IR 3Q 2001 Results

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Fourth Quarter2003 Results
2
Safe Harbor
Forward looking statements that involve risks.
Please refer to September 30, 2003 Form 10-Q for
details on factors that influence results.
3
Diluted Earnings Per Share
Fourth Quarter
Full Year
2003 2002 2003 2002
Continuing 1.11 .74 3.44 2.15 Discontinued
Ongoing (.02) .10
( .10) .32 Gain on Sale .03 - .40 - CDSOA -
.24 - .24 Goodwill Impairment
(3.73) TOTAL 1.12 1.08 3.74
(1.02)
Strong Growth in Continuing Operations
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Fourth Quarter 2003 Results

• Markets showing steady improvement
• Gained share through innovative products and
  solutions
• Earnings growth driven by volume and margin
  improvement
• Organic revenue growth 6
• Operating Margin close to 10
• Growth at all four sectors

Improving Tone of Business
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Fourth Quarter 2003
IR is a global industrial enterprise with market
leading brands We are dedicated to driving
Shareholder Value by achieving
Dramatic Growth ...
by focusing on innovative solutions for our
customers
Operational Excellence ...
by pursuing continuous improvement in all our
operations
Dual Citizenship ...
by bringing together the talents, energy and
enthusiasm of all IR people
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Innovative Solutions for Customers
7 Organic Revenue Growth in 2003
Nirvana Air Compressors
Magnum Refrigerated Container
Hand Reader Recognition Systems
Over 200 Million Revenue from New Products in
2003
7
Club Car Precedent
Redefining the Golf Car Industry
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Recurring Revenue
Millions
2,500
2,250
2,004
1,608
2003
2002
2001
2000
of Total
25
19
55 Increase in Recurring Revenue Since 2000
9
2003 Recurring Revenue Growth
10
7
Air Solutions
Hussmann
of Total Revenues
48
35
10
Operational Excellence

• Realized restructuring and productivity benefits
  of 0.25 EPS
• Continued to manage costs, working capital turns
  and customer service
• Supplier Footprint initiative material cost
  reductions
• 100 Million savings 2003
• 100 Million target 2004
• Portfolio restructuring Divested three business
  in 2003
• Lean Branch Focus on Hussmann
• 60 Improvement in operating profits
• Added 3 points to operating margin

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Migrating to One Company Dual Citizenship
Sales Enterprise Growth Initiatives Grew by 100
to 135 Million in 2003. 2008 Goal 750 Million
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2003 Successes

• Excellent year with strong progress toward
  long-range plan
• Annual organic revenue growth 7 above 4 - 6
  target
• Improved operating margins move toward 15 goal
• Strengthened balance sheet 33.5 debt/capital,
  target range of 35 - 40
• Exceeded full-year earnings and cash-flow targets

Executing our strategy
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Fourth Quarter 2003 Results
millions, except Diluted Earnings/Share (EPS)
Revenues 2,665.9 Operating Income 265.2 Margin
9.9 Interest Expense (40.1) Other
Income 2.0 Earnings before taxes, continuing
operations 227.1 Taxes, continuing
operations (31.1) Earnings after taxes,
continuing operations 196.0 Discontinued
operations, net of tax 1.4 Net Earnings
197.4 EPS Diluted Continuing
Operations 1.11 Discontinued Operations 0.01
1.12
14
Revenues Continuing Operations
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2003 Q4 Results Year-over-year change
7
3
(16)
Latin America
Asia Pacific
Europe
North America
Revenue gains in major geographic regions
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Climate Control

• Thermo King
• Revenue up 14 (7 ex. currency)
• Worldwide truck, trailer and bus
• New products
• Recurring revenue (18 of total)
• Operating margin improvement
• Revenue growth leverage
• Productivity program
• Price realization
• Hussmann
• Revenue up 3 (1 ex. currency)
• Recurring revenue (35 of total)
• Continued cautious capital spending by US
  supermarket chains
• Operational and lean branch improvement programs

Millions
752
697
Operating Margins
9.5
5.0
2003 2002
16
Air and Productivity Solutions
Millions

• Air Solutions
• Total revenue up 9 (4 ex. currency)
• Recurring revenue up 10
• New products and services
• Productivity Solutions
• Recurring revenue up 14
• Retail channel development
• Margin improvement
• Improvement in Service profitability
• Leveraging global presence
• New products
• Operational improvements

361
341
Operating Margins
10.5
6.2
2003 2002
17
Dresser-Rand
Millions
347
340

• Revenue
• Overall revenue down 2
• Revenues ex. buyouts up 3
• Service revenue growth of 35
• Margins
• Productivity Investments in FY2003

Operating Margins
7.0
7.4
2003 2002
18
Infrastructure
Millions

• Revenue improved by 18 (13 ex. currency)
• Bobcat revenue growth of 32 (26 ex.
  currency)
• Strong North American markets
• New products
• Growth in aftermarket sales
• Club Car Golf market share growth
• Road Development revenue growth of 14 (7 ex.
  currency)
• Operating Margin Improvement
• Favorable business mix
• New products
• Volume leverage

781
663
Operating Margins
10.3
6.3
2003 2002
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Security and Safety

• Revenues grew by 13 (10 ex. currency)
• Residential and Commercial up 12 and 7,
  respectively
• Solutions up 33 (23 ex. currency)
• Margin improvement
• Continued strength of NA market
• Solutions gaining traction
• Partially offset by new product development
  investments

Millions
432
381
Operating Margins
20.8
19.2
2003 2002
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Balance Sheet Indicators
2003
2002
Inventory Turns Receivables (DSO) Payables
(DPO) Total Debt Debt to Capital Capital
Expenditures Depreciation and Amortization
6.3 51 39 2.3 B 33.5 108 M 191 M
4.7 56 43 3.2 B 47.5 123 M 205 M
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Outlook 2004 Full Year

• Most markets improving at the end of 2003
• Expecting revenue growth 4 - 6 in most
  businesses
• Exception Dresser-Rand 400 Million elimination
  of buyouts and low margin projects
• Continued focus
• Material cost reductions
• Permanent reduction in operating cost structure
• Reduction in working capital
• Higher operating margins expected
• Tax rate of approximately 14

Expect Improved Activity in 2004
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2004 Earnings Outlook Full Year
2003 Continuing Operations 3.44 Operations
Improvement 0.44 0.69 Growth
Investments (0.07) Lower Interest Expense and FX
Impact 0.12 2004 Continuing Operations 3.93 -
4.18 Discontinued Operations (0.20) CDSOA 0.12
2004 Total company 3.85 - 4.10
Full Year 2004 EPS of 3.85 to 4.10
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2004 Earnings Outlook First Quarter
2003 Continuing Operations 0.59 Operations
Improvement 0.06 0.16 Growth
Investments (0.02) Lower Interest Expense and FX
Impact 0.07 2004 Continuing Operations 0.70 -
0.80 Discontinued Operations (0.05) 2004 Total
company 0.65 - 0.75
First Quarter 2004 EPS of 0.65 - 0.75
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