerants. Industrial countries may pass regulations that are even more restrictive than these international accords. Some countries, including the U.S., have not yet ratified the amendment and there could be lower customer demand for next generation products in these countries. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty. In addition, the U.S. withdrawal from the Paris Accord could affect our competitiveness in certain markets. Such regulatory uncertainty extends to future incentives for energy efficient buildings and vehicles and costs of compliance, which may impact the demand for our products, obsolescence of our products and our results of operations.
Natural disasters or other unexpected events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.
The occurrence of one or more unexpected events, including hurricanes, fires, earthquakes, floods and other forms of severe weather in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance. Natural disasters, power outages or other unexpected events could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions or by impacting the availability and cost of materials needed for manufacturing. Existing insurance arrangements may not provide full protection for the costs that may arise from such events, particularly if such events are catastrophic in nature or occur in combination. The occurrence of any of these events could increase our insurance and other operating costs.
Some of the markets in which we operate are cyclical and seasonal and demand for our products and services could be adversely affected by downturns in these industries.
Demand for most of our products and services depends on the level of new capital investment and planned maintenance expenditures by our customers. The level of capital expenditures by our customers fluctuates based on planned expansions, new builds, repairs, commodity prices, general economic conditions, availability of credit, inflation, interest rates, market forecasts, tax and regulatory developments, trade policies, fiscal spending and sociopolitcal factors among others.
Our commercial and residential HVAC businesses provide products and services to a wide range of markets, including significant sales to the commercial and residential construction markets. Weakness in either or both of these construction markets may negatively impact the demand for our products and services.
Demand for our commercial and residential HVAC business is also influenced by weather conditions. For instance, sales in our commercial and residential HVAC businesses historically tend to be seasonally higher in the second and third quarters of the year because, in the U.S. and other northern hemisphere markets, spring and summer are the peak seasons for sales of air conditioning systems and services. The results of any quarterly period may not be indicative of expected results for a full year and unusual weather patterns or events could negatively or positively affect our business and impact overall results of operations.
The business of many of our industrial customers, particularly oil and gas companies are to varying degrees cyclical and have experienced periodic downturns. During such economic downturns, customers in these industries historically have tended to delay major capital projects, maintenance projects and upgrades.
Decrease in the demand for our products and services could have a material adverse impact on our results of operations and cash flow.

12

Table of Contents

Our business strategy includes acquiring companies, product lines, plants and assets, entering into joint ventures and making investments that complement our existing businesses. We also occasionally divest businesses that we own. We may not identify acquisition or joint venture candidates at the same rate as the past. Acquisitions, dispositions, joint ventures and investments that we identify could be unsuccessful or consume significant resources, which could adversely affect our operating results.
We continue to analyze and evaluate the acquisition and divestiture of strategic businesses and product lines, technologies and capabilities, plants and assets, joint ventures and investments with the potential to strengthen our industry position, to enhance our existing set of product and services offerings, to increase productivity and efficiencies, to grow revenues, earnings and cash flow, to help us stay competitive or to reduce costs. There can be no assurance that we will identify or successfully complete transactions with suitable candidates in the future, that we will consummate these transactions at rates similar to the past or that completed transactions will be successful. Strategic transactions may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. Such transactions involve numerous other risks, including:

•	diversion of management time and attention from daily operations;	

•	difficulties integrating acquired businesses, technologies and personnel into our business;	

•	difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;	

•	inability to obtain required regulatory approvals and/or required financing on favorable terms;	

•	potential loss of key employees, key contractual relationships or key customers of either acquired businesses or our business;	

•	assumption of the liabilities and exposure to unforeseen or undisclosed liabilities of acquired businesses and exposure to regulatory sanctions;	

•	inheriting internal control deficiencies;	

•	dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities; and	

•	in the case of joint ventures and other investments, interests that diverge from those of our partners without the ability to direct the management and operations of the joint venture or investment in the manner we believe most appropriate to achieve the expected value.	
It may be difficult for us to complete transactions quickly without high costs and to integrate acquired operations efficiently into our business operations. Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations and cash flows.
Our operations are subject to regulatory risks.
Our U.S. and non-U.S. operations are subject to a number of laws and regulations, including among others, laws related to the environment and health and safety. We have made, and will be required to continue to make, significant expenditures to comply with these laws and regulations. Any violations of applicable laws and regulations could lead to significant penalties, fines or other sanctions. Changes in current laws and regulations could require us to increase our compliance expenditures, cause us to significantly alter or discontinue offering existing products and services or cause us to develop new products and services. Altering current products and services or developing new products and services to comply with changes in the applicable laws and regulations could require significant research and development investments, increase the cost of providing the products and services and adversely affect the demand for our products and services. The U.S. federal government and various states and municipalities have enacted or may enact legislation intended to deny government contracts to U.S. companies that reincorporate outside of the U.S. or have reincorporated outside of the U.S or may take other actions negatively impacting such companies. If we are unable to effectively respond to changes to applicable laws and regulations, interpretations of applicable laws and regulations, or comply with existing and future laws and regulations, our competitive position, results of operations, financial condition and cash flows could be materially adversely impacted.
Risks Relating to Our Operations and Corporate Structure
Our corporate structure has resulted from prior corporate reorganizations and related transactions. These various transactions exposed us and our shareholders to the risks described below. In addition, we cannot be assured that all of the anticipated benefits of our operations and corporate structure will be realized.

13

Table of Contents

Changes in tax or other laws, regulations or treaties, including the enactment of the U.S. Tax Cuts and Jobs Act, changes in our status under U.S. or non-U.S. laws or adverse determinations by taxing or other governmental authorities could increase our tax burden or otherwise affect our financial condition or operating results, as well as subject our shareholders to additional taxes.
The realization of any tax benefit related to our operations and corporate structure could be impacted by changes in tax or other laws, treaties or regulations or the interpretation or enforcement thereof by the U.S. or non-U.S. tax or other governmental authorities. Enacted comprehensive tax reform legislation in December 2017 known as the Tax Cuts and Jobs Act (the Act) made broad and complex changes to the U.S. tax code. As part of the migration from a worldwide system of taxation to a modified territorial system for corporations, the Act imposed a transition tax on certain unrepatriated earnings of non-U.S. subsidiaries. We recorded certain charges and benefits in connection with the Act and have taken a charge in connection with the mandatory deemed repatriation of earnings of certain of our Non-U.S. subsidiaries, and we have recorded other charges and benefits, set forth in greater detail in Note 16 to the Consolidated Financial Statements. Any additional impacts from the Act will be determined as the U.S. Department of Treasury and/or the IRS continue to release proposed and final guidance on certain relevant provisions of the Act which should provide better clarity regarding the interpretation, interaction and application of these rules; the new law’s substantial limitations on, and/or elimination of, certain tax deductions and the introduction of new taxing provisions, among other items, may increase our overall tax burden or otherwise negatively impact the Company. Moreover, our overall tax burden may also be adversely impacted by any tax law changes implemented by other countries.
Notwithstanding this change in U.S. tax law, we continue to monitor for other tax changes, U.S. and non-U.S. related. From time to time, proposals have been made and/or legislation has been introduced to change the tax laws, regulations or interpretations thereof of various jurisdictions or limit tax treaty benefits that if enacted or implemented could materially increase our tax burden and/or effective tax rate and could have a material adverse impact on our financial condition and results of operations. Moreover, the Organisation for Economic Co-operation and Development has released proposals to create an agreed set of international rules for fighting base erosion and profit shifting, such that tax laws in countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely impact us. Finally, the European Commission has been very active in investigating whether various tax regimes or private tax rulings provided by a country to particular taxpayers may constitute State Aid. We cannot predict the outcome of any of these potential changes or investigations in any of the jurisdictions, but if any of the above occurs and impacts us, this could materially increase our tax burden and/or effective tax rate and could have a material adverse impact on our financial condition and results of operations.
While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a going forward basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect. In particular, any changes and/or differing interpretations of applicable tax law that have the effect of disregarding the shareholders' decision to reorganize in Ireland, limiting our ability to take advantage of tax treaties between jurisdictions, modifying or eliminating the deductibility of various currently deductible payments, or increasing the tax burden of operating or being resident in a particular country, could subject us to increased taxation.
In addition, tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which we operate. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against us. If the ultimate result of these audits differ from our original or adjusted estimates, they could have a material impact on our tax provision.
Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.
The United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on U.S. federal or state civil liability laws, including the civil liability provisions of the U.S. federal or state securities laws, or hear actions against us or those persons based on those laws.
As an Irish company, we are governed by the Irish Companies Act, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, differences relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States.

14

Table of Contents

In addition, Irish law allows shareholders to authorize share capital which then can be issued by a board of directors without shareholder approval. Also, subject to specified exceptions, Irish law grants statutory pre-emptive rights to existing shareholders to subscribe for new issuances of shares for cash, but allows shareholders to authorize the waiver of the statutory pre-emptive rights with respect to any particular allotment of shares. Under Irish law, we must have authority from our shareholders to issue any shares, including shares that are part of the Company’s authorized but unissued share capital. In addition, unless otherwise authorized by its shareholders, when an Irish company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders on a pro-rata basis. If we are unable to obtain these authorizations from our shareholders, or are otherwise limited by the terms of our authorizations, our ability to issue shares or otherwise raise capital could be adversely affected.
Dividends received by our shareholders may be subject to Irish dividend withholding tax.
In certain circumstances, we are required to deduct Irish dividend withholding tax (currently at the rate of 20%) from dividends paid to our shareholders. In the majority of cases, shareholders resident in the United States will not be subject to Irish withholding tax, and shareholders resident in a number of other countries will not be subject to Irish withholding tax provided that they complete certain Irish dividend withholding tax forms. However, some shareholders may be subject to withholding tax, which could have an adverse impact on the price of our shares.
Dividends received by our shareholders could be subject to Irish income tax.
Dividends paid in respect of our shares will generally not be subject to Irish income tax where the beneficial owner of these dividends is exempt from dividend withholding tax, unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Ingersoll-Rand plc.
Our shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability to Irish income tax on the dividends unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Ingersoll-Rand plc.
Item 1B.      UNRESOLVED STAFF COMMENTS
None.
Item 2.      PROPERTIES
As of December 31, 2018 , we owned or leased a total of approximately 32 million square feet of space worldwide. Manufacturing and assembly operations are conducted in 52 plants across the world. We also maintain various warehouses, offices and repair centers throughout the world. The majority of our plant facilities are owned by us with the remainder under long-term lease arrangements. We believe that our plants have been well maintained, are generally in good condition and are suitable for the conduct of our business.

15

Table of Contents

The locations by segment of our principal plant facilities at December 31, 2018 were as follows:

					
Climate	
Americas	 	Europe and Middle East	 	Asia Pacific and India	
Arecibo, Puerto Rico	 	Barcelona, Spain	 	Bangkok, Thailand	
Charlotte, North Carolina	 	Bari, Italy	 	Penang, Malaysia	
Clarksville, Tennessee	 	Charmes, France	 	Taicang, China	
Columbia, South Carolina	 	Essen, Germany	 	Zhongshan, China	
Curitiba, Brazil	 	Galway, Ireland	 	 	
Fairlawn, New Jersey	 	Golbey, France	 	 	
Fort Smith, Arkansas	 	King Abdullah Economic City, Saudi Arabia	 	 	
Grand Rapids, Michigan	 	Kolin, Czech Republic	 	 	
Hastings, Nebraska	 	 	 	 	
La Crosse, Wisconsin	 	 	 	 	
Lexington, Kentucky	 	 	 	 	
Lynn Haven, Florida	 	 	 	 	
Monterrey, Mexico	 	 	 	 	
Pueblo, Colorado	 	 	 	 	
Rushville, Indiana	 	 	 	 	
St. Paul, Minnesota	 	 	 	 	
Trenton, New Jersey	 	 	 	 	
Tyler, Texas	 	 	 	 	
Vidalia, Georgia	 	 	 	 	
Waco, Texas	 	 	 	 	

					
Industrial	
Americas	 	Europe and Middle East	 	Asia Pacific and India	
Augusta, Georgia	 	Fogliano Redipuglia, Italy	 	Changzhou, China	
Buffalo, New York	 	Logatec, Slovenia	 	Guilin, China	
Campbellsville, Kentucky	 	Oberhausen, Germany	 	Naroda, India	
Dorval, Canada	 	Sin le Noble, France	 	Sahibabad, India	
Kent, Washington	 	Vignate, Italy	 	Wujiang, China	
Mocksville, North Carolina	 	Wasquehal, France	 	 	
Sarasota, Florida	 	 	 	 	
Southern Pines, North Carolina	 	 	 	 	
West Chester, Pennsylvania	 	 	 	 	
Item 3.  LEGAL PROCEEDINGS
In the normal course of business, we are involved in a variety of lawsuits, claims and legal proceedings, including commercial and contract disputes, employment matters, product liability and product defect claims, asbestos-related claims, environmental liabilities, intellectual property disputes, and tax-related matters. In our opinion, pending legal matters are not expected to have a material adverse impact on our results of operations, financial condition, liquidity or cash flows.
Asbestos-Related Matters
Certain of our wholly-owned subsidiaries and former companies are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims allege injury caused by exposure to asbestos contained in certain historical products, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
See also the discussion under Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," "Contingent Liabilities," and also Note 20 to the Consolidated Financial Statements.

16

Table of Contents

Item 4.  MINE SAFETY DISCLOSURES

Not applicable.
PART II
 
Item 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Information regarding the principal market for our ordinary shares and related shareholder matters is as follows:
Our ordinary shares are traded on the New York Stock Exchange under the symbol IR. As of February 1, 2019 , the approximate number of record holders of ordinary shares was 2,931 .
Issuer Purchases of Equity Securities
The following table provides information with respect to purchases by us of our ordinary shares during the quarter ended December 31, 2018 :

															
Period	 	Total number of shares purchased (000's) (a) (b)	 	Average price paid per share (a) (b)	 	Total number of shares purchased as part of program (000's) (a)	 	Approximate dollar value of shares still available to be purchased under the program ($000's) (a)	
October 1 - October 31	 	840.8		 	$	94.54		 	840.3		 	$	306,617		
November 1 - November 30	 	2,542.6		 	100.88		 	2,542.6		 	$	50,118		
December 1 - December 31	 	485.4		 	103.60		 	484.0		 	$	—		
Total	 	3,868.8		 	$	99.84		 	3,866.9		 	 	
(a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (the 2017 Authorization) upon completion of the prior authorized share repurchase program. Repurchases under the 2017 Authorization began in May 2017 and ended in December 2018, completing the program. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares upon completion of the 2017 Authorization. The authorized shares under the new share repurchase program are not included in the approximate dollar value of shares still available to be purchased in the table above.
(b) We may also reacquire shares outside of the repurchase program from time to time in connection with the surrender of shares to cover taxes on vesting of share based awards. We reacquired 456 shares in October and 1,425 shares in December in transactions outside the repurchase programs.

17

Table of Contents

Performance Graph
The following graph compares the cumulative total shareholder return on our ordinary shares with the cumulative total return on (i) the Standard & Poor’s 500 Stock Index and (ii) the Standard & Poor’s 500 Industrial Index for the five years ended December 31, 2018 . The graph assumes an investment of $100 in our ordinary shares, the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 Industrial Index on December 31, 2013 and assumes the reinvestment of dividends.

	
							
Company/Index	2013	2014	2015	2016	2017	2018	
Ingersoll Rand	100	105	93	129	156	163	
S&P 500	100	114	115	129	157	150	
S&P 500 Industrials Index	100	110	107	127	154	133	

18

Table of Contents

Item 6.      SELECTED FINANCIAL DATA
In millions, except per share amounts:

																					
At and for the years ended December 31,	 	2018	 	2017	 	2016	 	2015	 	2014	
 	 	 	 	 	 	 	 	 	 	 	
Net revenues	 	$	15,668.2		 	$	14,197.6		 	$	13,508.9		 	$	13,300.7		 	$	12,891.4		
 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	1,359.1		 	1,328.0		 	1,443.3		 	688.9		 	897.0		
Discontinued operations	 	(21.5	)	 	(25.4	)	 	32.9		 	(24.3	)	 	34.7		
 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	17,914.9		 	18,173.3		 	17,397.4		 	16,717.6		 	17,274.6		
 	 	 	 	 	 	 	 	 	 	 	
Total debt	 	4,091.3		 	4,064.0		 	4,070.2		 	4,217.8		 	4,200.5		
 	 	 	 	 	 	 	 	 	 	 	
Total Ingersoll-Rand plc shareholders’ equity	 	7,022.7		 	7,140.3		 	6,643.8		 	5,816.7		 	5,987.4		
 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	 	 	 	 	
Basic:	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	5.50		 	$	5.21		 	$	5.57		 	$	2.60		 	$	3.32		
Discontinued operations	 	(0.09	)	 	(0.10	)	 	0.13		 	(0.09	)	 	0.12		
 	 	 	 	 	 	 	 	 	 	 	
Diluted:	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	5.43		 	$	5.14		 	$	5.52		 	$	2.57		 	$	3.27		
Discontinued operations	 	(0.08	)	 	(0.09	)	 	0.13		 	(0.09	)	 	0.13		
 	 	 	 	 	 	 	 	 	 	 	
Dividends declared per ordinary share	 	$	1.96		 	$	1.70		 	$	1.36		 	$	1.16		 	$	1.00		

19

Table of Contents

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Item 1A. Risk Factors in this Annual Report on Form 10-K. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, which appears elsewhere in this Annual Report.
Overview
Organization
We are a diversified, global company that provides products, services and solutions to enhance the quality, energy efficiency and comfort of air in homes and buildings, transport and protect food and perishables and increase industrial productivity and efficiency. Our business segments consist of Climate and Industrial, both with strong brands and highly differentiated products within their respective markets. We generate revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Ingersoll-Rand ® , Trane ® , Thermo King ® , American Standard ® , ARO ® , and Club Car ® .
To achieve our mission of being a world leader in creating comfortable, sustainable and efficient environments, we continue to focus on growth by increasing our recurring revenue stream from parts, service, controls, used equipment and rentals; and to continuously improve the efficiencies and capabilities of the products and services of our businesses. We also continue to focus on operational excellence strategies as a central theme to improving our earnings and cash flows.
Trends and Economic Events
We are a global corporation with worldwide operations. As a global business, our operations are affected by worldwide, regional and industry-specific economic factors, as well as political factors, wherever we operate or do business. Our geographic and industry diversity, and the breadth of our product and services portfolios, have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.
Given the broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the Company. We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. We regularly perform detailed evaluations of the different market segments we are serving to proactively detect trends and to adapt our strategies accordingly. In addition, we believe our order rates are indicative of future revenue and thus a key measure of anticipated performance. In those industry segments where we are a capital equipment provider, revenues depend on the capital expenditure budgets and spending patterns of our customers, who may delay or accelerate purchases in reaction to changes in their businesses and in the economy.
Current economic conditions are showing positive trends in each of the segments in which we participate. Heating, Ventilation, and Air Conditioning (HVAC) equipment replacement, services, controls and aftermarket continue to experience strong demand. In addition, Residential and Commercial markets have seen continued momentum in the United States, positively impacting the results of our HVAC businesses. Global Industrial markets remain largely supportive of continued growth in both equipment and services. While geopolitical uncertainty exists in markets such as Europe, Asia and Latin America, we are confident we will continue our strong performance globally. In 2019, we expect positive growth in both our Climate and Industrial segments, each benefiting from operational excellence initiatives, new product launches and continued productivity programs.
We believe we have a solid foundation of global brands that are highly differentiated in all of our major product lines. Our growing geographic and industry diversity coupled with our large installed product base provides growth opportunities within our service, parts and replacement revenue streams. In addition, we are investing substantial resources to innovate and develop new products and services which we expect will drive our future growth.
Significant Events
Acquisitions and Equity Investments
We continue to be active with strategic acquisitions and investments. During 2018, acquisitions and equity method investments, net of cash acquired totaled $285.2 million. Related amounts in 2017 and 2016 were $157.6 million and $9.2 million, respectively.
In May 2018, we completed our investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi). The joint venture, reported within the Climate segment, focuses on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries.

20

Table of Contents

In January 2018, we acquired 100% of the outstanding stock of ICS Group Holdings Limited (ICS Cool Energy). The acquired business, reported within the Climate segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. It also sells, permanently installs and services high performance temperature control systems for all types of industrial processes.
During 2017, we acquired several businesses, including channel acquisitions, that complement existing products and services. Acquisitions within the Climate segment primarily consisted of independent dealers which support the ongoing strategy to expand our distribution network in North America. Other acquisitions within the segment strengthen our product portfolio. Acquisitions within the Industrial segment primarily consisted of a telematics business which builds upon our growing portfolio of connected assets. In addition, other acquisitions within the segment expand sales and service channels across the globe.
On February 6, 2019, we entered into a final, binding and irrevocable offer letter with Silver II GP Holdings S.C.A., an affiliate of BC Partners Advisors L.P. and The Carlyle Group (the Seller) pursuant to which we made a binding offer to acquire the precision flow systems management business (the Business) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). The Business is a manufacturer of precision flow control equipment including electric diaphragm pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer is subject to completion of information and consultation processes with employee representative bodies of the Business in applicable jurisdictions. If the offer is accepted, completion of the Acquisition would be subject to customary closing conditions and expected to close mid-year 2019 subject to regulatory approvals. The results of the Business will be included in our consolidated financial statements as of the date of acquisition and reported within the Industrial segment.
Share Repurchase Program and Dividends
Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (the 2017 Authorization) upon completion of the prior authorized share repurchase program. Repurchases under the 2017 Authorization began in May 2017 and ended in December 2018, completing the program. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares upon completion of the 2017 Authorization. However, no material amounts were repurchased under this program during 2018.
In June 2018, we announced an increase in our quarterly share dividend from $0.45 to $0.53 per ordinary share. This reflects an 18% increase that began with our September 2018 payment and an 83% increase since the beginning of 2016.
Issuance and Redemption of Senior Notes
In February 2018, we issued $1.15 billion principal amount of senior notes in three tranches through an indirect, wholly-owned subsidiary. The tranches consist of $300 million aggregate principal amount of 2.900% senior notes due 2021, $550 million aggregate principal amount of 3.750% senior notes due 2028 and $300 million aggregate principal amount of 4.300% senior notes due 2048. In March 2018, we used the proceeds to fund the redemption of $750 million aggregate principal amount of 6.875% senior notes due 2018 and $350 million aggregate principal amount of 2.875% senior notes due 2019, with the remainder used for general corporate purposes.
Tax Cuts and Job Act
In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the Act) which made widespread changes to the Internal Revenue Code. The Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a transition tax on earnings of certain foreign subsidiaries that were previously not subject to U.S. tax and creates new income taxes on certain foreign sourced earnings. The SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provided guidance on accounting for the tax effects of the Act and allowed for adjustments to provisional amounts during a measurement period of up to one year.  In accordance with SAB 118, we made reasonable estimates related to (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. As a result, we recognized a net provisional income tax benefit of $21.0 million associated with these items in the fourth quarter of 2017. We completed the accounting for the income tax effects of the Act during 2018 and recorded $9.0 million of net measurement period adjustments as a component of Provision for income taxes during the year to increase the net provisional income tax benefit recorded as of December 31, 2017.
Sale of Hussmann Equity Investment
During 2011, we completed the sale of a controlling interest of our Hussmann refrigerated display case business (Hussmann) to a newly-formed affiliate of private equity firm Clayton Dubilier & Rice, LLC (CD&R).  Per the terms of the agreement, CD&R’s ownership interest in Hussmann at the acquisition date was 60% with the remaining 40% being retained by us. As a result, we accounted for our interest in Hussmann using the equity method of accounting.

21

Table of Contents

On December 21, 2015, we announced we would sell our remaining equity interest in Hussmann as part of a transaction in which Panasonic Corporation would acquire 100 percent of Hussmann's outstanding shares. The transaction was completed on April 1, 2016. We received net proceeds of $422.5 million for our interest and recognized a gain of $397.8 million on the sale.
Results of Operations
Our Climate segment delivers energy-efficient products and innovative energy services. It includes Trane ® and American Standard ® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage and Nexia; and Thermo King ® transport temperature control solutions.
Our Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes compressed air and gas systems and services, power tools, material handling systems, ARO ® fluid management equipment, as well as Club Car ® golf, utility and consumer low-speed vehicles.
Segment operating income is the measure of profit and loss that our chief operating decision maker uses to evaluate the financial performance of the business and as the basis for performance reviews, compensation and resource allocation. For these reasons, we believe that Segment operating income represents the most relevant measure of segment profit and loss. We define Segment operating margin as Segment operating income as a percentage of Net revenues .
On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers" (ASC 606), which created a comprehensive, five-step model for revenue recognition that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. We adopted this standard on January 1, 2018 using the modified retrospective approach and recorded a cumulative effect adjustment to increase Retained earnings by $2.4 million . Related amounts did not materially impact Net revenues ,  Operating income  or the Balance Sheet.
On January 1, 2017, we adopted Accounting Standards Update (ASU) No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" (ASU 2016-09) which simplified several aspects of the accounting for employee share-based payment transactions. The standard made several modifications to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, ASU 2016-09 clarified the statement of cash flows presentation for certain components of share-based awards. We applied the cash flow presentation requirements retrospectively.
On January 1, 2017, we adopted ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07) which required a company to present the service cost component of net periodic benefit cost in the same income statement line as other employee compensation costs with the remaining components of net periodic benefit cost presented separately from the service cost component and outside of any subtotal of operating income. We applied the presentation requirements retrospectively.
Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017

																	
Dollar amounts in millions	 	2018	 	2017	 	Period Change	 	2018
 % of Revenues	 	2017
 % of Revenues	
Net revenues	 	$	15,668.2		 	$	14,197.6		 	$	1,470.6		 	 	 	 	
Cost of goods sold	 	(10,847.6	)	 	(9,811.6	)	 	(1,036.0	)	 	69.2%	 	69.1%	
Selling and administrative expenses	 	(2,903.2	)	 	(2,720.7	)	 	(182.5	)	 	18.5%	 	19.2%	
Operating income	 	1,917.4		 	1,665.3		 	252.1		 	12.2%	 	11.7%	
Interest expense	 	(220.7	)	 	(215.8	)	 	(4.9	)	 	 	 	 	
Other income/(expense), net	 	(36.4	)	 	(31.6	)	 	(4.8	)	 	 	 	 	
Earnings before income taxes	 	1,660.3		 	1,417.9		 	242.4		 	 	 	 	
Provision for income taxes	 	(281.3	)	 	(80.2	)	 	(201.1	)	 	 	 	 	
Earnings from continuing operations	 	1,379.0		 	1,337.7		 	41.3		 	 	 	 	
Discontinued operations, net of tax	 	(21.5	)	 	(25.4	)	 	3.9		 	 	 	 	
Net earnings	 	$	1,357.5		 	$	1,312.3		 	$	45.2		 	 	 	 	
Net Revenues

22

Table of Contents

Net revenues for the year ended December 31, 2018 increased by 10.4% , or $1,470.6 million , compared with the same period of 2017 . The components of the period change are as follows:

			
Volume/product mix	7.3	%	
Acquisitions	1.1	%	
Pricing	1.6	%	
Currency translation	0.4	%	
Total	10.4	%	
The increase was primarily driven by higher volumes in both our Climate and Industrial segments. Improved pricing, along with incremental revenues from acquisitions, further contributed to the year-over-year increase. In addition, each segment benefited from favorable foreign currency exchange rate movements.
Our Revenues by segment are as follows:

										
Dollar amounts in millions	2018	 	2017	 	% change	
Climate	$	12,343.8		 	$	11,167.5		 	10.5%	
Industrial	3,324.4		 	3,030.1		 	9.7%	
Total	$	15,668.2		 	$	14,197.6		 	 	
Climate
Net revenues for the year ended December 31, 2018 increased by 10.5% or $ 1,176.3 million , compared with the same period of 2017 . The components of the period change are as follows:

			
Volume/product mix	7.6	%	
Acquisitions	1.1	%	
Pricing	1.5	%	
Currency translation	0.3	%	
Total	10.5	%	
Industrial
Net revenues for the year ended December 31, 2018 increased by 9.7% or $ 294.3 million , compared with the same period of 2017 . The components of the period change are as follows:

			
Volume/product mix	6.3	%	
Acquisitions	0.9	%	
Pricing	1.6	%	
Currency translation	0.9	%	
Total	9.7	%	
Operating Income/Margin
Operating margin increased to 12.2% for the year ended December 31, 2018 , compared with 11.7% for the same period of 2017 . The increase was primarily driven by higher volumes and favorable product mix (0.9%) as well as pricing improvements in excess of material inflation (0.1%). These amounts were partially offset by investments and restructuring spending (0.5%).

23

Table of Contents

Our Operating income and Operating margin by segment are as follows:

																		
Dollar amounts in millions	 	2018 Operating Income (Expense)	 	2017 Operating Income (Expense)	 	Period Change	2018 Operating Margin	 	2017 Operating Margin	
Climate	 	$	1,766.2		 	$	1,572.7		 	$	193.5		14.3	%	 	14.1	%	
Industrial	 	405.3		 	357.6		 	47.7		12.2	%	 	11.8	%	
Unallocated corporate expense	 	(254.1	)	 	(265.0	)	 	10.9		N/A		 	N/A		
Total	 	$	1,917.4		 	$	1,665.3		 	$	252.1		12.2	%	 	11.7	%	
Climate
Operating margin increased to 14.3% for the year ended December 31, 2018 , compared with 14.1% for the same period of 2017 . The increase was primarily driven by higher volumes and favorable product mix. Other inflation in excess of productivity benefits, investments and restructuring spending partially offset the benefits.
Industrial
Operating margin increased to 12.2% for the year ended December 31, 2018 compared with 11.8% for the same period of 2017 . The increase was primarily driven by higher volumes and favorable product mix, productivity benefits in excess of other inflation and pricing improvements in excess of material inflation. These amounts were partially offset by investments and restructuring spending.
Unallocated Corporate Expense
Unallocated corporate expense for the year ended December 31, 2018 decreased by 4.1% or $ 10.9 million , compared with the same period of 2017 . Lower functional costs from productivity projects more than offset compensation and benefit charges related to variable compensation.
Interest Expense
Interest expense for the year ended December 31, 2018 increased by $ 4.9 million compared with the same period of 2017 . During 2018, we issued $1.15 billion of senior notes and redeemed $1.1 billion of senior notes. The increase primarily relates to the redemption of the senior notes in which we recognized $15.4 million of premium expense and $1.2 million of unamortized costs in Interest expense . This amount was partially offset by lower interest rates on the new senior notes issued during the period.
Other income/(expense), net
The components of Other income/(expense), net , for the years ended December 31 are as follows:

													
In millions	 	2018	 	2017	 	Period Change	
Interest income	 	$	6.4		 	$	9.4		 	$	(3.0	)	
Exchange gain (loss)	 	(17.6	)	 	(8.8	)	 	(8.8	)	
Other components of net periodic benefit cost	 	(21.9	)	 	(31.0	)	 	9.1		
Other activity, net	 	(3.3	)	 	(1.2	)	 	(2.1	)	
Other income/(expense), net	 	$	(36.4	)	 	$	(31.6	)	 	$	(4.8	)	
Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net include costs associated with Trane U.S. Inc. (Trane) for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims.
Provision for Income Taxes
The 2018 effective tax rate was 16.9% which is lower than the U.S. Statutory rate of 21% primarily due to the measurement period adjustment related to the change in permanent reinvestment assertion on unremitted earnings of certain foreign subsidiaries, the deduction for Foreign Derived Intangible Income, the recognition of excess tax benefits from employee share based payments and a reduction in a valuation allowance for certain state net deferred tax assets. This decrease was partially offset by the measurement period adjustment related to a valuation allowance on excess foreign tax credits, U.S. state and local income taxes

24

Table of Contents

and certain non-deductible employee expenses. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenues from non-U.S. jurisdictions accounts for approximately 36% of our total revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
The 2017 effective tax rate was 5.7% which is lower than the U.S. Statutory rate of 35% primarily due to the remeasurement of our net U.S. deferred tax liabilities, the premium paid related to the early retirement of certain intercompany debt obligations, the recognition of a claim for refund related to previously paid interest and the recognition of excess tax benefits from employee shared based payments. In the aggregate, these items decreased the effective tax rate by 37.9%. This decrease was partially offset by the transition tax cost, a change in permanent reinvestment assertion on the unremitted earnings of certain foreign subsidiaries and a non-cash charge related to the establishment of a valuation allowance on certain net deferred tax assets in Brazil. In the aggregate these items increased the effective tax rate by 13.7%. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenues from non-U.S. jurisdictions accounts for approximately 35% of our total revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
Discontinued Operations
The components of Discontinued operations, net of tax for the years ended December 31 are as follows:

													
In millions	 	2018	 	2017	 	Period Change	
Pre-tax earnings (loss) from discontinued operations	 	$	(85.5	)	 	$	(34.0	)	 	$	(51.5	)	
Tax benefit (expense)	 	64.0		 	8.6		 	55.4		
Discontinued operations, net of tax	 	$	(21.5	)	 	$	(25.4	)	 	$	3.9		
Discontinued operations are retained costs from previously sold businesses including postretirement benefits, product liability and legal costs. In addition, we include costs associated with Ingersoll-Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of our liability for potential future claims. A portion of the tax benefit (expense) in each period represents adjustments for certain tax matters associated with the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion plc (Allegion).

Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016

																	
Dollar amounts in millions	 	2017	 	2016	 	Period Change	 	2017
 % of Revenues	 	2016
 % of Revenues	
Net revenues	 	$	14,197.6		 	$	13,508.9		 	$	688.7		 	 	 	 	
Cost of goods sold	 	(9,811.6	)	 	(9,307.9	)	 	(503.7	)	 	69.1%	 	68.9%	
Selling and administrative expenses	 	(2,720.7	)	 	(2,597.8	)	 	(122.9	)	 	19.2%	 	19.2%	
Operating income	 	1,665.3		 	1,603.2		 	62.1		 	11.7%	 	11.9%	
Interest expense	 	(215.8	)	 	(221.5	)	 	5.7		 	 	 	 	
Other income/(expense), net	 	(31.6	)	 	359.6		 	(391.2	)	 	 	 	 	
Earnings before income taxes	 	1,417.9		 	1,741.3		 	(323.4	)	 	 	 	 	
Provision for income taxes	 	(80.2	)	 	(281.5	)	 	201.3		 	 	 	 	
Earnings from continuing operations	 	1,337.7		 	1,459.8		 	(122.1	)	 	 	 	 	
Discontinued operations, net of tax	 	(25.4	)	 	32.9		 	(58.3	)	 	 	 	 	
Net earnings	 	$	1,312.3		 	$	1,492.7		 	$	(180.4	)	 	 	 	 	

25

Table of Contents

Net Revenues
Net revenues for the year ended December 31, 2017 increased by 5.1% , or $688.7 million , compared with the same period of 2016 . The components of the period change are as follows:

			
Volume/product mix	4.4	%	
Pricing	0.3	%	
Currency translation	0.4	%	
Total	5.1	%	
The increase was primarily driven by higher volumes in both our Climate and Industrial segments. Additionally, improved pricing and favorable foreign currency exchange rate movements further contributed to the year-over-year increase.
Our Revenues by segment are as follows:

											
Dollar amounts in millions	 	2017	 	2016	 	% change	
Climate	 	$	11,167.5		 	$	10,545.0		 	5.9%	
Industrial	 	3,030.1		 	2,963.9		 	2.2%	
Total	 	$	14,197.6		 	$	13,508.9		 	 	
Climate
Net revenues for the year ended December 31, 2017 increased by 5.9% or $ 622.5 million , compared with the same period of 2016 . The components of the period change are as follows:

			
Volume/product mix	5.4	%	
Pricing	0.2	%	
Currency translation	0.3	%	
Total	5.9	%	
Industrial
Net revenues for the year ended December 31, 2017 increased by 2.2% , or $ 66.2 million , compared with the same period of 2016 . The components of the period change are as follows:

			
Volume/product mix	0.7	%	
Pricing	1.0	%	
Currency translation	0.5	%	
Total	2.2	%	
Operating Income/Margin
Operating margin decreased to 11.7% for the year ended December 31, 2017 , compared with 11.9% for the same period of 2016 . The decrease was primarily driven by material inflation in excess of pricing improvements (0.7%) investments and restructuring spending (0.7%). These amounts were partially offset by productivity benefits in excess of other inflation (0.6%) and higher volumes and favorable product mix (0.6%).

26

Table of Contents

Our Operating income and Operating margin by segment are as follows:

																		
Dollar amounts in millions	 	2017 Operating Income (Expense)	 	2016 Operating Income (Expense)	 	Period Change	2017 Operating Margin	 	2016 Operating Margin	
Climate	 	$	1,572.7		 	$	1,537.5		 	$	35.2		14.1	%	 	14.6	%	
Industrial	 	357.6		 	300.3		 	57.3		11.8	%	 	10.1	%	
Unallocated corporate expense	 	(265.0	)	 	(234.6	)	 	$	(30.4	)	N/A		 	N/A		
Total	 	$	1,665.3		 	$	1,603.2		 	$	62.1		11.7	%	 	11.9	%	
Climate
Operating margin decreased to 14.1% for the year ended December 31, 2017 , compared with 14.6% for the same period of 2016 . The decrease was primarily driven by material inflation in excess of pricing improvements, investments and restructuring spending. These amounts were partially offset by productivity benefits in excess of other inflation and higher volumes and favorable product mix.
Industrial
Operating margin increased to 11.8% for the year ended December 31, 2017 , compared with 10.1% for the same period of 2016 . The increase was primarily driven by higher volumes and favorable product mix. In addition, the segment benefited from productivity benefits in excess of other inflation, the non-recurrence of capitalized costs related to new product engineering and development that were reclassified to the income statement, pricing improvements in excess of material inflation and favorable foreign currency exchange rate movements. These amounts were partially offset by investments and restructuring spending.
Unallocated Corporate Expense
Unallocated corporate expense for the year ended December 31, 2017 increased by 13.0% or $30.4 million , compared with the same period of 2016 . The increase in expense primarily relates to costs associated with acquisition efforts, higher employee benefit costs and stock-based compensation as well as planned incubator investments in technologies that benefit our business.
Interest Expense
Interest expense for the year ended December 31, 2017 decreased by $ 5.7 million compared with the same period of 2016 . The decrease relates primarily to changes in short-term financing arrangements and other items.
Other income/(expense), net
The components of Other income/(expense), net , for the years ended December 31 are as follows:

													
In millions	 	2017	 	2016	 	Period Change	
Interest income	 	$	9.4		 	$	8.0		 	$	1.4		
Exchange gain (loss)	 	(8.8	)	 	(2.0	)	 	(6.8	)	
Other components of net periodic benefit cost	 	(31.0	)	 	(30.1	)	 	(0.9	)	
Income (loss) from equity investment	 	—		 	(0.8	)	 	0.8		
Gain on sale of Hussmann equity investment	 	—		 	397.8		 	(397.8	)	
Other activity, net	 	(1.2	)	 	(13.3	)	 	12.1		
Other income/(expense), net	 	$	(31.6	)	 	$	359.6		 	$	(391.2	)	
Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, we include the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net include costs associated with Trane for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Other activity, net for the year ended December 31, 2016 includes a charge of $16.4 million for the settlement of a lawsuit originally filed by a customer in 2012. The lawsuit related to a commercial HVAC contract entered into in 2001, prior to our acquisition of Trane. The charge represents the settlement and related legal costs recognized during the fourth quarter of 2016.

27

Table of Contents

Provision for Income Taxes
The 2017 effective tax rate was 5.7% which is lower than the U.S. Statutory rate of 35% primarily due to the remeasurement of our net U.S. deferred tax liabilities, the premium paid related to the early retirement of certain intercompany debt obligations, the recognition of a claim for refund related to previously paid interest and the recognition of excess tax benefits from employee shared based payments. In the aggregate, these items decreased the effective tax rate by 37.9%. This decrease was partially offset by the transition tax cost, a change in permanent reinvestment assertion on the unremitted earnings of certain foreign subsidiaries and a non-cash charge related to the establishment of a valuation allowance on certain net deferred tax assets in Brazil. In the aggregate these items increased the effective tax rate by 13.7%. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenues from non-U.S. jurisdictions accounts for approximately 35% of our total revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
The 2016 effective tax rate was 16.2% which is lower than the U.S. Statutory rate of 35% primarily due to the tax treatment of the Hussmann gain. The gain, which is not subject to tax under the relevant local tax laws, decreased the effective tax rate by 4.8%. In addition, the reduction was also driven by earnings in non-U.S. jurisdictions, which in aggregate, have a lower effective tax rate. Revenues from non-U.S. jurisdictions accounts for approximately 35% of our total revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%. When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate.
Discontinued Operations
The components of Discontinued operations, net of tax for the years ended December 31 are as follows:

													
In millions	 	2017	 	2016	 	Period Change	
Pre-tax earnings (loss) from discontinued operations	 	$	(34.0	)	 	$	28.1		 	$	(62.1	)	
Tax benefit (expense)	 	8.6		 	4.8		 	3.8		
Discontinued operations, net of tax	 	$	(25.4	)	 	$	32.9		 	$	(58.3	)	
Discontinued operations are retained costs from previously sold businesses including postretirement benefits, product liability and legal costs. In addition, we include costs associated with Ingersoll-Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. For the year ended December 31, 2016, ongoing costs were more than offset by asbestos-related settlements with various insurance carriers. A portion of the tax benefit (expense) in each period represents adjustments for certain tax matters associated with the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and income tax payments. Our cash requirements primarily consist of the following:

•	Funding of working capital	
		
•	Funding of capital expenditures	
		
•	Dividend payments	
		
•	Debt service requirements	

Our primary sources of liquidity include cash balances on hand, cash flows from operations, proceeds from debt offerings, commercial paper, and borrowing availability under our existing credit facilities. We earn a significant amount of our operating income in jurisdictions where it is deemed to be permanently reinvested. Our most prominent jurisdiction of operation is the U.S. We expect existing cash and cash equivalents available to the U.S. operations, the cash generated by our U.S. operations, our committed credit lines as well as our expected ability to access the capital and debt markets will be sufficient to fund our U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future. In addition, we expect existing non-U.S. cash and cash equivalents and the cash generated by our non-U.S. operations will be sufficient to fund our non-U.S. operating and capital needs for at least the next twelve months and thereafter for the foreseeable future.
As of December 31, 2018 , we had $903.4 million of cash and cash equivalents on hand, of which $689.7 million was held by non-U.S. subsidiaries. Cash and cash equivalents held by our non-U.S. subsidiaries are generally available for use in our U.S. operations

28

Table of Contents

via intercompany loans, equity infusions or via distributions from direct or indirectly owned non-U.S. subsidiaries for which we do not assert permanent reinvestment. As a result of the Tax Cuts and Jobs Act in 2017, additional repatriation opportunities to access cash and cash equivalents held by non-U.S. subsidiaries have been created. In general, repatriation of cash to the U.S. can be completed with no significant incremental U.S. tax. However, to the extent that we repatriate funds from non-U.S. subsidiaries for which we assert permanent reinvestment to fund our U.S. operations, we would be required to accrue and pay applicable non-U.S. taxes. As of December 31, 2018 , we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.
Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. In February 2017, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares under a share repurchase program (the 2017 Authorization) upon completion of the prior authorized share repurchase program. Repurchases under the 2017 Authorization began in May 2017 and ended in December 2018, completing the program. In October 2018, our Board of Directors authorized the repurchase of up to $1.5 billion of our ordinary shares upon completion of the 2017 Authorization. However, no material amounts were repurchased under this program during 2018. In June 2018, we announced an increase in our quarterly share dividend from $0.45 to $0.53 per ordinary share. This reflects an 18% increase that began with our September 2018 payment and an 83% increase since the beginning of 2016. We continue to be active with acquisitions and joint venture activity. Since the beginning of 2017, we entered into a joint venture and acquired several businesses, including channel acquisitions, that complement existing products and services further growing our product portfolio. In addition, we incur ongoing costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives may include workforce reductions, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. We expect that our available cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, ongoing restructuring actions, acquisitions and joint venture activity.
Liquidity
The following table contains several key measures of our financial condition and liquidity at the periods ended December 31:

													
In millions	 	2018	 	2017	 	2016	
Cash and cash equivalents	 	$	903.4		 	$	1,549.4		 	$	1,714.7		
Short-term borrowings and current maturities of long-term debt (1)	 	350.6		 	1,107.0		 	360.8		
Long-term debt  (1)	 	3,740.7		 	2,957.0		 	3,709.4		
Total debt	 	4,091.3		 	4,064.0		 	4,070.2		
Total Ingersoll-Rand plc shareholders’ equity	 	7,022.7		 	7,140.3		 	6,643.8		
Total equity	 	7,064.8		 	7,206.9		 	6,718.3		
Debt-to-total capital ratio	 	36.7	%	 	36.1	%	 	37.7	%	
(1) During the first quarter of 2018, the Company redeemed its 6.875% senior notes due 2018 and its 2.875% senior notes due 2019. In addition, the Company issued $1.15 billion principal amount of senior notes during February 2018.
Debt and Credit Facilities
Our short-term obligations primarily consists of current maturities of long-term debt. In addition, we have outstanding $343.0 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date.  If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder.  We also maintain a commercial paper program which is used for general corporate purposes.  Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion as of December 31, 2018 . We had no commercial paper outstanding at December 31, 2018 and December 31, 2017 .  See Note 7 to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations.
Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 2020 and 2048.  In addition, we maintain two 5-year, $1.0 billion revolving credit facilities.  Each senior unsecured credit facility, one of which matures in March 2021 and the other in April 2023, provides support for our commercial paper program and can be used for working capital and other general corporate purposes. Total commitments of $ 2.0 billion were unused at December 31, 2018 and December 31, 2017 . See Note 7 and Note 21 to the Consolidated Financial Statements for additional information regarding the terms of our long-term obligations and their related guarantees.

29

Table of Contents

Pension Plans
Our investment objective in managing defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. We seek to achieve this goal while trying to mitigate volatility in plan funded status, contribution and expense by better matching the characteristics of the plan assets to that of the plan liabilities. Our approach to asset allocation is to increase fixed income assets as the plan's funded status improves. We monitor plan funded status and asset allocation regularly in addition to investment manager performance. In addition, we monitor the impact of market conditions on our defined benefit plans on a regular basis. None of our defined benefit pension plans have experienced a significant impact on their liquidity due to the volatility in the markets. See Note 10 to the Consolidated Financial Statements for additional information regarding pensions.
Cash Flows
The following table reflects the major categories of cash flows for the years ended December 31, respectively. For additional details, please see the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.

													
In millions	 	2018	 	2017	 	2016	
Net cash provided by (used in) continuing operating activities	 	$	1,474.5		 	$	1,561.6		 	$	1,433.0		
Net cash provided by (used in) investing activities	 	(629.4	)	 	(374.7	)	 	240.1		
Net cash provided by (used in) financing activities	 	(1,378.8	)	 	(1,432.5	)	 	(726.9	)	
Operating Activities
Net cash provided by continuing operating activities for the year ended December 31, 2018 was $1,474.5 million , of which net income provided $1,662.0 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $187.5 million . Improvements in accounts payable were offset by higher accounts receivable and inventory balances. Net cash provided by continuing operating activities for the year ended December 31, 2017 was $1,561.6 million , of which net income provided $1,642.1 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $80.5 million . Improvements in accounts payable were offset by higher accounts receivable and inventory balances. Net cash provided by continuing operating activities for the year ended December 31, 2016 was $1,433.0 million , of which net income provided $1,449.8 million after adjusting for non-cash transactions. Changes in other assets and liabilities used $16.8 million . Improvements in accounts payable were offset by higher accounts receivable balances.
Investing Activities
Cash flows from investing activities represents inflows and outflows regarding the purchase and sale of assets.  Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, investments in joint ventures and divestitures. During the year ended December 31, 2018 , net cash used in investing activities from continuing operations was $629.4 million . The primary driver of the usage is attributable to the acquisition of several businesses and the investment of a 50% ownership interest in a joint venture with Mitsubishi. The total outflow, net of cash acquired, was $285.2 million . Other outflows included capital expenditures which totaled $ 365.6 million . Net cash used in investing activities from continuing operations for the year ended December 31, 2017 was $374.7 million . The primary driver of the outflow is attributable to capital expenditures of $221.3 million . In addition, we acquired several businesses that complement existing products and services. Cash paid for acquisitions, net of cash acquired, was $157.6 million during the year. During the year ended December 31, 2016 , net cash provided by investing activities from continuing operations was $240.1 million . The primary driver of the inflow is attributable to the proceeds of $422.5 million received from the sale of our Hussmann equity interest. This amount was partially offset by capital expenditures during the year.
Financing Activities
Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt.  Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our stock and debt transactions. During the year ended December 31, 2018 , net cash used in financing activities from continuing operations was $1,378.8 million . Primary drivers of the cash outflow related to the repurchase of 9.7 million ordinary shares totaling $900.2 million and $479.5 million of dividends paid to ordinary shareholders. In addition, we issued $1.15 billion of senior notes which was predominately offset by the redemption of $1.1 billion of senior notes. During the year ended December 31, 2017 , net cash used in financing activities from continuing operations was $1,432.5 million . Primary drivers of the cash outflow related to the repurchase of 11.8 million ordinary shares totaling $1,016.9 million and $430.1 million of dividends paid to ordinary shareholders. Net cash used in financing activities from continuing operations for the year ended December 31, 2016 was $726.9 million . Primary drivers of the cash outflow related to the repurchase of 4.9 million ordinary shares totaling $250.1 million and $348.6 million of dividends paid to ordinary shareholders. In addition, we repaid our outstanding commercial paper balance during the year. 

30

Table of Contents

Discontinued Operations
Cash flows from discontinued operations primarily represent ongoing costs associated with postretirement benefits, product liability and legal costs from previously sold businesses. Net cash used in discontinued operating activities during the year ended December 31, 2018 was $66.7 million and primarily related to ongoing costs. Net cash used in discontinued operating activities for the year ended December 31, 2017 was $38.1 million. Ongoing costs were partially offset by asbestos-related settlements reached with various insurance carriers during the year. Net cash provided by discontinued operating activities during the year ended December 31, 2016 was $88.9 million and included asbestos-related settlements reached with various insurance carriers during the year as well as cash proceeds on the sale of property related to a previously sold business. These amounts more than offset ongoing costs.
Capital Resources
Based on historical performance and current expectations, we believe our cash and cash equivalents balance, the cash generated from our operations, our committed credit lines and our expected ability to access capital markets will satisfy our working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities, and other liquidity requirements associated with our operations for the foreseeable future.
Capital expenditures were $ 365.6 million , $ 221.3 million and $ 182.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Our investments continue to improve manufacturing productivity, reduce costs, provide environmental enhancements, upgrade information technology infrastructure and security and advanced technologies for existing facilities. The capital expenditure program for 2019 is estimated to be approximately $300 million, including amounts approved in prior periods. Many of these projects are subject to review and cancellation at our option without incurring substantial charges.
For financial market risk impacting the Company, see Item 7A. "Quantitative and Qualitative Disclosure About Market Risk."
Capitalization
In addition to cash on hand and operating cash flow, we maintain significant credit availability under our Commercial Paper Program. Our ability to borrow at a cost-effective rate under the Commercial Paper Program is contingent upon maintaining an investment-grade credit rating. As of December 31, 2018 , our credit ratings were as follows:

					
 	 	Short-term	 	Long-term	
Moody’s	 	P-2	 	Baa2	
Standard and Poor’s	 	A-2	 	BBB	
The credit ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.
Our public debt does not contain financial covenants and our revolving credit lines have a debt-to-total capital covenant of 65%. As of December 31, 2018 , our debt-to-total capital ratio was 36.7% and significantly beneath this limit.
Contractual Obligations
The following table summarizes our contractual cash obligations by required payment period:

																					
In millions	 	Less than
1 year	 	1 - 3
years	 	3 - 5
years	 	More than
5 years	 	Total	
Short-term debt	 	$	—		  	$	—		 	$	—		 	$	—		 	$	—		
Long-term debt	 	350.6		(a)  	740.2		 	715.0		 	2,314.7		 	$	4,120.5		
Interest payments on long-term debt	 	186.5		 	355.1		 	298.6		 	1,394.0		 	2,234.2		
Purchase obligations	 	946.0		  	—		 	—		 	—		 	946.0		
Operating leases	 	197.1		 	259.4		 	110.6		 	42.7		 	609.8		
Total contractual cash obligations	 	$	1,680.2		  	$	1,354.7		 	$	1,124.2		 	$	3,751.4		 	$	7,910.5		
		
(a)	Includes $343.0 million of debt redeemable at the option of the holder. The scheduled maturities of these bonds range between 2027 and 2028.	
Future expected obligations under our pension and postretirement benefit plans, income taxes, environmental, asbestos-related, and product liability matters have not been included in the contractual cash obligations table above.

31

Table of Contents

Pensions
At December 31, 2018 , we had a net unfunded liability of $ 698.4 million , which consists of noncurrent pension assets of $ 49.9 million and current and non-current pension benefit liabilities of $ 748.3 million . It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required. We currently project that we will contribute approximately $ 104 million to our plans worldwide in 2019 . The timing and amounts of future contributions are dependent upon the funding status of the plan, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors. Therefore, pension contributions have been excluded from the preceding table. See Note 10 to the Consolidated Financial Statements for additional information regarding pensions.
Postretirement Benefits Other than Pensions
At December 31, 2018 , we had postretirement benefit obligations of $ 442.7 million . We fund postretirement benefit costs principally on a pay-as-you-go basis as medical costs are incurred by covered retiree populations. Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $ 46 million in 2019 . Because benefit payments are not required to be funded in advance, and the timing and amounts of future payments are dependent on the cost of benefits for retirees covered by the plan, they have been excluded from the preceding table. See Note 10 to the Consolidated Financial Statements for additional information regarding postretirement benefits other than pensions.
Income Taxes
At December 31, 2018 , we have total unrecognized tax benefits for uncertain tax positions of $ 83.0 million and $ 20.7 million of related accrued interest and penalties, net of tax. The liability has been excluded from the preceding table as we are unable to reasonably estimate the amount and period in which these liabilities might be paid. See Note 16 to the Consolidated Financial Statements for additional information regarding income taxes, including unrecognized tax benefits.
Contingent Liabilities
We are involved in various litigation, claims and administrative proceedings, including those related to environmental, asbestos-related, and product liability matters. We believe that these liabilities are subject to the uncertainties inherent in estimating future costs for contingent liabilities, and will likely be resolved over an extended period of time. Because the timing and amounts of potential future cash flows are uncertain, they have been excluded from the preceding table. See Note 20 to the Consolidated Financial Statements for additional information regarding contingent liabilities.
Critical Accounting Policies
Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of financial statements in conformity with those accounting principles requires management to use judgment in making estimates and assumptions based on the relevant information available at the end of each period. These estimates and assumptions have a significant effect on reported amounts of assets and liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities because they result primarily from the need to make estimates and assumptions on matters that are inherently uncertain. Actual results may differ from these estimates. If updated information or actual amounts are different from previous estimates, the revisions are included in our results for the period in which they become known.
The following is a summary of certain accounting estimates and assumptions made by management that we consider critical.
		
•	Allowance for doubtful accounts – We maintain an allowance for doubtful accounts receivable which represents our best estimate of probable loss inherent in our accounts receivable portfolio. This estimate is based upon our two step policy that results in the total recorded allowance for doubtful accounts. The first step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and our historical experience with our end markets, customer base and products. The second step is to create a specific reserve for significant accounts as to which the customer's ability to satisfy their financial obligation to us is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probable loss, factoring in such considerations as the market value of collateral, if applicable. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period that they are determined.	
		
•	Goodwill and indefinite-lived intangible assets – We have significant goodwill and indefinite-lived intangible assets on our balance sheet related to acquisitions. These assets are tested and reviewed annually during the fourth quarter for impairment or when there is a significant change in events or circumstances that indicate that the fair value of an asset is more likely than not less than the carrying amount of the asset.	

32

Table of Contents

Impairment of goodwill is assessed at the reporting unit level and begins with a qualitative assessment to determine if it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test under ASC 350, "Intangibles-Goodwill and Other," (ASC 350). For those reporting units that bypass or fail the qualitative assessment, the test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized for the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
As quoted market prices are not available for our reporting units, the calculation of their estimated fair value is determined using three valuation techniques: a discounted cash flow model (an income approach), a market-adjusted multiple of earnings and revenues (a market approach), and a similar transactions method (also a market approach). The discounted cash flow approach relies on our estimates of future cash flows and explicitly addresses factors such as timing, growth and margins, with due consideration given to forecasting risk. The earnings and revenue multiple approach reflects the market's expectations for future growth and risk, with adjustments to account for differences between the guideline publicly traded companies and the subject reporting units. The similar transactions method considers prices paid in transactions that have recently occurred in our industry or in related industries. These valuation techniques are weighted 50%, 40% and 10%, respectively.
Impairment of other intangible assets with indefinite useful lives is first assessed using a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. This assessment is used as a basis for determining whether it is necessary to calculate the fair value of an indefinite-lived intangible asset. For those indefinite-lived assets where it is required, a fair value is determined on a relief from royalty methodology (income approach) which is based on the implied royalty paid, at an appropriate discount rate, to license the use of an asset rather than owning the asset. The present value of the after-tax cost savings (i.e. royalty relief) indicates the estimated fair value of the asset. Any excess of the carrying value over the estimated fair value would be recognized as an impairment loss equal to that excess.
The determination of the estimated fair value and the implied fair value of goodwill and other indefinite-lived intangible assets requires us to make assumptions about estimated cash flows, including profit margins, long-term forecasts, discount rates and terminal growth rates. We developed these assumptions based on the market and geographic risks unique to each reporting unit. For our annual impairment testing performed during the fourth quarter of 2018, we calculated the fair value for each of the reporting units and indefinite-lived intangibles. Based on the results of these calculations and further outlined below, we determined that the fair value of the reporting units and indefinite-lived intangible assets exceeded their respective carrying values. The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows.
Goodwill - Under the income approach, we assumed a forecasted cash flow period of five years with discount rates ranging from 11.0% to 14.0% and terminal growth rates ranging from 3.0% to 4.5%. Under the guideline public company method, we used an adjusted multiple ranging from 6.5 to 13.5 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies. Additionally, we compared the estimated aggregate fair value of our reporting units to our overall market capitalization. For all reporting units except one in Latin America, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) was a minimum of 75%. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair value of these reporting units. The one reporting unit with a percentage of carrying value less than 75% exceeded its carrying value by 1.1%. The reporting unit, reported within the Climate segment, has approximately $190 million of goodwill at the testing date. With all other assumptions and trends remaining constant for each independent variable, a 0.5% increase in the discount rate combined with a 0.5% decrease in the long-term growth rate would result in an approximate $15 million impairment for this reporting unit.
Other Indefinite-lived intangible assets - In testing our other indefinite-lived intangible assets for impairment, we assumed forecasted revenues for a period of five years with discount rates ranging from 11.0% to 15.5%, terminal growth rates of 3.0%, and royalty rates ranging from 0.5% to 4.5%. For all tradenames, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) was a minimum of 74%, with the exception of one. The tradename, reported within our Climate segment, had an excess of the estimated fair value over carrying value of approximately 19% (9% in 2017) and an approximate carrying value of $15 million at December 31, 2018. A significant increase in the discount rate, decrease in the long-term growth rate, decrease in the royalty rate or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair values of any of our tradenames. In addition, the Company has three recently acquired tradenames now subject to our annual impairment test. Combined, these tradenames have a carrying value of approximately $14 million, each with an estimated fair value over carrying value of under 10%

33

Table of Contents

as expected. Due to their recent valuation upon acquisition, small variations in our estimates and assumptions could impact their fair value.
Long-lived assets and finite-lived intangibles – Long-lived assets and finite-lived intangibles are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. Assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows can be generated. Impairment in the carrying value of an asset would be recognized whenever anticipated future undiscounted cash flows from an asset are less than its carrying value. The impairment is measured as the amount by which the carrying value exceeds the fair value of the asset as determined by an estimate of discounted cash flows. Changes in business conditions could potentially require future adjustments to these valuations.
		
•	Loss contingencies – Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, environmental and asbestos matters and product liability, product warranty, worker’s compensation and other claims. We have recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, we believe our estimated reserves are reasonable and do not believe the final determination of the liabilities with respect to these matters would have a material effect on our financial condition, results of operations, liquidity or cash flows for any year.  	
		
•	Asbestos matters – Certain of our wholly-owned subsidiaries and former companies are named as defendants in asbestos-related lawsuits in state and federal courts. We record a liability for our actual and anticipated future claims as well as an asset for anticipated insurance settlements. Asbestos-related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos. We record certain income and expenses associated with our asbestos liabilities and corresponding insurance recoveries within Discontinued operations, net of tax , as they relate to previously divested businesses, except for amounts associated with Trane’s asbestos liabilities and corresponding insurance recoveries which are recorded within continuing operations. See Note 20 to the Consolidated Financial Statements for further information regarding asbestos-related matters.	
		
•	Revenue recognition – Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of our revenues are recognized over time as the customer simultaneously receives control as we perform work under a contract. We adopted ASC 606 on January 1, 2018 using the modified retrospective approach. Refer to Note 2, "Summary of Significant Accounting Policies" and Note 11, "Revenue" for additional information related to the adoption of ASC 606.	
The transaction price allocated to performance obligations reflects our expectations about the consideration we will be entitled to receive from a customer. To determine the transaction price, variable and noncash consideration are assessed as well as whether a significant financing component exists. Our contracts with customers, dealers and distributors include several forms of sales incentive programs (variable consideration) which are estimated and included in the transaction price. They include, but are not limited to, discounts, coupons, and rebates where the customer does not have to provide any additional requirements to receive the discount. We record an accrual (contra receivable) and a sales deduction for our best estimate determined using the expected value method. In addition, sales returns and customer disputes involving a question of quantity or price are also accounted for as variable consideration. All other incentives or incentive programs where the customer is required to reach a certain sales level, remain a customer for a certain period of time, provide a rebate form or is subject to additional requirements are accounted for as a reduction of revenue and establishment of a liability for our best estimate determined using the expected value method. We consider historical data in determining our best estimates of variable consideration. These estimates are reviewed regularly for appropriateness, considering also whether the estimates should be constrained in order to avoid a significant reversal of revenue recognition in a future period. If updated information or actual amounts are different from previous estimates of variable consideration, the revisions are included in the results for the period in which they become known through a cumulative effect adjustment to revenue.
We enter into sales arrangements that contain multiple goods and services, such as equipment, installation and extended warranties. For these arrangements, each good or service is evaluated to determine whether it represents a distinct performance obligation. The total transaction price is then allocated to the distinct performance obligations based on their relative standalone selling price at the inception of the arrangement. If available, we utilize observable prices for goods or services sold separately to similar customers in similar circumstances to determine its relative standalone selling price. Otherwise, list prices are used if they are determined to be representative of standalone selling prices. If neither of these items are available at contract inception, judgment may be required and we will estimate standalone selling price based on our best estimate. We recognize revenue for delivered goods or services when the delivered good or service is distinct,

34

Table of Contents

control of the good or service has transferred to the customer, and only customary refund or return rights related to the goods or services exist.
		
•	Income taxes – Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. We recognize future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in our judgment to be more likely than not. We regularly review the recoverability of our deferred tax assets considering our historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of our tax planning strategies. Where appropriate, we record a valuation allowance with respect to a future tax benefit.	
The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which we operate. Future changes in applicable laws, projected levels of taxable income, and tax planning could change the effective tax rate and tax balances recorded by us. In addition, tax authorities periodically review income tax returns filed by us and can raise issues regarding our filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which we operate. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. We believe that we have adequately provided for any reasonably foreseeable resolution of these matters. We will adjust our estimate if significant events so dictate. To the extent that the ultimate results differ from our original or adjusted estimates, the effect will be recorded in the provision for income taxes in the period that the matter is finally resolved.
		
•	Employee benefit plans – We provide a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits. Determining the cost associated with such benefits is dependent on various actuarial assumptions including discount rates, expected return on plan assets, compensation increases, mortality, turnover rates and healthcare cost trend rates. Actuarial valuations are performed to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated and amortized into earnings over future periods. We review our actuarial assumptions at each measurement date and make modifications to the assumptions based on current rates and trends, if appropriate. The discount rate, the rate of compensation increase and the expected long-term rates of return on plan assets are determined as of each measurement date.	
The rate of compensation increase is dependent on expected future compensation levels. The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and the target asset allocation. The expected long-term rate of return is determined as of each measurement date. We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on input from our actuaries, outside investment advisors and information as to assumptions used by plan sponsors.
Changes in any of the assumptions can have an impact on the net periodic pension cost or postretirement benefit cost. Estimated sensitivities to the expected 2019 net periodic pension cost of a 0.25% rate decline in the two basic assumptions are as follows: the decline in the discount rate would increase expense by approximately $7.2 million and the decline in the estimated return on assets would increase expense by approximately $6.7 million. A 0.25% rate decrease in the discount rate for postretirement benefits would increase expected 2019 net periodic postretirement benefit cost by $0.7 million and a 1.0% increase in the healthcare cost trend rate would increase the service and interest cost by approximately $0.4 million.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.
Item 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to fluctuations in currency exchange rates, interest rates and commodity prices which could impact our results of operations and financial condition.
Foreign Currency Exposures
We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
Many of our non-U.S. operations have a functional currency other than the U.S. dollar, and their results are translated into U.S. dollars for reporting purposes. Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency. Our largest concentration of revenues from non-U.S. operations as of

35

Table of Contents

December 31, 2018 are in Euros and Chinese Yuan. A hypothetical 10% unfavorable change in the average exchange rate used to translate Net revenues for the year ended December 31, 2018 from either Euros or Chinese Yuan-based operations into U.S. dollars would not have a material impact on our financial statements.
We use derivative instruments to hedge those material exposures that cannot be naturally offset. The instruments utilized are viewed as risk management tools, primarily involve little complexity and are not used for trading or speculative purposes. To minimize the risk of counter party non-performance, derivative instrument agreements are made only through major financial institutions with significant experience in such derivative instruments.
We evaluate our exposure to changes in currency exchange rates on our foreign currency derivatives using a sensitivity analysis. The sensitivity analysis is a measurement of the potential loss in fair value based on a percentage change in exchange rates. Based on the firmly committed currency derivative instruments in place at December 31, 2018 , a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an unrealized loss of approximately $ 17.6 million , as compared with $ 58.3 million at December 31, 2017 . These amounts, when realized, would be offset by changes in the fair value of the underlying transactions.
Commodity Price Exposures
We are exposed to volatility in the prices of commodities used in some of our products and we use fixed price contracts to manage this exposure. We do not have committed commodity derivative instruments in place at December 31, 2018 .
Interest Rate Exposure
Our debt portfolio mainly consists of fixed-rate instruments, and therefore any fluctuation in market interest rates is not expected to have a material effect on our results of operations.

36

Table of Contents

Item 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a)	The following Consolidated Financial Statements and Financial Statement Schedules and the report thereon of PricewaterhouseCoopers LLP dated February 12, 2019 , are presented under Item 16 of this Annual Report on Form 10-K.	
Consolidated Financial Statements:
Report of independent registered public accounting firm
Consolidated Statements of comprehensive income for the years ended December 31, 2018 , 2017 and 2016
Consolidated balance sheets at December 31, 2018 and 2017
For the years ended December 31, 2018 , 2017 and 2016 :
Consolidated statements of equity
Consolidated statements of cash flows
Notes to Consolidated Financial Statements
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2018 , 2017 and 2016

(b)	The unaudited selected quarterly financial data for the two years ended December 31, is as follows:	

	
																	
 	 	2018	
In millions, except per share amounts	 	First
Quarter	 	Second
Quarter	 	Third
Quarter	 	Fourth
Quarter	
Net revenues	 	$	3,384.5		 	$	4,357.7		 	$	4,030.9		 	$	3,895.1		
Cost of goods sold	 	(2,420.2	)	 	(2,964.1	)	 	(2,718.3	)	 	(2,745.0	)	
Operating income	 	243.4		 	640.3		 	587.0		 	446.7		
Net earnings	 	124.1		 	452.6		 	519.4		 	261.4		
Net earnings attributable to Ingersoll-Rand plc	 	120.4		 	448.1		 	515.1		 	254.0		
Earnings per share attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	 	 	
Basic	 	$	0.48		 	$	1.81		 	$	2.09		 	$	1.04		
Diluted	 	$	0.48		 	$	1.79		 	$	2.06		 	$	1.03		
 	 	2017	
 	 	First
Quarter	 	Second
Quarter	 	Third
Quarter	 	Fourth
Quarter	
Net revenues	 	$	3,000.6		 	$	3,908.4		 	$	3,670.5		 	$	3,618.1		
Cost of goods sold	 	(2,126.1	)	 	(2,653.1	)	 	(2,489.9	)	 	(2,542.5	)	
Operating income	 	215.0		 	557.6		 	506.1		 	386.6		
Net earnings	 	121.1		 	362.2		 	371.9		 	457.1		
Net earnings attributable to Ingersoll-Rand plc	 	117.1		 	358.6		 	367.0		 	459.9		
Earnings per share attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	 	 	
Basic	 	$	0.45		 	$	1.40		 	$	1.45		 	$	1.84		
Diluted	 	$	0.45		 	$	1.38		 	$	1.43		 	$	1.81		

37

Table of Contents

Item 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
Item 9A.      CONTROLS AND PROCEDURES

		
(a)	Evaluation of Disclosure Controls and Procedures	
The Company's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2018 , that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act has been recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and that such information has been 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 disclosure.

		
(b)	Management's Report on Internal Control Over Financial Reporting	
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by the Company's Board of Directors to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management has assessed the effectiveness of internal control over financial reporting as of December 31, 2018 . In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control - Integrated Framework (2013). Management concluded that based on its assessment, the Company's internal control over financial reporting was effective as of December 31, 2018 .
The effectiveness of the Company's internal control over financial reporting as of December 31, 2018 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

		
(c)	Changes in Internal Control Over Financial Reporting	
There were no changes in internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B.      OTHER INFORMATION
On February 6, 2019, the Board of Directors of Ingersoll-Rand plc terminated the Company's Senior Executive Performance Plan effective immediately.

38

Table of Contents

PART III
Item 10.      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information regarding our executive officers is included in Part I under the caption “Executive Officers of Registrant.”
The other information required by this item is incorporated herein by reference to the information contained under the headings “Item 1. Election of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance” in our definitive proxy statement for the 2019 annual general meeting of shareholders ( 2019 Proxy Statement).
Item 11.      EXECUTIVE COMPENSATION
The other information required by this item is incorporated herein by reference to the information contained under the headings “Compensation Discussion and Analysis,” “Compensation of Directors,” “Executive Compensation,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in our 2019 Proxy Statement.
Item 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The other information required by this item is incorporated herein by reference to the information contained under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” of our 2019 Proxy Statement.
Item 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The other information required by this item is incorporated herein by reference to the information contained under the headings “Corporate Governance” and “Certain Relationships and Related Person Transactions” of our 2019 Proxy Statement.
Item 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated herein by reference to the information contained under the caption “Fees of the Independent Auditors” in our 2019 Proxy Statement.

39

Table of Contents

PART IV
Item 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

	
		
(a) 1. and 2.	Financial statements and financial statement schedule
See Item 8.	
 	 	
3.	Exhibits	
 	The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K.	

40

Table of Contents

INGERSOLL-RAND PLC
INDEX TO EXHIBITS
(Item 15(a))
Description
Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), Ingersoll-Rand plc (the “Company”) has filed certain agreements as exhibits to this Annual Report on Form 10-K. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.
On July 1, 2009, Ingersoll-Rand Company Limited, a Bermuda company, completed a reorganization to change the jurisdiction of incorporation of the parent company from Bermuda to Ireland. As a result, Ingersoll-Rand plc replaced Ingersoll-Rand Company Limited as the ultimate parent company effective July 1, 2009. All references related to the Company prior to July 1, 2009 relate to Ingersoll-Rand Company Limited.
(a) Exhibits

	
						
Exhibit No.	 	Description	  	Method of Filing	 	

2.1	 	Separation and Distribution Agreement between Ingersoll-Rand plc and Allegion plc, dated November 29, 2013.
	  	Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.

3.1	 	Constitution of the Company, as amended and restated on June 2, 2016	  	Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 7, 2016.	 	
 	 	 	 	 	 	
 	 	The Company and its subsidiaries are parties to several long-term debt instruments under which, in each case, the total amount of securities authorized does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.	  	Pursuant to paragraph 4 (iii)(A) of Item 601 (b) of Regulation S-K, the Company agrees to furnish a copy of such instruments to the Securities and Exchange Commission upon request.

4.1	 	Indenture, dated as of June 20, 2013, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Company Limited and Ingersoll-Rand International Holding Limited, as guarantors and The Bank of New York Mellon, as Trustee. .	 	Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.

4.2	 	First Supplemental Indenture, dated as of June 20, 2013, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Company Limited and Ingersoll-Rand International Holding Limited, as guarantors and The Bank of New York Mellon, as Trustee, relating to the 2.875% Senior Notes due 2019.	 	Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.

41

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
4.3	 	Second Supplemental Indenture, dated as of June 20, 2013, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Company Limited and Ingersoll-Rand International Holding Limited, as guarantors and The Bank of New York Mellon, as Trustee, relating to the 4.250% Senior Notes due 2023.	 	Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.	 	
 	 	 	 	 	 	
4.4	 	Third Supplemental Indenture, dated as of June 20, 2013, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Company Limited and Ingersoll-Rand International Holding Limited, as guarantors and The Bank of New York Mellon, as Trustee, relating to the 5.750% Senior Notes due 2043.	 	Incorporated by reference to Exhibit 4.4 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on June 26, 2013.

4.5	 	Fourth Supplemental Indenture, dated as of November 20, 2013, among Ingersoll-Rand Global Holding Company Limited, a Bermuda company, Ingersoll-Rand Company Limited, a Bermuda company, Ingersoll-Rand International Holding Limited, a Bermuda company, Ingersoll-Rand plc, an Irish public limited company, Ingersoll-Rand Company, a New Jersey corporation, and The Bank of New York Mellon, as Trustee, to the Indenture dated as of June 20, 2013.	 	Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on November 26, 2013.

4.6	 	Fifth Supplemental Indenture, dated as of October 28, 2014, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand Company, as co-obligor, Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Luxembourg Finance S.A., as guarantors, and The Bank of New York Mellon, as Trustee, to an Indenture, dated as of June 20, 2013.	 	Incorporated by reference to Exhibit 4.5 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.

42

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
4.7	 	Sixth Supplemental Indenture, dated as of December 18, 2015, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand Company, as co-obligor, Ingersoll-Rand plc, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Luxembourg Finance S.A., and Ingersoll-Rand Lux International Holding Company S.à.r.l. as guarantors, and The Bank of New York Mellon, as Trustee, to an Indenture, dated as of June 20, 2013.  	 	Incorporated by reference to Exhibit 4.21 to the Company's Form 10-K for the fiscal year ended 2015 (File No. 001-34400) filed with the SEC on February 12, 2016.

4.8	 	Seventh Supplemental Indenture, dated as of April 5, 2016, by and among Ingersoll-Rand Global Holding company Limited, as issuer, Ingersoll-Rand Company, as co-obligor, Ingersoll-Rand plc, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., and Ingersoll-Rand Irish Holdings Unlimited Company, as guarantors, and The Bank of New York Mellon, as Trustee, to an indenture, dated as of June 20, 2013.
	 	Incorporated by reference to Exhibit 4.19 to the Company’s Form 10-K for the fiscal year ended 2016 (File No. 001-34400) filed with the SEC on February 13, 2017.

 	 	 	 	 	 	
4.9	 	Indenture, dated as of October 28, 2014, by and among Ingersoll-Rand Luxembourg Finance S.A., as issuer, and Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company and Ingersoll-Rand Global Holding Company Limited, as guarantors, and The Bank of New York Mellon, as Trustee.	 	Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014

4.10	 	First Supplemental Indenture, dated as of October 28, 2014, by and among Ingersoll-Rand Luxembourg Finance S.A., as issuer, and Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company and Ingersoll-Rand Global Holding Company Limited, as guarantors, and The Bank of New York Mellon, as Trustee, relating to the 2.625% Senior Notes due 2020.	 	Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.

43

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
4.11	 	Second Supplemental Indenture, dated as of October 28, 2014, by and among Ingersoll-Rand Luxembourg Finance S.A., as issuer, and Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company and Ingersoll-Rand Global Holding Company Limited, as guarantors, and The Bank of New York Mellon, as Trustee, relating to the 3.550% Senior Notes due 2024.	 	Incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.

4.12	 	Third Supplemental Indenture, dated as of October 28, 2014, by and among Ingersoll-Rand Luxembourg Finance S.A., as issuer, and Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company and Ingersoll-Rand Global Holding Company Limited, as guarantors, and The Bank of New York Mellon, as Trustee, relating to the 4.650% Senior Notes due 2044.	 	Incorporated by reference to Exhibit 4.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on October 29, 2014.	 	
 	 	 	 	 	 	
4.13	 	Fourth Supplemental Indenture, dated as of December 18, 2015, by and among Ingersoll-Rand Luxembourg Finance S.A., as issuer, and Ingersoll-Rand plc, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company, Ingersoll-Rand Global Holding Company Limited, and Ingersoll-Rand Lux International Holding Company S.à.r.l. as guarantors, and The Bank of New York Mellon, as Trustee.	 	Incorporated by reference to Exhibit 4.27 to the Company's Form 10-K for the fiscal year ended 2015 (File No. 001-34400) filed with the SEC on February 12, 2016.	 	
 	 	 	 	 	 	
4.14	 	Fifth Supplemental Indenture, dated as of April 5, 2016, by and among Ingersoll-Rand Luxembourg Finance S.A., as Issuer, and Ingersoll-Rand plc, Ingersoll-Rand Company Limited, Ingersoll-Rand Company, Ingersoll-Rand International Holding Limited, Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company, as guarantors, and The Bank of New York Mellon, as Trustee.
	 	Incorporated by reference to Exhibit 4.25 to the Company’s Form 10-K for the fiscal year ended 2016 (File No. 001-34400) filed with the SEC on February 13, 2017.	 	

44

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
4.15	 	Indenture, dated as of February 21, 2018, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company and Ingersoll-Rand Company, as guarantors, and Wells Fargo Bank, National Association, as Trustee.	 	Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.	 	
 	 	 	 	 	 	
4.16	 	First Supplemental Indenture, dated as of February 21, 2018, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company and Ingersoll-Rand Company, as guarantors, and Wells Fargo Bank, National Association, as Trustee, relating to the 2.900% Senior Notes due 2021.	 	Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.	 	
 	 	 	 	 	 	
4.17	 	Second Supplemental Indenture, dated as of February 21, 2018, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company and Ingersoll-Rand Company, as guarantors, and Wells Fargo Bank, National Association, as Trustee, relating to the 3.750% Senior Notes due 2028.	 	Incorporated by reference to Exhibit 4.4 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.	 	
 	 	 	 	 	 	
4.18	 	Third Supplemental Indenture, dated as of February 21, 2018, by and among Ingersoll-Rand Global Holding Company Limited, as issuer, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company and Ingersoll-Rand Company, as guarantors, and Wells Fargo Bank, National Association, as Trustee, relating to the 4.300% Senior Notes due 2048.	 	Incorporated by reference to Exhibit 4.6 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 26, 2018.	 	
 	 	 	 	 	 	
4.26	 	Form of Ordinary Share Certificate of Ingersoll-Rand plc.	  	Incorporated by reference to Exhibit 4.6 to the Company’s Form S-3 (File No. 333-161334) filed with the SEC on August 13, 2009.	 	
 	 	 	 	 	 	
10.1*	 	Form of Global Stock Option Award Agreement (June 2018).	  	Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.

45

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
 	 	 	 	 	 	
10.2*	 	Form of Global Restricted Stock Unit Award Agreement (June 2018).	  	Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.	 	
 	 	 	 	 	 	
10.3*	 	Form of Global Performance Stock Unit Award Agreement (June 2018).	  	Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on June 12, 2018.	 	
 	 	 	 	 	 	
10.4	 	Credit Agreement dated March 15, 2016 among Ingersoll-Rand Global Holding Company Limited, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand International Holding Limited, Ingersoll-Rand Company, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, Bank of America, N.A., BNP Paribas, Deutsche Bank Securities, Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., and The Bank of Tokyo-Mitsubishi UFJ, Ltd. as Documentation Agents, and JPMorgan Chase Bank, N.A. and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners, and certain lending institutions from time to time parties thereto.	 	Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on March 17, 2016.	 	
 	 	 	 	 	 	
10.5	 	Supplemental Guarantee dated as of April 5, 2016 made by Ingersoll-Rand Irish Holdings Unlimited Company in favor of JPMorgan Chase Bank, N.A., as Administrative Agent for the Banks that are parties to the Credit Agreement dated as of March 15, 2016.	 	Incorporated by reference to Exhibit 10.8 to the Company’s Form 10-K for the fiscal year ended 2017 (File No. 001-34400) filed with the SEC on February 13, 2017.	 	

46

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
10.6	 	Credit Agreement dated April 17, 2018 among Ingersoll-Rand Global Holding Company Limited, Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance S.A., Ingersoll-Rand Lux International Holding Company S.à r.l., Ingersoll-Rand Irish Holdings Unlimited Company, Ingersoll-Rand Company, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, Bank of America, N.A., BNP Paribas, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., and MUFG Bank Ltd. as Documentation Agents, and JPMorgan Chase Bank, N.A. and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners, and certain lending institutions from time to time parties thereto.
	 	Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on April 19, 2018.	 	
 	 	 	 	 	 	
10.7	 	Deed Poll Indemnity of Ingersoll-Rand plc, an Irish public limited company, as to the directors, secretary and officers and senior executives of Ingersoll-Rand plc and the directors and officers of Ingersoll-Rand plc’s subsidiaries.
	 	Incorporated by reference to Exhibit 10.5 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.	 	
 	 	 	 	 	 	
10.8	 	Tax Sharing Agreement, dated as of July 16, 2007, by and among American Standard Companies Inc. and certain of its subsidiaries and WABCO Holdings Inc. and certain of its subsidiaries.
	 	Incorporated by reference to Exhibit 10.1 to Trane Inc.’s Form 8-K (File No. 001-11415) filed with the SEC on July 20, 2007.	 	
 	 	 	 	 	 	
10.9	 	Tax Matters Agreement between Ingersoll-Rand plc and Allegion plc, dated November 30, 2013.	  	Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.	 	
 	 	 	 	 	 	
10.10*	 	Ingersoll-Rand plc Incentive Stock Plan of 2013.	  	Incorporated by reference to Exhibit 4.5 to the Company's Form S-8 (File No. 333-189446) filed with the SEC on June 19, 2013.	 	
 	 	 	 	 	 	
10.11*	 	Ingersoll-Rand plc Incentive Stock Plan of 2018.	 	Incorporated by reference to Exhibit 4.3 to the Company’s Form S-8 (File No. 333-225575) filed with the SEC on June 12, 2018.	 	
 	 	 	 	 	 	
10.12*	 	IR Executive Deferred Compensation Plan (as amended and restated effective January 1, 2017).	 	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2017 (File No. 001-34400) filed with the SEC on July 26, 2017.	 	

47

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
10.13*	 	IR Executive Deferred Compensation Plan II (as amended and restated effective January 1, 2017).	  	Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2017 (File No. 001-34400) filed with the SEC on July 26, 2017.	 	
 	 	 	 	 	 	
10.14*	 	First Amendment to IR Executive Deferred Compensation Plan II (dated December 22, 2009).	  	Incorporated by reference to Exhibit 10.19 to the Company’s Form 10-K for the fiscal year ended 2011 (File No. 001-34400) filed with the SEC on February 21, 2012.	 	
 	 	 	 	 	 	
10.15*	 	Second Amendment to IR Executive Deferred Compensation Plan II (dated December 23, 2010).	  	Incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K for the fiscal year ended 2011 (File No. 001-16831) filed with the SEC on February 21, 2012.	 	
 	 	 	 	 	 	
10.16*	 	IR-plc Director Deferred Compensation and Stock Award Plan (as amended and restated effective July 1, 2009).	 	Incorporated by reference to Exhibit 10.11 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.	 	
 	 	 	 	 	 	
10.17*	 	IR-plc Director Deferred Compensation and Stock Award Plan II (as amended and restated effective July 1, 2009).	 	Incorporated by reference to Exhibit 10.12 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.	 	
 	 	 	 	 	 	
10.18*	 	Ingersoll-Rand Company Supplemental Employee Savings Plan (amended and restated effective October 1, 2012).	  	Incorporated by reference to exhibit 10.23 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.	 	
 	 	 	 	 	 	
10.19*	 	Amendment to the Ingersoll-Rand Company Supplemental Employee Savings Plan dated April 6, 2017.	  	Incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.	 	
 	 	 	 	 	 	
10.20*	 	Ingersoll-Rand Company Supplemental Employee Savings Plan II (effective January 1, 2005 and amended and restated through October 1, 2012).	  	Incorporated by reference to exhibit 10.24 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.	 	
 	 	 	 	 	 	
10.21*	 	Amendment to the Ingersoll-Rand Company Supplemental Employee Savings Plan II dated April 6, 2017.	 	Incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.	 	
 	 	 	 	 	 	
10.22*	 	Trane Inc. Deferred Compensation Plan (as amended and restated as of July 1, 2009, except where otherwise stated).	  	Incorporated by reference to Exhibit 10.19 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.	 	
 	 	 	 	 	 	
10.23*	 	Amendment to Trane Inc. Deferred Compensation Plan dated April 6, 2017.	 	Incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.	 	
 	 	 	 	 	 	
10.24*	 	Ingersoll-Rand Company Supplemental Pension Plan (Amended and Restated Effective January 1, 2005).	 	Incorporated by reference to Exhibit 10.28 to the Company’s Form 10-K for the fiscal year ended 2008 (File No. 001-16831) filed with the SEC on March 2, 2009.	 	

48

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
 	 	 	 	 	 	
10.25*	 	First Amendment to the Ingersoll-Rand Company Supplemental Pension Plan, dated as of July 1, 2009.	 	Incorporated by reference to Exhibit 10.21 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on July 1, 2009.	 	
 	 	 	 	 	 	
10.26*	 	Ingersoll-Rand Company Elected Officers Supplemental Plan (Effective January 1, 2005 and Amended and Restated effective October 1, 2012).	 	Incorporated by reference to exhibit 10.32 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.	 	
 	 	 	 	 	 	
10.27*	 	Ingersoll-Rand Company Key Management Supplemental Program (Effective January 1, 2005 and Amended and Restated effective October 1, 2012).	 	Filed herewith.	 	
 	 	 	 	 	 	
10.28*	 	First Amendment to the Ingersoll Rand Company Key Management Supplemental Program, dated as of June 15, 2015.	 	Filed herewith.	 	
 	 	 	 	 	 	
10.29*	 	Description of Annual Incentive Matrix Program.	 	Incorporated by reference to Exhibit 10.30 to the Company’s Form 10-K (File No. 001-34400) filed with the SEC on February 12, 2018.	 	
 	 	 	 	 	 	
10.30*	 	Form of Tier 1 Change in Control Agreement (Officers before May 19, 2009).
	 	Incorporated by reference to Exhibit 99.1 to the Company's Form 8-K (File No. 001-16831) filed with the SEC on December 4, 2006.	 	
 	 	 	 	 	 	
10.31*	 	Form of Tier 2 Change in Control Agreement (Officers before May 19, 2009).	 	Incorporated by reference to Exhibit 99.2 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on December 4, 2006.	 	
 	 	 	 	 	 	
10.32*	 	Form of Tier 1 Change in Control Agreement (New Officers on or after May 19, 2009).	 	Incorporated by reference to Exhibit 10.32 to the Company’s Form 10-Q for the period ended June 30, 2009 (File No. 001-34400) filed with the SEC on August 6, 2009.	 	
 	 	 	 	 	 	
10.33*	 	Form of Tier 2 Change in Control Agreement (New Officers on or after May 19, 2009).	 	Incorporated by reference to Exhibit 10.33 to the Company’s Form 10-Q for the period ended June 30, 2009 (File No. 001-34400) filed with the SEC on August 6, 2009.	 	
 	 	 	 	 	 	
10.34*	 	Amended and Restated Major Restructuring Severance Plan (as amended and restated effective December 31, 2014).	 	Incorporated by reference to Exhibit 10.35 to the Company’s Form 10-K for the fiscal year ended 2014 (File No. 001-34400) filed with the SEC on February 13, 2015.	 	
 	 	 	 	 	 	
10.35*	 	Michael W. Lamach Letter, dated December 24, 2003.	  	Incorporated by reference to Exhibit 10.35 to the Company’s Form 10-K for the fiscal year ended 2003 (File No. 001-16831) filed with the SEC on February 27, 2004.	 	
 	 	 	 	 	 	
10.36*	 	Michael W. Lamach Letter, dated June 4, 2008.	 	Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on June 10, 2008.	 	

49

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
10.37*	 	Michael W. Lamach Letter, dated February 4, 2009.	 	Incorporated by reference to Exhibit 10.43 to the Company’s Form 10-K for the fiscal year ended 2008 (File No. 001-16831) filed with the SEC on March 2, 2009.	 	
 	 	 	 	 	 	
10.38*	 	Michael W. Lamach Letter, dated February 3, 2010.	 	Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-34400) filed with the SEC on February 5, 2010.	 	
 	 	 	 	 	 	
10.39*	 	Michael W. Lamach Letter, dated December 23, 2012.	 	Incorporated by reference to exhibit 10.48 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.	 	
 	 	 	 	 	 	
10.40*	 	Marcia J. Avedon Letter, dated January 8, 2007.	 	Incorporated by reference to Exhibit 10.45 to the Company's Form 10-K for the fiscal year ended December 31, 2006 (File No. 001-16831) filed with the SEC on March 1, 2007.	 	
 	 	 	 	 	 	
10.41*	 	Marcia J. Avedon Letter, dated December 20, 2012.	 	Incorporated by reference to exhibit 10.53 to the Company's Form 10-K for the fiscal year ended 2012 (File No. 001-34400) filed with the SEC on February 14, 2013.	 	
 	 	 	 	 	 	
10.42*	 	Susan K. Carter Letter, dated as of August 19, 2013.	 	Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on October 2, 2013.	 	
 	 	 	 	 	 	
10.43*	 	Maria Green Letter, dated as of September 22, 2015.
	 	Filed herewith.	 	
 	 	 	 	 	 	
10.44*	 	Dave Regnery Letter, dated as of September 1, 2017.	 	Filed herewith.	 	
 	 	 	 	 	 	
10.45*	 	Employee Matters Agreement between Ingersoll-Rand plc and Allegion plc, dated November 30, 2013.	 	Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K (File No. 001-34400) filed with the SEC on December 2, 2013.	 	
 	 	 	 	 	 	
21	 	List of Subsidiaries of Ingersoll-Rand plc.	 	Filed herewith.	 	
 	 	 	 	 	 	
23.1	 	Consent of Independent Registered Public Accounting Firm.	 	Filed herewith.	 	
 	 	 	 	 	 	
31.1	 	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	  	Filed herewith.	 	
 	 	 	 	 	 	
31.2	 	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	  	Filed herewith.	 	

50

Table of Contents

	
						
Exhibit No.	 	Description	  	Method of Filing	 	
32	 	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	  	Furnished herewith.	 	
 	 	 	 	 	 	
101	 	The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.	  	Furnished herewith.	 	
* Management contract or compensatory plan or arrangement.

51

Table of Contents

Item 16.  FORM 10-K SUMMARY
Not applicable.

52

Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INGERSOLL-RAND PLC
(Registrant)

	
			
By:	 	/s/ Michael W. Lamach	
 	 	Michael W. Lamach	
 	 	Chairman of the Board and Chief Executive Officer	
Date:	 	February 12, 2019	

53

Table of Contents

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	
					
Signature	  	Title	 	Date	
 	 	 	 	 	
/s/ Michael W. Lamach	  	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	 	February 12, 2019	
(Michael W. Lamach)	 		 	 	
 	 	 	 	 	
/s/ Susan K. Carter	  	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	 	February 12, 2019	
(Susan K. Carter)	 		 	 	
 	 	 	 	 	
/s/ Christopher J. Kuehn	  	Vice President and Chief Accounting Officer (Principal Accounting Officer)	 	February 12, 2019	
(Christopher J. Kuehn)	 		 	 	
 	 	 	 	 	
/s/ Kirk E. Arnold	  	Director	 	February 12, 2019	
(Kirk E. Arnold)	 		 	 	
 	 	 	 	 	
/s/ Ann C. Berzin	  	Director	 	February 12, 2019	
(Ann C. Berzin)	 		 	 	
 	 	 	 	 	
/s/ John Bruton	  	Director	 	February 12, 2019	
(John Bruton)	 		 	 	
 	 	 	 	 	
/s/ Jared L. Cohon	  	Director	 	February 12, 2019	
(Jared L. Cohon)	 		 	 	
 	 	 	 	 	
/s/ Gary D. Forsee	  	Director	 	February 12, 2019	
(Gary D. Forsee)	 		 	 	
 	 	 	 	 	
/s/ Linda P. Hudson	  	Director	 	February 12, 2019	
(Linda P. Hudson)	 		 	 	
 	 	 	 	 	
/s/ Myles P. Lee	  	Director	 	February 12, 2019	
(Myles P. Lee)	 		 	 	
 	 	 	 	 	
/s/ Karen B. Peetz	 	Director	 	February 12, 2019	
(Karen B. Peetz)	 		 	 	
 	 	 	 	 	
/s/ John P. Surma	 	Director	 	February 12, 2019	
 (John P. Surma)	 		 	 	
 	 	 	 	 	
/s/ Richard J. Swift	  	Director	 	February 12, 2019	
(Richard J. Swift)	 		 	 	
 	 	 	 	 	
/s/ Tony L. White	  	Director	 	February 12, 2019	
(Tony L. White)	 		 	 	

54

Table of Contents

INGERSOLL-RAND PLC
Index to Consolidated Financial Statements

	
		
Report of Independent Registered Public Accounting Firm	F-2	
 	 	
Consolidated Statements of Comprehensive Income	F-3	
 	 	
Consolidated Balance Sheets	F-5	
 	 	
Consolidated Statements of Equity	F-6	
 	 	
Consolidated Statements of Cash Flows	F-7	
 	 	
Notes to Consolidated Financial Statements	F-8	
 	 	
Schedule II – Valuation and Qualifying Accounts	F-55	

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Ingersoll-Rand plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Ingersoll-Rand plc and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2018, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2018 appearing under Item 16 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina    
February 12, 2019
We have served as the Company’s auditor since at least 1906. We have not been able to determine the specific year we began serving as auditor of the Company.

F-2

Table of Contents

Ingersoll-Rand plc
Consolidated Statements of Comprehensive Income
In millions, except per share amounts	
													
For the years ended December 31,	 	2018	 	2017	 	2016	
Net revenues	 	$	15,668.2		 	$	14,197.6		 	$	13,508.9		
Cost of goods sold	 	(10,847.6	)	 	(9,811.6	)	 	(9,307.9	)	
Selling and administrative expenses	 	(2,903.2	)	 	(2,720.7	)	 	(2,597.8	)	
Operating income	 	1,917.4		 	1,665.3		 	1,603.2		
Interest expense	 	(220.7	)	 	(215.8	)	 	(221.5	)	
Other income/(expense), net	 	(36.4	)	 	(31.6	)	 	359.6		
Earnings before income taxes	 	1,660.3		 	1,417.9		 	1,741.3		
Provision for income taxes	 	(281.3	)	 	(80.2	)	 	(281.5	)	
Earnings from continuing operations	 	1,379.0		 	1,337.7		 	1,459.8		
Discontinued operations, net of tax	 	(21.5	)	 	(25.4	)	 	32.9		
Net earnings	 	1,357.5		 	1,312.3		 	1,492.7		
Less: Net earnings attributable to noncontrolling interests	 	(19.9	)	 	(9.7	)	 	(16.5	)	
Net earnings attributable to Ingersoll-Rand plc	 	$	1,337.6		 	$	1,302.6		 	$	1,476.2		
Amounts attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	
Continuing operations	 	$	1,359.1		 	$	1,328.0		 	$	1,443.3		
Discontinued operations	 	(21.5	)	 	(25.4	)	 	32.9		
Net earnings	 	$	1,337.6		 	$	1,302.6		 	$	1,476.2		
Earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:	 	 	 	 	 	 	
Basic:	 	 	 	 	 	 	
Continuing operations	 	$	5.50		 	$	5.21		 	$	5.57		
Discontinued operations	 	(0.09	)	 	(0.10	)	 	0.13		
Net earnings	 	$	5.41		 	$	5.11		 	$	5.70		
Diluted:	 		 		 	 	
Continuing operations	 	$	5.43		 	$	5.14		 	$	5.52		
Discontinued operations	 	(0.08	)	 	(0.09	)	 	0.13		
Net earnings	 	$	5.35		 	$	5.05		 	$	5.65		

F-3

Table of Contents

Ingersoll-Rand plc
Consolidated Statements of Comprehensive Income (continued)
In millions, except per share amounts	
													
For the years ended December 31,	 	2018	 	2017	 	2016	
Net earnings	 	$	1,357.5		 	$	1,312.3		 	$	1,492.7		
Other comprehensive income (loss):	 	 	 	 	 	 	
Currency translation	 	(230.6	)	 	450.3		 	(233.8	)	
Cash flow hedges	 	 	 	 	 	 	
Unrealized net gains (losses) arising during period	 	1.2		 	(1.8	)	 	2.2		
Net gains (losses) reclassified into earnings	 	0.9		 	3.6		 	(4.8	)	
Tax (expense) benefit	 	(0.1	)	 	—		 	0.4		
Total cash flow hedges, net of tax	 	2.0		 	1.8		 	(2.2	)	
Pension and OPEB adjustments:	 	 	 	 	 	 	
Prior service costs for the period	 	(16.0	)	 	(3.8	)	 	(6.2	)	
Net actuarial gains (losses) for the period	 	12.8		 	39.6		 	23.6		
Amortization reclassified into earnings	 	50.7		 	52.1		 	57.5		
Settlements/curtailments reclassified to earnings	 	2.5		 	7.7		 	2.1		
Currency translation and other	 	7.5		 	(15.4	)	 	22.5		
Tax (expense) benefit	 	(17.2	)	 	(20.1	)	 	(23.5	)	
Total pension and OPEB adjustments, net of tax	 	40.3		 	60.1		 	76.0		
Other comprehensive income (loss), net of tax	 	(188.3	)	 	512.2		 	(160.0	)	
Comprehensive income, net of tax	 	$	1,169.2		 	$	1,824.5		 	$	1,332.7		
Less: Comprehensive income attributable to noncontrolling interests	 	(16.9	)	 	(10.2	)	 	(26.1	)	
Comprehensive income attributable to Ingersoll-Rand plc	 	$	1,152.3		 	$	1,814.3		 	$	1,306.6		
See accompanying notes to Consolidated Financial Statements.

F-4

Table of Contents

Ingersoll-Rand plc
Consolidated Balance Sheets
In millions, except share amounts

	
									
December 31,	 	2018	 	2017	
ASSETS	 	 	 	 	
Current assets:	 	 	 	 	
Cash and cash equivalents	 	$	903.4		 	$	1,549.4		
Accounts and notes receivable, net	 	2,679.2		 	2,477.4		
Inventories, net	 	1,677.8		 	1,555.4		
Other current assets	 	471.6		 	536.9		
Total current assets	 	5,732.0		 	6,119.1		
Property, plant and equipment, net	 	1,730.8		 	1,551.3		
Goodwill	 	5,959.5		 	5,935.7		
Intangible assets, net	 	3,634.7		 	3,742.9		
Other noncurrent assets	 	857.9		 	824.3		
Total assets	 	$	17,914.9		 	$	18,173.3		
LIABILITIES AND EQUITY	 	 	 	 	
Current liabilities:	 	 	 	 	
Accounts payable	 	$	1,705.3		 	$	1,556.1		
Accrued compensation and benefits	 	531.6		 	509.7		
Accrued expenses and other current liabilities	 	1,728.2		 	1,655.2		
Short-term borrowings and current maturities of long-term debt	 	350.6		 	1,107.0		
Total current liabilities	 	4,315.7		 	4,828.0		
Long-term debt	 	3,740.7		 	2,957.0		
Postemployment and other benefit liabilities	 	1,192.9		 	1,285.3		
Deferred and noncurrent income taxes	 	538.4		 	757.5		
Other noncurrent liabilities	 	1,062.4		 	1,138.6		
Total liabilities	 	10,850.1		 	10,966.4		
Equity:	 	 	 	 	
Ingersoll-Rand plc shareholders’ equity	 	 	 	 	
Ordinary shares, $1 par value (266,405,347 and 273,980,824 shares issued at December 31, 2018 and 2017, respectively)	 	266.4		 	274.0		
Ordinary shares held in treasury, at cost (24,500,054 and 24,501,667 shares at December 31, 2018 and 2017, respectively)	 	(1,719.4	)	 	(1,719.4	)	
Capital in excess of par value	 	—		 	461.3		
Retained earnings	 	9,439.8		 	8,903.2		
Accumulated other comprehensive loss	 	(964.1	)	 	(778.8	)	
Total Ingersoll-Rand plc shareholders’ equity	 	7,022.7		 	7,140.3		
Noncontrolling interest	 	42.1		 	66.6		
Total equity	 	7,064.8		 	7,206.9		
Total liabilities and equity	 	$	17,914.9		 	$	18,173.3		
See accompanying notes to Consolidated Financial Statements.

F-5

Ingersoll-Rand plc
Consolidated Statements of Equity

																																
 	 	 	 	Ingersoll-Rand plc shareholders’ equity	 	 	
In millions, except per share amounts	 	Total
equity	 	Ordinary shares	 	Ordinary shares held in treasury, at cost	 	Capital in
excess of
par value	 	Retained
earnings	 	Accumulated  other
comprehensive
income (loss)	 	Noncontrolling Interest	
	 		 	Amount	 	Shares	 		 		 		 		 		
Balance at December 31, 2015	 	$	5,879.2		 	$	269.0		 	269.0		 	$	(452.6	)	 	$	223.3		 	$	6,897.9		 	$	(1,120.9	)	 	$	62.5		
Net earnings	 	1,492.7		 	—		 	—		 	—		 	—		 	1,476.2		 	—		 	16.5		
Other comprehensive income (loss)	 	(160.0	)	 	—		 	—		 	—		 	—		 	—		 	(169.6	)	 	9.6		
Shares issued under incentive stock plans	 	60.4		 	2.7		 	2.7		 	—		 	57.7		 	—		 	—		 	—		
Repurchase of ordinary shares	 	(250.1	)	 	—		 	—		 	(250.1	)	 	—		 	—		 	—		 	—		
Share-based compensation	 	61.6		 	—		 	—		 	—		 	66.0		 	(4.4	)	 	—		 	—		
Dividends declared to noncontrolling interest	 	(14.1	)	 	—		 	—		 	—		 	—		 	—		 	—		 	(14.1	)	
Cash dividends declared ($1.36 per share)	 	(351.0	)	 	—		 	—		 	—		 	—		 	(351.0	)	 	—		 	—		
Other	 	(0.4	)	 	—		 	—		 	—		 	(0.5	)	 	0.1		 	—		 	—		
Balance at December 31, 2016	 	$	6,718.3		 	$	271.7		 	271.7		 	$	(702.7	)	 	$	346.5		 	$	8,018.8		 	$	(1,290.5	)	 	$	74.5		
Net earnings	 	1,312.3		 	—		 	—		 	—		 	—		 	1,302.6		 	—		 	9.7		
Other comprehensive income (loss)	 	512.2		 	—		 	—		 	—		 	—		 	—		 	511.7		 	0.5		
Shares issued under incentive stock plans	 	51.2		 	2.3		 	2.3		 	—		 	48.9		 	—		 	—		 	—		
Repurchase of ordinary shares	 	(1,016.9	)	 	—		 	—		 	(1,016.9	)	 	—		 	—		 	—		 	—		
Share-based compensation	 	67.9		 	—		 	—		 	—		 	70.8		 	(2.9	)	 	—		 	—		
Dividends declared to noncontrolling interest	 	(15.8	)	 	—		 	—		 	—		 	—		 	—		 	—		 	(15.8	)	
Adoption of ASU 2016-09 (See Note 2)	 	15.1		 	—		 	—		 	—		 	—		 	15.1		 	—		 	—		
Acquisition/divestiture of noncontrolling interest	 	(7.3	)	 	—		 	—		 	—		 	(5.0	)	 	—		 	—		 	(2.3	)	
Cash dividends declared ($1.70 per share)	 	(430.2	)	 	—		 	—		 	—		 	—		 	(430.2	)	 	—		 	—		
Other	 	0.1		 	—		 	—		 	0.2		 	0.1		 	(0.2	)	 	—		 	—		
Balance at December 31, 2017	 	$	7,206.9		 	$	274.0		 	274.0		 	$	(1,719.4	)	 	$	461.3		 	$	8,903.2		 	$	(778.8	)	 	$	66.6		
Net earnings	 	1,357.5		 	—		 	—		 	—		 	—		 	1,337.6		 	—		 	19.9		
Other comprehensive income (loss)	 	(188.3	)	 	—		 	—		 	—		 	—		 	—		 	(185.3	)	 	(3.0	)	
Shares issued under incentive stock plans	 	43.1		 	2.1		 	2.1		 	—		 	41.0		 	—		 	—		 	—		
Repurchase of ordinary shares	 	(900.2	)	 	(9.7	)	 	(9.7	)	 	—		 	(581.2	)	 	(309.3	)	 	—		 	—		
Share-based compensation	 	74.7		 	—		 	—		 	—		 	78.8		 	(4.1	)	 	—		 	—		
Dividends declared to noncontrolling interest	 	(41.4	)	 	—		 	—		 	—		 	—		 	—		 	—		 	(41.4	)	
Adoption of ASU 2014-09 (See Note 2)	 	2.4		 	—		 	—		 	—		 	—		 	2.4		 	—		 	—		
Adoption of ASU 2016-16 (See Note 2)	 	(9.1	)	 	—		 	—		 	—		 	—		 	(9.1	)	 	—		 	—		
Cash dividends declared ($1.96 per share)	 	(480.8	)	 	—		 	—		 	—		 	—		 	(480.8	)	 	—		 	—		
Other	 	—		 	—		 	—		 	—		 	0.1		 	(0.1	)	 	—		 	—		
Balance at December 31, 2018	 	$	7,064.8		 	$	266.4		 	266.4		 	$	(1,719.4	)	 	$	—		 	$	9,439.8		 	$	(964.1	)	 	$	42.1		
See accompanying notes to Consolidated Financial Statements.

F-6

Table of Contents

Ingersoll-Rand plc
Consolidated Statements of Cash Flows
In millions

	
													
For the years ended December 31,	 	2018	 	2017	 	2016	
Cash flows from operating activities:	 	 	 	 	 	 	
Net earnings	 	$	1,357.5		 	$	1,312.3		 	$	1,492.7		
Discontinued operations, net of tax	 	21.5		 	25.4		 	(32.9	)	
Adjustments for non-cash transactions:	 	 	 	 	 	 	
Asset impairment	 	—		 	8.4		 	—		
Depreciation and amortization	 	361.5		 	353.3		 	352.2		
Gain on sale of Hussmann equity investment	 	—		 	—		 	(397.8	)	
Gain on sale of joint venture	 	—		 	(1.5	)	 	—		
Other non-cash items, net	 	(78.5	)	 	(55.8	)	 	35.6		
Changes in other assets and liabilities	 	 	 	 	 	 	
Accounts and notes receivable	 	(236.0	)	 	(156.7	)	 	(101.3	)	
Inventories	 	(169.9	)	 	(112.4	)	 	26.8		
Other current and noncurrent assets	 	35.3		 	(206.8	)	 	(24.5	)	
Accounts payable	 	120.7		 	167.2		 	103.6		
Other current and noncurrent liabilities	 	62.4		 	228.2		 	(21.4	)	
Net cash provided by (used in) continuing operating activities	 	1,474.5		 	1,561.6		 	1,433.0		
Net cash provided by (used in) discontinued operating activities	 	(66.7	)	 	(38.1	)	 	88.9		
Net cash provided by (used in) operating activities	 	1,407.8		 	1,523.5		 	1,521.9		
Cash flows from investing activities:	 	 	 	 	 	 	
Capital expenditures	 	(365.6	)	 	(221.3	)	 	(182.7	)	
Acquisitions and equity method investments, net of cash acquired	 	(285.2	)	 	(157.6	)	 	(9.2	)	
Proceeds from sale of property, plant and equipment	 	22.1		 	1.5		 	9.5		
Proceeds from sale of Hussmann equity investment	 	—		 	—		 	422.5		
Other investing activities, net	 	(0.7	)	 	2.7		 	—		
Net cash provided by (used in) investing activities	 	(629.4	)	 	(374.7	)	 	240.1		
Cash flows from financing activities:	 	 	 	 	 	 	
Short-term borrowings (payments), net	 	(6.4	)	 	(4.0	)	 	(150.7	)	
Proceeds from long-term debt	 	1,147.0		 	—		 	—		
Payments of long-term debt	 	(1,123.0	)	 	(7.7	)	 	—		
Net proceeds (repayments) of debt	 	17.6		 	(11.7	)	 	(150.7	)	
Debt issuance costs	 	(12.0	)	 	(0.2	)	 	(2.1	)	
Dividends paid to ordinary shareholders	 	(479.5	)	 	(430.1	)	 	(348.6	)	
Dividends paid to noncontrolling interests	 	(41.4	)	 	(15.8	)	 	(14.1	)	
Acquisition of noncontrolling interest	 	—		 	(6.8	)	 	—		
Proceeds from shares issued under incentive plans	 	68.9		 	76.7		 	62.9		
Repurchase of ordinary shares	 	(900.2	)	 	(1,016.9	)	 	(250.1	)	
Other financing activities, net	 	(32.2	)	 	(27.7	)	 	(24.2	)	
Net cash provided by (used in) financing activities	 	(1,378.8	)	 	(1,432.5	)	 	(726.9	)	
Effect of exchange rate changes on cash and cash equivalents	 	(45.6	)	 	118.4		 	(57.2	)	
Net increase (decrease) in cash and cash equivalents	 	(646.0	)	 	(165.3	)	 	977.9		
Cash and cash equivalents – beginning of period	 	1,549.4		 	1,714.7		 	736.8		
Cash and cash equivalents – end of period	 	$	903.4		 	$	1,549.4		 	$	1,714.7		
Cash paid during the year for:	 	 	 	 	 	 	
Interest	 	$	200.6		 	$	210.0		 	$	209.3		
Income taxes, net of refunds	 	$	375.4		 	$	286.7		 	$	334.3		
See accompanying notes to Consolidated Financial Statements.

F-7

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF COMPANY
Ingersoll-Rand plc (Plc or Parent Company), a public limited company incorporated in Ireland in 2009, and its consolidated subsidiaries (collectively, we, our, the Company) is a diversified, global company that provides products, services and solutions to enhance the quality, energy efficiency and comfort of air in homes and buildings, transport and protect food and perishables and increase industrial productivity and efficiency. The Company's business segments consist of Climate and Industrial, both with strong brands and highly differentiated products within their respective markets. The Company generates revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Ingersoll-Rand ® , Trane ® , Thermo King ® , American Standard ® , ARO ® , and Club Car ® .
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies used in the preparation of the accompanying Consolidated Financial Statements follows:
Basis of Presentation:   The accompanying Consolidated Financial Statements reflect the consolidated operations of the Company and have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) as defined by the Financial Accounting Standards Board (FASB) within the FASB Accounting Standards Codification (ASC). Intercompany accounts and transactions have been eliminated. The assets, liabilities, results of operations and cash flows of all discontinued operations have been separately reported as discontinued operations for all periods presented. Certain reclassifications of amounts reported in prior periods have been made to conform with the current period presentation. The Company has revised its supplemental cash flow information in prior years to properly reflect cash paid during the year for interest.
The Consolidated Financial Statements include all majority-owned subsidiaries of the Company. A noncontrolling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes Noncontrolling interest as a component of Total equity in the Consolidated Balance Sheet and the Net earnings attributable to noncontrolling interests are presented as an adjustment from Net earnings used to arrive at Net earnings attributable to Ingersoll-Rand plc in the Consolidated Statement of Comprehensive Income. Partially-owned equity affiliates represent 20 - 50 % ownership interests in investments where the Company demonstrates significant influence, but does not have a controlling financial interest. Partially-owned equity affiliates are accounted for under the equity method.
Use of Estimates:   The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends, and the assessment of the probable future outcome. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period that they are determined.
Currency Translation:   Assets and liabilities of non-U.S. subsidiaries, where the functional currency is not the U.S. dollar, have been translated at year-end exchange rates, and income and expense accounts have been translated using average exchange rates throughout the year. Adjustments resulting from the process of translating an entity’s financial statements into the U.S. dollar have been recorded in the equity section of the Consolidated Balance Sheet within Accumulated other comprehensive income (loss) . Transactions that are denominated in a currency other than an entity’s functional currency are subject to changes in exchange rates with the resulting gains and losses recorded within Net earnings .
Cash and Cash Equivalents:   Cash and cash equivalents include cash on hand, demand deposits and all highly liquid investments with original maturities at the time of purchase of three months or less. The Company maintains amounts on deposit at various financial institutions, which may at times exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions and has not experienced any losses on such deposits.
Allowance for Doubtful Accounts :  The Company maintains an allowance for doubtful accounts receivable which represents the best estimate of probable loss inherent in the Company's accounts receivable portfolio. This estimate is based upon a two-step policy that results in the total recorded allowance for doubtful accounts. The first step is to record a portfolio reserve based on the aging of the outstanding accounts receivable portfolio and the Company's historical experience with the Company's end markets, customer base and products. The second step is to create a specific reserve for significant accounts as to which the customer's ability to satisfy their financial obligation to the Company is in doubt due to circumstances such as bankruptcy, deteriorating operating results or financial position. In these circumstances, management uses its judgment to record an allowance based on the best estimate of probable loss, factoring in such considerations as the market value of collateral, if applicable. Actual results could differ from those estimates. These estimates and assumptions are reviewed periodically, and the effects of changes, if any, are

F-8

Table of Contents

reflected in the Consolidated Statement of Comprehensive Income in the period that they are determined. The Company reserved $ 32.7 million and $ 26.9 million for doubtful accounts as of December 31, 2018 and 2017 , respectively.
Inventories:   Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or market using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method. At December 31, 2018 and 2017 , approximately 56% and 51% , respectively, of all inventory utilized the LIFO method.
Property, Plant and Equipment:   Property, plant and equipment are stated at cost, less accumulated depreciation. Assets placed in service are recorded at cost and depreciated using the straight-line method over the estimated useful life of the asset except for leasehold improvements, which are depreciated over the shorter of their economic useful life or their lease term. The range of useful lives used to depreciate property, plant and equipment is as follows:

					
Buildings	10	to	50	years	
Machinery and equipment	2	to	12	years	
Software	2	to	7	years	
Major expenditures for replacements and significant improvements that increase asset values and extend useful lives are also capitalized. Capitalized costs are amortized over their estimated useful lives using the straight-line method. Repairs and maintenance expenditures that do not extend the useful life of the asset are charged to expense as incurred. The carrying amounts of assets that are sold or retired and the related accumulated depreciation are removed from the accounts in the year of disposal, and any resulting gain or loss is reflected within current earnings.
Per ASC 360, "Property, Plant, and Equipment," (ASC 360) the Company assesses the recoverability of the carrying value of its property, plant and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.
Goodwill and Intangible Assets:   The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. In accordance with ASC 350, "Intangibles-Goodwill and Other," (ASC 350) goodwill and other indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset is more likely than not less than the carrying amount of the asset.
Impairment of goodwill is assessed at the reporting unit level and begins with an optional qualitative assessment to determine if it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test under ASC 350. For those reporting units that bypass or fail the qualitative assessment, the test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss will be recognized for the amount by which the reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
Intangible assets such as patents, customer-related intangible assets and other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated economic lives. The weighted-average useful lives approximate the following:

			
Customer relationships	20	years	
Completed technology/patents	10	years	
Other	20	years	
The Company assesses the recoverability of the carrying value of its intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to the future net undiscounted cash flows expected to be generated by the asset group. If the undiscounted cash flows are less than the carrying amount of the asset group, an impairment loss is recognized for the amount by which the carrying value of the asset group exceeds the fair value of the asset group.
Employee Benefit Plans : The Company provides a range of benefits, including pensions, postretirement and postemployment benefits to eligible current and former employees. Determining the cost associated with such benefits is dependent on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, mortality, turnover rates, and healthcare cost trend rates. Actuaries perform the required calculations to determine expense in accordance with GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated into Accumulated other comprehensive income

F-9

Table of Contents

(loss) and amortized into Net earnings over future periods. The Company reviews its actuarial assumptions at each measurement date and makes modifications to the assumptions based on current rates and trends, if appropriate.
Loss Contingencies:   Liabilities are recorded for various contingencies arising in the normal course of business, including litigation and administrative proceedings, environmental matters, product liability, product warranty, worker’s compensation and other claims. The Company has recorded reserves in the financial statements related to these matters, which are developed using input derived from actuarial estimates and historical and anticipated experience data depending on the nature of the reserve, and in certain instances with consultation of legal counsel, internal and external consultants and engineers. Subject to the uncertainties inherent in estimating future costs for these types of liabilities, the Company believes its estimated reserves are reasonable and does not believe the final determination of the liabilities with respect to these matters would have a material effect on the financial condition, results of operations, liquidity or cash flows of the Company for any year.
Environmental Costs:   The Company is subject to laws and regulations relating to protecting the environment. Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and can be reasonably estimated, generally no later than the completion of feasibility studies or the Company’s commitment to a plan of action. The assessment of this liability, which is calculated based on existing technology, does not reflect any offset for possible recoveries from insurance companies, and is not discounted.
Asbestos Matters :  Certain of the Company's wholly-owned subsidiaries and former companies are named as defendants in asbestos-related lawsuits in state and federal courts. The Company records a liability for actual and anticipated future claims as well as an asset for anticipated insurance settlements. Asbestos-related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. None of the Company's existing or previously-owned businesses were a producer or manufacturer of asbestos. The Company records certain income and expenses associated with asbestos liabilities and corresponding insurance recoveries within discontinued operations, net of tax, as they relate to previously divested businesses, except for amounts associated with Trane U.S. Inc.’s asbestos liabilities and corresponding insurance recoveries which are recorded within continuing operations.
Product Warranties:   Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available. The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Revenue on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.
Income Taxes:   Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. The Company recognizes future tax benefits, such as net operating losses and tax credits, to the extent that realizing these benefits is considered in its judgment to be more likely than not. The Company regularly reviews the recoverability of its deferred tax assets considering its historic profitability, projected future taxable income, timing of the reversals of existing temporary differences and the feasibility of its tax planning strategies. Where appropriate, the Company records a valuation allowance with respect to a future tax benefit.
Revenue Recognition:   Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract. See Note 11 to the Consolidated Financial Statements for additional information regarding revenue recognition.
Research and Development Costs:  The Company conducts research and development activities for the purpose of developing and improving new products and services. These expenditures are expensed when incurred. For the years ended December 31, 2018, 2017 and 2016, these expenditures amounted to $228.7 million, $210.8 million and $207.9 million, respectively.
Recent Accounting Pronouncements
The FASB ASC is the sole source of authoritative GAAP other than the Securities and Exchange Commission (SEC) issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU's. ASU's not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

F-10

Table of Contents

Recently Adopted Accounting Pronouncements
In August 2017, the FASB issued ASU 2017-12, "Derivatives and hedging (Topic 815): Targeted improvements to accounting for hedging activities" (ASU 2017-12). This standard more closely aligns the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. This standard also addresses specific limitations in current GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. ASU 2017-12 is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this standard on October 1, 2018 with no material impact to the financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16) which removed the prohibition in Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. As a result, the income tax consequences of an intra-entity transfer of assets other than inventory will be recognized in the current period income statement rather than being deferred until the assets leave the consolidated group. The Company applied ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment which reduced Retained earnings by $9.1 million as of January 1, 2018.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (ASC 606), which created a comprehensive, five-step model for revenue recognition that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Under ASC 606, a company will be required to use more judgment and make more estimates when considering contract terms as well as relevant facts and circumstances when identifying performance obligations, estimating the amount of variable consideration in the transaction price and allocating the transaction price to each separate performance obligation. The Company adopted this standard on January 1, 2018 using the modified retrospective approach and recorded a cumulative effect adjustment to increase Retained earnings by $2.4 million with related amounts not materially impacting the Balance Sheet. Refer to Note 11, “Revenue,” for a further discussion on the adoption of ASC 606.
In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" (ASU 2017-07) which changes the way employers that sponsor defined benefit pension and/or postretirement benefit plans reflect net periodic benefit costs in the income statement. Under the previous standard, the multiple components of net periodic benefit costs are aggregated and reported within the operating section of the income statement or capitalized into assets when appropriate. The new standard requires a company to present the service cost component of net periodic benefit cost in the same income statement line as other employee compensation costs with the remaining components of net periodic benefit cost presented separately from the service cost component and outside of any subtotal of operating income, if one is presented. In addition, only the service cost component will be eligible for capitalization in assets. The Company adopted this standard on January 1, 2017 applying the presentation requirements retrospectively.
In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" (ASU 2016-09) which simplifies several aspects of the accounting for employee share-based payment transactions. The standard makes several modifications to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. In addition, ASU 2016-09 clarifies the statement of cash flows presentation for certain components of share-based awards. The Company adopted this standard on January 1, 2017 and prospectively presented any excess tax benefits or deficiencies in the income statement as a component of Provision for income taxes rather than in the Equity section of the Balance Sheet. As part of the adoption, the Company reclassified $15.1 million of excess tax benefits previously unrecognized on a modified retrospective basis through a cumulative-effect adjustment to increase Retained earnings as of January 1, 2017. In addition, the statement of cash flows for the twelve months ended December 31, 2016 was retrospectively adjusted to present $21.7 million of excess tax benefits as an operating activity rather than a financing activity.
Recently Issued Accounting Pronouncements
In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract" (ASU 2018-15), which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, the guidance also clarifies the presentation requirements for reporting such costs in the financial statements. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019 with early adoption permitted. The Company is currently assessing the impact of the ASU on its financial statements.

F-11

Table of Contents

In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02), which allows companies to reclassify stranded tax effects in Accumulated other comprehensive income (loss) that have been caused by the Tax Cuts and Jobs Act of 2017 (the Act) to Retained earnings for each period in which the effect of the change in the U.S. federal corporate income tax rate is recorded . ASU 2018-02 is effective for annual reporting periods beginning after December 15, 2018 with early adoption permitted. However, the FASB has made the reclassification optional. As a result, the Company assessed the impact of the ASU on its financial statements and will not exercise the option to reclassify the stranded tax effects caused by the Act.
In February 2016, the FASB issued ASU 2016-02, "Leases" (ASU 2016-02), which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The FASB allows the option to adopt the standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings applied either to the beginning of the earliest period presented or the beginning of the period of adoption. The Company will adopt the new guidance effective January 1, 2019 using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company expects the estimated right-of-use asset and related lease liability recognized on the Balance Sheet to approximate $500 million. However, the Company does not expect the adoption to have a material impact to its Statement of Cash Flows or Statement of Comprehensive Income.
NOTE 3. INVENTORIES
Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or market using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method.
At December 31, the major classes of inventory were as follows:

									
In millions	 	2018	 	2017	
Raw materials	 	$	550.5		 	$	502.8		
Work-in-process	 	182.0		 	180.5		
Finished goods	 	1,028.8		 	941.0		
 	 	1,761.3		 	1,624.3		
LIFO reserve	 	(83.5	)	 	(68.9	)	
Total	 	$	1,677.8		 	$	1,555.4		
The Company performs periodic assessments to determine the existence of obsolete, slow-moving and non-saleable inventories and records necessary provisions to reduce such inventories to net realizable value. Reserve balances, primarily related to obsolete and slow-moving inventories, were $ 119.9 million and $ 120.3 million at December 31, 2018 and December 31, 2017 , respectively.
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
At December 31, the major classes of property, plant and equipment were as follows:

									
In millions	 	2018	 	2017	
Land	 	$	53.2		 	$	52.0		
Buildings	 	870.7		 	770.1		
Machinery and equipment	 	2,079.9		 	2,019.5		
Software	 	831.4		 	822.7		
 	 	3,835.2		 	3,664.3		
Accumulated depreciation	 	(2,104.4	)	 	(2,113.0	)	
Total	 	$	1,730.8		 	$	1,551.3		
Depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $217.4 million , $217.3 million and $216.7 million , which include amounts for software amortization of $25.7 million , $28.6 million and $35.9 million , respectively.

F-12

Table of Contents

NOTE 5. GOODWILL
The Company records as goodwill the excess of the purchase price over the fair value of the net assets acquired in a business combination. Measurement period adjustments may be recorded once a final valuation has been performed. Goodwill is tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset.
The changes in the carrying amount of Goodwill are as follows:  

													
In millions	 	Climate	 	Industrial	 	Total	
Net balance as of December 31, 2016	 	$	4,879.1		 	$	779.3		 	$	5,658.4		
Acquisitions (1)	 	26.3		 	60.5		 	86.8		
Currency translation	 	159.7		 	30.8		 	190.5		
Net balance as of December 31, 2017	 	5,065.1		 	870.6		 	5,935.7		
Acquisitions (1)	 	118.1		 	1.8		 	119.9		
Currency translation	 	(84.0	)	 	(12.1	)	 	(96.1	)	
Net balance as of December 31, 2018	 	5,099.2		 	860.3		 	5,959.5		
(1) Refer to Note 17, "Acquisitions and Divestitures" for more information regarding acquisitions.
The net goodwill balances at December 31, 2018 , 2017 and 2016 include $ 2,496.0 million of accumulated impairment. The accumulated impairment relates entirely to a charge in the fourth quarter of 2008 associated with the Climate segment.
The Company performed its annual goodwill impairment test during the fourth quarter of 2018 and determined that the estimated fair value of each reporting unit exceeded their respective carrying value. As a result, no impairment charges were recorded during the year. However, the Climate Latin America reporting unit is at risk of impairment as its estimated fair value exceeded its carrying value by 1.1%. The reporting unit has approximately $190 million of goodwill as of December 31, 2018. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in end markets and volume assumptions could have a negative impact on its estimated fair value. With all other assumptions and trends remaining constant for each independent variable, a 0.5% increase in the discount rate combined with a 0.5% decrease in the long-term growth rate would result in an approximate $15 million impairment for this reporting unit.
NOTE 6. INTANGIBLE ASSETS
Indefinite-lived intangible assets are tested and reviewed annually for impairment during the fourth quarter or whenever there is a significant change in events or circumstances that indicate that the fair value of the asset may be less than the carrying amount of the asset. All other intangible assets with finite useful lives are being amortized on a straight-line basis over their estimated useful lives.
The following table sets forth the gross amount and related accumulated amortization of the Company’s intangible assets at December 31:

																									
 	 	2018	 	2017	
In millions	 	Gross carrying amount	 	Accumulated amortization	 	Net carrying amount	 	Gross carrying amount	 	Accumulated amortization	 	Net carrying amount	
Completed technologies/patents	 	$	206.6		 	$	(182.0	)	 	$	24.6		 	$	209.4		 	$	(177.3	)	 	$	32.1		
Customer relationships	 	2,086.8		 	(1,176.3	)	 	910.5		 	2,068.9		 	(1,056.9	)	 	1,012.0		
Other	 	84.5		 	(54.4	)	 	30.1		 	93.9		 	(52.7	)	 	41.2		
Total finite-lived intangible assets	 	$	2,377.9		 	$	(1,412.7	)	 	$	965.2		 	$	2,372.2		 	$	(1,286.9	)	 	$	1,085.3		
Trademarks (indefinite-lived)	 	2,669.5		 	—		 	2,669.5		 	2,657.6		 	—		 	2,657.6		
Total	 	$	5,047.4		 	$	(1,412.7	)	 	$	3,634.7		 	$	5,029.8		 	$	(1,286.9	)	 	$	3,742.9		
Intangible asset amortization expense for 2018 , 2017 and 2016 was $139.3 million , $132.0 million and $132.0 million , respectively. Future estimated amortization expense on existing intangible assets in each of the next five years amounts to approximately $139 million for 2019, $137 million for 2020, $137 million for 2021, $137 million for 2022, and $135 million for 2023.

F-13

Table of Contents

NOTE 7. DEBT AND CREDIT FACILITIES
At December 31, Short-term borrowings and current maturities of long-term debt consisted of the following:

									
In millions	 	2018	 	2017	
Debentures with put feature	 	$	343.0		 	$	343.0		
6.875% Senior notes due 2018 (1)	 	—		 	749.6		
Other current maturities of long-term debt	 	7.6		 	7.7		
Short-term borrowings	 	—		 	6.7		
Total	 	$	350.6		 	$	1,107.0		
(1) During the first quarter of 2018, the Company redeemed its 6.875% Senior notes due 2018.
The Company's short-term obligations primarily consist of current maturities of long-term debt. Other obligations relate to short-term lines of credit used to fund working capital requirements in certain non U.S. countries. The weighted-average interest rate for Short-term borrowings and current maturities of long-term debt at December 31, 2018 and 2017 was 6.3% and 6.7% , respectively.
Commercial Paper Program
The Company uses borrowings under its commercial paper program for general corporate purposes. The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $ 2.0 billion as of December 31, 2018 . Under the commercial paper program, the Company may issue notes from time to time through Ingersoll-Rand Global Holding Company Limited or Ingersoll-Rand Luxembourg Finance S.A. Each of Ingersoll-Rand plc, Ingersoll-Rand Irish Holdings Unlimited Company, Ingersoll-Rand Lux International Holding Company S.à.r.l., Ingersoll-Rand Global Holding Company Limited and Ingersoll-Rand Company provided irrevocable and unconditional guarantees for any notes issued under the commercial paper program. The Company had no outstanding balance under its commercial paper program as of December 31, 2018 and December 31, 2017 .
Debentures with Put Feature
At December 31, 2018 and December 31, 2017 , the Company had $343.0 million of fixed rate debentures outstanding which contain a put feature that the holders may exercise on each anniversary of the issuance date.  If exercised, the Company is obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount of the debentures plus accrued interest. If these options are not exercised, the final contractual maturity dates would range between 2027 and 2028 . Holders of these debentures had the option to exercise the put feature on each of the outstanding debentures in 2018, subject to the notice requirement. No material exercises were made.
At December 31, long-term debt excluding current maturities consisted of:

									
In millions	 	2018	 	2017	
2.875% Senior notes due 2019 (1)	 	$	—		 	$	349.4		
2.625% Senior notes due 2020	 	299.4		 	298.9		
2.900% Senior notes due 2021	 	298.3		 	—		
9.000% Debentures due 2021	 	124.9		 	124.9		
4.250% Senior notes due 2023	 	697.1		 	696.5		
7.200% Debentures due 2019-2025	 	44.8		 	52.3		
3.550% Senior notes due 2024	 	495.9		 	495.2		
6.480% Debentures due 2025	 	149.7		 	149.7		
3.750% Senior notes due 2028	 	544.5		 	—		
5.750% Senior notes due 2043	 	494.3		 	494.0		
4.650% Senior notes due 2044	 	295.8		 	295.6		
4.300% Senior notes due 2048	 	295.9		 	—		
Other loans and notes, at end-of-year average interest rates of 7.0% in 2018 and
5.71% in 2017, maturing in various amounts to 2023	 	0.1		 	0.5		
Total	 	$	3,740.7		 	$	2,957.0		
(1) During the first quarter of 2018, the Company redeemed its 2.875% Senior notes due 2019.

F-14

Table of Contents

Scheduled maturities of long-term debt, including current maturities, as of December 31, 2018 are as follows:

				
In millions	  	
2019	$	350.6		
2020	307.0		
2021	430.7		
2022	7.5		
2023	704.6		
Thereafter	2,290.9		
Total	$	4,091.3		
Issuance and Redemption of Senior Notes
In February 2018, the Company issued $1.15 billion principal amount of senior notes in three tranches through an indirect, wholly-owned subsidiary. The tranches consist of $300 million aggregate principal amount of 2.900% senior notes due 2021, $550 million aggregate principal amount of 3.750% senior notes due 2028 and $300 million aggregate principal amount of 4.300% senior notes due 2048. The notes are fully and unconditionally guaranteed by each of Ingersoll Rand plc, Ingersoll-Rand Irish Holdings Unlimited Company, Ingersoll-Rand Lux International Holding Company S.à.r.l, Ingersoll-Rand Company and Ingersoll-Rand Luxembourg Finance S.A. The Company has the option to redeem the notes in whole or in part at any time, prior to their stated maturity date at redemption prices set forth in the indenture agreement. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to the Company’s operations. In March 2018, the Company used the proceeds to fund the redemption of $750 million aggregate principal amount of 6.875% senior notes due 2018 and $350 million aggregate principal amount of 2.875% senior notes due 2019, with the remainder used for general corporate purposes. As a result of the early redemption, the Company recognized $15.4 million of premium expense and $1.2 million of unamortized costs in Interest expense in 2018.
Other Credit Facilities
The Company maintains two 5-year, $ 1.0 billion revolving credit facilities (the Facilities) through its wholly-owned subsidiaries, Ingersoll-Rand Global Holding Company Limited and Ingersoll-Rand Luxembourg Finance S.A. (collectively, the Borrowers). Each senior unsecured credit facility provides support for the Company's commercial paper program and can be used for working capital and other general corporate purposes. Ingersoll-Rand plc, Ingersoll-Rand Irish Holdings Unlimited Company, Ingersoll-Rand Lux International Holding Company S.à.r.l. and Ingersoll-Rand Company each provide irrevocable and unconditional guarantees for these Facilities.  In addition, each Borrower will guarantee the obligations under the Facilities of the other Borrower. Total commitments of $ 2.0 billion were unused at December 31, 2018 and December 31, 2017 . On April 17, 2018, the Company entered into a new 5-year, $ 1.0 billion senior unsecured credit facility and terminated its 5-year, $ 1.0 billion facility set to expire in March 2019. As a result, the current maturity dates of the Facilities are March 2021 and April 2023.
Fair Value of Debt
The carrying value of the Company's short-term borrowings is a reasonable estimate of fair value due to the short-term nature of the instruments. The fair value of the Company's debt instruments at December 31, 2018 and December 31, 2017 was $4,244.0 million and $ 4,462.2 million , respectively. The Company measures the fair value of its long-term debt instruments for disclosure purposes based upon observable market prices quoted on public exchanges for similar assets. These fair value inputs are considered Level 2 within the fair value hierarchy. The methodologies used by the Company to determine the fair value of its long-term debt instruments at December 31, 2018 are the same as those used at December 31, 2017 .
Guarantees
Along with Ingersoll-Rand plc, certain of the Company's 100% directly or indirectly owned subsidiaries have fully and unconditionally guaranteed, on a joint and several basis, public debt issued by other 100% directly or indirectly owned subsidiaries. Refer to Note 21 for the Company's current guarantor structure.
NOTE 8. FINANCIAL INSTRUMENTS
In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors. These fluctuations can increase the cost of financing, investing and operating the business. The Company may use various financial instruments, including derivative instruments, to manage the risks associated with interest rate, commodity price and foreign currency exposures. These financial instruments are not used for trading or speculative purposes. The Company recognizes all derivatives on the Consolidated Balance Sheet at their fair value as either assets or liabilities.
On the date a derivative contract is entered into, the Company designates the derivative instrument as a cash flow hedge of a forecasted transaction or as an undesignated derivative. The Company formally documents its hedge relationships, including identification of the derivative instruments and the hedged items, as well as its risk management objectives and strategies for

F-15

Table of Contents

undertaking the hedge transaction. This process includes linking derivative instruments that are designated as hedges to specific assets, liabilities or forecasted transactions.
The Company assesses at inception and at least quarterly thereafter, whether the derivatives used in cash flow hedging transactions are highly effective in offsetting the changes in the cash flows of the hedged item. To the extent the derivative is deemed to be a highly effective hedge, the fair market value changes of the instrument are recorded to Accumulated other comprehensive income (AOCI). If the hedging relationship ceases to be highly effective, or it becomes probable that a forecasted transaction is no longer expected to occur, the hedging relationship will be undesignated and any future gains and losses on the derivative instrument will be recorded in Net earnings .
The fair values of derivative instruments included within the Consolidated Balance Sheet as of December 31 were as follows:

																	
 	 	Derivative assets	 	Derivative liabilities	
In millions	 	2018	 	2017	 	2018	 	2017	
Derivatives designated as hedges:	 	 	 	 	 	 	 	 	
Currency derivatives	 	$	1.3		 	$	—		 	$	0.7		 	$	1.3		
Derivatives not designated as hedges:	 	 	 	 	 	 	 	 	
Currency derivatives	 	0.9		 	7.2		 	0.6		 	1.2		
Total derivatives	 	$	2.2		 	$	7.2		 	$	1.3		 	$	2.5		
Asset and liability derivatives included in the table above are recorded within Other current assets and Accrued expenses and other current liabilities , respectively.
Currency Hedging Instruments
The notional amount of the Company’s currency derivatives was $ 0.6 billion and $ 0.7 billion at December 31, 2018 and 2017 , respectively. At December 31, 2018 and 2017 , a net gain of $ 0.5 million and a net loss of $ 1.2 million , net of tax, respectively, was included in AOCI related to the fair value of the Company’s currency derivatives designated as accounting hedges. The amount expected to be reclassified into Net earnings over the next twelve months is a gain of $ 0.5 million . The actual amounts that will be reclassified to Net earnings may vary from this amount as a result of changes in market conditions. Gains and losses associated with the Company’s currency derivatives not designated as hedges are recorded in Net earnings as changes in fair value occur. At December 31, 2018 , the maximum term of the Company’s currency derivatives was approximately 12 months, except for currency derivatives in place related to a certain long-term contract.
Other Derivative Instruments
Prior to 2005, the Company utilized forward-starting interest rate swaps and interest rate locks to manage interest rate exposure in periods prior to the anticipated issuance of certain fixed-rate debt. These instruments were designated as cash flow hedges and had a notional amount of $1.3 billion . Consequently, when the contracts were settled upon the issuance of the underlying debt, any realized gains or losses in the fair values of the instruments were deferred into AOCI. These deferred gains or losses are subsequently recognized in Interest expense over the term of the related notes. The net unrecognized gain in AOCI was $6.7 million and $6.6 million at December 31, 2018 and at December 31, 2017 . The deferred gain at December 31, 2018 will be amortized over the term of notes with maturities ranging from 2018 to 2044. The amount expected to be amortized over the next twelve months is a net gain of $0.7 million . The Company has no forward-starting interest rate swaps or interest rate lock contracts outstanding at December 31, 2018 or 2017 .

F-16

Table of Contents

The following table represents the amounts associated with derivatives designated as hedges affecting Net earnings and AOCI for the years ended December 31 :

																											
 	 	Amount of gain (loss)
recognized in AOCI	 	Location of gain (loss) reclassified from AOCI and recognized into Net earnings	 	Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	
In millions	 	2018	 	2017	 	2016	 		 	2018	 	2017	 	2016	
Currency derivatives designated as hedges	 	$	1.2		 	$	(1.8	)	 	$	2.2		 	Cost of goods sold	 	$	(0.8	)	 	$	(3.1	)	 	$	5.3		
Interest rate swaps & locks	 	—		 	—		 	—		 	Interest expense	 	(0.1	)	 	(0.5	)	 	(0.5	)	
Total	 	$	1.2		 	$	(1.8	)	 	$	2.2		 	 	 	$	(0.9	)	 	$	(3.6	)	 	$	4.8		
The following table represents the amounts associated with derivatives not designated as hedges affecting Net earnings for the years ended December 31 :

															
In millions	 	Location of gain (loss) recognized in Net earnings	 	Amount of gain (loss) recognized in Net earnings	
				2018	 	2017	 	2016	
Currency derivatives	 	Other income/(expense), net	 	$	(29.6	)	 	$	58.0		 	$	(39.2	)	
Total	 	 	 	$	(29.6	)	 	$	58.0			$	(39.2	)	
The gains and losses associated with the Company’s undesignated currency derivatives are materially offset in Other income/(expense), net by changes in the fair value of the underlying transactions.
The following table presents the effects of the Company's designated financial instruments on the associated financial statement line item within the Consolidated Statement of Comprehensive Income where the financial instrument are recorded:

									
 	 	Classification and amount of gain (loss) recognized in income on cash flow hedging relationships	
 	 	2018	
In millions	 	Cost of goods sold	 	Interest expense	
Total amounts presented in the Consolidated Statements of Comprehensive Income	 	$	(10,847.6	)	 	$	(220.7	)	
Gain (loss) on cash flow hedging relationships	 	 	 	 	
Currency derivatives:	 	 	 	 	
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	 	$	(0.8	)	 	$	—		
Amount excluded from effectiveness testing recognized in net earnings based on changes in fair value and amortization	 	$	(0.1	)	 	$	—		
Interest rate swaps & locks:	 	 	 	 	
Amount of gain (loss) reclassified from AOCI and recognized into Net earnings	 	$	—		 	$	(0.1	)	
Concentration of Credit Risk
The counterparties to the Company’s forward contracts consist of a number of investment grade major international financial institutions. The Company could be exposed to losses in the event of nonperformance by the counterparties. However, the credit ratings and the concentration of risk in these financial institutions are monitored on a continuous basis and present no significant credit risk to the Company.
NOTE 9. FAIR VALUE MEASUREMENTS
ASC 820, "Fair Value Measurement," (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

•	Level 1: Observable inputs such as quoted prices in active markets;	
		
•	Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and	
		
•	Level 3: Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.	
ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

F-17

Table of Contents

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 :

																
In Millions	Fair Value	 	Fair value measurements	
		 	Level 1	 	Level 2	 	Level 3	
Assets:	 	 	 	 	 	 	 	
Derivative instruments	$	2.2		 	$	—		 	$	2.2		 	$	—		
Liabilities:	 	 	 	 	 	 	 	
Derivative instruments	$	1.3		 	$	—		 	$	1.3		 	$	—		
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 :

																
In Millions	Fair Value	 	Fair value measurements	
		 	Level 1	 	Level 2	 	Level 3	
Assets:	 	 	 	 	 	 	 	
Derivative instruments	$	7.2		 	$	—		 	$	7.2		 	$	—		
Liabilities:	 	 	 	 	 	 	 	
Derivative instruments	$	2.5		 	$	—		 	$	2.5		 	$	—		
Derivative instruments include forward foreign currency contracts and instruments related to non-functional currency balance sheet exposures. The fair value of the derivative instruments are determined based on a pricing model that uses spot rates and forward prices from actively quoted currency markets that are readily accessible and observable.
The carrying values of cash and cash equivalents, accounts receivable and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. These methodologies used by the Company to determine the fair value of its financial assets and liabilities at December 31, 2018 are the same as those used at December 31, 2017 . There have been no transfers between levels of the fair value hierarchy.
NOTE 10. PENSIONS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors several U.S. defined benefit and defined contribution plans covering substantially all of the Company's U.S. employees. Additionally, the Company has many non-U.S. defined benefit and defined contribution plans covering eligible non-U.S. employees. Postretirement benefits other than pensions (OPEB) provide healthcare benefits, and in some instances, life insurance benefits for certain eligible employees.
Pension Plans
The noncontributory defined benefit pension plans covering non-collectively bargained U.S. employees provide benefits on a final average pay formula while plans for most collectively bargained U.S. employees provide benefits on a flat dollar benefit formula or a percentage of pay formula. The non-U.S. pension plans generally provide benefits based on earnings and years of service. The Company also maintains additional other supplemental plans for officers and other key or highly compensated employees.

F-18

Table of Contents

The following table details information regarding the Company’s pension plans at December 31:

									
In millions	 	2018	 	2017	
Change in benefit obligations:	 	 	 	 	
Benefit obligation at beginning of year	 	$	3,742.2		 	$	3,531.9		
Service cost	 	75.0		 	70.8		
Interest cost	 	109.7		 	109.0		
Employee contributions	 	1.1		 	1.1		
Amendments	 	16.1		 	3.8		
Actuarial (gains) losses	 	(224.8	)	 	175.8		
Benefits paid	 	(218.9	)	 	(194.8	)	
Currency translation	 	(34.8	)	 	69.6		
Curtailments, settlements and special termination benefits	 	(4.6	)	 	(13.1	)	
Other, including expenses paid	 	4.3		 	(11.9	)	
Benefit obligation at end of year	 	$	3,465.3		 	$	3,742.2		
Change in plan assets:	 	 	 	 	
Fair value at beginning of year	 	$	3,063.1		 	$	2,797.1		
Actual return on assets	 	(125.9	)	 	326.9		
Company contributions	 	86.9		 	101.4		
Employee contributions	 	1.1		 	1.1		
Benefits paid	 	(218.9	)	 	(194.8	)	
Currency translation	 	(32.8	)	 	59.0		
Settlements	 	(9.8	)	 	(13.5	)	
Other, including expenses paid	 	3.2		 	(14.1	)	
Fair value of assets end of year	 	$	2,766.9		 	$	3,063.1		
Net unfunded liability	 	$	(698.4	)	 	$	(679.1	)	
Amounts included in the balance sheet:	 	 	 	 	
Other noncurrent assets	 	$	49.9		 	$	61.7		
Accrued compensation and benefits	 	(25.9	)	 	(15.3	)	
Postemployment and other benefit liabilities	 	(722.4	)	 	(725.5	)	
Net amount recognized	 	$	(698.4	)	 	$	(679.1	)	
It is the Company’s objective to contribute to the pension plans to ensure adequate funds, and no less than required by law, are available in the plans to make benefit payments to plan participants and beneficiaries when required. However, certain plans are not or cannot be funded due to either legal, accounting, or tax requirements in certain jurisdictions. As of December 31, 2018 , approximately seven percent of the Company's projected benefit obligation relates to plans that cannot be funded.

F-19

Table of Contents

The pretax amounts recognized in Accumulated other comprehensive income (loss) are as follows:

													
In millions	 	Prior service benefit (cost)	 	Net actuarial gains (losses)	 	Total	
December 31, 2017	 	$	(20.2	)	 	$	(833.5	)	 	$	(853.7	)	
Current year changes recorded to AOCI	 	(16.0	)	 	(47.6	)	 	(63.6	)	
Amortization reclassified to earnings	 	4.2		 	51.3		 	55.5		
Settlements/curtailments reclassified to earnings (1)	 	0.2		 	2.3		 	2.5		
Currency translation and other	 	0.6		 	6.9		 	7.5		
December 31, 2018	 	$	(31.2	)	 	$	(820.6	)	 	$	(851.8	)	
(1) Includes $0.2 million recorded in restructuring charges.
Weighted-average assumptions used to determine the benefit obligation at December 31 are as follows:

							
 	 	2018	 	2017	
Discount rate:	 	 	 	 	
U.S. plans	 	4.21	%	 	3.54	%	
Non-U.S. plans	 	2.47	%	 	2.29	%	
Rate of compensation increase:	 	 	 	 	
U.S. plans	 	4.00	%	 	4.00	%	
Non-U.S. plans	 	4.00	%	 	4.00	%	
The accumulated benefit obligation for all defined benefit pension plans was $ 3,364.6 million and $ 3,626.7 million at December 31, 2018 and 2017 , respectively. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations more than plan assets were $ 3,075.2 million , $ 2,992.0 million and $ 2,330.4 million , respectively, as of December 31, 2018 , and $ 3,291.4 million , $ 3,194.7 million and $ 2,554.0 million , respectively, as of December 31, 2017 .
Pension benefit payments are expected to be paid as follows:

				
In millions	  	
2019	$	232.2		
2020	220.7		
2021	219.6		
2022	226.3		
2023	229.1		
2024 — 2028	1,125.4		

F-20

Table of Contents

The components of the Company’s net periodic pension benefit costs for the years ended December 31 include the following:

													
In millions	 	2018	 	2017	 	2016	
Service cost	 	$	75.0		 	$	70.8		 	$	72.1		
Interest cost	 	109.7		 	109.0		 	110.2		
Expected return on plan assets	 	(146.6	)	 	(141.7	)	 	(146.1	)	
Net amortization of:	 	 	 	 	 	 	
Prior service costs (benefits)	 	4.2		 	3.8		 	4.7		
Plan net actuarial (gains) losses	 	51.3		 	56.8		 	61.6		
Net periodic pension benefit cost	 	93.6		 	98.7		 	102.5		
Net curtailment, settlement, and special termination benefits (gains) losses	 	2.3		 	5.6		 	2.1		
Net periodic pension benefit cost after net curtailment and settlement (gains) losses	 	$	95.9		 	$	104.3		 	$	104.6		
Amounts recorded in continuing operations:	 	 	 	 	 	 	
   Operating income	 	$	72.7		 	$	68.2		 	$	69.3		
   Other income/(expense), net	 	14.6		 	25.4		 	25.5		
Amounts recorded in discontinued operations	 	8.6		 	10.7		 	9.8		
Total	 	$	95.9		 	$	104.3		 	$	104.6		
Net periodic pension benefit cost for 2019 is projected to be approximately $ 113 million . The amounts expected to be recognized in net periodic pension benefit cost during 2019 for prior service cost and plan net actuarial losses are approximately $ 5 million and $ 54 million , respectively.
Weighted-average assumptions used to determine net periodic pension cost for the years ended December 31 are as follows:

										
 	 	2018	 	2017	 	2016	
Discount rate:	 	 	 	 	 	 	
U.S. plans	 	 	 	 	 	 	
Service cost	 	3.70	%	 	4.18	%	 	4.25	%	
Interest cost	 	3.24	%	 	3.36	%	 	3.29	%	
Non-U.S. plans	 			 			 			
Service cost	 	2.52	%	 	2.66	%	 	3.05	%	
Interest cost	 	2.46	%	 	2.50	%	 	3.18	%	
Rate of compensation increase:	 	 	 	 	 	 	
U.S. plans	 	4.00	%	 	4.00	%	 	4.00	%	
Non-U.S. plans	 	4.00	%	 	4.00	%	 	4.00	%	
Expected return on plan assets:	 	 	 	 	 	 	
U.S. plans	 	5.50	%	 	5.50	%	 	5.75	%	
Non-U.S. plans	 	3.25	%	 	3.25	%	 	3.75	%	
The expected long-term rate of return on plan assets reflects the average rate of returns expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return on plan assets is based on what is achievable given the plan’s investment policy, the types of assets held and target asset allocations. The expected long-term rate of return is determined as of the measurement date. The Company reviews each plan and its historical returns and target asset allocations to determine the appropriate expected long-term rate of return on plan assets to be used.
The Company's objective in managing its defined benefit plan assets is to ensure that all present and future benefit obligations are met as they come due. It seeks to achieve this goal while trying to mitigate volatility in plan funded status, contribution, and expense by better matching the characteristics of the plan assets to that of the plan liabilities. The Company utilizes a dynamic approach to asset allocation whereby a plan's allocation to fixed income assets increases as the plan's funded status improves. The Company monitors plan funded status and asset allocation regularly in addition to investment manager performance.

F-21

Table of Contents

The fair values of the Company’s pension plan assets at December 31, 2018 by asset category are as follows:

																					
 	 	Fair value measurements	 	Net asset value	 	Total
fair value	
In millions	 	Level 1	 	Level 2	 	Level 3	 		 		
Cash and cash equivalents	 	$	4.0		 	$	26.8		 	$	—		 	$	—		 	$	30.8		
Equity investments:	 	 	 	 	 	 	 	 	 	 	
Registered mutual funds – equity specialty	 	—		 	—		 	—		 	51.1		 	51.1		
Commingled funds – equity specialty	 	—		 	—		 	—		 	520.7		 	520.7		
 	 	—		 	—		 	—		 	571.8		 	571.8		
Fixed income investments:	 	 	 	 	 	 	 	 	 	 	
U.S. government and agency obligations	 	—		 	476.2		 	—		 	—		 	476.2		
Corporate and non-U.S. bonds (a)	 	—		 	1,225.8		 	—		 	—		 	1,225.8		
Asset-backed and mortgage-backed securities	 	—		 	67.3		 	—		 	—		 	67.3		
Registered mutual funds – fixed income specialty	 	—		 	—		 	—		 	135.1		 	135.1		
Commingled funds – fixed income specialty	 	—		 	—		 	—		 	117.7		 	117.7		
Other fixed income (b)	 	—		 	—		 	24.8		 	—		 	24.8		
 	 	—		 	1,769.3		 	24.8		 	252.8		 	2,046.9		
Derivatives	 	—		 	(0.4	)	 	—		 	—		 	(0.4	)	
Real estate (c)	 	—		 	—		 	4.1		 	—		 	4.1		
Other (d)	 	—		 	—		 	101.6		 	—		 	101.6		
Total assets at fair value	 	$	4.0		 	$	1,795.7		 	$	130.5		 	$	824.6		 	$	2,754.8		
Receivables and payables, net	 	 	 	 	 	 	 	 	 	12.1		
Net assets available for benefits	 	 	 	 	 	 	 	 	 	$	2,766.9		
The fair values of the Company’s pension plan assets at December 31, 2017 by asset category are as follows:

																					
 	 	Fair value measurements	 	Net asset value	 	Total
fair value	
In millions	 	Level 1	 	Level 2	 	Level 3	 				
Cash and cash equivalents	 	$	4.8		 	$	35.4		 	$	—		 	$	—		 	$	40.2		
Equity investments:	 	 	 	 	 	 	 	 	 	 	
Registered mutual funds – equity specialty	 	—		 	—		 	—		 	77.6		 	77.6		
Commingled funds – equity specialty	 	—		 	—		 	—		 	674.7		 	674.7		
 	 	—		 	—		 	—		 	752.3		 	752.3		
Fixed income investments:	 	 	 	 	 	 	 	 	 	 	
U.S. government and agency obligations	 	—		 	517.5		 	—		 	—		 	517.5		
Corporate and non-U.S. bonds (a)	 	—		 	1,336.8		 	—		 	—		 	1,336.8		
Asset-backed and mortgage-backed securities	 	—		 	69.0		 	—		 	—		 	69.0		
Registered mutual funds – fixed income specialty	 	—		 	—		 	—		 	111.0		 	111.0		
Commingled funds – fixed income specialty	 	—		 	—		 	—		 	131.8		 	131.8		
Other fixed income (b)	 	—		 	—		 	26.3		 	—		 	26.3		
 	 	—		 	1,923.3		 	26.3		 	242.8		 	2,192.4		
Derivatives	 	—		 	(0.3	)	 	—		 	—		 	(0.3	)	
Real estate (c)	 	—		 	—		 	4.9		 	—		 	4.9		
Other (d)	 	—		 	—		 	79.0		 	—		 	79.0		
Total assets at fair value	 	$	4.8		 	$	1,958.4		 	$	110.2		 	$	995.1		 	$	3,068.5		
Receivables and payables, net	 	 	 	 	 	 	 	 	 	(5.4	)	
Net assets available for benefits	 	 	 	 	 	 	 	 	 	$	3,063.1		
		
(a)	This class includes state and municipal bonds.	
		
(b)	This class includes group annuity and guaranteed interest contracts.	
		
(c)	This class includes a private equity fund that invests in real estate.	
		
(d)	This investment comprises the Company's non-significant, non-US pension plan assets. It primarily includes insurance contracts.	

F-22

Table of Contents

Cash equivalents are valued using a market approach with inputs including quoted market prices for either identical or similar instruments. Fixed income securities are valued through a market approach with inputs including, but not limited to, benchmark yields, reported trades, broker quotes and issuer spreads. Commingled funds are valued at their daily net asset value (NAV) per share or the equivalent. NAV per share or the equivalent is used for fair value purposes as a practical expedient. NAVs are calculated by the investment manager or sponsor of the fund. Private real estate fund values are reported by the fund manager and are based on valuation or appraisal of the underlying investments. Refer to Note 9, "Fair Value Measurements" for additional information related to the fair value hierarchy defined by ASC 820. There have been no significant transfers between levels of the fair value hierarchy.
The Company made required and discretionary contributions to its pension plans of $ 86.9 million in 2018 , $ 101.4 million in 2017 , and $ 56.4 million in 2016 and currently projects that it will contribute approximately $ 104 million to its plans worldwide in 2019 . The Company’s policy allows it to fund an amount, which could be in excess of or less than the pension cost expensed, subject to the limitations imposed by current tax regulations. However, the Company anticipates funding the plans in 2019 in accordance with contributions required by funding regulations or the laws of each jurisdiction.
Most of the Company’s U.S. employees are covered by defined contribution plans. Employer contributions are determined based on criteria specific to the individual plans and amounted to approximately $131.9 million , $118.7 million , and $108.3 million in 2018 , 2017 and 2016 , respectively. The Company’s contributions relating to non-U.S. defined contribution plans and other non-U.S. benefit plans were $52.0 million , $47.7 million and $ 39.9 million in 2018 , 2017 and 2016 , respectively.
Multiemployer Pension Plans
The Company also participates in a number of multiemployer defined benefit pension plans related to collectively bargained U.S. employees of Trane. The Company's contributions, and the administration of the fixed retirement payments, are determined by the terms of the related collective-bargaining agreements. These multiemployer plans pose different risks to the Company than single-employer plans, including:
		
1.	The Company's contributions to multiemployer plans may be used to provide benefits to all participating employees of the program, including employees of other employers.	
		
2.	In the event that another participating employer ceases contributions to a plan, the Company may be responsible for any unfunded obligations along with the remaining participating employers.	
		
3.	If the Company chooses to withdraw from any of the multiemployer plans, the Company may be required to pay a withdrawal liability, based on the underfunded status of the plan.	
As of December 31, 2018 , the Company does not participate in any plans that are individually significant, nor is the Company an individually significant participant to any of these plans. Total contributions to multiemployer plans for the years ended December 31 were as follows:

													
In millions	 	2018	 	2017	 	2016	
Total contributions	 	$	9.8		 	$	9.0		 	$	7.7		
Contributions to these plans may increase in the event that any of these plans are underfunded.
Postretirement Benefits Other Than Pensions
The Company sponsors several postretirement plans that provide for healthcare benefits, and in some instances, life insurance benefits that cover certain eligible employees. These plans are unfunded and have no plan assets, but are instead funded by the Company on a pay-as-you-go basis in the form of direct benefit payments. Generally, postretirement health benefits are contributory with contributions adjusted annually. Life insurance plans for retirees are primarily noncontributory.

F-23

Table of Contents

The following table details changes in the Company’s postretirement plan benefit obligations for the years ended December 31:

									
In millions	 	2018	 	2017	
Benefit obligation at beginning of year	 	$	528.0		 	$	578.6		
Service cost	 	2.8		 	3.1		
Interest cost	 	14.4		 	15.7		
Plan participants’ contributions	 	9.1		 	9.8		
Actuarial (gains) losses	 	(60.4	)	 	(30.2	)	
Benefits paid, net of Medicare Part D subsidy (1)	 	(50.2	)	 	(55.4	)	
Special termination benefits recorded in restructuring	 	—		 	5.9		
Other	 	(1.0	)	 	0.5		
Benefit obligations at end of year	 	$	442.7		 	$	528.0		
(1) Amounts are net of Medicare Part D subsidy of $0.9 million and $1.1 million in 2018 and 2017 , respectively

The benefit plan obligations are reflected in the Consolidated Balance Sheets as follows: 

									
In millions	 	December 31, 2018	 	December 31, 2017	
Accrued compensation and benefits	 	$	(45.1	)	 	$	(48.5	)	
Postemployment and other benefit liabilities	 	(397.6	)	 	(479.5	)	
Total	 	$	(442.7	)	 	$	(528.0	)	
The pre-tax amounts recognized in Accumulated other comprehensive income (loss) were as follows:

													
In millions	 	Prior service benefit (cost)	 	Net actuarial gains (losses)	 	Total	
Balance at December 31, 2017	 	$	4.1		 	$	31.0		 	$	35.1		
Gain (loss) in current period	 	—		 	60.4		 	60.4		
Amortization reclassified to earnings	 	(3.8	)	 	(1.0	)	 	(4.8	)	
Balance at December 31, 2018	 	$	0.3		 	$	90.4		 	$	90.7		
The components of net periodic postretirement benefit (income) cost for the years ended December 31 were as follows:

													
In millions	 	2018	 	2017	 	2016	
Service cost	 	$	2.8		 	$	3.1		 	$	3.7		
Interest cost	 	14.4		 	15.7		 	17.5		
Net amortization of:	 	 	 	 	 	 	
Prior service costs (benefits)	 	(3.8	)	 	(8.6	)	 	(8.9	)	
Net actuarial (gains) losses	 	(1.0	)	 	0.1		 	0.1		
Net periodic postretirement benefit cost	 	$	12.4		 	$	10.3		 	$	12.4		
Amounts recorded in continuing operations:	 			 			 			
   Operating income	 	$	2.8		 	$	3.1		 	$	3.7		
   Other income/(expense), net	 	7.3		 	5.6		 	4.6		
Amounts recorded in discontinued operations	 	2.3		 	1.6		 	4.1		
Total	 	$	12.4		 	$	10.3		 	$	12.4		
Postretirement cost for 2019 is projected to be approximately $ 11 million . The amount expected to be recognized in net periodic postretirement benefits cost in 2019 for prior service gains and net actuarial gains are approximately $ 1 million and $ 7 million, respectively.

F-24

Table of Contents

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 are as follows: 

										
 	 	2018	 	2017	 	2016	
Discount rate:	 	 	 	 	 	 	
Benefit obligations at December 31	 	4.05	%	 	3.38	%	 	3.73	%	
Net periodic benefit cost	 	 	 	 	 	 	
Service cost	 	3.47	%	 	3.82	%	 	3.97	%	
Interest cost	 	2.94	%	 	2.99	%	 	2.99	%	
Assumed health-care cost trend rates at December 31:	 	 	 	 	 	 	
Current year medical inflation	 	6.45	%	 	6.85	%	 	7.25	%	
Ultimate inflation rate	 	5.00	%	 	5.00	%	 	5.00	%	
Year that the rate reaches the ultimate trend rate	 	2023		 	2023		 	2023		
A 1% change in the assumed medical trend rate would have the following effects as of and for the year ended December 31, 2018 :

									
In millions	 	1%
Increase	 	1%
Decrease	
Effect on total of service and interest cost components of current year benefit cost	 	$	0.4		 	$	(0.4	)	
Effect on benefit obligation at year-end	 	12.2		 	(11.0	)	
Benefit payments for postretirement benefits, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be paid as follows:

				
In millions	  	
2019	$	45.9		
2020	45.0		
2021	43.0		
2022	40.9		
2023	38.4		
2024 — 2027	158.5		
NOTE 11. REVENUE
The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract.
Performance Obligations
A performance obligation is a distinct good, service or a bundle of goods and services promised in a contract. The Company identifies performance obligations at the inception of a contract and allocates the transaction price to individual performance obligations to faithfully depict the Company’s performance in transferring control of the promised goods or services to the customer.
The following are the primary performance obligations identified by the Company:
Equipment and parts . The Company principally generates revenue from the sale of equipment and parts to customers and recognizes revenue at a point in time when control transfers to the customer. Transfer of control is generally determined based on the shipping terms of the contract. However, certain transactions within the Industrial segment include contracts to design, deliver and build highly engineered or customized equipment which have no alternative use for the Company in the event the customer cancels the contract. In addition, the Company has the right to payment for performance completed to date. As a result, revenues related to these contracts are recognized over time with progress towards completion measured using an input method as the basis to recognize revenue and an estimated profit. To-date efforts for work performed corresponds with and faithfully depicts transfer of control to the customer.
Contracting and Installation . The Company enters into various construction-type contracts to design, deliver and build integrated solutions to meet customer specifications. These transactions, primarily included within the Climate segment, provide services that range from the development and installation of new HVAC systems to the design and integration of critical building systems

F-25

Table of Contents

to optimize energy efficiency and overall performance. These contracts have a typical term of less than one year and are considered a single performance obligation as multiple combined goods and services promised in the contract represent a single output delivered to the customer. Revenues associated with contracting and installation contracts are recognized over time with progress towards completion measured using an input method as the basis to recognize revenue and an estimated profit. To-date efforts for work performed corresponds with and faithfully depicts transfer of control to the customer. 
Services and Maintenance . The Company provides various levels of preventative and/or repair and maintenance type service agreements for its customers. The typical length of a contract is 12 months but can be as long as 60 months. Revenues associated with these performance obligations are primarily recognized over time on a straight-line basis over the life of the contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. Certain repair services do not meet the definition of over time revenue recognition as the Company does not transfer control to the customer until the service is completed. As a result, revenue related to these services is recognized at a point in time.
Extended warranties . The Company enters into various warranty contracts with customers related to its products. A standard warranty generally warrants that a product is free from defects in workmanship and materials under normal use and conditions for a certain period of time. The Company’s standard warranty is not considered a distinct performance obligation as it does not provide services to customers beyond assurance that the covered product is free of initial defects. An extended warranty provides a customer with additional time that the Company is liable for covered incidents associated with its products. Extended warranties are purchased separately and can last up to five years. As a result, they are considered separate performance obligations for the Company. Revenue associated with these performance obligations are primarily recognized over time on a straight-line basis over the life of the contract as the customer simultaneously receives and consumes the benefit provided by the Company. However, if historical evidence indicates that the cost of providing these services on a straight-line basis is not appropriate, revenue is recognized over the contract period in proportion to the costs expected to be incurred while performing the service. Refer to Note 20, "Commitments and Contingencies," for more information related to product warranties.
The transaction price allocated to performance obligations reflects the Company’s expectations about the consideration it will be entitled to receive from a customer. To determine the transaction price, variable and noncash consideration are assessed as well as whether a significant financing component exists. The Company’s contracts with customers, dealers and distributors include several forms of sales incentive programs (variable consideration) which are estimated and included in the transaction price. They include, but are not limited to, discounts, coupons, and rebates where the customer does not have to provide any additional requirements to receive the discount. The Company records an accrual (contra receivable) and a sales deduction for its best estimate determined using the expected value method. In addition, sales returns and customer disputes involving a question of quantity or price are also accounted for as variable consideration. All other incentives or incentive programs where the customer is required to reach a certain sales level, remain a customer for a certain period of time, provide a rebate form or is subject to additional requirements are accounted for as a reduction of revenue and establishment of a liability for its best estimate determined using the expected value method. The Company considers historical data in determining its best estimates of variable consideration. These estimates are reviewed regularly for appropriateness, considering also whether the estimates should be constrained in order to avoid a significant reversal of revenue recognition in a future period. If updated information or actual amounts are different from previous estimates of variable consideration, the revisions are included in the results for the period in which they become known through a cumulative effect adjustment to revenue.  The Company has performance guarantees related to energy savings contracts that are provided under the maintenance portion of contracting and installation agreements extending from 2019-2047 . These performance guarantees represent variable consideration and are estimated as part of the overall transaction price. The Company has not recognized any significant adjustments to the transaction price due to variable consideration.
The Company enters into sales arrangements that contain multiple goods and services, such as equipment, installation and extended warranties. For these arrangements, each good or service is evaluated to determine whether it represents a distinct performance obligation. The total transaction price is then allocated to the distinct performance obligations based on their relative standalone selling price at the inception of the arrangement. If available, the Company utilizes observable prices for goods or services sold separately to similar customers in similar circumstances to determine its relative standalone selling price. Otherwise, list prices are used if they are determined to be representative of standalone selling prices. If neither of these items are available at contract inception, judgment may be required and the Company will estimate standalone selling price based on its best estimate. The Company recognizes revenue for delivered goods or services when the delivered good or service is distinct, control of the good or service has transferred to the customer, and only customary refund or return rights related to the goods or services exist. The Company excludes from revenues taxes it collects from a customer that are assessed by a government authority. Excluding noncurrent contract liabilities, unsatisfied (or partially unsatisfied) performance obligations as of the end of the reporting period are expected to be recognized as revenue within the next 12 months.

F-26

Table of Contents

Disaggregated Revenue
A summary of Net revenues by destination for the year ended at December 31 is as follows:

				
In millions	2018	
Climate	 	
     United States	$	8,285.4		
     Non-U.S.	4,058.4		
Total Climate	$	12,343.8		
Industrial	 	
     United States	$	1,763.6		
     Non-U.S.	1,560.8		
Total Industrial	$	3,324.4		
A summary of Net revenues by major type of good or service for the year ended at December 31 is as follows:

				
In millions	2018	
Climate	 	
     Equipment	$	8,425.6		
     Services and parts	3,918.2		
Total Climate	$	12,343.8		
Industrial	 	
     Equipment	$	2,023.3		
     Services and parts	1,301.1		
Total Industrial	$	3,324.4		
Revenue from goods and services transferred to customers at a point in time accounted for approximately 84% of the Company's revenue for the year ended December 31, 2018 .
Contract Balances
The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended December 31, 2018 and December 31, 2017 were as follows:

								
In millions	2018	 	2017	
Contract assets	$	210.9		 	$	166.0		
Contract liabilities	846.2		 	814.2		
The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheet. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Contract assets relate to the conditional right to consideration for any completed performance under the contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is unconditional before it transfers a good or service to the customer. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. During the year ended December 31, 2018 , changes in contract asset and liability balances were not materially impacted by any other factors.
During the year ended December 31, 2018 , approximately 55% of the contract liability balance at the beginning of the period was recognized as revenue. The remaining 45% is expected to be recognized as revenue during 2019 or thereafter .
ASC 606 adoption impact
Under ASC 606, the majority of the Company’s revenue continues to be recognized on a similar basis as previous accounting standards. However, certain highly engineered products sold to customers within the Industrial segment for which revenue was previously recognized at a point in time meet the criteria of a performance obligation satisfied over time. These contracts consist

F-27

Table of Contents

of equipment that is highly engineered or customized to meet the customer’s requirements. In the event the customer cancels the contract, the Company will have no alternative use for the equipment as well as the right to payment for performance completed to date. This change results in accelerated recognition of revenue and increases the balance of contract assets compared to the previous revenue recognition standard.
The Company adopted ASC 606 on January 1, 2018 using the modified retrospective approach with a cumulative effect adjustment to increase Retained earnings by $2.4 million . As a result, the Company applied ASC 606 only to contracts that were not completed as of January 1, 2018. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods presented. The Company elected to reflect the aggregate effect of all contract modifications that occurred before the beginning of the earliest period presented in determining the transaction price, identifying the satisfied and unsatisfied performance obligations and allocating the transaction price to the satisfied and unsatisfied performance obligations for the modified contract at transition. The effects of this relief are immaterial.
The following table summarizes the impact of adopting ASC 606 on the Company’s Consolidated Statements of Comprehensive Income:

												
 	Year Ended December 31, 2018	
In millions	As Reported	 	Balances Without Adoption of ASC 606	 	Effect of Change Higher/(Lower)	
Net revenues	$	15,668.2		 	$	15,651.0		 	$	17.2		
Cost of goods sold	(10,847.6	)	 	(10,831.7	)	 	15.9		
Selling and administrative expenses	(2,903.2	)	 	(2,903.2	)	 	—		
Operating income	1,917.4		 	1,916.1		 	1.3		
Interest expense	(220.7	)	 	(220.7	)	 	—		
Other income/(expense), net	(36.4	)	 	(36.4	)	 	—		
Earnings before income taxes	1,660.3		 	1,659.0		 	1.3		
Provision for income taxes	(281.3	)	 	(281.0	)	 	0.3		
Earnings from continuing operations	$	1,379.0		 	$	1,378.0		 	$	1.0		
The following table summarizes the impact of adopting ASC 606 on the Company’s Balance Sheet:

												
 	December 31, 2018	
In millions	As Reported	 	Balances Without Adoption of ASC 606	 	Effect of Change Higher/(Lower)	
Assets	 	 	 	 	 	
Accounts and notes receivable, net	$	2,679.2		 	$	2,681.2		 	$	(2.0	)	
Inventories, net	1,677.8		 	1,693.7		 	(15.9	)	
Other current assets	471.6		 	454.2		 	17.4		
Other noncurrent assets	857.9		 	857.9		 	—		
 	 	 	 	 	 	
Liabilities	 	 	 	 	 	
Accrued expenses and other current liabilities	$	1,728.2		 	$	1,729.7		 	$	(1.5	)	
Deferred and noncurrent income taxes	538.4		 	538.4		 	—		
Other noncurrent liabilities	1,062.4		 	1,062.4		 	—		
 	 	 	 	 	 	
Equity	 	 	 	 	 	
Retained earnings	$	9,439.8		 	$	9,438.8		 	$	1.0		
NOTE 12. EQUITY
The authorized share capital of Ingersoll Rand plc is 1,185,040,000 shares, consisting of (1)  1,175,000,000 ordinary shares, par value $ 1.00 per share, (2)  40,000 ordinary shares, par value EUR 1.00 and (3)  10,000,000 preference shares, par value $ 0.001 per share. There were no preference shares or Euro-denominated ordinary shares outstanding at December 31, 2018 or 2017 .

F-28

Table of Contents

The changes in ordinary shares and treasury shares for the year ended December 31, 2018 are as follows:

						
In millions	Ordinary shares issued	 	Ordinary shares held in treasury	
December 31, 2017	274.0		 	24.5		
Shares issued under incentive plans	2.1		 	—		
Repurchase of ordinary shares	(9.7	)	 	—		
December 31, 2018	266.4		 	24.5		
Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements. Shares acquired and canceled upon repurchase are accounted for as a reduction of Ordinary Shares and Capital in excess of par value , or Retained earnings to the extent Capital in excess of par value is exhausted. Shares acquired and held in treasury are presented separately on the balance sheet as a reduction to Equity and recognized at cost. In February 2017, the Company's Board of Directors authorized the repurchase of up to $ 1.5 billion of its ordinary shares under a share repurchase program (2017 Authorization) upon completion of the prior authorized share repurchase program. Repurchases under the 2017 Authorization, which began in May 2017, totaled approximately $ 600 million at December 31, 2017 and were held in Treasury. The remaining $ 900 million of ordinary shares were repurchased and canceled during 2018. In October 2018, the Company's Board of Directors authorized the repurchase of up to $1.5 billion of its ordinary shares upon completion of the 2017 Authorization. However, no material amounts were repurchased under this program during 2018.
Other Comprehensive Income (Loss)
The changes in Accumulated other comprehensive income (loss) are as follows:

																	
In millions	 	Derivative Instruments	 	Pension and OPEB Items	 	Foreign Currency Translation	 	Total	
December 31, 2016	 	$	2.9		 	$	(554.4	)	 	$	(739.0	)	 	$	(1,290.5	)	
Other comprehensive income (loss) attributable to Ingersoll-Rand plc	 	1.8		 	60.1		 	449.8		 	511.7		
December 31, 2017	 	$	4.7		 	$	(494.3	)	 	$	(289.2	)	 	$	(778.8	)	
Other comprehensive income (loss) attributable to Ingersoll-Rand plc	 	2.0		 	40.3		 	(227.6	)	 	(185.3	)	
December 31, 2018	 	$	6.7		 	$	(454.0	)	 	$	(516.8	)	 	$	(964.1	)	
The amounts of Other comprehensive income (loss) attributable to noncontrolling interests for 2018 , 2017 and 2016 were $ (3.0) million , $ 0.5 million and $ 9.6 million , respectively, related to currency translation.
NOTE 13. SHARE-BASED COMPENSATION
The Company accounts for stock-based compensation plans in accordance with ASC 718, "Compensation - Stock Compensation" (ASC 718), which requires a fair-value based method for measuring the value of stock-based compensation. Fair value is measured once at the date of grant and is not adjusted for subsequent changes. The Company’s share-based compensation plans include programs for stock options, restricted stock units (RSUs), performance share units (PSUs), and deferred compensation. Under the Company's incentive stock plan, the total number of ordinary shares authorized by the shareholders is 23.0 million , of which 22.9 million remains available as of December 31, 2018 for future incentive awards.

F-29

Table of Contents

Compensation Expense
Share-based compensation expense related to continuing operations is included in Selling and administrative expenses . The following table summarizes the expenses recognized:

													
In millions	 	2018	 	2017	 	2016	
Stock options	 	$	23.5		 	$	19.5		 	$	18.1		
RSUs	 	30.4		 	26.4		 	26.3		
PSUs	 	23.0		 	23.0		 	19.9		
Deferred compensation	 	3.4		 	3.1		 	3.2		
Other	 	0.5		 	1.6		 	2.1		
Pre-tax expense	 	80.8		 	73.6		 	69.6		
Tax benefit	 	19.6		 	28.2		 	26.6		
After-tax expense	 	$	61.2		 	$	45.4		 	$	43.0		
Amounts recorded in continuing operations	 	$	61.2		 	$	45.4		 	$	43.0		
Amounts recorded in discontinued operations	 	—		 	—		 	—		
Total	 	$	61.2		 	$	45.4		 	$	43.0		
Grants issued during the year ended December 31 were as follows:

																					
 	2018	 	2017	 	2016	
 	Number Granted	 	Weighted-average fair value per award	 	Number Granted	 	Weighted-average fair value per award	 	Number Granted	 	Weighted-average fair value per award	
Stock options	1,541,025		 	$	15.51		 	1,518,335		 	$	13.46		 	1,958,476		 	$	9.42		
RSUs	327,411		 	$	90.07		 	372,443		 	$	81.09		 	486,401		 	$	51.28		
Performance shares  (1)	363,342		 	$	106.31		 	419,404		 	$	93.68		 	597.088		 	$	53.82		
(1) The number of performance shares represents the maximum award level.
Stock Options / RSUs
Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. The fair value of each of the Company’s stock option and RSU awards is expensed on a straight-line basis over the required service period, which is generally the 3 -year vesting period. However, for stock options and RSUs granted to retirement eligible employees, the Company recognizes expense for the fair value at the grant date.
The average fair value of the stock options granted is determined using the Black Scholes option pricing model. The following assumptions were used during the year ended December 31:

										
 	 	2018	 	2017	 	2016	
Dividend yield	 	2.00	%	 	2.00	%	 	2.55	%	
Volatility	 	21.64	%	 	22.46	%	 	28.60	%	
Risk-free rate of return	 	2.48	%	 	1.80	%	 	1.12	%	
Expected life in years	 	4.8		 	4.8		 	4.8		
A description of the significant assumptions used to estimate the fair value of the stock option awards is as follows:
		
•	Volatility - The expected volatility is based on a weighted average of the Company’s implied volatility and the most recent historical volatility of the Company’s stock commensurate with the expected life.	
		
•	Risk-free rate of return -The Company applies a yield curve of continuous risk-free rates based upon the published US Treasury spot rates on the grant date.	
		
•	Expected life - The expected life of the Company’s stock option awards represents the weighted-average of the actual period since the grant date for all exercised or canceled options and an expected period for all outstanding options.	
		
•	Dividend yield - The Company determines the dividend yield based upon the expected quarterly dividend payments as of the grant date and the current fair market value of the Company’s stock.	

F-30

Table of Contents

•	Forfeiture Rate - The Company analyzes historical data of forfeited options to develop a reasonable expectation of the number of options to forfeit prior to vesting per year. This expected forfeiture rate is applied to the Company’s ongoing compensation expense; however, all expense is adjusted to reflect actual vestings and forfeitures.	
Changes in options outstanding under the plans for the years 2018 , 2017 and 2016 are as follows:

														
 	 	Shares
subject
to option	 	Weighted-
average
exercise price	 	Aggregate
intrinsic
value (millions)	 	Weighted-
average
remaining life (years)	
December 31, 2015	 	6,836,029		 	$	43.46		 	 	 	 	
Granted	 	1,958,476		 	50.04		 	 	 	 	
Exercised	 	(1,854,058	)	 	33.71		 	 	 	 	
Cancelled	 	(93,552	)	 	56.22		 	 	 	 	
December 31, 2016	 	6,846,895		 	47.81		 	 	 	 	
Granted	 	1,518,335		 	80.27		 	 	 	 	
Exercised	 	(1,789,615	)	 	42.79		 	 	 	 	
Cancelled	 	(220,733	)	 	61.91		 	 	 	 	
December 31, 2017	 	6,354,882		 	56.49		 	 	 	 	
Granted	 	1,541,025		 	89.71		 	 	 	 	
Exercised	 	(1,515,955	)	 	45.44		 	 	 	 	
Cancelled	 	(94,601	)	 	79.53		 	 	 	 	
Outstanding December 31, 2018	 	6,285,351		 	$	66.95		 	$	152.8		 	6.7	
Exercisable December 31, 2018	 	3,262,865		 	$	55.76		 	$	115.7		 	5.3	
The following table summarizes information concerning currently outstanding and exercisable options:

																												
  	 	 	 	 	 	Options outstanding	 	Options exercisable	
Range of
exercise price	 	Number
outstanding at
December 31,
2018	 	Weighted-
average
remaining
life (years)	 	Weighted-
average
exercise
price	 	Number
outstanding at
December 31,
2018	 	Weighted-
average
remaining
life (years)	 	Weighted-
average
exercise
price	
$	10.01		 	—	 	$	20.00		 	34,551		 	0.1	 	$	13.49		 	34,551		 	0.1		 	$	13.49		
20.01		 	—	 	30.00		 	78,051		 	1.7	 	24.95		 	78,051		 	1.7		 	24.95		
30.01		 	—	 	40.00		 	265,557		 	2.7	 	34.41		 	265,557		 	2.7		 	34.41		
40.01		 	—	 	50.00		 	1,764,942		 	6.0	 	47.97		 	1,189,081		 	5.6		 	46.98		
50.01		 	—	 	60.00		 	586,455		 	4.9	 	59.57		 	572,668		 	4.9		 	59.69		
60.01		 	—	 	70.00		 	743,796		 	5.7	 	67.04		 	743,796		 	5.7		 	67.04		
70.01		 	—	 	80.00		 	14,031		 	8.0	 	75.67		 	—		 	—		 	—		
80.01		 	—	 	90.00		 	1,440,841		 	7.8	 	80.75		 	375,001		 	7.6		 	80.31		
90.01		 	—	 	100.00		 	1,340,727		 	8.9	 	90.07		 	4,160		 	2.3		 	90.07		
100.01		 	—	 	110.00		 	16,400		 	9.9	 	101.21		 	—		 	—		 	—		
$	13.49		 	—	 	$	101.21		 	6,285,351		 	6.7	 	$	66.95		 	3,262,865		 	5.3		 	$	55.76		
At December 31, 2018 , there was $11.5 million of total unrecognized compensation cost from stock option arrangements granted under the plan, which is primarily related to unvested shares of non-retirement eligible employees. The aggregate intrinsic value of options exercised during the year ended December 31, 2018 and 2017 was $74.1 million and $72.7 million , respectively. Generally, stock options expire ten years from their date of grant.

F-31

Table of Contents

The following table summarizes RSU activity for the years 2018 , 2017 and 2016 :

								
 	 	RSUs	 	Weighted-
average grant
date fair value	
Outstanding and unvested at December 31, 2015	 	922,611		 	$	58.14		
Granted	 	486,401		 	51.28		
Vested	 	(545,437	)	 	53.84		
Cancelled	 	(27,826	)	 	58.19		
Outstanding and unvested at December 31, 2016	 	835,749		 	$	56.95		
Granted	 	372,443		 	81.09		
Vested	 	(370,397	)	 	58.56		
Cancelled	 	(34,096	)	 	63.79		
Outstanding and unvested at December 31, 2017	 	803,699		 	$	67.09		
Granted	 	327,411		 	90.07		
Vested	 	(389,285	)	 	64.88		
Cancelled	 	(20,186	)	 	77.95		
Outstanding and unvested at December 31, 2018	 	721,639		 	$	78.40		
At December 31, 2018 , there was $ 16.8 million of total unrecognized compensation cost from RSU arrangements granted under the plan, which is related to unvested shares of non-retirement eligible employees.
Performance Shares
The Company has a Performance Share Program (PSP) for key employees. The program provides awards in the form of PSUs based on performance against pre-established objectives. The annual target award level is expressed as a number of the Company's ordinary shares based on the fair market value of the Company's stock on the date of grant. All PSUs are settled in the form of ordinary shares.
Beginning with the 2018 grant year, PSU awards are earned based 50% upon a performance condition, measured by relative Cash Flow Return on Invested Capital (CROIC) growth to the industrial group of companies in the S&P 500 Index over a 3-year performance period, and 50% upon a market condition, measured by the Company's relative total shareholder return (TSR) as compared to the TSR of the industrial group of companies in the S&P 500 Index over a 3 -year performance period. The fair value of the market condition is estimated using a Monte Carlo Simulation approach in a risk-neutral framework based upon historical volatility, risk-free rates and correlation matrix. Awards granted prior to 2018 were earned based 50% upon a performance condition, measured by relative earnings-per-share (EPS) growth to the industrial group of companies in the S&P 500 Index over a 3 -year performance period, and 50% upon a market condition measured by the Company's relative TSR as compared to the TSR of the industrial group of companies in the S&P Index over a 3 -year performance period.

F-32

Table of Contents

The following table summarizes PSU activity for the maximum number of shares that may be issued for the years 2018 , 2017 and 2016 :

								
 	 	PSUs	 	Weighted-average grant date fair value	
Outstanding and unvested at December 31, 2015	 	1,448,232		 	$	63.18		
Granted	 	597,088		 	53.82		
Vested	 	(462,035	)	 	46.81		
Forfeited	 	(159,489	)	 	56.25		
Outstanding and unvested at December 31, 2016	 	1,423,796		 	$	65.34		
Granted	 	419,404		 	93.68		
Vested	 	(353,834	)	 	65.35		
Forfeited	 	(124,830	)	 	73.40		
Outstanding and unvested at December 31, 2017	 	1,364,536		 	$	73.31		
Granted	 	363,342		 	106.31		
Vested	 	(309,306	)	 	76.00		
Forfeited	 	(172,408	)	 	90.89		
Outstanding and unvested at December 31, 2018	 	1,246,164		 	$	79.83		
At December 31, 2018 , there was $ 18.6 million of total unrecognized compensation cost from PSU arrangements based on current performance, which is related to unvested shares. This compensation will be recognized over the required service period, which is generally the three-year vesting period.
Deferred Compensation
The Company allows key employees to defer a portion of their eligible compensation into a number of investment choices, including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution.
NOTE 14. RESTRUCTURING ACTIVITIES
The Company incurs costs associated with restructuring initiatives intended to result in improved operating performance, profitability and working capital levels. Actions associated with these initiatives include workforce reduction, improving manufacturing productivity, realignment of management structures and rationalizing certain assets. Restructuring charges recorded during the years ended December 31 were as follows:

													
In millions	 	2018	 	2017	 	2016	
Climate	 	$	34.1		 	$	42.3		 	$	6.2		
Industrial	 	49.9		 	14.5		 	20.5		
Corporate and Other	 	9.4		 	4.9		 	8.8		
Total	 	$	93.4		 	$	61.7		 	$	35.5		
 	 	 	 	 	 	 	
Cost of goods sold	 	$	72.3		 	$	46.8		 	$	9.8		
Selling and administrative expenses	 	21.1		 	14.9		 	25.7		
Total	 	$	93.4		 	$	61.7		 	$	35.5		

F-33

Table of Contents

The changes in the restructuring reserve were as follows:

																	
In millions	 	Climate	 	Industrial	 	Corporate
and Other	 	Total	
December 31, 2016	 	$	3.4		 	$	4.3		 	$	0.6		 	$	8.3		
Additions, net of reversals (1)	 	25.6		 	14.5		 	4.9		 	45.0		
Cash paid/Other	 	(21.6	)	 	(12.7	)	 	(3.0	)	 	(37.3	)	
December 31, 2017	 	7.4		 	6.1		 	2.5		 	16.0		
Additions, net of reversals (2)	 	16.3		 	49.9		 	9.4		 	75.6		
Cash paid/Other	 	(4.8	)	 	(26.1	)	 	(9.3	)	 	(40.2	)	
December 31, 2018	 	$	18.9		 	$	29.9		 	$	2.6		 	$	51.4		
(1) Excludes the non-cash costs of asset rationalizations ($8.4 million) and pension-related impacts ($8.3 million).
(2) Excludes the non-cash costs of asset rationalizations ($12.3 million) and pension-related impacts ($5.5 million).
Current restructuring actions include general workforce reductions as well as the closure and consolidation of certain manufacturing facilities in an effort to improve the Company's cost structure. Amounts recognized primarily relate to severance and exit costs. However, the Company does include costs that are directly attributable to the restructuring activity but do not fall into the severance, exit or disposal categories. During the year ended December 31, 2018 , costs associated with announced restructuring actions primarily included the following:
		
•	the plan to close a Non-U.S. manufacturing facility within the Industrial segment and relocate production to other U.S. and Non-U.S. facilities; and	
		
•	the plan to close two U.S. manufacturing facilities within the Climate segment and relocate production to another existing U.S. facility.	
As of December 31, 2018 , the Company had $51.4 million accrued for costs associated with its ongoing restructuring actions, of which a majority is expected to be paid within one year. These actions primarily relate to workforce reduction benefits.
NOTE 15. OTHER INCOME/(EXPENSE), NET
The components of Other income/(expense), net for the years ended December 31, 2018 , 2017 and 2016 are as follows:

													
In millions	 	2018	 	2017	 	2016	
Interest income	 	$	6.4		 	$	9.4		 	$	8.0		
Exchange gain (loss)	 	(17.6	)	 	(8.8	)	 	(2.0	)	
Other components of net periodic benefit cost	 	(21.9	)	 	(31.0	)	 	(30.1	)	
Income (loss) from equity investment	 	—		 	—		 	(0.8	)	
Gain on sale of Hussmann equity investment	 	—		 	—		 	397.8		
Other activity, net	 	(3.3	)	 	(1.2	)	 	(13.3	)	
Other income/(expense), net	 	$	(36.4	)	 	$	(31.6	)	 	$	359.6		
Other income /(expense), net includes the results from activities other than normal business operations such as interest income and foreign currency gains and losses on transactions that are denominated in a currency other than an entity’s functional currency. In addition, the Company includes the components of net periodic benefit cost for pension and post retirement obligations other than the service cost component. Other activity, net include costs associated with Trane U.S. Inc. (Trane) for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Refer to Note 20, "Commitments and Contingencies," for more information regarding asbestos-related matters. In addition, other activity, net for the year ended December 31, 2016 includes $16.4 million for the settlement of a lawsuit originally filed by a customer in 2012. The lawsuit related to a commercial HVAC contract entered into in 2001, prior to our acquisition of Trane. The charge represents the settlement and related legal costs recognized during 2016.
Sale of Hussmann Equity Investment
During 2011, the Company completed the sale of a controlling interest of its Hussmann refrigerated display case business (Hussmann) to a newly-formed affiliate of private equity firm Clayton Dubilier & Rice, LLC (CD&R).  Per the terms of the agreement, CD&R’s ownership interest in Hussmann at the acquisition date was 60% with the remaining 40% being retained by the Company.  As a result, the Company accounted for its interest in Hussmann using the equity method of accounting.

F-34

Table of Contents

On December 21, 2015, the Company announced it would sell its remaining equity interest in Hussmann as part of a transaction in which Panasonic Corporation would acquire 100 percent of Hussmann's outstanding shares. The transaction was completed on April 1, 2016. The Company received net proceeds of $422.5 million , for its interest and recognized a gain of $397.8 million on the sale.
NOTE 16. INCOME TAXES
In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”) which makes widespread changes to the Internal Revenue Code. The Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a transition tax on earnings of certain foreign subsidiaries that were previously not subject to U.S. tax and creates new income taxes on certain foreign sourced earnings.
The SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provides guidance on accounting for the tax effects of the Act and allows for adjustments to provisional amounts during a measurement period of up to one year. In accordance with SAB 118, the Company has made reasonable estimates related to (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. As a result, the Company recognized a net provisional income tax benefit of $21.0 million associated with these items in 2017.
During 2018, the Company recognized measurement period adjustments for (1) the remeasurement of U.S. deferred tax balances for the reduction in the tax rate, (2) the liability for the transition tax and (3) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. In determining the measurement period adjustments, the Company assessed regulatory guidance that was issued to determine the impact on the provisional estimates recognized in 2017. In addition, the Company gathered information and performed additional analysis on these estimates, including, but not limited to, the amount of earnings and profits subject to the transition tax, the calculation of foreign tax credits, the local tax treatment of future distributions of unremitted earnings and in regard to the remeasurement of U.S. deferred taxes, the filing of its 2017 federal and state income tax returns. Measurement period adjustments were reported as a component of Provision for income taxes in the reporting period the amounts were determined. As of December 31, 2018, the Company finalized its provisional accounting under SAB 118.
A reconciliation of the provisional amounts reported to the final tax effect of the Act is as follows:

												
In millions	2017
Provisional Amounts Reported	 	2018
Measurement Period Adjustments	 	Final Tax
Effects of
the Act	
Remeasurement of deferred tax balances	$	(300.6	)	 	$	4.8		 	$	(295.8	)	
Transition tax	160.7		 	24.6		 	185.3		
Change in permanent reinvestment assertion	118.9		 	(38.4	)	 	80.5		
Income tax benefit, net	$	(21.0	)	 	$	(9.0	)	 	$	(30.0	)	
Current and deferred provision for income taxes
Earnings before income taxes for the years ended December 31 were taxed within the following jurisdictions:

												
In millions	2018	 	2017	 	2016	
United States (1)	$	971.6		 	$	(17.6	)	 	$	419.8		
Non-U.S.	688.7		 	1,435.5		 	1,321.5		
Total	$	1,660.3		 	$	1,417.9		 	$	1,741.3		
(1) Amount reported in 2017 includes the impact of a premium paid of approximately $520 million related to the early retirement of certain intercompany debt obligations

F-35

Table of Contents

The components of the Provision for income taxes for the years ended December 31 were as follows:

													
In millions	 	2018	 	2017	 	2016	
Current tax expense (benefit):	 	 	 	 	 	 	
United States	 	$	231.9		 	$	102.2		 	$	179.6		
Non-U.S.	 	193.2		 	95.4		 	135.7		
Total:	 	425.1		 	197.6		 	315.3		
Deferred tax expense (benefit):	 	 	 	 	 	 	
United States	 	(83.2	)	 	(234.7	)	 	(6.7	)	
Non-U.S.	 	(60.6	)	 	117.3		 	(27.1	)	
Total:	 	(143.8	)	 	(117.4	)	 	(33.8	)	
Total tax expense (benefit):	 	 	 	 	 	 	
United States	 	148.7		 	(132.5	)	 	172.9		
Non-U.S.	 	132.6		 	212.7		 	108.6		
Total	 	$	281.3		 	$	80.2		 	$	281.5		
The Provision for income taxes differs from the amount of income taxes determined by applying the applicable U.S. statutory income tax rate to pretax income, as a result of the following differences:

										
 	 	Percent of pretax income	
 	 	2018	 	2017	 	2016	
Statutory U.S. rate	 	21.0	 %	 	35.0	 %	 	35.0	 %	
Increase (decrease) in rates resulting from:	 	 	 	 	 	 	
Non-U.S. tax rate differential (a)	 	(1.8	)	 	(28.8	)	 	(14.7	)	
Tax on U.S. subsidiaries on non-U.S. earnings (d)	 	0.7		 	0.8		 	0.9		
State and local income taxes (b)	 	0.1		 	1.2		 	1.4		
Valuation allowances (c)	 	0.7		 	2.8		 	0.1		
Change in permanent reinvestment assertion (d), (f)	 	(2.3	)	 	8.4		 	—		
Transition tax (f)	 	1.5		 	11.3		 	—		
Remeasurement of deferred tax balances (f)	 	0.3		 	(21.2	)	 	—		
Stock based compensation	 	(0.9	)	 	(1.7	)	 	—		
Foreign derived intangible income	 	(1.1	)	 	—		 	—		
Reserves for uncertain tax positions	 	(0.8	)	 	(0.9	)	 	0.1		
Hussmann gain (e)	 	—		 	—		 	(5.7	)	
Provision to return and other true-up adjustments	 	(0.7	)	 	(1.7	)	 	(0.6	)	
Other adjustments	 	0.2		 	0.5		 	(0.3	)	
Effective tax rate	 	16.9	 %	 	5.7	 %	 	16.2	 %	
		
(a)	Amount reported in 2017 includes the impact of a premium paid of approximately $520 million related to the early retirement of certain intercompany debt obligations	
		
(b)	Net of changes in state valuation allowances	
		
(c)	Primarily federal and non-U.S., excludes state valuation allowances	
		
(d)	Net of foreign tax credits	
		
(e)	Gain from sale of Hussmann equity investment	
		
(f)	Provisional amounts reported under SAB 118 were finalized in 2018	

Tax incentives, in the form of tax holidays, have been granted to the Company in certain jurisdictions to encourage industrial development. The expiration of these tax holidays varies by country. The tax holidays are conditional on the Company meeting certain employment and investment thresholds. The most significant tax holidays relate to the Company’s qualifying locations in China, Puerto Rico, Panama and Singapore. The benefit for the tax holidays for the years ended December 31, 2018 , 2017 and 2016 was $ 25.4 million , $ 19.7 million and $ 23.3 million , respectively.

F-36

Table of Contents

Deferred tax assets and liabilities
A summary of the deferred tax accounts at December 31 are as follows:

									
In millions	 	2018	 	2017	
Deferred tax assets:	 	 	 	 	
Inventory and accounts receivable	 	$	20.3		 	$	17.4		
Fixed assets and intangibles	 	39.2		 	10.4		
Postemployment and other benefit liabilities	 	386.1		 	396.5		
Product liability	 	95.1		 	95.4		
Other reserves and accruals	 	153.9		 	134.8		
Net operating losses and credit carryforwards	 	589.9		 	589.0		
Other	 	28.6		 	22.7		
Gross deferred tax assets	 	1,313.1		 	1,266.2		
Less: deferred tax valuation allowances	 	(332.2	)	 	(344.6	)	
Deferred tax assets net of valuation allowances	 	$	980.9		 	$	921.6		
Deferred tax liabilities:	 	 	 	 	
Inventory and accounts receivable	 	$	(18.6	)	 	$	(24.1	)	
Fixed assets and intangibles	 	(1,220.9	)	 	(1,237.4	)	
Postemployment and other benefit liabilities	 	(9.7	)	 	(9.6	)	
Other reserves and accruals	 	(11.8	)	 	(1.5	)	
Product liability	 	(1.2	)	 	(1.4	)	
Undistributed earnings of foreign subsidiaries	 	(39.5	)	 	(137.7	)	
Other	 	(10.6	)	 	(11.1	)	
Gross deferred tax liabilities	 	(1,312.3	)	 	(1,422.8	)	
Net deferred tax assets (liabilities)	 	$	(331.4	)	 	$	(501.2	)	
At December 31, 2018 , no deferred taxes have been provided for earnings of certain of the Company’s subsidiaries, since these earnings have been, and under current plans will continue to be permanently reinvested in these subsidiaries. These earnings amount to approximately $ 3.2 billion which if distributed would result in additional taxes, which may be payable upon distribution, of approximately $400.0 million .
At December 31, 2018 , the Company had the following operating loss and tax credit carryforwards available to offset taxable income in prior and future years:

							
In millions	 	Amount	 	Expiration
Period	
U.S. Federal net operating loss carryforwards	 	$	680.2		 	2020-2036	
U.S. Federal credit carryforwards	 	127.9		 	2022-Unlimited	
U.S. State net operating loss carryforwards	 	3,317.0		 	2019-Unlimited	
U.S. State credit carryforwards	 	30.4		 	2019-Unlimited	
Non-U.S. net operating loss carryforwards	 	752.9		 	2019-Unlimited	
Non-U.S. credit carryforwards	 	7.1		 	Unlimited	
The U.S. state net operating loss carryforwards were incurred in various jurisdictions. The non-U.S. net operating loss carryforwards were incurred in various jurisdictions, predominantly in Belgium, Brazil, China, India, Luxembourg, Spain, and the United Kingdom.

F-37

Table of Contents

Activity associated with the Company’s valuation allowance is as follows:

													
In millions	 	2018	 	2017	 	2016	
Beginning balance	 	$	344.6		 	$	184.5		 	$	213.1		
Increase to valuation allowance	 	54.9		 	176.5		 	19.4		
Decrease to valuation allowance	 	(55.1	)	 	(19.1	)	 	(43.5	)	
Write off against valuation allowance	 	(4.6	)	 	—		 	—		
Accumulated other comprehensive income (loss)	 	(7.6	)	 	2.7		 	(4.5	)	
Ending balance	 	$	332.2		 	$	344.6		 	$	184.5		
During 2018, the Company recorded a net addition to the valuation allowance related to excess foreign tax credits in the amount of $17.3 million. In addition, the Company recorded a $35 million reduction in a valuation allowance for certain state net deferred tax assets. The reduction in certain state net deferred tax assets is primarily the result of revised projections of future state taxable income during the carryforward period.
During 2017, the Company recorded a valuation allowance of approximately $30 million on certain net deferred tax assets in Brazil that were no longer expected to be realized. In addition, the Company recorded a valuation allowance of approximately $100 million related to excess foreign tax credits generated as a result of the Act.
Unrecognized tax benefits
The Company has total unrecognized tax benefits of $ 83.0 million and $ 120.5 million as of December 31, 2018 , and December 31, 2017 , respectively. The amount of unrecognized tax benefits that, if recognized, would affect the continuing operations effective tax rate are $ 60.8 million as of December 31, 2018 . A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

													
In millions	 	2018	 	2017	 	2016	
Beginning balance	 	$	120.5		 	$	107.1		 	$	174.9		
Additions based on tax positions related to the current year	 	3.4		 	6.2		 	5.9		
Additions based on tax positions related to prior years	 	23.5		 	16.8		 	29.1		
Reductions based on tax positions related to prior years	 	(47.2	)	 	(8.6	)	 	(37.6	)	
Reductions related to settlements with tax authorities	 	(14.2	)	 	(4.8	)	 	(60.9	)	
Reductions related to lapses of statute of limitations	 	(0.9	)	 	(1.3	)	 	(2.8	)	
Translation (gain) loss	 	(2.1	)	 	5.1		 	(1.5	)	
Ending balance	 	$	83.0		 	$	120.5		 	$	107.1		
The Company records interest and penalties associated with the uncertain tax positions within its Provision for income taxes . The Company had reserves associated with interest and penalties, net of tax, of $ 20.7 million and $ 35.0 million at December 31, 2018 and December 31, 2017 , respectively. For the year ended December 31, 2018 and December 31, 2017 , the Company recognized a $ 13.4 million tax benefit and a $ 1.9 million tax expense, respectively, in interest and penalties, net of tax in continuing operations related to these uncertain tax positions.
The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits, excluding interest and penalties, could potentially be reduced by up to approximately $ 4 million during the next 12 months.
The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Brazil, Canada, China, France, Germany, Ireland, Italy, Mexico, Spain, the Netherlands, the United Kingdom and the United States. These examinations on their own, or any subsequent litigation related to the examinations, may result in additional taxes or penalties against the Company. If the ultimate result of these audits differ from

F-38

Table of Contents

original or adjusted estimates, they could have a material impact on the Company’s tax provision. In general, the examination of the Company’s material tax returns are complete or effectively settled for the years prior to 2008, with certain matters prior to 2008 being resolved through appeals and litigation and also unilateral procedures as provided for under double tax treaties.
NOTE 17. ACQUISITIONS AND DIVESTITURES
Acquisitions and Equity Method Investments
During 2018 , the Company acquired several businesses and entered into a joint venture. The aggregate cash paid, net of cash acquired, totaled $285.2 million and was funded through cash on hand. Acquisitions are recorded using the acquisition method of accounting in accordance with ASC 805 "Business Combinations." As a result, the aggregate price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition. Ownership interests in a joint venture are accounted for under the equity method when the Company does not have a controlling financial interest and reported within Other noncurrent assets on the Balance Sheet.
Primary activity during 2018 relates to the acquisition of ICS Group Holdings Limited in January 2018. The business, reported within the Climate segment, specializes in the temporary rental of energy efficient chillers for commercial and industrial buildings across Europe. In addition, the Company continues to acquire independent dealers to expand its distribution network. Intangible assets associated with these acquisitions totaled $45.2 million and primarily relate to trademarks and customer relationships. The excess purchase price over the estimated fair value of net assets acquired was recognized as goodwill and totaled $119.9 million .
In addition, the Company completed its investment of a 50% ownership interest in a joint venture with Mitsubishi Electric Corporation (Mitsubishi) in May 2018. The joint venture, reported within the Climate segment, will focus on marketing, selling and supporting variable refrigerant flow (VRF) and ductless heating and air conditioning systems through Trane, American Standard and Mitsubishi channels in the U.S. and select Latin American countries. Ongoing results since the date of investment are accounted for under the equity method and are not considered material to the Company’s results of operations.
During 2017, the Company acquired several businesses, including channel acquisitions, that complement existing products and services. The aggregate cash paid, net of cash acquired, totaled $157.6 million and was funded through cash on hand. These acquisitions were recorded using the acquisition method of accounting in accordance with the accounting guidance for business acquisitions. As a result, the aggregate price has been allocated to assets acquired and liabilities assumed based on the estimate of fair market value of such assets and liabilities at the date of acquisition.
Divestitures
The Company has retained costs from previously sold businesses that primarily include expenses related to postretirement benefits, product liability and legal costs. In addition, the Company includes amounts related to the 2013 spin-off of our commercial and residential security business, now an independent public company operating under the name of Allegion plc (Allegion). The components of Discontinued operations, net of tax for the years ended December 31 are as follows:

													
In millions	 	2018	 	2017	 	2016	
Pre-tax earnings (loss) from discontinued operations	 	$	(85.5	)	 	$	(34.0	)	 	$	28.1		
Tax benefit (expense)	 	64.0		 	8.6		 	4.8		
Discontinued operations, net of tax	 	$	(21.5	)	 	$	(25.4	)	 	$	32.9		
Pre-tax earnings (loss) from discontinued operations includes costs associated with Ingersoll Rand Company for the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of its liability for potential future claims. Refer to Note 20, "Commitments and Contingencies," for more information related to asbestos. A portion of the tax benefit (expense) in each period represent adjustments for certain tax matters associated with Allegion.

F-39

Table of Contents

NOTE 18. EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing Net earnings attributable to Ingersoll-Rand plc by the weighted-average number of ordinary shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive ordinary shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations:

										
In millions	 	2018	 	2017	 	2016	
Weighted-average number of basic shares outstanding	 	247.2		 	254.9		 	259.2		
Shares issuable under incentive stock plans	 	2.9		 	3.2		 	2.5		
Weighted-average number of diluted shares outstanding	 	250.1		 	258.1		 	261.7		
Anti-dilutive shares	 	1.5		 	1.6		 	1.2		
NOTE 19. BUSINESS SEGMENT INFORMATION
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except that the operating segments’ results are prepared on a management basis that is consistent with the manner in which the Company prepares financial information for internal review and decision making. The Company largely evaluates performance based on Segment operating income and Segment operating margins. Intercompany sales between segments are considered immaterial.
The Company's Climate segment delivers energy-efficient products and innovative energy services. It includes Trane ® and American Standard ® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; energy services and building automation through Trane Building Advantage and Nexia; and Thermo King ® transport temperature control solutions.
The Company's Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes compressed air and gas systems and services, power tools, material handling systems, ARO ® fluid management equipment, as well as Club Car ® golf, utility and rough terrain vehicles.
Segment operating income is the measure of profit and loss that the Company's chief operating decision maker uses to evaluate the financial performance of the business and as the basis for performance reviews, compensation and resource allocation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss.

F-40

Table of Contents

A summary of operations by reportable segments for the years ended December 31 were as follows: 

													
Dollar amounts in millions	 	2018	 	2017	 	2016	
Climate	 	 	 	 	 	 	
Net revenues	 	$	12,343.8		 	$	11,167.5		 	$	10,545.0		
Segment operating income	 	1,766.2		 	1,572.7		 	1,537.5		
Segment operating income as a percentage of revenues	 	14.3	%	 	14.1	%	 	14.6	%	
Depreciation and amortization	 	252.0		 	247.6		 	225.2		
Capital expenditures	 	217.3		 	103.8		 	78.2		
Industrial	 	 	 	 	 	 	
Net revenues	 	3,324.4		 	3,030.1		 	2,963.9		
Segment operating income	 	405.3		 	357.6		 	300.3		
Segment operating income as a percentage of revenues	 	12.2	%	 	11.8	%	 	10.1	%	
Depreciation and amortization	 	79.2		 	77.3		 	67.2		
Capital expenditures	 	80.9		 	57.4		 	36.3		
 	 	 	 	 	 	 	
Total net revenues	 	$	15,668.2		 	$	14,197.6		 	$	13,508.9		
 	 	 	 	 	 	 	
Reconciliation to Operating Income	 	 	 	 	 	 	
Segment operating income from reportable segments	 	2,171.5		 	1,930.3		 	1,837.8		
Unallocated corporate expense	 	(254.1	)	 	(265.0	)	 	(234.6	)	
Total operating income	 	$	1,917.4		 	$	1,665.3		 	$	1,603.2		
Total operating income as a percentage of revenues	 	12.2	%	 	11.7	%	 	11.9	%	
Depreciation and Amortization	 	 	 	 	 	 	
Depreciation and amortization from reportable segments	 	331.2		 	324.9		 	292.4		
Unallocated depreciation and amortization	 	30.3		 	28.4		 	59.8		
Total depreciation and amortization	 	$	361.5			$	353.3			$	352.2		
Capital Expenditures	 	 	 	 	 	 	
Capital expenditures from reportable segments	 	298.2		 	161.2		 	114.5		
Corporate capital expenditures	 	67.4		 	60.1		 	68.2		
Total capital expenditures	 	$	365.6		 	$	221.3		 	$	182.7		
At December 31, summary of long-lived assets by geographic area were as follows:

									
In millions	 	2018		2017  (1)	
United States	 	$	1,914.7		 	$	1,878.1		
Non-U.S.	 	781.3		 	758.5		
Total	 	$	2,696.0		 	$	2,636.6		
(1) In the Company's Annual Report on Form 10-K for the year ended December 31, 2017, the amounts disclosed for long-lived assets by geographic area at December 31, 2017 were inadvertently misstated. Management determined the disclosure error was not material to the 2017 financial statements. The revised amounts have been included in table above.
NOTE 20. COMMITMENTS AND CONTINGENCIES
The Company is involved in various litigations, claims and administrative proceedings, including those related to environmental, asbestos, and product liability matters. In accordance with ASC 450, "Contingencies" (ASC 450), the Company records accruals for loss contingencies when it is both probable that a liability will be incurred and the amount of the loss can be reasonably estimated. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, except as expressly set forth in this note, management believes that any liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

F-41

Table of Contents

Environmental Matters
The Company continues to be dedicated to environmental and sustainability programs to minimize the use of natural resources, and reduce the utilization and generation of hazardous materials from our manufacturing processes and to remediate identified environmental concerns. As to the latter, the Company is currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.
The Company is sometimes a party to environmental lawsuits and claims and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. It has also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, the Company’s involvement is minimal.
In estimating its liability, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based on the Company's understanding of the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.
As of December 31, 2018 and 2017 , the Company has recorded reserves for environmental matters of $ 41.2 million and $ 41.9 million , respectively. Of these amounts $ 36.1 million and $ 36.8 million , respectively, relate to remediation of sites previously disposed by the Company.
Asbestos-Related Matters
Certain wholly-owned subsidiaries and former companies of ours are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims have been filed against either Ingersoll-Rand Company or Trane U.S. Inc. (Trane) and generally allege injury caused by exposure to asbestos contained in certain historical products sold by Ingersoll-Rand Company or Trane, primarily pumps, boilers and railroad brake shoes. None of our existing or previously-owned businesses were a producer or manufacturer of asbestos.
The Company engages an outside expert to perform a detailed analysis and project an estimated range of the Company’s total liability for pending and unasserted future asbestos-related claims. In accordance with ASC 450, the Company records the liability at the low end of the range as it believes that no amount within the range is a better estimate than any other amount. Asbestos-related defense costs are excluded from the liability and are recorded separately as services are incurred. The methodology used to prepare estimates relies upon and includes the following factors, among others:
		
•	the outside expert’s interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;	
		
•	epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;	
		
•	the Company’s historical experience with the filing of non-malignancy claims and claims alleging other types of malignant diseases filed against the Company relative to the number of lung cancer claims filed against the Company;	
		
•	the outside expert’s analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s claims history;	
		
•	an analysis of the Company’s pending cases, by type of disease claimed and by year filed;	
		
•	an analysis of the Company’s history to determine the average settlement and resolution value of claims, by type of disease claimed;	
		
•	an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.0% to take account of the declining value of claims resulting from the aging of the claimant population; and	
		
•	an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future (currently projected through 2053).	
At December 31, 2018 , over 75 percent of the open and active claims against the Company are non-malignant or unspecified disease claims. In addition, the Company has a number of claims which have been placed on inactive or deferred dockets and expected to have little or no settlement value against the Company.
The Company’s liability for asbestos-related matters and the asset for probable asbestos-related insurance recoveries are included in the following balance sheet accounts:

F-42

Table of Contents

	
								
In millions	December 31,
2018	 	December 31,
2017	
Accrued expenses and other current liabilities	$	63.3		 	$	48.2		
Other noncurrent liabilities	548.3		 	556.6		
Total asbestos-related liabilities	$	611.6		 	$	604.8		
 	 	 	 	
Other current assets	$	69.2		 	$	56.1		
Other noncurrent assets	199.0		 	210.3		
Total asset for probable asbestos-related insurance recoveries	$	268.2		 	$	266.4		
The Company's asbestos insurance receivable related to Ingersoll-Rand Company and Trane was $ 141.7 million and $ 126.5 million at December 31, 2018 , and $ 138.5 million and $ 127.9 million at December 31, 2017 , respectively. The receivable attributable to Trane for probable insurance recoveries as of December 31, 2018 is entirely supported by settlement agreements between Trane and the respective insurance carriers. Most of these settlement agreements constitute “coverage-in-place” arrangements, in which the insurer signatories agree to reimburse Trane for specified portions of its costs for asbestos bodily injury claims and Trane agrees to certain claims-handling protocols and grants to the insurer signatories certain releases and indemnifications.
The costs associated with the settlement and defense of asbestos-related claims, insurance settlements on asbestos-related matters and the revaluation of the Company's liability for potential future claims are included in the income statement within continuing operations or discontinued operations depending on the business to which they relate. Income and expenses associated with Ingersoll-Rand Company's asbestos-related matters are recorded within discontinued operations as they relate to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold by the Company in 2000. Income and expenses associated with Trane’s asbestos-related matters are recorded within Other income/(expense), net as part of continuing operations.
The income (expense) associated with these transactions for the years ended December 31, were as follows:

													
In millions	 	2018	 	2017	 	2016	
Continuing operations	 	$	(10.4	)	 	$	(3.1	)	 	$	2.7		
Discontinued operations	 	(56.5	)	 	(11.9	)	 	46.3		
Total	 	$	(66.9	)	 	$	(15.0	)	 	$	49.0		
During the year ended December 31, 2018 , the Company's valuation model was updated to address a change in potential future claims. The adjustment, which increased the asbestos-related liability for both Ingersoll-Rand Company and Trane, was partially offset by asbestos-related receivables from insurance carriers. During the year ended December 31, 2017 , the Company recorded an adjustment to update its liability for potential future claims. This amount was partially offset by asbestos-related settlements reached with various insurance carriers. Amounts recorded during the year ended December 31, 2016 included asbestos-related settlements with various insurance carriers.
In 2012 and 2013, Ingersoll-Rand Company filed actions in the Superior Court of New Jersey, Middlesex County, seeking a declaratory judgment and other relief regarding the Company's rights to defense and indemnity for asbestos claims. The defendants were several dozen solvent insurance companies, including companies that had been paying a portion of Ingersoll-Rand Company's asbestos claim defense and indemnity costs. The responding defendants generally challenged the Company's right to recovery, and raised various coverage defenses. Since filing the actions, Ingersoll Rand Company has settled with approximately two-thirds of the insurer defendants, and has dismissed one of the actions in its entirety.
The Company continually monitors the status of pending litigation that could impact the allocation of asbestos claims against the Company's various insurance policies. The Company has concluded that its Ingersoll-Rand Company insurance receivable is probable of recovery because of the following factors:
		
•	Ingersoll-Rand Company has reached favorable settlements regarding asbestos coverage claims for the majority of its recorded asbestos-related insurance receivable;	
		
•	a review of other companies in circumstances comparable to Ingersoll-Rand Company, including Trane, and the success of other companies in recovering under their insurance policies, including Trane's favorable settlement discussed above;	
		
•	the Company's confidence in its right to recovery under the terms of its policies and pursuant to applicable law; and	
		
•	the Company's history of receiving payments under the Ingersoll-Rand Company insurance program, including under policies that had been the subject of prior litigation.	
The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. The Company’s actual liabilities or insurance recoveries could be significantly higher or lower than those recorded

F-43

Table of Contents

if assumptions used in the calculations vary significantly from actual results. Key variables in these assumptions include the number and type of new claims to be filed each year, the average cost of resolution of each such new claim, the resolution of coverage issues with insurance carriers, and the solvency risk with respect to the Company’s insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
The aggregate amount of the stated limits in insurance policies available to the Company for asbestos-related claims acquired, over many years and from many different carriers, is substantial. However, limitations in that coverage, primarily due to the considerations described above, are expected to result in the projected total liability to claimants substantially exceeding the probable insurance recovery.
Warranty Liability
Standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience. The Company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims, or as new information becomes available.
The changes in the standard product warranty liability for the year ended December 31, were as follows:

								
In millions	2018	 	2017	
Balance at beginning of period	$	270.5		 	$	261.6		
Reductions for payments	(159.0	)	 	(140.5	)	
Accruals for warranties issued during the current period	158.2		 	141.9		
Changes to accruals related to preexisting warranties	11.5		 	2.2		
Translation	(2.3	)	 	5.3		
Balance at end of period	$	278.9		 	$	270.5		
Standard product warranty liabilities are classified as Accrued expenses and other current liabilities , or Other noncurrent liabilities based on their expected term. The Company's total current standard product warranty reserve at December 31, 2018 and December 31, 2017 was $ 149.5 million and $ 144.5 million , respectively.
The Company's extended warranty liability represents the deferred revenue associated with its extended warranty contracts and is amortized into Net revenues on a straight-line basis over the life of the contract, unless another method is more representative of the costs incurred. The Company assesses the adequacy of its liability by evaluating the expected costs under its existing contracts to ensure these expected costs do not exceed the extended warranty liability.
The changes in the extended warranty liability for the year ended December 31, were as follows:

								
In millions	2018	 	2017	
Balance at beginning of period	$	293.0		 	$	295.9		
Amortization of deferred revenue for the period	(115.0	)	 	(107.2	)	
Additions for extended warranties issued during the period	116.1		 	100.8		
Changes to accruals related to preexisting warranties	(0.5	)	 	1.3		
Translation	(1.4	)	 	2.2		
Balance at end of period	$	292.2		 	$	293.0		
The extended warranty liability is classified as Accrued expenses and other current liabilities or Other noncurrent liabilities based on the timing of when the deferred revenue is expected to be amortized into Net revenues . The Company's total current extended warranty liability at December 31, 2018 and December 31, 2017 was $ 103.1 million and $ 100.0 million , respectively. For the years ended December 31, 2018 and 2017 , the Company incurred costs of $ 63.2 million and $ 60.7 million , respectively, related to extended warranties.
Other Commitments and Contingencies
Certain office and warehouse facilities, transportation vehicles and data processing equipment are leased by the Company. Total rental expense was $ 261.3 million in 2018 , $ 241.8 million in 2017 and $ 230.4 million in 2016 . Minimum lease payments required under non-cancelable operating leases with terms in excess of one year for the next five years amounts to approximately: $ 197 million in 2019, $ 152 million in 2020, $ 107 million in 2021, $ 68 million in 2022, and $ 42 million in 2023.
Refer to Note 16 for a discussion of income tax-related contingencies.

F-44

Table of Contents

NOTE 21. GUARANTOR FINANCIAL INFORMATION
Ingersoll-Rand plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries. The following condensed consolidating financial information is provided so that separate financial statements of these subsidiary issuer and guarantors are not required to be filed with the U.S. Securities and Exchange Commission.
The following table shows the Company’s guarantor relationships as of December 31, 2018 :

			
Parent, issuer or guarantors	Notes issued	Notes guaranteed (1)	
Ingersoll-Rand plc (Plc)	None	All registered notes and debentures	
Ingersoll-Rand Irish Holdings Unlimited Company (Irish Holdings)	None	All notes issued by Global Holding and Lux Finance	
Ingersoll-Rand Lux International Holding Company S.a.r.l. (Lux International)	None	All notes issued by Global Holding and Lux Finance	
Ingersoll-Rand Global Holding Company Limited (Global Holding)	2.900% Senior notes due 2021
4.250% Senior notes due 2023
3.750% Senior notes due 2028
5.750% Senior notes due 2043
4.300% Senior notes due 2048	All notes issued by Lux Finance	
Ingersoll-Rand Company (New Jersey)	9.000% Debentures due 2021
7.200% Debentures due 2019-2025
6.480% Debentures due 2025
Puttable debentures due 2027-2028	All notes issued by Global Holding and Lux Finance	
Ingersoll-Rand Luxembourg Finance S.A. (Lux Finance)	2.625% Notes due 2020
3.550% Notes due 2024
4.650% Notes due 2044	All notes and debentures issued by Global Holding and New Jersey	
(1) All subsidiary issuers and guarantors provide irrevocable guarantees of borrowings, if any, made under revolving credit facilities
Each subsidiary debt issuer and guarantor is owned 100% directly or indirectly by the Parent Company. Each guarantee is full and unconditional, and provided on a joint and several basis. There are no significant restrictions of the Parent Company, or any guarantor, to obtain funds from its subsidiaries, such as provisions in debt agreements that prohibit dividend payments, loans or advances to the parent by a subsidiary.
Basis of presentation
The following Condensed Consolidating Financial Statements present the financial position, results of operations and cash flows of each issuer or guarantor on a legal entity basis. The financial information for all periods has been presented based on the Company’s legal entity ownerships and guarantees outstanding at December 31, 2018 . Assets and liabilities are attributed to each issuer and guarantor generally based on legal entity ownership. Investments in subsidiaries of the Parent Company, subsidiary guarantors and issuers represent the proportionate share of their subsidiaries’ net assets. Certain adjustments are needed to consolidate the Parent Company and its subsidiaries, including the elimination of investments in subsidiaries and related activity that occurs between entities in different columns. These adjustments are presented in the Consolidating Adjustments column. This basis of presentation is intended to comply with the specific reporting requirements for subsidiary issuers and guarantors, and is not intended to present the Company’s financial position or results of operations or cash flows for any other purpose.

F-45

Table of Contents

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2018

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
Net revenues	$	—		 	$	—		 	$	—		 	$	—		 	$	1,414.5		 	$	—		 	$	14,658.2		 	$	(404.5	)	 	$	15,668.2		
Cost of goods sold	—		 	—		 	—		 	—		 	(1,044.0	)	 	—		 	(10,208.1	)	 	404.5		 	(10,847.6	)	
Selling and administrative expenses	(39.5	)	 	—		 	(0.4	)	 	(0.3	)	 	(391.5	)	 	(0.3	)	 	(2,471.2	)	 	—		 	(2,903.2	)	
Operating income (loss)	(39.5	)		—			(0.4	)		(0.3	)		(21.0	)		(0.3	)		1,978.9			—			1,917.4		
Equity earnings (loss) in subsidiaries, net of tax	1,460.8		 	1,458.6		 	1,183.7		 	1,190.7		 	1,074.3		 	195.6		 	—		 	(6,563.7	)	 	—		
Interest expense	—		 	—		 	0.4		 	(130.3	)	 	(46.8	)	 	(43.0	)	 	(1.0	)	 	—		 	(220.7	)	
Intercompany interest and fees	(92.7	)	 	—		 	41.1		 	(196.5	)	 	122.8		 	(11.2	)	 	136.5		 	—		 	—		
Other income/(expense), net	—		 	—		 	(48.8	)	 	0.7		 	(17.3	)	 	0.1		 	28.9		 	—		 	(36.4	)	
Earnings (loss) before income taxes	1,328.6			1,458.6			1,176.0			864.3			1,112.0			141.2			2,143.3			(6,563.7	)		1,660.3		
Benefit (provision) for income taxes	9.0		 	—		 	—		 	86.2		 	98.5		 	—		 	(475.0	)	 	—		 	(281.3	)	
Earnings (loss) from continuing operations	1,337.6			1,458.6			1,176.0			950.5			1,210.5			141.2			1,668.3			(6,563.7	)		1,379.0		
Gain (loss) from discontinued operations, net of tax	—		 	—		 	—		 	—		 	(20.1	)	 	—		 	(1.4	)	 	—		 	(21.5	)	
Net earnings (loss)	1,337.6			1,458.6			1,176.0			950.5			1,190.4			141.2			1,666.9			(6,563.7	)		1,357.5		
Less: Net earnings attributable to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(19.9	)	 	—		 	(19.9	)	
Net earnings attributable to Ingersoll-Rand plc	$	1,337.6			$	1,458.6			$	1,176.0			$	950.5			$	1,190.4			$	141.2			$	1,647.0			$	(6,563.7	)		$	1,337.6		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss), net of tax	(185.3	)	 	(184.7	)	 	(173.7	)	 	(85.7	)	 	(85.7	)	 	(83.5	)	 	(256.2	)	 	869.5		 	(185.3	)	
Comprehensive income attributable to Ingersoll-Rand plc	$	1,152.3		 	$	1,273.9		 	$	1,002.3		 	$	864.8		 	$	1,104.7		 	$	57.7		 	$	1,390.8		 	$	(5,694.2	)	 	$	1,152.3		

F-46

Table of Contents

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2017

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
Net revenues	$	—		 	$	—		 	$	—		 	$	—		 	$	1,336.6		 	$	—		 	$	13,216.7		 	$	(355.7	)	 	$	14,197.6		
Cost of goods sold	—		 	—		 	—		 	—		 	(957.9	)	 	—		 	(9,209.4	)	 	355.7		 	(9,811.6	)	
Selling and administrative expenses	(15.6	)	 	—		 	(0.1	)	 	(1.2	)	 	(401.7	)	 	(0.2	)	 	(2,301.9	)	 	—		 	(2,720.7	)	
Operating income (loss)	(15.6	)		—			(0.1	)		(1.2	)		(23.0	)		(0.2	)		1,705.4			—			1,665.3		
Equity earnings (loss) in subsidiaries, net of tax	1,349.2		 	1,334.7		 	982.3		 	565.3		 	1,212.5		 	107.9		 	—		 	(5,551.9	)	 	—		
Interest expense	—		 	—		 	—		 	(127.0	)	 	(47.2	)	 	(41.0	)	 	(0.6	)	 	—		 	(215.8	)	
Intercompany interest and fees	(33.1	)	 	—		 	253.0		 	(493.9	)	 	(500.9	)	 	(8.2	)	 	783.1		 	—		 	—		
Other income/(expense), net	—		 	—		 	0.1		 	—		 	(5.8	)	 	—		 	(25.9	)	 	—		 	(31.6	)	
Earnings (loss) before income taxes	1,300.5			1,334.7			1,235.3			(56.8	)		635.6			58.5			2,462.0			(5,551.9	)		1,417.9		
Benefit (provision) for income taxes	2.1		 	—		 	—		 	247.2		 	(42.4	)	 	—		 	(287.1	)	 	—		 	(80.2	)	
Earnings (loss) from continuing operations	1,302.6			1,334.7			1,235.3			190.4			593.2			58.5			2,174.9			(5,551.9	)		1,337.7		
Gain (loss) from discontinued operations, net of tax	—		 	—		 	—		 	—		 	(27.9	)	 	—		 	2.5		 	—		 	(25.4	)	
Net earnings (loss)	1,302.6			1,334.7			1,235.3			190.4			565.3			58.5			2,177.4			(5,551.9	)		1,312.3		
Less: Net earnings attributable to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(9.7	)	 	—		 	(9.7	)	
Net earnings attributable to Ingersoll-Rand plc	$	1,302.6			$	1,334.7			$	1,235.3			$	190.4			$	565.3			$	58.5			$	2,167.7			$	(5,551.9	)		$	1,302.6		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss), net of tax	511.7		 	510.3		 	472.5		 	369.3		 	368.8		 	102.1		 	499.0		 	(2,322.0	)	 	511.7		
Comprehensive income attributable to Ingersoll-Rand plc	$	1,814.3		 	$	1,845.0		 	$	1,707.8		 	$	559.7		 	$	934.1		 	$	160.6		 	$	2,666.7		 	$	(7,873.9	)	 	$	1,814.3		

F-47

Table of Contents

Condensed Consolidating Statement of Comprehensive Income
For the year ended December 31, 2016

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
Net revenues	$	—		 	$	—		 	$	—		 	$	—		 	$	1,327.2		 	$	—		 	$	12,533.9		 	$	(352.2	)	 	$	13,508.9		
Cost of goods sold	—		 	—		 	—		 	—		 	(982.2	)	 	—		 	(8,677.9	)	 	352.2		 	(9,307.9	)	
Selling and administrative expenses	(16.9	)	 	—		 	(0.2	)	 	(0.1	)	 	(352.5	)	 	(0.5	)	 	(2,227.6	)	 	—		 	(2,597.8	)	
Operating income (loss)	(16.9	)		—			(0.2	)		(0.1	)		(7.5	)		(0.5	)		1,628.4			—			1,603.2		
Equity earnings (loss) in subsidiaries, net of tax	1,559.7		 	1,544.0		 	1,463.4		 	609.4		 	808.7		 	1,521.1		 	—		 	(7,506.3	)	 	—		
Interest expense	—		 	—		 	—		 	(127.0	)	 	(47.9	)	 	(42.6	)	 	(4.0	)	 	—		 	(221.5	)	
Intercompany interest and fees	(69.2	)	 	—		 	(46.4	)	 	(164.5	)	 	(277.2	)	 	(6.8	)	 	564.1		 	—		 	—		
Other income/(expense), net	0.9		 	—		 	—		 	—		 	(13.8	)	 	—		 	372.5		 	—		 	359.6		
Earnings (loss) before income taxes	1,474.5			1,544.0			1,416.8			317.8			462.3			1,471.2			2,561.0			(7,506.3	)		1,741.3		
Benefit (provision) for income taxes	1.7		 	—		 	3.0		 	115.6		 	117.3		 	—		 	(519.1	)	 	—		 	(281.5	)	
Earnings (loss) from continuing operations	1,476.2			1,544.0			1,419.8			433.4			579.6			1,471.2			2,041.9			(7,506.3	)		1,459.8		
Gain (loss) from discontinued operations, net of tax	—		 	—		 	—		 	—		 	30.4		 	—		 	2.5		 	—		 	32.9		
Net earnings (loss)	1,476.2			1,544.0			1,419.8			433.4			610.0			1,471.2			2,044.4			(7,506.3	)		1,492.7		
Less: Net earnings attributable to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(16.5	)	 	—		 	(16.5	)	
Net earnings attributable to Ingersoll-Rand plc	$	1,476.2			$	1,544.0			$	1,419.8			$	433.4			$	610.0			$	1,471.2			$	2,027.9			$	(7,506.3	)		$	1,476.2		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss), net of tax	(169.6	)	 	(168.5	)	 	(166.8	)	 	(161.1	)	 	(161.5	)	 	5.0		 	33.3		 	619.6		 	(169.6	)	
Comprehensive income attributable to Ingersoll-Rand plc	$	1,306.6			$	1,375.5			$	1,253.0			$	272.3			$	448.5			$	1,476.2			$	2,061.2			$	(6,886.7	)		$	1,306.6		

F-48

Table of Contents

Condensed Consolidating Balance Sheet
December 31, 2018

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	—		 	$	0.1		 	$	0.2		 	$	—		 	$	363.5		 	$	—		 	$	539.6		 	$	—		 	$	903.4		
Accounts and notes receivable, net	—		 	—		 	0.1		 	—		 	183.4		 	—		 	2,495.7		 	—		 	2,679.2		
Inventories, net	—		 	—		 	—		 	—		 	146.6		 	—		 	1,531.2		 	—		 	1,677.8		
Other current assets	0.2		 	—		 	7.8		 	—		 	101.0		 	—		 	363.4		 	(0.8	)	 	471.6		
Intercompany receivables	59.5		 	—		 	3.9		 	—		 	3,851.0		 	0.1		 	3,838.0		 	(7,752.5	)	 	—		
Total current assets	59.7		 	0.1		 	12.0		 	—		 	4,645.5		 	0.1		 	8,767.9		 	(7,753.3	)	 	5,732.0		
Property, plant and equipment, net	—		 	—		 	0.1		 	—		 	314.6		 	—		 	1,416.1		 	—		 	1,730.8		
Goodwill and other intangible assets, net	—		 	—		 	—		 	—		 	432.1		 	—		 	9,162.1		 	—		 	9,594.2		
Other noncurrent assets	—		 	—		 	8.0		 	180.0		 	498.1		 	—		 	610.6		 	(438.8	)	 	857.9		
Investments in consolidated subsidiaries	9,308.9		 	9,267.8		 	3,935.4		 	11,743.2		 	9,923.2		 	1,264.2		 	—		 	(45,442.7	)	 	—		
Intercompany notes receivable	—		 	—		 	—		 	—		 	—		 	—		 	2,249.7		 	(2,249.7	)	 	—		
Total assets	$	9,368.6		 	$	9,267.9		 	$	3,955.5		 	$	11,923.2		 	$	15,813.5		 	$	1,264.3		 	$	22,206.4		 	$	(55,884.5	)	 	$	17,914.9		
LIABILITIES AND EQUITY		 		 		 		 		 		 		 		 		
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued expenses	$	11.3		 	$	—		 	$	0.1		 	$	41.7		 	$	599.6		 	$	6.9		 	$	3,306.3		 	$	(0.8	)	 	$	3,965.1		
Short-term borrowings and current maturities of long-term debt	—		 	—		 	—		 	—		 	350.4		 	—		 	0.2		 	—		 	350.6		
Intercompany payables	2,334.6		 	—		 	132.9		 	3,518.7		 	1,700.9		 	0.2		 	65.2		 	(7,752.5	)	 	—		
Total current liabilities	2,345.9		 	—		 	133.0		 	3,560.4		 	2,650.9		 	7.1		 	3,371.7		 	(7,753.3	)	 	4,315.7		
Long-term debt	—		 	—		 	—		 	2,330.0		 	319.5		 	1,091.0		 	0.2		 	—		 	3,740.7		
Other noncurrent liabilities	—		 	—		 	—		 	5.5		 	1,100.5		 	—		 	2,126.5		 	(438.8	)	 	2,793.7		
Intercompany notes payable	—		 	—		 	—		 	2,249.7		 	—		 	—		 	—		 	(2,249.7	)	 	—		
Total liabilities	2,345.9		 	—		 	133.0		 	8,145.6		 	4,070.9		 	1,098.1		 	5,498.4		 	(10,441.8	)	 	10,850.1		
Equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	7,022.7		 	9,267.9		 	3,822.5		 	3,777.6		 	11,742.6		 	166.2		 	16,708.0		 	(45,442.7	)	 	7,064.8		
Total liabilities and equity	$	9,368.6		 	$	9,267.9		 	$	3,955.5		 	$	11,923.2		 	$	15,813.5		 	$	1,264.3		 	$	22,206.4		 	$	(55,884.5	)	 	$	17,914.9		

F-49

Table of Contents

Condensed Consolidating Balance Sheet
December 31, 2017

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	—		 	$	—		 	$	0.6		 	$	—		 	$	359.3		 	$	—		 	$	1,189.5		 	$	—		 	$	1,549.4		
Accounts and notes receivable, net	—		 	—		 	—		 	—		 	166.5		 	—		 	2,310.9		 	—		 	2,477.4		
Inventories, net	—		 	—		 	—		 	—		 	168.5		 	—		 	1,386.9		 	—		 	1,555.4		
Other current assets	0.2		 	—		 	5.7		 	112.6		 	76.2		 	—		 	342.2		 	—		 	536.9		
Intercompany receivables	1,819.1		 	9,912.2		 	2,036.8		 	—		 	1,849.9		 	—		 	5,014.8		 	(20,632.8	)	 	—		
Total current assets	1,819.3		 	9,912.2		 	2,043.1		 	112.6		 	2,620.4		 	—		 	10,244.3		 	(20,632.8	)	 	6,119.1		
Property, plant and equipment, net	—		 	—		 	—		 	—		 	310.6		 	—		 	1,240.7		 	—		 	1,551.3		
Goodwill and other intangible assets, net	—		 	—		 	—		 	—		 	436.0		 	—		 	9,242.6		 	—		 	9,678.6		
Other noncurrent assets	—		 	—		 	—		 	185.4		 	471.1		 	—		 	550.8		 	(383.0	)	 	824.3		
Investments in consolidated subsidiaries	7,318.1		 	1,684.2		 	2,953.9		 	10,480.3		 	10,923.7		 	1,150.9		 	—		 	(34,511.1	)	 	—		
Total assets	$	9,137.4		 	$	11,596.4		 	$	4,997.0		 	$	10,778.3		 	$	14,761.8		 	$	1,150.9		 	$	21,278.4		 	$	(55,526.9	)	 	$	18,173.3		
LIABILITIES AND EQUITY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued expenses	$	8.5		 	$	—		 	$	0.2		 	$	27.3		 	$	572.3		 	$	6.9		 	$	3,105.8		 	$	—		 	$	3,721.0		
Short-term borrowings and current maturities of long-term debt	—		 	—		 	—		 	749.6		 	350.4		 	—		 	7.0		 	—		 	1,107.0		
Intercompany payables	1,988.3		 	—		 	9,316.7		 	5,481.1		 	1,790.0		 	523.3		 	1,533.4		 	(20,632.8	)	 	—		
Total current liabilities	1,996.8		 	—		 	9,316.9		 	6,258.0		 	2,712.7		 	530.2		 	4,646.2		 	(20,632.8	)	 	4,828.0		
Long-term debt	—		 	—		 	—		 	1,539.9		 	326.8		 	1,089.7		 	0.6		 	—		 	2,957.0		
Other noncurrent liabilities	0.3		 	—		 	—		 	92.4		 	1,251.8		 	—		 	2,219.9		 	(383.0	)	 	3,181.4		
Total liabilities	1,997.1		 	—		 	9,316.9		 	7,890.3		 	4,291.3		 	1,619.9		 	6,866.7		 	(21,015.8	)	 	10,966.4		
Equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	7,140.3		 	11,596.4		 	(4,319.9	)	 	2,888.0		 	10,470.5		 	(469.0	)	 	14,411.7		 	(34,511.1	)	 	7,206.9		
Total liabilities and equity	$	9,137.4		 	$	11,596.4		 	$	4,997.0		 	$	10,778.3		 	$	14,761.8		 	$	1,150.9		 	$	21,278.4		 	$	(55,526.9	)	 	$	18,173.3		

F-50

Table of Contents

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2018

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) continuing operating activities	$	78.8		 	$	(2.7	)	 	$	31.5		 	$	(217.6	)	 	$	1,544.4		 	$	(52.0	)	 	$	92.1		 	$	—		 	$	1,474.5		
Net cash provided by (used in) discontinued operating activities	—		 	—		 	—		 	—		 	(65.3	)	 	—		 	(1.4	)	 	—		 	(66.7	)	
Net cash provided by (used in) operating activities	78.8			(2.7	)		31.5			(217.6	)		1,479.1			(52.0	)		90.7			—			1,407.8		
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	—		 	—		 	—		 	—		 	(87.7	)	 	—		 	(277.9	)	 	—		 	(365.6	)	
Acquisitions and equity method investments, net of cash acquired	—		 	—		 	—		 	—		 	—		 	—		 	(285.2	)	 	—		 	(285.2	)	
Proceeds from sale of property, plant and equipment	—		 	—		 	—		 	—		 	9.0		 	—		 	13.1		 	—		 	22.1		
Other investing activities, net	—		 	—		 	(7.9	)	 	—		 	3.0		 	—		 	4.2		 	—		 	(0.7	)	
Intercompany investing activities, net	1,058.7		 	(481.2	)	 	545.4		 	9.5		 	287.1		 	—		 	2,641.1		 	(4,060.6	)	 	—		
Net cash provided by (used in) investing activities	1,058.7			(481.2	)		537.5			9.5			211.4			—			2,095.3			(4,060.6	)		(629.4	)	
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net proceeds (repayments) of debt	—		 	—		 	—		 	31.6		 	(7.5	)	 	—		 	(6.5	)	 	—		 	17.6		
Debt issuance costs	—		 	—		 	—		 	(12.0	)	 	—		 	—		 	—		 	—		 	(12.0	)	
Dividends paid to ordinary shareholders	(479.5	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(479.5	)	
Dividends paid to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(41.4	)	 	—		 	(41.4	)	
Proceeds from shares issued under incentive plans	68.9		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	68.9		
Repurchase of ordinary shares	(900.2	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(900.2	)	
Other financing activities, net	(25.8	)	 	—		 	—		 	—		 	(1.5	)	 	—		 	(4.9	)	 	—		 	(32.2	)	
Intercompany financing activities, net	199.1		 	484.0		 	(569.4	)	 	188.5		 	(1,677.3	)	 	52.0		 	(2,737.5	)	 	4,060.6		 	—		
Net cash provided by (used in) financing activities	(1,137.5	)		484.0			(569.4	)		208.1			(1,686.3	)		52.0			(2,790.3	)		4,060.6			(1,378.8	)	
Effect of exchange rate changes on cash and cash equivalents	—		 	—		 	—		 	—		 	—		 	—		 	(45.6	)	 	—		 	(45.6	)	
Net increase (decrease) in cash and cash equivalents	—			0.1			(0.4	)		—			4.2			—			(649.9	)		—			(646.0	)	
Cash and cash equivalents - beginning of period	—		 	—		 	0.6		 	—		 	359.3		 	—		 	1,189.5		 	—		 	1,549.4		
Cash and cash equivalents - end of period	$	—			$	0.1			$	0.2			$	—			$	363.5			$	—			$	539.6			$	—			$	903.4		

F-51

Table of Contents

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2017

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) continuing operating activities	$	83.8		 	$	—		 	$	(42.8	)	 	$	(284.9	)	 	$	438.4		 	$	(48.0	)	 	$	1,415.1		 	$	—		 	$	1,561.6		
Net cash provided by (used in) discontinued operating activities	—		 	—		 	—		 	—		 	(36.9	)	 	—		 	(1.2	)	 	—		 	(38.1	)	
Net cash provided by (used in) operating activities	83.8			—			(42.8	)		(284.9	)		401.5			(48.0	)		1,413.9			—			1,523.5		
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	—		 	—		 	—		 	—		 	(74.2	)	 	—		 	(147.1	)	 	—		 	(221.3	)	
Acquisitions and equity method investments, net of cash acquired	—		 	—		 	—		 	—		 	(2.7	)	 	—		 	(154.9	)	 	—		 	(157.6	)	
Proceeds from sale of property, plant and equipment	—		 	—		 	—		 	—		 	—		 	—		 	1.5		 	—		 	1.5		
Other investing activities, net	—		 	—		 	—		 	—		 	—		 	—		 	2.7		 	—		 	2.7		
Intercompany investing activities, net	285.1		 	285.2		 	2,050.2		 	270.1		 	4,899.4		 	11.7		 	6,788.3		 	(14,590.0	)	 	—		
Net cash provided by (used in) investing activities	285.1			285.2			2,050.2			270.1			4,822.5			11.7			6,490.5			(14,590.0	)		(374.7	)	
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net proceeds (repayments) of debt	—		 	—		 	—		 	—		 	(7.5	)	 	—		 	(4.2	)	 	—		 	(11.7	)	
Debt issuance costs	—		 	—		 	—		 	(0.2	)	 	—		 	—		 	—		 	—		 	(0.2	)	
Dividends paid to ordinary shareholders	(430.1	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(430.1	)	
Dividends paid to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(15.8	)	 	—		 	(15.8	)	
Acquisition of noncontrolling interest	—		 	—		 	—		 	—		 	—		 	—		 	(6.8	)	 	—		 	(6.8	)	
Proceeds from shares issued under incentive plans	76.7		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	76.7		
Repurchase of ordinary shares	(1,016.9	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(1,016.9	)	
Other financing activities, net	(25.4	)	 	—		 	—		 	—		 	(1.7	)	 	—		 	(0.6	)	 	—		 	(27.7	)	
Intercompany financing activities, net	1,026.8		 	(285.2	)	 	(2,006.8	)	 	15.0		 	(5,490.1	)	 	36.3		 	(7,886.0	)	 	14,590.0		 	—		
Net cash provided by (used in) financing activities	(368.9	)		(285.2	)		(2,006.8	)		14.8			(5,499.3	)		36.3			(7,913.4	)		14,590.0			(1,432.5	)	
Effect of exchange rate changes on cash and cash equivalents	—		 	—		 	—		 	—		 	—		 	—		 	118.4		 	—		 	118.4		
Net increase (decrease) in cash and cash equivalents	—			—			0.6			—			(275.3	)		—			109.4			—			(165.3	)	
Cash and cash equivalents – beginning of period	—		 	—		 	—		 	—		 	634.6		 	—		 	1,080.1		 	—		 	1,714.7		
Cash and cash equivalents – end of period	$	—			$	—			$	0.6			$	—			$	359.3			$	—			$	1,189.5			$	—			$	1,549.4		

F-52

Table of Contents

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2016

	
																																				
In millions	Plc	 	Irish Holdings	 	Lux International	 	Global
Holding	 	New
Jersey	 	Lux
Finance	 	Other
Subsidiaries	 	Consolidating
Adjustments	 	
Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) continuing operating activities	$	(80.4	)	 	$	—		 	$	(42.0	)	 	$	(276.6	)	 	$	823.4		 	$	(47.3	)	 	$	1,055.9		 	$	—		 	$	1,433.0		
Net cash provided by (used in) discontinued operating activities	—		 	—		 	—		 	—		 	86.4		 	—		 	2.5		 	—		 	88.9		
Net cash provided by (used in) operating activities	(80.4	)		—			(42.0	)		(276.6	)		909.8			(47.3	)		1,058.4			—			1,521.9		
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	—		 	—		 	—		 	—		 	(73.7	)	 	—		 	(109.0	)	 	—		 	(182.7	)	
Acquisitions and equity method investments, net of cash acquired	—		 	—		 	—		 	—		 	(9.2	)	 	—		 	—		 	—		 	(9.2	)	
Proceeds from sale of property, plant and equipment	—		 	—		 	—		 	—		 	—		 	—		 	9.5		 	—		 	9.5		
Proceeds from sale of Hussmann equity investment	—		 	—		 	—		 	—		 	—		 	—		 	422.5		 	—		 	422.5		
Intercompany investing activities, net	(90.1	)	 	(19,465.7	)	 	6,181.4		 	(172.9	)	 	65.8		 	336.1		 	(2,226.8	)	 	15,372.2		 	—		
Net cash provided by (used in) investing activities	(90.1	)		(19,465.7	)		6,181.4			(172.9	)		(17.1	)		336.1			(1,903.8	)		15,372.2			240.1		
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net proceeds (repayments) of debt	—		 	—		 	—		 	—		 	(7.7	)	 	(143.0	)	 	—		 	—		 	(150.7	)	
Debt issuance costs	—		 	—		 	—		 	(2.1	)	 	—		 	—		 	—		 	—		 	(2.1	)	
Dividends paid to ordinary shareholders	(348.6	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(348.6	)	
Dividends paid to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	(14.1	)	 	—		 	(14.1	)	
Proceeds from shares issued under incentive plans	62.9		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	62.9		
Repurchase of ordinary shares	(250.1	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(250.1	)	
Other financing activities, net	(24.2	)	 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(24.2	)	
Intercompany financing activities, net	730.5		 	19,465.7		 	(6,139.4	)	 	440.2		 	(250.4	)	 	(145.9	)	 	1,271.5		 	(15,372.2	)	 	—		
Net cash provided by (used in) financing activities	170.5			19,465.7			(6,139.4	)		438.1			(258.1	)		(288.9	)		1,257.4			(15,372.2	)		(726.9	)	
Effect of exchange rate changes on cash and cash equivalents	—		 	—		 	—		 	—		 	—		 	—		 	(57.2	)	 	—		 	(57.2	)	
Net increase (decrease) in cash and cash equivalents	—			—			—			(11.4	)		634.6			(0.1	)		354.8			—			977.9		
Cash and cash equivalents – beginning of period	—		 	—		 	—		 	11.4		 	—		 	0.1		 	725.3		 	—		 	736.8		
Cash and cash equivalents – end of period	$	—			$	—			$	—			$	—			$	634.6			$	—			$	1,080.1			$	—			$	1,714.7		

F-53

Table of Contents

NOTE 22. SUBSEQUENT EVENTS
On February 6, 2019, the Company entered into a final, binding and irrevocable offer letter with Silver II GP Holdings S.C.A., an affiliate of BC Partners Advisors L.P. and The Carlyle Group (the Seller) pursuant to which the Company made a binding offer to acquire the precision flow systems management business (the Business) for approximately $1.45 billion in cash, subject to working capital and certain other adjustments (the Acquisition). The Business is a manufacturer of precision flow control equipment including electric diaphragm pumps and controls that serve the global water, oil and gas, agriculture, industrial and specialty market segments. The offer is subject to completion of information and consultation processes with employee representative bodies of the Business in applicable jurisdictions. If the offer is accepted, completion of the Acquisition would be subject to customary closing conditions and expected to close mid-year 2019 subject to regulatory approvals. The results of the Business will be included in the Company’s consolidated financial statements as of the date of acquisition and reported within the Industrial segment.

F-54

Table of Contents

SCHEDULE II
INGERSOLL-RAND PLC
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED December 31, 2018 , 2017 AND 2016
(Amounts in millions)

	
				
Allowances for Doubtful Accounts:	 	
 	 	
Balance December 31, 2015	$	28.3		
Additions charged to costs and expenses	7.9		
Deductions (a)	(9.5	)	
Business acquisitions and divestitures, net	—		
Currency translation	(0.7	)	
 	 	
Balance December 31, 2016	26.0		
Additions charged to costs and expenses	9.7		
Deductions (a)	(9.7	)	
Business acquisitions and divestitures, net	—		
Currency translation	1.3		
 	 	
Balance December 31, 2017	26.9		
Additions charged to costs and expenses	15.3		
Deductions (a)	(9.1	)	
Business acquisitions and divestitures, net	0.5		
Currency translation	(0.9	)	
Balance December 31, 2018	$	32.7		

	
		
(a)	“Deductions” include accounts and advances written off, less recoveries.	

 

F-55

Exhibit 10.27*

INGERSOLL-RAND COMPANY

KEY MANAGEMENT

SUPPLEMENTAL PROGRAM

Effective January 1, 2005

Amended and Restated Effective October 1, 2012

INGERSOLL-RAND

TABLE OF CONTENTS
Page

INTRODUCTION .................................................................................................................      1

SECTION 1 - DEFINITIONS

1.1      Actuarial Equivalent.....................................................................................................      2
1.2      Board............................................................................................................................      2
1.3      Change in Control........................................................................................................      2
1.4      Company......................................................................................................................      2
1.5      Compensation Committee............................................................................................      2
1.6      Deferral Plan................................................................................................................      2
1.7      Employee.....................................................................................................................      2
1.8      Employer......................................................................................................................      2
1.9      Final Average Pay.........................................................................................................      2
1.10      Foreign Plan.................................................................................................................      3
1.11      Pension Plan.................................................................................................................      3
1.12      Predecessor Program....................................................................................................      3
1.13      Program........................................................................................................................      3
1.14      Retirement....................................................................................................................      3
1.15      Separation from Service...............................................................................................      4
1.16      Year of Service.............................................................................................................      4

SECTION 2 - PARTICIPATION

2.1      Eligibility to Participate................................................................................................      4
2.2      Duration of Participation..............................................................................................      5

SECTION 3 - AMOUNT OF BENEFIT

3.1      Amount of Benefit........................................................................................................      5

SECTION 4 - VESTING

4.1      Vesting...........................................................................................................................      6
4.2      Forfeiture for Cause.......................................................................................................      6

SECTION 5 - DISTRIBUTIONS

5.1      Retirement.....................................................................................................................      6
5.2      Time and Form of Distribution......................................................................................      7
5.3      Disability........................................................................................................................      8
5.4      Death..............................................................................................................................      9
5.5      No Acceleration..............................................................................................................      10

SECTION 6 - FUNDING

6.1      Funding...........................................................................................................................      10
6.2      Company Obligation.......................................................................................................      10

SECTION 7 - MISCELLANEOUS

7.1      Amendment and Termination.      ..........................................................................................      11
7.2      No Contract of Employment............................................................................................      11
7.3      Withholding.……………………………………………….............................................      11
7.4      Loans……………………………………………….......................................................      11
7.5      Compensation Committee……………………………………………….......................      11
7.6      Entire Agreement; Successors……………………………………………….................      12
7.7      Severability………………………………………………..............................................      12
7.8      Governing Law ……………………………………………….......................................      12
7.9      Participant as General Creditor ………………………………………………..............      12
7.10      Nonassignability………………………………………………………………..............      12

APPENDIX A …………………………………………………………………………............      14

APPENDIX B …………………………………………………………………………............      17

INTRODUCTION

Ingersoll-Rand Company (the “Company”) has adopted this Ingersoll-Rand Company Key Management Supplemental Program (the “Program”) to provide retirement benefits to certain individuals employed by the Company and its affiliates in addition to the benefits provided from other qualified and non-qualified plans.

It is intended that this Program be treated as a plan which is unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

The Program is a continuation of the Ingersoll-Rand Company Key Management Supplemental Program (the “Predecessor Program”). The Predecessor Program became effective on June 30, 1995 and was thereafter amended. Effective January 1, 2005, the Company froze the Predecessor Program to limit the applicability of its terms to retirement benefits that were accrued and vested thereunder as of December 31, 2004, and to make the Predecessor Program inapplicable to all retirement benefits accrued or vested after December 31, 2004 that would otherwise be subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company adopted the Program effective January 1, 2005 as the Ingersoll-Rand Company Key Management Supplemental Program II, to provide retirement benefits subject to Section 409A of the Code on substantially the same terms as those provided under the Predecessor Program to the extent those terms are not inconsistent with Section 409A of the Code. The Program applies to benefits accrued or vested after December 31, 2004, that, pursuant to the effective date rules of Section 885(d) of the American Jobs Creation Act of 2004 and Treasury Regulations Section 1.409A-6, are subject to Section 409A of the Code.

The Company now hereby amends and restates the Program effective as of October 1, 2012.

SECTION 1

DEFINITIONS

1.1	“Actuarial Equivalent” means an amount having equal value when computed on the basis of the mortality table specified in the Pension Plan and an interest rate equal to the average of the monthly rates for ten year Constant Maturities for US Treasury Securities for the twelve-month period immediately preceding the month prior to the month in which a determination of benefit occurs, such rate as quoted by the Federal Reserve.	

1.2	“Board” means the Board of Directors of Ingersoll-Rand plc (or if Ingersoll-Rand plc is a subsidiary of any other company, of the ultimate parent company).	

1.3	“Change in Control” shall have the same meaning as such term is defined in the Ingersoll-Rand Company Limited Incentive Stock Plan of 2007 or any successor or replacement plan thereto, unless a different definition is used for purposes of a change in control event in any severance or employment agreement between an Employer and an Employee, in which event as to such Employee such definition shall apply. The term Change in Control shall refer solely to a Change in Control of Ingersoll-Rand Company Limited. Further notwithstanding the foregoing provisions of this Section 1.3, or any other provision in this Plan or the Ingersoll-Rand Company Limited Incentive Stock Plan of 2007, none of the transactions contemplated by the Irish Reorganization that are undertaken by (i) Ingersoll-Rand Company Limited or its affiliates prior to, or as of, the effective date of the Irish Reorganization or (ii) Ingersoll-Rand plc or its affiliates on and after the effective date of the Irish Reorganization shall trigger, constitute or be deemed a ‘Change in Control.’ On and after the effective date of the Irish Reorganization, the term ‘Change in Control’ shall refer solely to a ‘Change in Control’ of Ingersoll-Rand plc.	

1.4	“Company” means Ingersoll-Rand Company, and its successors or assigns.	

1.5	“Compensation Committee” means the Compensation Committee of the Board.	

		
1.6	“Deferral Plan” means the IR Executive Deferred Compensation Plan and/or the IR Executive Deferred Compensation Plan II.	

1.7	“Employee” means an employee of an Employer who is eligible to participate in the Program as provided in Section 2.1.	

1.8	“Employer” means the Company and any domestic or foreign entity in which the Company owns (directly or indirectly) a 50% or greater interest.	

1.9	“Final Average Pay” means, except as provided in Section 5.3 for purposes of disability, the sum of the following:	

(a)	for Employees actively employed by an Employer on and after February 1, 2006, the average of each of the three highest bonus awards from the Employer (whether the awards are paid to the Employee or are a Deferral Amount (as such term is defined in the Deferral Plan)) for the six most recent calendar years, including the year during which the Employee’s retirement or death occurs, but excluding Supplemental Contributions (as such term is defined in the Deferral Plan) or any amounts paid from the Deferred Compensation Account (as such term is defined in the Deferral Plan) or any other account under the Deferral Plan including, but not limited to, amounts paid consisting of Deferral Amounts and Supplemental Contributions and their earnings, and	

(b)	the Employee’s annualized base salary from the Employer in effect immediately prior to the date of determination unreduced by any Deferral Amount (as defined in the Deferral Plan) or other elective salary reduction contributions to any plan of the Employer.	

For any Employee who terminated employment with an Employer prior to February 1, 2006, the phrase “five highest bonus awards” shall be substituted for “three highest bonus awards” in subsection (a). An Employee’s Final Average Pay shall not take account of any bonus awards made by an employer that was not, at the time of the award, an Employer.

1.10	“Foreign Plan” means (i) any plan or program maintained by a foreign Employer (an Employer that is not an entity organized under the laws of the United States) under which cash benefits are payable to an Employee following retirement or other termination of employment, regardless of the form or structure of such plan, and (ii) any other plan, program, or system providing such benefits in respect of services performed by such an Employee for a foreign Employer that is established by the government of a foreign country, mandated under the laws of a foreign country or under a government decree or directive having the force of law, or mandated or maintained under any collective bargaining or similar agreement.	

1.11	“Pension Plan” means the Ingersoll-Rand Pension Plan Number One as in effect on January 1, 2003, and as may be amended from time to time.	

1.12	“Predecessor Program” means the Ingersoll-Rand Company Key Management Supplemental Program, as effective on June 30, 1995 and as thereafter amended.	

1.13	“Program” means the Ingersoll-Rand Company Key Management Supplemental Program as stated herein and as may be amended from time to time.	

		
1.14	“Retirement” means an Employee’s Separation from Service other than by reason of death or disability (as defined in Section 5.3) at a time when the Employee has satisfied the vesting requirements of Section 4.1.	

1.15	“Separation from Service” means an Employee’s separation from service as determined under the general rules under Section 409A of the Code.	

1.16	“Year of Service” shall be determined in accordance with the provisions of the Pension Plan, another qualified defined benefit pension plan (other than the Trane Pension Plan), the Trane Employee Stock Ownership Plan, or Foreign Plan, in which an Employee participates that are applicable to determining the Employee’s years of vesting service under such plan. Unless otherwise agreed by the Company, an Employee’s Years of Service shall exclude any period of service during which the employer of the Employee was not an Employer under the Program, and shall not include any period of service performed on behalf of Trane Inc. or its affiliates before the date that Ingersoll-Rand Company Limited acquired Trane Inc. For purposes of this Section, a qualified defined benefit pension plan means a plan defined in Code Section 414(j) which is sponsored by an Employer. Notwithstanding any provision of the Program to the contrary, in the event an Employee earns one or more hours of service during a calendar year, he shall be credited with a Year of Service with respect to such year for purposes of the Program; provided, however, that any Employee who becomes an Participant in the Program on or after May 18, 2009 and who earns one or more hours of service during a calendar month shall be credited with service only for that month for purposes of the Program. An Employee’s Years of Service shall not include any period of service in a calendar year following the year of the Employee’s Separation from Service.	

Whenever the word “he”, “his”, or “him” is used in the Program, such word is intended to embrace within its purview the word “she” or “her”, as may be appropriate.

SECTION 2

PARTICIPATION

2.1      Eligibility to Participate

An individual employed by an Employer on or after January 1, 2005 shall be an Employee eligible to participate in this Program if:

(a)	the sum of his age (as of his last birthday) and completed Years of Service (as defined in Section 1.16) equals or exceeds 50, and	
		
(b)	his salary grade level is 36 (or the equivalent thereof) or higher, and he has demonstrated sustained performance and leadership potential, and	

(c)	he has been nominated for participation in the Program by an elected officer of Ingersoll-Rand plc and approved by (i) the Senior Vice-President of Human Resources and Communications, (ii) the Chairman and CEO of Ingersoll-Rand plc, and (iii) the Compensation Committee of the Board of Directors of Ingersoll- Rand plc.	

2.2      Duration of Participation

An Employee shall continue to participate in the Program until all benefits accrued hereunder have been paid or forfeited or the Employee has become a Participant in the Company’s Elected Officers Supplemental Program.

SECTION 3

AMOUNT OF BENEFIT

3.1      Amount of Benefit

An Employee who is a participant in the Program shall be entitled to receive a benefit, determined as of the date of the Employee’s Retirement, death, or (in the case of disability) attainment of age 65, that is equal to (a) minus (b) minus (c), where:

(a) is the lump sum Actuarial Equivalent of a single life annuity that is equal to the product of:

(i)    his Final Average Pay,

(ii)    his Years of Service (up to a maximum of 30 Years of Service), and

(iii)    1.7% (as further adjusted to give effect to any adjustments required under Sections 5.1, 5.2(b), and 5.4);

(b)	is the benefit offset amount as determined under Appendix A attached hereto from the Pension Plan and any other plan(s) identified in Appendix A, expressed in the same form and with the same commencement date as the benefit payable to the Employee under this Program except to the extent otherwise provided in Section 5.3(b); and	

(c)	is the benefit payable to the Employee under the Predecessor Program, expressed in the same form and with the same commencement date as the benefit payable to the Employee under this Program.	

SECTION 4

VESTING

4.1      Vesting

An Employee shall become vested in the benefit provided under this Program upon the earliest of (i) the attainment of age 55 and the completion of 5 Years of Service, (ii) the attainment of age 65, (iii) death, (iv) disability (to the extent provided in Section 5.3), or (v) a Change in Control. An Employee shall forfeit all right to benefits under the Program upon ceasing to be an employee of any Employer prior to satisfying any of the foregoing vesting conditions.

4.2      Forfeiture for Cause

All benefits for which an Employee would otherwise be eligible hereunder may be forfeited, at the discretion of the Compensation Committee, under the following circumstances:

(a)	The Employee is discharged by an Employer for just cause, which shall be a breach of the standards set forth in the Ingersoll-Rand Company Code of Conduct; or	

		
(b)	Determination by the Compensation Committee no later than 12 months after termination of employment that the Employee has engaged in serious or willful misconduct in connection with his employment with an Employer; or	

(c)	The Employee (whether while employed or for two years thereafter) without the written consent of the Employer, is employed by, becomes associated with, renders service to, or owns an interest in any business that is competitive with an Employer or with any business in which an Employer has a substantial interest as determined by the Compensation Committee; provided, however, that an Employee may own up to 1% of the publicly traded equity securities of any business, notwithstanding the foregoing.	

SECTION 5

DISTRIBUTIONS

5.1      Retirement

Upon an Employee’s Retirement, the benefit described in Section 3.1 shall be subject to further adjustment as follows:

(a)	Normal Retirement - Upon attaining age 65, an Employee may retire and receive the benefit determined under Section 3.1.	

(b)	Early Retirement - If an Employee who has become vested in accordance with Section 4.1 retires before attaining age 65, he will receive a benefit under the Program equal to the benefit he would have received upon Retirement at age 65, provided however that:	

(i)	the amount determined under Section 3.1(a) shall be reduced by 0.3% for each month that the date of the Employee’s Retirement precedes attainment of age 65;	

(ii)	the benefit offset amount as determined under Appendix A from the Pension Plan and any other plan(s) identified in Appendix A shall be adjusted under the terms of the applicable plan(s) for retirement to the earliest date on which the Employee may retire and begin receiving a benefit under such plan(s), and shall be further adjusted, if necessary, to an actuarially equivalent benefit payable on the date of the Employee’s Retirement; and	

(iii)	for years prior to Social Security normal retirement age, the Social Security Primary Insurance Amount (as defined in Appendix A) shall be reduced by the same factors used by the Social Security Administration to adjust benefits payable at age 62 or later, and by 0.3% for each month that the date of the Employee’s Retirement precedes attainment of age 62.	

(c)	Late Retirement - If an Employee retires after age 65, he will receive a benefit equal to the greater of:	

		
(i)	the benefit determined under Section 3.1 as of his actual date of Retirement, or	

(ii)	the benefit he would have received had he retired at age 65, such benefit shall be converted into a single lump sum based on the Actuarial Equivalent as of the date the Employee attains age 65 and increased with interest (at the interest rate specified in Section 5.2(b)) until his date of Retirement.	

5.2      Time and Form of Distribution

(a)	Benefits under the Program shall be payable solely in a lump sum. In the case of Retirement, the lump sum benefit shall be paid on the later of (i) the first business day that is six months after the date of the Employee’s Retirement, or (ii) the first business day of the calendar year following the year of the Employee’s Retirement. In the case of disability or death, the lump sum benefit shall be paid on the payments date prescribed by Section 5.3 or Section 5.4 (without regard to whether the Employee’s death occurs prior or subsequent to Retirement), as applicable.	
		
(b)	The lump sum amount determined under Sections 3.1 and 5.1 shall be credited with interest from the determination date under Section 3.1 until the date of distribution at the average of the monthly rates for ten-year Constant Maturities for US Treasury Securities for the twelve-month period	

immediately preceding the month prior to the month in which a determination of benefit occurs, as quoted by the Federal Reserve.

5.3      Disability

(a)	An Employee who has a leave of absence for disability and returns to active employment before incurring a Separation from Service (as determined under section 1.409A-1(h) of the Treasury Regulations) shall continue to accrue benefits (and Years of Service) under the Program during the leave of absence. Except as provided in Section 5.3(b), an Employee who has had a leave of absence for disability and who does not return to active employment before incurring a Separation from Service shall accrue no benefits (or Years of Service) during such leave of absence. An Employee described in this Section 5.3(a) (and not covered by Section 5.3(b)) shall be entitled to benefits, if any, under the Program in accordance with Sections 5.1, 5.2, and 5.4 of the Program, based on the date of the Employee’s Separation from Service and his or her age and Years of Service at the date of the Employee’s Separation of Service.	

(b)	An Employee who becomes disabled within the meaning of Section 5.3(c) prior to his or her Separation from Service and who remains continuously disabled until attaining age 65 or earlier death shall continue to accrue benefits (and Years of Service) under the Program as if he or she continued to be employed by the Company until the earlier of attainment of age 65 or death. An Employee who becomes disabled within the meaning of Section 5.3(c) prior to his or her Separation from Service and who recovers from the disability before attaining age 65 but after the date on which the Employee is determined to have had a Separation from Service, shall be entitled to benefits, if any, in accordance with the last sentence of Section 5.3(a), but shall be entitled to no additional Years of Service under this Section 5.3(b). An Employee described in either of the preceding two sentences shall be paid the lump sum as a benefit payable by reason of disability or death (not by reason of Separation from Service), determined under Sections 3.1 and 5.2 of the Program, on the first business day of the month following the month the Employee attains age 65 or, if the Employee dies before attaining age 65, the Employee’s beneficiary shall be paid the benefit under Section 5.4 of the Program as if the Employee retired on the date of death. In determining the benefits payable under this Section 5.3(b), the benefit offset amount under paragraph (e) of Appendix A shall be the value of the Employee’s vested Core Contribution Account under the Ingersoll-Rand Company Employee Savings Plan and the Ingersoll-Rand Company Supplemental Employee Savings Plan II as of the date of the Employee’s Separation from Service.	

(c)	For purposes of Section 5.3(b), an Employee shall be disabled if he or she has: (a) a condition under which the Employee: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company; or (b) any other condition under which the Employee is considered “disabled” within the meaning of Code Section 409A(a)(2)(C).	

		
(d)	Notwithstanding any other provision of the Program to the contrary, in any case in which an Employee is entitled under Section 5.3(b) to accrue benefits (and Years of Service) under the Program during a period of disability, Final Average Pay means the sum of:	

(i)	the average of each of the three highest bonus awards (whether the awards are paid to the Employee, are a Deferral Amount (as such term is defined in the Deferral Plan) or the Employee has elected to forgo a bonus award pursuant to the Estate Program) during the six most recent calendar years, including the year during which the Employee’s disability occurs (or, if the average of the three highest bonus awards would be greater, the six most recent calendar years prior to the year in which the Employee’s disability occurs), but excluding Supplemental Contributions (as such term is defined in the Deferral Plan) or any amounts paid from the Deferred Compensation Account (as such term is defined in the Deferral Plan) or any other account under the Deferral Plan including, but not limited to, amounts paid consisting of Deferral Amounts and Supplemental Contributions and their earnings, and any amounts paid by the Company pursuant to the Estate Program, and	

(ii)	the Employee’s annualized base salary in effect as of the date he or she became disabled.	

5.4      Death

(a)	In the event of an Employee’s death prior to Retirement, his beneficiary shall receive a lump sum payment determined under Section 3.1 as if the Employee retired on the date of his death, provided that if the Employee’s death occurs prior to his attainment of age 55, the benefit shall be reduced by 0.3% for each month that the benefit commences before the Employee would have reached age 65. Such lump sum benefit shall be payable thirty (30) days after the date of the Employee’s death, or as soon as practicable thereafter.	
		
(b)	The Employee’s beneficiary(ies) under the Program shall be the same as the Employee’s beneficiary(ies) under the Pension Plan or, if the Employee was not a participant in the Pension Plan, such other qualified defined benefit pension plan or Foreign Plan in which the Employee has participated. If the Employee was not a participant in, or has no beneficiary under, the Pension Plan, another qualified defined benefit pension plan, or a Foreign Plan, the Employee’s estate shall be the beneficiary.	

5.5      No Acceleration
Except to the extent permitted under Code Section 409A, no benefits or payments under the Program shall be accelerated at any time.

SECTION 6

FUNDING

6.1      Funding

The Company shall have no obligation to fund the benefit that an Employee earns under this Program.

6.2      Company Obligation

Notwithstanding any provisions of any trust agreement or similar funding vehicle to the contrary, the Company shall remain obligated to pay benefits under this Program. Nothing in this Program or any such trust agreement shall relieve the Company of its liabilities to pay benefits under this Program except to the extent that such liabilities are met by the distribution of trust assets.

SECTION 7

MISCELLANEOUS

7.1      Amendment and Termination

This Program may, at any time and from time to time, be amended or terminated without the consent of any Employee or beneficiary, (a) by the Board or the Compensation Committee, or (b) in the case of amendments which do not materially modify the provisions hereof, the Administrative Committee (as described in Section 7.5), provided, however, that no such amendment or termination shall reduce any benefits accrued or vested under the terms of this Program as of the date of termination or amendment.

7.2      No Contract of Employment

The establishment of this Program or any modification hereof shall not give any Employee or other person the right to remain in the service of an Employer, and all Employees and other persons shall remain subject to discharge to the same extent as if the Program had never been adopted.

7.3      Withholding

An Employer shall be entitled to withhold from any payment due under this Program any and all taxes of any nature required by any government to be withheld from such payment.

7.4      Loans

No loans to Employees shall be permitted under this Program.

7.5      Compensation Committee

This Program shall be administered by the Compensation Committee (or any successor committee) of the Board. The Compensation Committee has delegated to the Administrative Committee appointed by the Company’s Chief Executive Officer (the “Administrative Committee”) the authority to administer the Program in accordance with its terms. Subject to review by the Compensation Committee, the Administrative Committee shall make all determinations relating to the right of any person to a benefit under the Program and, unless modified by the Compensation Committee, any determination by the Administrative Committee shall be conclusive and binding upon all affected parties. Any denial by the Administrative Committee of a claim for benefits under this Program by

an Employee or beneficiary shall be stated in writing by the Administrative Committee in accordance with the claims procedures annexed hereto as Appendix B.

7.6      Entire Agreement; Successors

The Program, including any subsequently adopted amendments, shall constitute the entire agreement or contract between an Employer and any Employee regarding the Program. There are no covenants, promises, agreements, conditions or understandings, either oral or written, between an Employer and any Employee regarding the provisions of the Program, other than those set forth herein. Notwithstanding the previous sentence, to the extent any written agreement between an Employer and an Employee modifies the provisions of the Program with respect to the Employee, such agreement shall be deemed to modify the provisions of the Program but only to the extent such agreement is approved by the Compensation Committee. The Program and any amendment hereof shall be binding on an Employer and the Employees and their respective heirs, administrators, trustees, successors and assigns, including but not limited to, any successors of an Employer by merger, consolidation or otherwise by operation of law, and on all designated beneficiaries of the Employee.

7.7      Severability

If any provisions of this Program shall, to any extent, be invalid or unenforceable, the remainder of this Program shall not be affected thereby, and each provision of this Program shall be valid and enforceable to the fullest extent permitted by law.

7.8      Governing Law

Except as preempted by federal law, the laws of the State of New Jersey shall govern this Program.

7.9      Participant as General Creditor

Benefits under the Program shall be payable by the Company out of its general funds. The Company shall have the right to establish a reserve or make any investment for the purposes of satisfying its obligations hereunder for payment of benefits at its discretion, provided, however, that no Employee eligible to participate in this Program shall have any interest in such investment or reserve. To the extent that any person acquires a right to receive benefits under this Program, such rights shall be no greater than the right of any unsecured general creditor of the Company.

7.10      Nonassignability

To the extent permitted by law, the right of any Employee or any beneficiary in any benefit hereunder shall not be subject to attachment, garnishment, or any other legal or equitable process for the debts of such Employee or beneficiary; nor shall any such benefit be subject to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance.

IN WITNESS WHEREOF , the Company has caused this instrument to be executed this 1st day of October, 2012.

INGERSOLL-RAND COMPANY

By: /s/ Barbara Santoro                    
Barbara Santoro
Vice President and Secretary

APPENDIX A

The sum of the following benefit offset amounts shall be used for purposes of Sections 3.1(b) and 5.1(b) of the Program, irrespective of whether the Employee commences to receive a benefit under any of the plans identified below at the date the Employee’s benefit under the Program is determined:
		
(a)	All employer-paid benefits under any qualified defined benefit plan (as defined in Code Section 414(j)) and associated supplemental plans (including the Ingersoll-Rand Company Supplemental Pension Plan II) sponsored by the Company. For purposes of this Paragraph (a), the amount of any pension payable under the Clark Equipment Company Retirement Program for Salaried Employees shall be determined without reduction by the lifetime pension equivalent of the Employee’s vested interest in his PPOA Account (as such term is defined in the I-R/Clark Leveraged Employee Stock Ownership Plan).	
The Employee’s benefit, if any, under any qualified defined benefit plan and associated supplemental plans described in the previous paragraph, shall be determined as a life annuity based on the Employee’s credited period of service under such plan through the date of the Employee’s Separation from Service, converted to a lump sum in accordance with the factors used to determine lump sum distributions under such plan(s) or, if lump sum distributions are not available under such plan(s), as the lump sum Actuarial Equivalent of the accrued and vested benefits under such plan(s).
		
(b)	The Social Security Primary Insurance Amount (as defined below) estimated at age 65, multiplied by a fraction, the numerator of which is his Years of Service (up to a maximum of 30 Years of Service), and the denominator of which is 30.	
For purposes of the Program, “Social Security Primary Insurance Amount” means the amount of the Employee’s annual primary old age insurance determined under the Social Security Act in effect at the date of determination and payable in accordance with (i) or (ii) below.
		
(i)	For benefits determined on or after age 65, payable for the year following his date of retirement.	
		
(ii)	For benefits determined before the Employee attains age 65, payable for the year following his retirement or death (or which would be payable when he first would have become eligible if he were then unemployed), assuming he will not receive after retirement (or death) any income that would be treated as wages for purposes of the Social Security Act.	

For purposes of determining the Social Security Benefit under paragraphs (i) and (ii) above, an Employee’s covered earnings under said Act for each calendar year preceding the Employee’s first full calendar year of employment shall be determined by multiplying his covered earnings subsequent to the year being determined by the ratio of the average per worker total wages as reported by the Social Security Administration for the calendar year being determined to such average for the calendar year subsequent to the year being determined.

The “Social Security Primary Insurance Amount” determined above shall be converted to a lump sum that is the Actuarial Equivalent of such benefit.
		
(c)	An Employee’s accrued benefit under any qualified defined benefit pension plan (as defined in Code Section 414(j)) and any nonqualified pension plan with respect to any business that was acquired by the Company or any of its affiliates (“Acquired Business”) in respect of any period of service with the Acquired Business that is counted as a Year of Service under the Program, except that the amount of employer-paid contributions (excluding earnings and accretions thereto) made to the Trane, Inc. Employee Stock Ownership Plan from and after the date that Ingersoll-Rand Company Limited acquired Trane, Inc., and not the value of the Trane Pension Plan, shall be used. Each such pension plan, including but not limited to the Ingersoll-Rand Company/Thermo King Executive Pension Plan, the Hussmann Corporation Supplemental Executive Retirement Plan, and the Trane Inc. Executive Supplemental Retirement Benefit Program, is referred to herein as a “Former Plan.” The Employee’s accrued benefit under the Former Plan shall be determined as a life annuity payable as of the date of determination, using the Former Plan’s early retirement factors, if applicable, and converted to a lump sum based on the factors used to determine lump sum distributions under the Former Plan or, if lump sum distributions are not available under the Former Plan, as the lump sum Actuarial Equivalent of the benefits accrued under the Former Plan.	
		
(d)	Any and all benefits accrued or accumulated by the Employee under any Foreign Plan (as defined in Section 1.12 of the Program) in respect of any period of service with a foreign Employer that is counted as a Year of Service under the Program, excluding any benefit attributable to the Employee’s own contributions (whether voluntary or mandatory) under any Foreign Plan. Such benefits shall be converted to a lump sum based on the factors used to determine lump sum distributions under such plan(s) or, if lump sum distributions are not available under such plan(s), as the lump sum Actuarial Equivalent of the benefits accrued under such plan(s).	
		
(e)	An Employee’s vested Core Contribution Account under the Ingersoll-Rand Company Employee Savings Plan and the Ingersoll-Rand Company Supplemental Employee Savings Plan II.	
		
(f)	Except as hereinafter provided or otherwise required or permitted under Section 409A of the Code, no benefit offset amount shall be taken into account for purposes of Section 3.1(b) and 5.1(b) of the Program with respect to the benefits payable or paid to an Employee from another plan unless (i) the time and form of benefit payments under the other plan are the same as the time and form of benefit payments under the Program, or (ii) the benefits payable under the other plan were deferred (within the meaning of section 1.409A-2 of the Treasury Regulations) for periods of service (with any employer) prior to the period during which the benefits payable under the Program were accrued. This paragraph shall not preclude the following benefit offsets: (i) the benefit offsets permitted under sections 1.409A-2(a)(9) and 1.409A-3(j)(5) of	

the Treasury Regulations (relating to offsets for benefits payable under qualified employer plans and broad-based foreign retirement plans), (ii) the Social Security offsets specified under paragraph (b), (iii) offsets for benefits payable under a legally-mandated Foreign Plan described in section 1.409A-1(a)(3)(iv) or section 1.409A-1(b)(9)(iv) of the Treasury Regulations that is not subject to Section 409A of the Code, (iv) offsets to Program benefits that are not subject to Section 409A of the Code by reason of the Employee’s status as a nonresident alien or as a bona fide resident of Puerto Rico or of a U.S. possession described in section 931 of the Code or by reason of the exemption of the Employee’s compensation from U.S. income tax pursuant to a bilateral or multilateral treaty, or (v) offsets described in paragraph (e) of this Appendix A for benefits payable under Section 5.3(b) of the Program.
APPENDIX B

Claim Procedures
Employees, their beneficiaries, if applicable, or any individual duly authorized by them, shall have the right under the Plan and the Employee Retirement Income Security Act of 1974, as amended (ERISA), to file a written claim for benefits from the Plan in the event of a dispute over such Employee’s entitlement to benefits. All claims must be submitted to the Administrative Committee, or its delegate, in writing and within one year of the date on which the lump sum payment was made or allegedly should have been made. For all other claims, the date on which the action complained of occurred.

Timing of Claim Decision
If an Employee’s claim is denied, in whole or in part, the Administrative Committee, or its delegate, will give the Employee (or his or her representative) a written (or electronic) notice of the decision within 90 days after the Employee’s claim is received by the Administrative Committee, or its delegate, or within 180 days if special circumstances require an extension of time with respect to a determination of the claim. If the claim for benefits relates to disability benefits, the Employee (or his or her representative) will be given a written (or electronic) notice within 45 days after his or her claim is received by the Administrative Committee, or its delegate, unless special circumstances require an extension of time. The Administrative Committee, or its delegate, may extend the period no more than twice for up to 30 days for each extension to make a determination of a disability benefit claim. The Employee (or his or her representative) will be notified if any extensions are required, the special circumstances requiring an extension, and the date a determination is expected. If any additional information is needed to process an Employee’s claim for disability benefit claim, the Employee will be advised of the additional information that is needed and the standards on which the benefit entitlement is based, and he or she will have at least 45 days to provide the needed information. Failure to provide additional requested information may result in the denial of the claim.

Notice of Claim Denial
If the Employee is denied a claim for benefits, the Administrative Committee, or its delegate, will provide such Employee with a written or electronic notice setting forth:

1.	The specific reason(s) for the denial;	
		
2.	Specific reference(s) to pertinent Plan provisions upon which the denial is based;	
		
3.	A description of any additional material or information necessary for you to perfect the claim, and an explanation of why such material or information is necessary;	

		
4.	A description of the Plan’s claims review procedure and the time limits applicable to such procedures, including a statement of your right to bring a civil action under Section 502(a) of ERISA following a the exhaustion of the Plans’ administrative process;	
		
5.	If a claim based on disability was denied in reliance upon an internal rule, guideline, protocol or other similar criterion, the internal rule, guideline, protocol or other criteria will be described, or the notice will include a statement that a copy of such rule, guideline, protocol or other criteria will be provided free of charge upon request; and,	
		
6.	A statement that you have the right to appeal the decision.	

Appeal of Claim Denial
The Employee (or his or her representative) may request a review of a denial of a claim to the Administrative Committee, or its delegate, by filing a written application for review within 60 days (or, for disability claims, 180 days) after his or her receipt of the written notice of the denial of the claim. The filing of an appeal is mandatory if the Employee later determines that he or she wants to initiate a lawsuit under ERISA Section 502(a). The Administrative Committee, or its delegate, will conduct a full and fair review of the claim denial. The review shall:

1.	Not afford deference to the initial adverse benefit determination,	
		
2.	Provide for the identification of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the appeal, if applicable	
		
3.	Be conducted by someone that did not take part in the adverse determination under appeal and is not a subordinate of someone who did.	
The Employee shall have the opportunity to submit written comments, documents, records and other information relating to his or her claim without regard to whether such information was submitted or considered in the initial benefit determination. The Administrative Committee will re-examine your claim, along with all comments, documents, records and other information that you submit relating to the claim, regardless of whether or not it was submitted or considered in the initial determination. In deciding an appeal that is based in whole or in part on a medical judgment, the decision maker shall consult with a health care professional who has appropriate experience in the field of medicine and who was not consulted in connection with the initial adverse determination and is not the subordinate of someone who did.

Timing of Decision on Appeal
The Administrative Committee, or its delegate, shall notify the Employee (or his or her representative) of the determination on review within 60 days (or, for disability claims, 45 days) after receipt of the Employee’s request for review, unless the Administrative Committee, or its delegate, determines that special circumstances require an extension. The extension may not be longer than 60 days (or, for disability claims, 45 days). The Employee (or his or her representative) shall be notified if any extension is required, the special circumstances requiring an extension and the date when a determination is expected before the end of the initial 60 day (for disability claims, 45 day) period. Subject to the Compensation Committee, the Administrative Committee’s, or its delegate’s, decision shall be final and binding on all parties.

Notice of Benefit Determination on Review of an Appeal
The Administrative Committee, or its delegate, will provide the Employee (or his or her representative) with a written or electronic notice of the determination on review and, if the claim on review is denied:

		
1.	The specific reason or reasons for the denial;	
		
2.	The specific Plan provision(s) on which the decision is based;	
		
3.	A statement that the Employee is entitled to receive upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim for benefits;	
		
4.	If a claim based on disability was denied in reliance upon an internal rule, guideline, protocol or other similar criterion, the internal rule guideline, protocol or other criteria will be described, or the notice will include a statement that a copy of such rule, guideline, protocol or other criteria will be provided free of charge upon request; and	
		
5.	A statement that the Employee shall have a right to bring a civil action under Section 502(a) of ERISA following exhaustion of the Plans’ administrative processes.	

Discretionary Authority to Decide Claims and Appeals
The Administrative Committee, or its delegate, shall have full discretionary authority to determine eligibility under the Plan’s terms, to interpret and apply the terms and provisions of the Plans, to resolve discrepancies and ambiguities, and to make final decisions on the appeal by an Employee of an initial denied claim. Subject to Compensation Committee, the Administrative Committee’s, or its delegate’s, decision will be final and binding on all parties.

Right to File a Lawsuit Under ERISA
In the event an Employee’s appeal under a Plan is denied by the Administrative Committee, or its delegate, he or she shall have the right to file a lawsuit under ERISA Section 502(a). Any such lawsuit must be filed within 12 months of the appeal having been denied. Any lawsuit filed shall be governed by ERISA, or to the extent not preempted, the laws of the State of New Jersey.

1.	Except as specifically set forth herein, all other terms of the Plan shall remain in full force and effective and are hereby ratified in all respects.	

Exhibit 10.28*

FIRST AMENDMENT
TO THE INGERSOLL-RAND COMPANY
KEY MANAGEMENT SUPPLEMENTAL PROGRAM
WHEREAS, Ingersoll-Rand Company adopted the Ingersoll-Rand Company Key Management Supplemental Program II, which was originally effective on January 1, 2005, and later renamed as the Ingersoll-Rand Company Key Management Supplemental Program ("Program"), effective October 1, 2012; and
WHEREAS, the Company desires to amend the Program with respect to the vesting provisions of Section 4 of the Program for "Employees" (as defined in Section 1.7 of the Program) who first become eligible to participate in the Program on and after June 4, 2015.
NOW THEREFORE, the Program is hereby amended as described below:
1. Section 4.1 of the Program is hereby amended, effective June 4, 2015 by adding the following at the end thereof:
"Notwithstanding the foregoing, for any Employee who first becomes eligible to participate in the Program pursuant to Section 2.1 on and after June 4, 2015, such Employee shall become vested in the benefits provided under this Program under clause (i) of this Section 4.1 upon the later of: (A) the attainment of age 55 and the completion of 5 Years of Service, or (B) the 5 th anniversary of the date such Employee first became eligible to participate in the Program."
2. Except as specifically set forth herein, all other terms and conditions of the Program shall remain in full force and effective and are hereby ratified in all respects.
IN WITNESS WHEREOF, the Company has had its duly authorized representative sign
this Amendment as of this 15th day of June 2015.
INGERSOLL-RAND COMPANY
/s/ Evan Turtz
Name: Evan M. Turtz
Title: Vice President and Secretary

Exhibit 10.43*

September 22, 2015

Ms. Maria Green
[Address Redacted]

Dear Maria:

I am pleased to present you with an offer of employment to join Ingersoll Rand as Senior Vice President and General Counsel reporting to me. This position will be located in Davidson, North Carolina. Your date of employment will be November 2, 2015. In addition, it is my recommendation that you will become an Officer of Ingersoll-Rand plc (the “Company”), which will be considered by the Board of Directors on December 3, 2015. I look forward to your acceptance of this offer and becoming a part of our Executive Leadership Team (“ELT”).

1.	Your base salary will be set at an annual rate of $525,000 (Five Hundred Twenty Five Thousand U.S. dollars) paid monthly. You will be eligible for merit increase consideration during the annual merit increase cycle that will occur in April 2017.	

2.	This position is “incentive eligible,” which means you will participate in the Annual Incentive Matrix (“AIM”) Program. Beginning in January 2016 you will become eligible for AIM, and your annual opportunity will be targeted at 80% of your base salary or $420,000. The actual award that you may receive can range from 0% to 200% of the targeted amount depending upon your performance and the performance of the Company. For your reference, information related to the Ingersoll Rand 2015 AIM program is attached ( Attachment A ).	

3.	You will be eligible to receive equity awards under the 2013 Incentive Stock Plan (“ISP”) as administered by the Compensation Committee (“Committee”) of the Company’s Board of Directors. Your annual opportunity is targeted at a value equal to $625,000 based on the Fair Market Value (“FMV”) of the Company’s ordinary shares on the date the Committee approves the award. At this time, the awards are divided equally, with half of the value or $312,500 awarded in stock options and the other half of the value or $312,500 awarded in Restricted Stock Units (“RSUs”). Your first grant will be awarded in February 2016. Stock option and RSU awards generally vest ratably, one third each year, over three years from the date of grant. For purposes of these awards, you will be considered Retirement eligible upon attainment of age 65. Annual equity grants are contingent on and variable with your sustained performance and demonstrated leadership potential.	

4.	Starting with performance year of 2016, you will be eligible to receive grants under the Company’s Performance Share Program (“PSP”). The PSP measures performance over a three-year period. Therefore, your first award would be settled in February 2019 based on performance during the 2016 to 2018 measurement period. Awards are settled in ordinary shares of the Company. Your target number of units under the PSP will be set at a value equal to $625,000 based on the FMV of the Company’s ordinary shares on the date the Committee grants the award. At this time, the actual number of Performance Share Units (“PSUs”) earned will be based on Ingersoll Rand’s Earnings per Share (“EPS”) growth and Total Shareholder Return (“TSR”) relative to the companies within the S&P 500 Industrials Index. The number of shares earned can range from 0% to 200% of the target units based on performance. PSP performance goals are subject to change for future performance periods at the discretion of the Committee. For purposes of these awards, you will be considered Retirement eligible upon attainment of age 65. For your reference, information related to the Ingersoll Rand equity program is attached ( Attachment B ).	

Participation in the PSP includes stock ownership requirements. You will be required to achieve a minimum level of 40,000 ordinary shares of the Company within a five-year period from the time of your first PSP grant (at the rate of 20% or 8,000 ordinary shares per year).

When you consider each of the above items, your Total Annual Direct Compensation (“TDC”) target is $2,195,000.

		
5.	To offset the loss of compensation that will be forfeited from your current employer, you will receive the following sign-on awards:	

•	Cash : Based on a projected loss of $500,000 from the 2015 annual incentive plan, you will be provided with a cash payment equal to $500,000. This payment will be made in February 2016 (at the same time AIM payouts are made to other Officers of Ingersoll Rand). If you were to voluntarily terminate your employment or be terminated for Cause prior to February 1, 2018, the entire payment of $500,000 must be repaid to Ingersoll Rand.	

•	Stock Options : To compensate you for the projected loss of stock options granted in February 2015 with a grant date value of approximately $275,000, you will be granted Ingersoll Rand stock options     with a grant date expected value of $275,000. This value will be converted to Ingersoll Rand stock options based on the grant date stock price of Ingersoll Rand common shares and will vest ratably over three years from the date of grant. These stock options will be granted at the first meeting of the Committee following your date of employment (scheduled for December 3, 2015).	

•	PSUs : To help offset a portion of the forfeited performance stock units and long-term cash (estimated total forfeiture of $705,000), you will be provided with two additional PSU awards with a combined target value of $625,000:	
		
▪	For the 2014 - 2016 Ingersoll Rand performance cycle which will be settled in February 2017, you will be provided with a PSU award with an expected target value of $210,000 (which is approximately 1/3 of your annual PSU target value of $625,000).	
		
▪	For the 2015 - 2017 Ingersoll Rand performance cycle which will be settled in February 2018, you will be provided with a PSU award with an expected target value of $415,000 (which is approximately 2/3 of your annual PSU target value of $625,000).	
These two additional PSU grants will be awarded to you at the first meeting of the Committee following your date of employment (scheduled for December 3, 2015).

•	RSUs : To offset the remaining $80,000 in forfeited performance stock units and long-term cash and to replace an approximate loss of $255,000 in future pension value (approximately $335,000 in total), you will be granted Ingersoll Rand RSUs     with a grant date expected value of $335,000. This value will be converted to Ingersoll Rand RSUs based on the grant date stock price of Ingersoll Rand common shares and will vest ratably over three years from the date of grant. These RSUs will be awarded to you at the first meeting of the Committee following your date of employment (scheduled for December 3, 2015).	

For purposes of the stock option, PSU and RSU awards referenced above in section 5, you will be considered Retirement eligible upon attainment of age 65.

		
6.	You will be eligible to participate in all applicable qualified and non-qualified employee benefit programs offered to Company salaried employees in accordance with the terms and conditions of those programs. Please note that your medical, dental and life insurance coverage with the Company will commence on the first day of employment. For your reference, information related to Ingersoll Rand benefit plans is attached ( Attachment C ).	

7.	You will be eligible for paid vacation, which in your case is four (4) weeks. Vacation days are earned and accrued on a monthly basis each calendar year.	

8.	Other Benefits: In addition to the above, as an Officer of Ingersoll Rand, the following programs will be available to you:	
		
a.	Deferred Compensation Plan : You will be eligible to participate in the Ingersoll Rand Executive Deferred Compensation Plan (“EDCP”). The EDCP gives you the opportunity to defer up to 50% of your base salary, up to 100% of your AIM award, and up to 100% of your PSP awards on a pretax basis (except for FICA taxes payable at the time of deferral). Information regarding the EDCP will be emailed to you directly by the plan administrator, Mullin TBG.	

		
b.	Company Car: You will be provided a company automobile in accordance with our Company car policy, which in your case provides an executive automobile with a purchase value of up to $75,000. A portion of the benefit will be imputed to your statement of gross income for tax purposes. For your reference, a brief summary of the Ingersoll Rand Executive Automobile Program is attached ( Attachment D ).	
		
c.	Executive Health: You will also be eligible for the Company’s Executive Health Program. For your reference, a brief summary of the Ingersoll Rand Executive Health Program is attached ( Attachment E ).	
		
d.	Financial Counseling: You are eligible for financial and retirement counseling services through a provider of your choice. These services include tax, estate, and financial planning assistance up to $11,000 for the first year (and final year) and up to $9,000 for each subsequent year. A portion of the cost for these services is imputed to your annual income.	
		
e.	Executive Long-Term Disability: You will be eligible for an enhanced Executive Long-Term Disability (“LTD”) program that covers annual incentive compensation in addition to base salary and provides a greater benefit than offered in the standard group program.	

9.	You will be provided with a Change in Control Agreement (“CIC Agreement”), which provides economic security in the event of job loss caused by the sale of all or a substantial part of the Company. Any payment made would be provided in cash plus you would receive enhanced coverage under certain benefit plans. Your severance payment under a Change in Control would be equal to 2.5 times your base salary plus your AIM at target. The actual agreement will be sent to you shortly after you begin employment.	

10.	You will be eligible for the Company’s executive Relocation Program to Davidson, North Carolina. A representative from Cartus will be in touch with you after we receive your acceptance of this offer to explain the program and begin the process. For your reference, a summary of the executive Relocation Program is attached ( Attachment F ).	

11.	Based on your role in the Company, you are restricted from transactions involving ordinary shares of Company stock (exercising options, moving in or out of ordinary shares held in company benefit plans, or buying or selling ordinary shares on the open market) except during designated window periods. You will receive communication from the Corporate Secretary when window periods are open along with instructions on how to execute transactions.	

This offer of employment is contingent on your completion of a satisfactory background check, drug screening as well as satisfying the Conditions of Offer outlined on page 5. To accept this offer, please sign the attached “Conditions of Offer” form and return it to Jeff Blair, Vice President, Total Rewards (jeffreyblair@irco.com). Upon receipt of your signed Conditions of Offer form, you will receive further instructions to complete the background investigation and drug screen from our third party vendor (First Advantage).

In addition, there will be important policy information presented to you that you must agree to complete within the first (7) calendar days of your employment. The policies and training include: Annual Code of Conduct, Ethics Awareness and Decision Making, Global Corruption and Bribery - What You Need to Know, and the Ingersoll Rand Proprietary Agreement.

Maria, we all believe that you will make a significant contribution to the Company and look forward to you joining our ELT. If you should have any questions about the details of the various plans and benefits above, please feel free to call Marcia Avedon at 704-655-5821 or Jeff Blair at 704-655-4347. For any other questions, please feel free to contact me at 704-655-5820.
 
Sincerely,
/s/ Michael W. Lamach
Michael W. Lamach
Chairman and Chief Executive Officer

cc:     Marcia Avedon
Jeff Blair    

Attachments:     

A.	2015 AIM Program	
		
B.	2015 Long-term Incentive Program	
		
C.	2015 Benefits Summary	
		
D.	Executive Automobile Program	
		
E.	Executive Health Program	
		
F.	Relocation Summary	

Conditions of Offer:

This offer is contingent upon the following:

1.	Verification of information signed and submitted in connection with the Ingersoll Rand employment application and authorization for Release of Personal Data Records Information.	

2.	Passing the required background check and drug screening. All test results will be handled in strict confidence.	

3.	Providing proof of identity and employment eligibility pursuant to the Immigration Reform and Control Act of 1986 within three (3) working days after the actual date you commence work. After submitting your acceptance of employment, you will be provided with instructions for completing this requirement along with a list of acceptable verification documents.	

To accept and execute this offer, please sign in the space provided below and return to Jeff Blair.

By signing this letter, you represent and warrant to Ingersoll Rand that you are not currently subject to any express or implied contractual obligations to any of your former employers under secrecy, non-competition or other agreements or understanding, except for any such agreements which you have furnished to Ingersoll Rand prior to the date of this letter. You also represent and warrant that if you are subject to any agreements (which you have already furnished to Ingersoll Rand), such agreements will not adversely affect your job performance at Ingersoll Rand.

Ingersoll Rand maintains an employment-at-will policy, which means that you or the Company, for any reason or no reason, may terminate employment, and that nothing in this offer is intended to create a contract of employment for any period of time.

CANDIDATE ACCEPTANCE

I accept your offer of employment with Ingersoll Rand as Senior Vice President and General Counsel and agree to the conditions in the offer letter.

/s/ Maria Green                    September 22, 2015
__________________________________        _________________________________
Ms. Maria Green    Date

Exhibit 10.44*

September 1, 2017

Mr. David S. Regnery
[Address Redacted]

Dear Dave:
I am pleased to offer you the position of Executive Vice President ("EVP") reporting to me with overall accountability for the financial and operating performance of all Strategic Business Units. This position will be located in Davidson, North Carolina and becomes effective on September 5, 2017 (the "Effective Date"). In this role, you will remain a member of the Ingersoll Rand Executive Leadership ("ELT") team and I am pleased to inform you that the Board of Directors appointed you as an Executive Officer of Ingersoll-Rand plc (the "Company"). As an Executive Officer, we will be required to report changes in your compensation to the Security and Exchange Commission ("SEC"). I look forward to your acceptance of this offer and the contributions you will make in this new role.
		
1	On the Effective Date, your base salary will be set at an annual rate of $700,000 (Seven Hundred Thousand U.S. dollars) paid monthly. This represents an increase of $180,000 or 34.6%.	
		
2.	Your Annual Incentive Matrix ("AIM") target opportunity will increase from 80% to 100% of your base salary on the Effective Date. When you take into account your new base salary, this adjustment increases your annual AIM target from $416,000 to $700,000 or by $284,000 (+68.3%). The actual award that you may receive can range from 0% to 200% of the targeted amount depending upon your performance and the performance of the Company.	
For 2017, your AIM award will be prorated as follows:
		
a.	January 1, 2017 to September 4, 2017: In determining this portion of your award, we will use your base salary of $520,000, an AIM target of 80% of base salary, and the AIM metrics assigned to your current role as President, Commercial HVAC, North America and EMEA.	
		
b.	September 5, 2017 to December 31, 2017: In determining this portion of your award, we will use your base salary of $700,000, an AIM target of 100% of base salary, and the AIM metrics assigned to corporate positions.	
		
3.	Your annual equity target opportunity (next awardable in February 2018) will increase from $375,000 to $1,000,000 representing an increase of $625,000 or 166.7%. At this time, it is anticipated that your 2018 equity grant will be made in an equal proportion of stock options and Restricted Stock Units ("RSUs"). The award dollar value will be converted into stock options and RSUs based on the Fair Market Value ("FMV") of Ingersoll Rand's ordinary shares on the date the Compensation Committee of the Board Directors ("Committee") approves the awards.Annual equity awards are contingent on and variable with your sustained performance and demonstrated leadership.	
		
4.	Your annual Performance Share Unit ("PSUs") target (next awardable February 2018) will increase from $375,000 to $1,000,000 representing an increase of $625,000 or 166.7%. Your grant will be converted into PSUs based on the FMV of Ingersoll Rand's ordinary shares on the date the Committee approves the award. At this time, the actual number of PSUs awarded will be based on Ingersoll Rand's Earnings per Share ("EPS") growth and Total Shareholder Return ("TSR") relative to the S&P 500 Industrial peer companies over the 2018 to 2020 performance period and can range from 0% to 200% of the target number of PSUs.	
		
5.	When you consider items 1, 2, 3 and 4 above, your Target Annual Direct Compensation ("TDC") has increased from $1,686,000 to $3,400,000 or by $1,714,000 (+101.7%). Your revised compensation is summarized in the table below at the end of this letter.	
		
6.	In addition to the increase in your TDC, you will be awarded a special one-time equity grant in the amount of $2,000,000. This equity grant will be denominated 50% ($1,000,000) in RSUs with a three year cliff vesting period, and 50% in PSUs aligned with the 2018 to 2020 performance cycle. The actual number of RSUs and PSUs awarded will be determined using the FMV on the day that the Committee meets after the offer has been accepted (anticipated award date is October 3, 2017).	

		
7.	Your minimum level of required share ownership will increase from 15,000 to 75,000 ordinary shares of the Company. It is expected that you achieve this increased ownership requirement within a five-year period from the Effective Date of this role.	
		
8.	As an Executive Officer, you will participate in the following programs:	
		
a.	You will continue to be eligible for financial and retirement counseling services through a provider of your choice. These services include tax, estate, and financial planning assistance up to $11,000 for the first year (and final year) and up to $9,000 for each subsequent year. The cost for these services is imputed to your annual income based upon receipts submitted for qualified services.	
		
b.	You will be provided with a new Change in Control Agreement ("CIC Agreement") which increases your severance payment (as defined in the CIC Agreement) multiple from 2.0 to 2.5 times your base salary plus your AIM target. A CIC Agreement provides economic security in the form of cash payments to the participant and enhanced coverage under certain benefit plans in the event of job loss caused by the sale of all or a substantial part of the Company. The actual agreement will be sent to you shortly after you assume this new role.	
		
c.	You will continue to be provided with a company automobile in accordance with our company car policy, which in your case provides an automobile with a purchase value of up to $75,000. A portion of the benefit will be imputed to your statement of gross income for tax purposes.	
		
d.	You will continue to be eligible for an enhanced Executive Long-Term Disability ("LTD") program that covers annual incentive compensation in addition to base salary and provides a greater benefit than offered in the standard group program.	
		
9.	You will also continue to participate in following programs:	
		
a.	Executive Deferred Compensation Plan.	
		
b.	Executive Health Program.	
		
c.	Key Management Plan ("KMP") as a supplemental pension plan.	
		
d.	All employee benefit programs offered to Ingersoll Rand salaried employees in accordance with the terms and conditions of those programs.	
		
10.	Based on your role in the Company, you are restricted from transactions involving ordinary shares of Company stock (exercising options, moving in or out of ordinary shares held in company plans, or buying or selling ordinary shares on the open market) except during designated window periods. You will receive communication from the Corporate Secretary when window periods are open along with instructions on how to execute transactions.	
The above terms are contingent upon your acceptance of the Non-Compete and Proprietary Information agreements. To execute these agreements, please sign below as well as the attached Non-Compete and Proprietary agreements and return them to Jeff Blair, Vice President, Total Rewards.
Dave, we all believe that you will make a significant contribution to the Company in this new position and I look forward to you working directly for me. If you have any questions about this offer, please feel free to call Marcia Avedon at 704-655-5821, or Jeff Blair at 704-655-4347. For any other questions, please feel free to contact me.
Sincerely,
/s/ Michael W. Lamach
Michael W. Lamach
Chairman and Chief Executive Officer
cc: Marcia Avedon
Jeff Blair

CANDIDATE ACCEPTANCE
I accept your offer of employment with Ingersoll Rand as Executive Vice President and agree to the conditions herein and in the offer letter.

/s/ David Regnery                                  9/1/2017            
Mr. David Regnery                     Date

Exhibit 21

	

LIST OF SUBSIDIARIES OF INGERSOLL-RAND PLC	 	 	
As of December 31, 2018	 	 	
 	 	 	
Name of Subsidiary	Jurisdiction of Formation	Percent of Ownership	
AIRCO LIMITED	THAILAND	48%	
 	 	 	
AIRTEC LIMITED	UNITED KINGDOM	100%	
 	 	 	
ALLIANCE COMPRESSORS LLC	DELAWARE	25%	
 	 	 	
AMAIR LIMITED	THAILAND	97%	
 	 	 	
ARO DE VENEZUELA, C.A.	VENEZUELA	100%	
 	 	 	
BEST MATIC INTERNATIONAL LIMITED	UNITED KINGDOM	100%	
 	 	 	
BEST MATIC VERMOGENSVERWALTUNGS GMBH	GERMANY	100%	
 	 	 	
CALMAC CORP.	NEW YORK	100%	
 	 	 	
CELTRAK LIMITED	IRELAND	100%	
 	 	 	
CLUB CAR LIMITED	NEW ZEALAND	100%	
 	 	 	
CLUB CAR, LLC	DELAWARE	100%	
 	 	 	
COMERCIAL INGERSOLL-RAND (CHILE) LIMITADA	CHILE	100%	
 	 	 	
COMINGERSOLL-COMERCIO E INDUSTRIA DE EQUIPAMENTOS S.A. (PORTUGAL)	PORTUGAL	22%	
 	 	 	
COMPAGNIE INGERSOLL-RAND SAS	FRANCE	100%	
 	 	 	
COOL ENERGY LIMITED	UNITED KINGDOM	100%	
 	 	 	
DALLAH TRANE FOR MANUFACTURING AIR-CONDITIONERS	SAUDI ARABIA	49%	
 	 	 	
DIASORIN INTERNATIONAL B.V.	NETHERLANDS	100%	
 	 	 	
DRADNATS INC.	DELAWARE	100%	
 	 	 	
EBB HOLDINGS LIMITED	BARBADOS	100%	
 	 	 	
FELLON-MCCORD & ASSOCIATES, LLC	KENTUCKY	100%	
 	 	 	
FILAIRCO INC.	PHILIPPINES	100%	

	
			
FILAIRCO TECHNICAL SERVICES CO., INC.	PHILIPPINES	25%	
 	 	 	
FLEXENERGY HOLDINGS, LLC	DELAWARE	8%	
 	 	 	
FLOWCOOL LIMITED	UNITED KINGDOM	100%	
 	 	 	
FRIGOBLOCK GROSSKOPF GMBH	GERMANY	100%	
 	 	 	
FRIGOBLOCK UK LIMITED	UNITED KINGDOM	100%	
 	 	 	
GHH-RAND SCHRAUBENKOMPRESSOREN GMBH	GERMANY	100%	
 	 	 	
GOLF ACADEMIES LIMITED	UNITED KINGDOM	100%	
 	 	 	
GPS INDUSTRIES, LLC	DELAWARE	100%	
 	 	 	
GPSI HOLDINGS, LLC	DELAWARE	100%	
 	 	 	
GPSI LEASING II - ACCORD, LLC	DELAWARE	100%	
 	 	 	
GPSI LEASING, LLC	DELAWARE	100%	
 	 	 	
GPSI TELEMATICS LLC	DELAWARE	100%	
 	 	 	
HERMANN TRANE HARRISBURG INC.	DELAWARE	100%	
 	 	 	
HIBON INC.	CANADA	100%	
 	 	 	
ICS COOL ENERGY (SAS)	FRANCE	100%	
 	 	 	
ICS COOL ENERGY AG	SWITZERLAND	100%	
 	 	 	
ICS COOL ENERGY B.V.	NETHERLANDS	100%	
 	 	 	
ICS COOL ENERGY GMBH	GERMANY	100%	
 	 	 	
ICS COOL ENERGY INVESTMENTS LIMITED	UNITED KINGDOM	100%	
 	 	 	
ICS COOL ENERGY LIMITED	UNITED KINGDOM	100%	
 	 	 	
ICS GROUP HOLDINGS LIMITED	UNITED KINGDOM	100%	
 	 	 	
ICS HEAT PUMPS LIMITED	UNITED KINGDOM	100%	
 	 	 	
ICS RENEWABLE ENERGY LIMITED	UNITED KINGDOM	100%	
 	 	 	
ICS SERVICING LIMITED	UNITED KINGDOM	100%	

	
			
INDUSTRIAL CHILL SERVICING PRIVATE LTD.	MAURITIUS	100%	
 	 	 	
INGERSOLL RAND-TRANE ENERGY-SAVING SERVICES (SHANGHAI) CO., LTD.	CHINA	100%	
 	 	 	
INGERSOLL-RAND (AUSTRALIA) LTD.	AUSTRALIA	100%	
 	 	 	
INGERSOLL-RAND (CHANG ZHOU) TOOLS CO., LTD.	CHINA	100%	
 	 	 	
INGERSOLL-RAND (CHINA) INDUSTRIAL EQUIPMENT MANUFACTURING CO., LTD.	CHINA	100%	
 	 	 	
INGERSOLL-RAND (CHINA) INVESTMENT COMPANY LIMITED	CHINA	100%	
 	 	 	
INGERSOLL-RAND (EUROPE) LIMITED	UNITED KINGDOM	100%	
 	 	 	
INGERSOLL-RAND (GIBRALTAR) HOLDING	GIBRALTAR	100%	
 	 	 	
INGERSOLL-RAND (GUILIN) TOOLS COMPANY LIMITED	CHINA	100%	
 	 	 	
INGERSOLL-RAND (HONG KONG) HOLDING COMPANY LIMITED	HONG KONG	100%	
 	 	 	
INGERSOLL-RAND (INDIA) LIMITED	INDIA	74%	
 	 	 	
INGERSOLL-RAND (SHANGHAI) TRADING CO., LTD.	CHINA	100%	
 	 	 	
INGERSOLL-RAND AB	SWEDEN	100%	
 	 	 	
INGERSOLL-RAND AIR SOLUTIONS HIBON SARL	FRANCE	100%	
 	 	 	
INGERSOLL-RAND BEST-MATIC AB	SWEDEN	100%	
 	 	 	
INGERSOLL-RAND BETEILIGUNGS UND GRUNDSTUCKSVERWALTUNGS GMBH	GERMANY	100%	
 	 	 	
INGERSOLL-RAND BUFORD LLC	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND CHARITABLE FOUNDATION	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND CHINA LIMITED	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND CLIMATE LIMITED	UNITED KINGDOM	100%	
 	 	 	
INGERSOLL-RAND CLIMATE SOLUTIONS PRIVATE LIMITED	INDIA	100%	
 	 	 	
INGERSOLL-RAND CLUB CAR S.A.S.	           FRANCE	    100%	
 	 	 	
INGERSOLL-RAND COLOMBIA S.A.S.	COLOMBIA	100%	

	
			
INGERSOLL-RAND COMPANY	NEW JERSEY	100%	
 	 	 	
INGERSOLL-RAND COMPANY CHILE Y COMPAÑÍA LIMITADA	CHILE	100%	
 	 	 	
INGERSOLL-RAND COMPANY LIMITED (UK)	UNITED KINGDOM	100%	
 	 	 	
INGERSOLL-RAND COMPANY OF PERU S.A.C.	PERU	100%	
 	 	 	
INGERSOLL-RAND COMPANY SOUTH AFRICA (PTY) LIMITED	SOUTH AFRICA	100%	
 	 	 	
INGERSOLL-RAND COSTA RICA S.A.	COSTA RICA	100%	
 	 	 	
INGERSOLL-RAND CROATIA D.O.O. ZA TRGOVINU	CROATIA	100%	
 	 	 	
INGERSOLL-RAND CZ S.R.O.	CZECH REPUBLIC	100%	
 	 	 	
INGERSOLL-RAND DE MEXICO, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE	MEXICO	100%	
 	 	 	
INGERSOLL-RAND DE PUERTO RICO, INC.	PUERTO RICO	100%	
 	 	 	
INGERSOLL-RAND EQUIPEMENTS DE PRODUCTION S.A.S.	FRANCE	100%	
 	 	 	
INGERSOLL-RAND EUROPEAN HOLDING COMPANY B.V.	NETHERLANDS	100%	
 	 	 	
INGERSOLL-RAND FINANCIAL SERVICES CORPORATION	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND FINANCING LIMITED	IRELAND	100%	
 	 	 	
INGERSOLL-RAND FINLAND OY	FINLAND	100%	
 	 	 	
INGERSOLL-RAND FUNDING LTD.	BERMUDA	100%	
 	 	 	
INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND GMBH	GERMANY	100%	
 	 	 	
INGERSOLL-RAND HOLDINGS B.V.	NETHERLANDS	100%	
 	 	 	
INGERSOLL-RAND HOLDINGS LIMITED	UNITED KINGDOM	100%	
 	 	 	
INGERSOLL-RAND INDUSTRIA, COMERCIO E SERVICOS DE AR CONDICIONADO, AR COMPRIMIDO E REFRIGERACAO LTDA.	BRAZIL	100%	
 	 	 	
INGERSOLL-RAND INTERNATIONAL (INDIA) PRIVATE LIMITED	INDIA	100%	
 	 	 	
INGERSOLL-RAND INTERNATIONAL FINANCE LIMITED	IRELAND	100%	
 	 	 	
INGERSOLL-RAND INTERNATIONAL HOLDING LLC	NEW JERSEY	100%	

	
			
INGERSOLL-RAND INTERNATIONAL LIMITED	IRELAND	100%	
 	 	 	
INGERSOLL-RAND IRISH HOLDINGS UNLIMITED COMPANY	IRELAND	100%	
 	 	 	
INGERSOLL-RAND ITALIA S.R.L.	ITALY	100%	
 	 	 	
INGERSOLL-RAND ITALIANA S.P.A.	ITALY	100%	
 	 	 	
INGERSOLL-RAND ITS JAPAN LTD.	JAPAN	100%	
 	 	 	
INGERSOLL-RAND JAPAN, LTD.	JAPAN	100%	
 	 	 	
INGERSOLL-RAND KOREA HOLDING LLC	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND KOREA LIMITED	KOREA, REPUBLIC OF	100%	
 	 	 	
INGERSOLL-RAND LATIN AMERICA B.V.	NETHERLANDS	100%	
 	 	 	
INGERSOLL-RAND LATIN AMERICA, S. DE R.L. DE C.V.	MEXICO	100%	
 	 	 	
INGERSOLL-RAND LUX EURO III FINANCING S.À R.L.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND LUX HOLDINGS II COMPANY S.À R.L.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND LUX INTERNATIONAL HOLDING COMPANY S.À R.L.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND LUXEMBOURG FINANCE S.A.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND LUXEMBOURG UNITED S.À R.L.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND MACHINERY (SHANGHAI) COMPANY LIMITED	CHINA	100%	
 	 	 	
INGERSOLL-RAND MALAYSIA CO. SDN. BHD.	MALAYSIA	100%	
 	 	 	
INGERSOLL-RAND MANUFACTURA, S. DE R.L DE C.V.	MEXICO	100%	
 	 	 	
INGERSOLL-RAND MANUFACTURING S.R.O.	CZECH REPUBLIC	100%	
 	 	 	
INGERSOLL RAND MAROC S.À R.L.	MOROCCO	100%	
 	 	 	
INGERSOLL-RAND NETHERLANDS B.V.	NETHERLANDS	100%	
 	 	 	
INGERSOLL-RAND NEXIA INTELLIGENCE LLC	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND NY, INC.	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND PHILIPPINES, INC.	PHILIPPINES	100%	

	
			
INGERSOLL-RAND POLSKA SP. Z.O.O.	POLAND	100%	
 	 	 	
INGERSOLL-RAND PORTUGAL - SOCIEDADE, UNIPESSOAL, LDA.	PORTUGAL	100%	
 	 	 	
INGERSOLL-RAND RODAMIENTOS HOLDING, S.L.	SPAIN	100%	
 	 	 	
INGERSOLL-RAND RUS LLC	RUSSIAN FEDERATION	100%	
 	 	 	
INGERSOLL-RAND S.A.	SWITZERLAND	100%	
 	 	 	
INGERSOLL RAND, S.A. DE C.V.	MEXICO	100%	
 	 	 	
INGERSOLL-RAND SALES COMPANY, LLC	DELAWARE	100%	
 	 	 	
INGERSOLL RAND SERVICE DO BRASIL LTDA.	BRAZIL	100%	
 	 	 	
INGERSOLL-RAND SERVICES AND TRADING LIMITED LIABILITY COMPANY	RUSSIAN FEDERATION	100%	
 	 	 	
INGERSOLL-RAND SERVICES COMPANY	DELAWARE	100%	
 	 	 	
INGERSOLL-RAND SERVICES LIMITED	UNITED KINGDOM	100%	
 	 	 	
INGERSOLL-RAND SERVICES S.R.O.	CZECH REPUBLIC	100%	
 	 	 	
INGERSOLL-RAND SINGAPORE ENTERPRISES PTE. LTD.	SINGAPORE	100%	
 	 	 	
INGERSOLL-RAND SOUTH EAST ASIA (PTE.) LTD.	SINGAPORE	100%	
 	 	 	
INGERSOLL-RAND SPAIN, S.A.	SPAIN	100%	
 	 	 	
INGERSOLL-RAND SUPERAY HOLDINGS LIMITED	HONG KONG	100%	
 	 	 	
INGERSOLL-RAND SVENSKA AB	SWEDEN	100%	
 	 	 	
INGERSOLL-RAND TECHNICAL AND SERVICES LIMITED	IRELAND	100%	
 	 	 	
INGERSOLL-RAND TECHNICAL AND SERVICES S.Á.R.L.	SWITZERLAND	100%	
 	 	 	
INGERSOLL-RAND TECHNOLOGIES AND SERVICES PRIVATE LIMITED	INDIA	100%	
 	 	 	
INGERSOLL-RAND TECHNOLOGIES S.R.O.	CZECH REPUBLIC	100%	
 	 	 	
INGERSOLL-RAND TOOL HOLDINGS LIMITED	HONG KONG	100%	
 	 	 	
INGERSOLL-RAND TRADING GMBH	GERMANY	100%	
 	 	 	
INGERSOLL-RAND UK LIMITED	UNITED KINGDOM	100%	

	
			
INGERSOLL-RAND UKRAINE LIMITED LIABILITY COMPANY	UKRAINE	100%	
 	 	 	
INGERSOLL-RAND VIETNAM COMPANY LIMITED	VIETNAM	100%	
 	 	 	
INGERSOLL-RAND WORLD TRADE GMBH	SWITZERLAND	100%	
 	 	 	
INGERSOLL-RAND WORLDWIDE CAPITAL S.À R.L.	LUXEMBOURG	100%	
 	 	 	
INGERSOLL-RAND ZIMBABWE (PRIVATE) LIMITED	ZIMBABWE	100%	
 	 	 	
IR CANADA HOLDINGS ULC	CANADA	100%	
 	 	 	
IR CANADA SALES & SERVICE ULC	CANADA	100%	
 	 	 	
IR FRANCE SAS	FRANCE	100%	
 	 	 	
MB AIR SYSTEMS LIMITED	UNITED KINGDOM	100%	
 	 	 	
MITSUBISHI ELECTRIC TRANE HVAC US LLC	DELAWARE	50%	
 	 	 	
OFFICINA MECCANICHE INDUSTRIALI SRL	ITALY	100%	
 	 	 	
PERFECT PITCH, L.P.	DELAWARE	68%	
 	 	 	
PLURIFILTER D.O.O.	SLOVENIA	100%	
 	 	 	
PRIME AIR LIMITED	THAILAND	100%	
 	 	 	
PT INGERSOLL-RAND INDONESIA	INDONESIA	100%	
 	 	 	
PT TRANE INDONESIA	INDONESIA	100%	
 	 	 	
R&O IMMOBILIEN GMBH	GERMANY	100%	
 	 	 	
REFTRANS, S.A.	SPAIN	85%	
 	 	 	
SHANGHAI INGERSOLL-RAND COMPRESSOR LIMITED	CHINA	100%	
 	 	 	
SOCIETE TRANE SAS	FRANCE	100%	
 	 	 	
SPANASHVIEW UNLIMITED COMPANY	IRELAND	100%	
 	 	 	
STANDARD CENTENNIAL PROPERTY, LLC	DELAWARE	100%	
 	 	 	
STANDARD COMPRESSORS INC.	DELAWARE	100%	
 	 	 	
STANDARD INDUSTRIAL MINERAL PRODUCTS CORP.	PHILIPPINES	40%	

	
			
STANDARD RESOURCES AND DEVELOPMENT CORPORATION	PHILIPPINES	40%	
 	 	 	
STANDARD TRANE INSURANCE COMPANY	NORTH CAROLINA	100%	
 	 	 	
STANDARD TRANE INSURANCE IRELAND DESIGNATED ACTIVITY COMPANY	IRELAND	100%	
 	 	 	
STANDARD TRANE WARRANTY COMPANY	SOUTH CAROLINA	100%	
 	 	 	
T.I. SOLUTIONS (ISRAEL) LTD.	ISRAEL	100%	
 	 	 	
TAST LIMITED	THAILAND	48%	
 	 	 	
THE TRANE COMPANY	NEVADA	100%	
 	 	 	
THERMO KING CONTAINER TEMPERATURE CONTROL (SUZHOU) CORPORATION LTD.	CHINA	82%	
 	 	 	
THERMO KING CONTAINER-DENMARK A/S	DENMARK	100%	
 	 	 	
THERMO KING CORPORATION	DELAWARE	100%	
 	 	 	
THERMO KING DE PUERTO RICO, INC.	DELAWARE	100%	
 	 	 	
THERMO KING EUROPEAN MANUFACTURING LIMITED	IRELAND	100%	
 	 	 	
THERMO KING INDIA PRIVATE LIMITED	INDIA	100%	
 	 	 	
THERMO KING IRELAND LIMITED	IRELAND	100%	
 	 	 	
THERMO KING PUERTO RICO MANUFACTURA, INC.	PUERTO RICO	100%	
 	 	 	
THERMO KING SERVICES LIMITED	IRELAND	100%	
 	 	 	
THERMO KING SVC, INC.	DELAWARE	100%	
 	 	 	
THERMO KING TRADING COMPANY	DELAWARE	100%	
 	 	 	
THERMO KING TRANSPORTKOELING B.V.	NETHERLANDS	100%	
 	 	 	
TK PUERTO RICO AIRE, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO COMERCIAL, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO ENSAMBLAJE, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO FABRICACION, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO LOGISTICA, INC.	PUERTO RICO	100%	

	
			
TK PUERTO RICO OPERACIONES INDUSTRIALES, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO PRODUCCION, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO SOLUCIONES CLIMATICAS, INC.	PUERTO RICO	100%	
 	 	 	
TK PUERTO RICO TECNOLOGIAS, INC.	PUERTO RICO	100%	
 	 	 	
TM AIR CONDITIONING SDN. BHD.	MALAYSIA	100%	
 	 	 	
TRANE (IRELAND) LIMITED	IRELAND	100%	
 	 	 	
TRANE (SCHWEIZ) GMBH / TRANE (SUISSE) S.A.R.L.	SWITZERLAND	100%	
 	 	 	
TRANE (THAILAND) LIMITED	THAILAND	100%	
 	 	 	
TRANE (UK) LTD.	UNITED KINGDOM	100%	
 	 	 	
TRANE AIR CONDITIONING PRODUCTS LIMITED	CAYMAN ISLANDS	100%	
 	 	 	
TRANE AIR CONDITIONING SYSTEMS (CHINA) CO. LTD.	CHINA	100%	
 	 	 	
TRANE AIR CONDITIONING SYSTEMS AND SERVICE CO., LIMITED	HONG KONG	100%	
 	 	 	
TRANE AIRCONDITIONING PTE. LTD.	SINGAPORE	100%	
 	 	 	
TRANE AIRE ACONDICIONADO S.L.	SPAIN	100%	
 	 	 	
TRANE BERMUDA LTD.	BERMUDA	100%	
 	 	 	
TRANE BRANDS, INC.	DELAWARE	100%	
 	 	 	
TRANE BVBA	BELGIUM	100%	
 	 	 	
TRANE CANADA LP	CANADA	100%	
 	 	 	
TRANE CANADA ULC	CANADA	100%	
 	 	 	
TRANE CENTRAL AMERICA, INC.	DELAWARE	100%	
 	 	 	
TRANE CHINA HOLDINGS LIMITED	CAYMAN ISLANDS	100%	
 	 	 	
TRANE CLIMATE MANUFACTURING S.R.L.	ITALY	100%	
 	 	 	
TRANE CR SPOL SRO.	CZECH REPUBLIC	100%	
 	 	 	
TRANE DE ARGENTINA S.A.	ARGENTINA	100%	

	
			
TRANE DE CHILE S.A.	CHILE	100%	
 	 	 	
TRANE DE COLOMBIA S.A.	COLOMBIA	100%	
 	 	 	
TRANE DEUTSCHLAND GMBH	GERMANY	100%	
 	 	 	
TRANE DISTRIBUTION PTE LTD	SINGAPORE	100%	
 	 	 	
TRANE DO BRASIL INDÚSTRIA E COMÉRCIO DE PRODUCTOS PARA CONDICIONAMENTO DE AR LTDA.	BRAZIL	100%	
 	 	 	
TRANE DOMINICANA, S.R.L.	DOMINICAN REPUBLIC	100%	
 	 	 	
TRANE EGYPT LLC	EGYPT	99%	
 	 	 	
TRANE ENERGY CHOICE, LLC	DELAWARE	100%	
 	 	 	
TRANE EUROPE HOLDINGS B.V.	NETHERLANDS	100%	
 	 	 	
TRANE EXPORT LLC	DELAWARE	100%	
 	 	 	
TRANE FINANCE SPRL	BELGIUM	100%	
 	 	 	
TRANE FOUNDATION OF NEW YORK	NEW YORK	100%	
 	 	 	
TRANE FRANCE SAS	FRANCE	100%	
 	 	 	
TRANE GMBH	AUSTRIA	100%	
 	 	 	
TRANE GP INC.	CANADA	100%	
 	 	 	
TRANE GRID SERVICES LLC	KENTUCKY	100%	
 	 	 	
TRANE HELLAS S.A.	GREECE	100%	
 	 	 	
TRANE HOLDING CO.	CANADA	100%	
 	 	 	
TRANE HOLDINGS COMPANY YK	JAPAN	100%	
 	 	 	
TRANE HUNGARY KFT	HUNGARY	100%	
 	 	 	
TRANE INC.	DELAWARE	100%	
 	 	 	
TRANE INC. OF DELAWARE	DELAWARE	100%	
 	 	 	
TRANE INDIA LTD.	DELAWARE	100%	
 	 	 	
TRANE INTERNATIONAL INC.	DELAWARE	100%	

	
			
TRANE IP INC.	DELAWARE	100%	
 	 	 	
TRANE ITALIA S.R.L	ITALY	100%	
 	 	 	
TRANE JAPAN, LTD.	JAPAN	100%	
 	 	 	
TRANE KLIMA TICARET AS	TURKEY	100%	
 	 	 	
TRANE KOREA, INC.	KOREA, REPUBLIC OF	100%	
 	 	 	
TRANE KUWAIT AIRCONDITIONING CO WLL	KUWAIT	49%	
 	 	 	
TRANE L.P.	BERMUDA	100%	
 	 	 	
TRANE MALAYSIA SALES & SERVICES SDN. BHD.	MALAYSIA	100%	
 	 	 	
TRANE PUERTO RICO LLC	DELAWARE	100%	
 	 	 	
TRANE QATAR LLC	QATAR	49%	
 	 	 	
TRANE ROMANIA S.R.L.	ROMANIA	100%	
 	 	 	
TRANE S.A.	SWITZERLAND	100%	
 	 	 	
TRANE S.A.E.	EGYPT	100%	
 	 	 	
TRANE SERVICEFIRST, C.A.	VENEZUELA	100%	
 	 	 	
TRANE SISTEMAS INTEGRALES, S. DE R.L. DE C.V.	MEXICO	100%	
 	 	 	
TRANE SUPPORT SAS	FRANCE	100%	
 	 	 	
TRANE SWEDEN AB	SWEDEN	100%	
 	 	 	
TRANE SYSTEMS SOLUTIONS OF PANAMA, INC.	PANAMA	100%	
 	 	 	
TRANE TAIWAN DISTRIBUTION LTD.	TAIWAN PROVINCE OF CHINA	100%	
 	 	 	
TRANE U.S. INC.	DELAWARE	100%	
 	 	 	
TRANE VIDALIA LLC	GEORGIA	100%	
 	 	 	
TRANE VIETNAM SERVICES COMPANY LIMITED	VIETNAM	100%	
 	 	 	
TRANE, S.A. DE C.V.	MEXICO	100%	
 	 	 	
TRICOOL THERMAL LIMITED	UNITED KINGDOM	100%	

	
			
TSI ANSTALT LTD.	LIECHTENSTEIN	100%	
 	 	 	
TWENTYTHREEC, LLC	DELAWARE	100%	
 	 	 	
TYS LIMITED	HONG KONG	50%	
 	 	 	
WORLD STANDARD LTD.	DELAWARE	100%	
 	 	 	
ZEKS COMPRESSED AIR SOLUTIONS LLC	DELAWARE	100%	

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S‑3 (No. 333-221265) and Form S‑8 (Nos. 333-225575, 333-206494, 333-201353, 333-189446, 333-185429, 333-185428, 333-151607-99, 333-149537-99, 333-149396-99, 333-143716-99, 333-130047-99, 333-42133-99, 333-19445-99, and 333-67257-99) of Ingersoll-Rand plc of our report dated February 12, 2019 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.    

/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 12, 2019

Exhibit 31.1
CERTIFICATION
I, Michael W. Lamach, certify that:

1.	I have reviewed the Annual Report on Form 10-K of Ingersoll-Rand plc for the year ended December 31, 2018 ;	

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:	February 12, 2019	 	/s/ Michael W. Lamach	
 	 	 	Michael W. Lamach	
 	 	 	Principal Executive Officer	

Exhibit 31.2
CERTIFICATION
I, Susan K. Carter, certify that:

1.	I have reviewed the Annual Report on Form 10-K of Ingersoll-Rand plc for the year ended December 31, 2018 ;	

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:	February 12, 2019	 	/s/ Susan K. Carter	
 	 	 	Susan K. Carter	
 	 	 	Principal Financial Officer	

Exhibit 32

Section 1350 Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Ingersoll-Rand plc (the Company), does hereby certify that to our knowledge:

The Annual Report on Form 10-K for the year ended December 31, 2018 (the Form 10-K) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

	

/s/ Michael W. Lamach	
Michael W. Lamach	
Principal Executive Officer	
February 12, 2019	
 	
/s/ Susan K. Carter	
Susan K. Carter	
Principal Financial Officer	
February 12, 2019