EXHIBIT 13
















                    INGERSOLL-RAND COMPANY LIMITED
                    2001 FINANCIAL REPORT
































Consolidated Statement of Income
In millions except per share amounts

For the years ended December 31     2001         2000        1999
Net sales                       $9,682.0     $9,597.6    $7,819.0
Cost of goods sold               7,611.5      7,141.4     5,673.2
Selling and administrative
  expenses                       1,454.2      1,279.6     1,066.1
Restructuring charges               93.1         87.2          -
Operating income                   523.2      1,089.4     1,079.7
Interest expense                  (253.0)      (255.3)     (183.5)
Other income (expense), net         (6.8)        35.8         3.1
Minority interests                 (20.1)       (39.3)      (29.1)
Earnings before income taxes       243.3        830.6       870.2
(Benefit)/provision for income
  taxes                             (2.9)      284.4        307.1
Earnings from continuing
  operations                       246.2        546.2       563.1
Discontinued operations
  (net of tax)                       -          123.2        28.0
Net earnings                    $  246.2     $  669.4    $  591.1
Basic earnings per share:
    Continuing operations          $1.49        $3.39       $3.44
    Discontinued operations          -           0.76        0.17
                                   $1.49        $4.15       $3.61
Diluted earnings per share:
    Continuing operations          $1.48        $3.36       $3.40
    Discontinued operations          -           0.76        0.17
                                   $1.48        $4.12       $3.57

See accompanying Notes to Consolidated Financial Statements.

Consolidated Balance Sheet

In millions except share amounts

December 31
                                                2001       2000
Assets
Current assets:
Cash and cash equivalents                  $   114.0  $    97.0
Marketable securities                            7.4      130.4
Accounts and notes receivable, less
  allowances of $54.3 in 2001 and
  $48.5 in 2000                              1,482.9    1,671.0
Inventories                                  1,295.3    1,242.3
Prepaid expenses and deferred income taxes     288.2      235.5
                                             3,187.8    3,376.2
Property, plant and equipment, net           1,633.0    1,653.4
Intangible assets, net                       5,689.3    5,372.2
Deferred income taxes                            -        152.9
Other assets                                   553.6      497.9
                                           $11,063.7  $11,052.6
Liabilities and Equity
Current liabilities:
Accounts payable                           $   761.0  $   681.4
Accrued expenses and other current
  liabilities                                1,526.3    1,561.0
Loans payable                                  563.7    2,126.1
                                             2,851.0    4,368.5
Long-term debt                               2,900.7    1,540.4
Deferred income taxes                          170.1        -
Postemployment and other benefit liabilities   920.4      957.8
Minority interests                             110.5      113.4
Other liabilities                              194.4      188.8
                                             7,147.1    7,168.9
Company obligated mandatorily redeemable
  preferred securities of subsidiary trust
  holding solely debentures of the company       -        402.5
Shareholders' equity:
Common shares (168,003,884 and 171,466,627
  shares issued in 2001 and 2000,
  respectively)                                168.0      343.1
Capital in excess of par value                 324.2      258.8
Retained earnings                            3,745.8    3,612.7
                                             4,238.0    4,214.6
Unallocated LESOP shares, at cost                -         (1.8)
Treasury stock, at cost                          -       (471.0)
Accumulated other comprehensive income        (321.4)    (260.6)
Shareholders' equity                         3,916.6     3,481.2
                                           $11,063.7   $11,052.6

See accompanying Notes to Consolidated Financial Statements.


Consolidated Statement of Shareholders' Equity

In millions
<TABLE>
                                                    Capital in                                    Accumulated
                                 Total                  excess                                          other
                         shareholders'   Common stock   of par  Retained Unallocated  Treasury  comprehensive  Comprehensive
                                equity  Amount  Shares   value  earnings       LESOP     stock         income         income

                                    <c>     <c>     <c>    <c>       <c>          <c>       <c>            <c>            <c>
Balance at December 31, 1998  $2,721.8  $337.8   168.9  $133.4  $2,567.3      $(27.0)  $(150.9)       $(138.8)
Net earnings                     591.1                             591.1                                              $591.1
Foreign currency translation     (48.0)                                                                 (48.0)         (48.0)
 Total comprehensive income                                                                                           $543.1
Shares issued under stock and
  incentive plans                 94.8     4.5     2.3    90.3
Allocation of LESOP shares        24.6                    14.1                  10.5
Purchase of treasury shares     (205.8)                                                 (205.8)
Cash dividends                  (105.3)                           (105.3)
Balance at December 31, 1999   3,073.2   342.3   171.2   237.8   3,053.1       (16.5)   (356.7)        (186.8)
Net earnings                     669.4                             669.4                                              $669.4
Foreign currency translation     (90.2)                                                                 (90.2)         (90.2)
Unrealized gain on marketable
  securities                      16.4                                                                   16.4           16.4
  Total comprehensive income                                                                                          $595.6
Acquisition of business            6.4                                                     6.4
Shares issued under stock and
  incentive plans                 11.7     0.8     0.3    10.3                             0.6
Allocation of LESOP shares        25.4                    10.7                  14.7
Purchase of treasury shares     (121.3)                                                 (121.3)
Cash dividends                  (109.8)                          (109.8)
Balance at December 31, 2000   3,481.2   343.1   171.5   258.8  3,612.7         (1.8)   (471.0)       (260.6)
Net earnings                     246.2                            246.2                                               $246.2
Foreign currency translation     (45.9)                                                                (45.9)          (45.9)
Cumulative effect of change
  in accounting principal
  (SFAS 133), net of tax          (1.2)                                                                 (1.2)           (1.2)
Cash flow hedges, net of tax:
  Unrealized (loss) gain           1.5                                                                    1.5            1.5
  Reclassification adjustments     1.2                                                                    1.2            1.2
Reclassification to realized on
  marketable securities,
  net of tax                     (16.4)                                                                 (16.4)         (16.4)
  Total comprehensive income                                                                                          $185.4
Acquisition of business           15.3                                                    15.3
Shares issued under stock and
  incentive plans                 15.3     0.6     0.4    14.7
Allocation of LESOP shares         2.5                     0.7                   1.8
Purchase of treasury shares      (72.5)                                                  (72.5)
Stock issued related to equity-
  linked securities              402.5    16.7     8.3   385.8
Treasury stock cancellation        -     (24.4)  (12.2) (503.8)                          528.2
Common stock conversion            -    (168.0)          168.0
Cash dividends                  (113.1)                          (113.1)
Balance at December 31, 2001  $3,916.6  $168.0   168.0  $324.2 $3,745.8       $  -      $  -           (321.4)

</TABLE>

See accompanying Notes to Consolidated Financial Statements.



Consolidated Statement of Cash Flows


In millions

For the years ended December 31                      2001      2000       1999
Cash flows from operating activities:
 Income from continuing operations                $ 246.2   $ 546.2     $563.1
 Adjustments to arrive at net cash provided by
   operating activities:
   Restructure charges                               93.1      87.2        -
   Depreciation and amortization                    362.5     327.1      272.4
   Gain on sale of businesses                         -       (42.9)     (14.6)
   Loss/(gain) on sale of property, plant and
    equipment                                         1.6      (5.1)      (3.4)
   Minority interests, net of dividends              (3.4)      4.9       (0.2)
   Equity earnings/losses, net of dividends          (1.5)      0.8      (28.5)
   Deferred income taxes                             23.4       13.6      62.2
   Other items                                       10.6       35.7      40.9
 Changes in assets and liabilities
  (Increase)/decrease in:
    Accounts and notes receivable                   229.4      (31.6)    (57.7)
    Inventories                                     (24.1)    (160.2)     56.7
    Other current and noncurrent assets            (172.9)       3.1      12.8
  Increase/(decrease) in:
   Accounts payable and accruals                     40.0       50.3     (55.6)
   Other current and noncurrent liabilities        (203.3)     (92.1)      6.6
      Net cash provided by operating activities     601.6      737.0     854.7

Cash flows from investing activities:
  Capital expenditures                             (200.6)    (201.3)   (190.5)
  Proceeds from sales of property, plant and
   equipment                                         41.7       28.5      30.4
  Acquisitions, net of cash *                      (158.3)  (2,288.0)   (161.2)
  Proceeds from business dispositions                17.5      977.3      84.8
  Decrease/(increase) in marketable securities       97.2       (6.3)      1.5
  Cash provided by/(invested in) or advances
   from/(to) equity companies                        15.7       12.2      (2.0)
      Net cash used in investing activities        (186.8)  (1,477.6)   (237.0)

Cash flows from financing activities:
  (Decrease)/increase in short-term borrowings   (1,026.1)     950.2     (36.8)
  Proceeds from long-term debt                    1,493.8        3.1      21.5
  Payments of long-term debt                       (681.8)     (80.9)   (252.2)
  Net change in debt                               (214.1)     872.4    (267.5)
  Proceeds from exercise of stock options             9.7        8.3      70.2
  Dividends paid                                   (113.1)    (109.8)   (105.3)
  Purchase of treasury stock                        (72.5)    (121.3)   (205.8)
  Other                                               -          -        63.3
      Net cash (used in)/provided by financing
        activities                                 (390.0)     649.6    (445.1)
      Net cash (used in)/provided by discontinued
        operations                                    -        (22.1)     14.6
Effect of exchange rate changes on cash and cash
  equivalents                                        (7.8)     (12.8)     (7.8)
   Net increase/(decrease) in cash and cash
     equivalents                                     17.0     (125.9)    179.4
   Cash and cash equivalents-beginning of year       97.0      222.9      43.5
Cash and cash equivalents-end of year            $  114.0  $    97.0   $ 222.9

*Acquisitions:
 Working capital, other than cash                $   (5.9) $  (376.8)  $ (61.0)
 Property, plant and equipment                      (41.6)    (487.2)    (13.0)
 Intangibles and other assets                      (126.6)  (1,806.2)   (101.4)
 Long-term debt and other liabilities                 0.5      375.7      14.2
 Treasury stock issued                               15.3        6.5       -
     Net cash used to acquire businesses         $ (158.3) $(2,288.0)  $(161.2)

Cash paid during the year for:
   Interest, net of amounts capitalized          $  293.4   $  346.8   $ 230.4
   Income taxes                                     154.6      175.7     217.7

In 1999, the company acquired the remaining 49% interest in
Ingersoll-Dresser Pump Company in a noncash transaction by
issuing a note for $377.0 million.

See accompanying Notes to Consolidated Financial Statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  A  summary  of
significant  accounting  policies  used  in  the  preparation  of   the
accompanying financial statements follows:

Basis  of  Presentation:   The  consolidated  financial  statements  of
Ingersoll-Rand  Company Limited, a Bermuda company (IR-Limited  or  the
company),  have  been  prepared in accordance with  generally  accepted
accounting principles in the United States. IR-Limited is the successor
to  Ingersoll-Rand Company, a New Jersey corporation  (IR-New  Jersey),
following  a corporate reorganization (the reorganization) that  became
effective  on  December 31, 2001.  The reorganization was  accomplished
through  a  merger  of  a  newly-formed merger subsidiary  into  IR-New
Jersey.  IR-New Jersey, the surviving company, continues to exist as an
indirect,  wholly-owned subsidiary of IR-Limited.  IR-Limited  and  its
subsidiaries continue to conduct the businesses previously conducted by
IR-New  Jersey  and  its  subsidiaries.  The  reorganization  has  been
accounted for as a reorganization of entities under common control  and
accordingly  it  did  not  result in any changes  to  the  consolidated
amounts of assets, liabilities and shareholders' equity.

Principles  of  Consolidation:  The consolidated  financial  statements
include all wholly owned and majority-owned subsidiaries.  Intercompany
transactions and balances have been eliminated.  Partially owned equity
affiliates  are accounted for under the equity method.   In  conformity
with  generally  accepted accounting principles,  management  has  used
estimates  and assumptions that affect the reported amounts of  assets,
liabilities,  revenues and expenses, and the disclosure  of  contingent
assets  and liabilities.  Significant estimates include accounting  for
doubtful  accounts,  amortization  and  depreciation,  warranty,  sales
allowances,   taxes,   environmental,  product  liability   and   other
contingencies. Actual results could differ from those estimates.

Reclassifications:  Reclassifications were made to prior  year  amounts
to  conform with the 2001 presentation.  The accompanying  consolidated
financial statements restate the previously presented amounts to report
Dresser-Rand Company (Dresser-Rand) on a fully consolidated basis since
acquisition.   Previously, the company reported  the  results  and  net
assets of Dresser-Rand as assets held for sale.

The  company adopted Emerging Issues Task Force Issue No. 00-25 "Vendor
Income  Statement Characterization of Consideration Paid to a  Reseller
of  the  Vendor's  Products"  in  the fourth  quarter  of  2001.   Upon
adoption, financial statements for all periods presented were  restated
to  comply with the income statement classification of reseller finance
costs and cooperative advertising programs, which resulted in decreases
to  net  sales  of  $28.6  million, $24.0 million  and  $23.6  million,
decreases  in  cost of goods sold of $13.1 million, $15.8  million  and
$17.7  million,  increases  in selling and administrative  expenses  of
$18.5  million,  $21.3  million and $13.7  million,  and  decreases  in
interest  expense of $34.0 million, $29.5 million and $19.6 million  in
2001, 2000 and 1999, respectively.

Cash Equivalents:  The company considers all highly liquid investments,
consisting  primarily  of  time  deposits  and  commercial  paper  with
maturities  of  three  months  or  less  when  purchased,  to  be  cash
equivalents.   Cash equivalents were $0.5 million and $1.0  million  at
December 31, 2001 and 2000, respectively.

Inventories:  Inventories are stated at cost, which is not in excess of
market.   Most  U.S.  manufactured inventories, excluding  the  Climate
Control and Dresser-Rand Segments, are valued on the last-in, first-out
(LIFO)  method.  All other inventories are valued using  the  first-in,
first-out (FIFO) method.

Property,  Plant  and  Equipment:  Property, plant  and  equipment  are
stated at cost, less accumulated depreciation.  The company principally
uses  accelerated  depreciation methods for assets  placed  in  service
prior  to  December 31, 1994.  Assets acquired subsequent to that  date
are  depreciated  using the straight-line method over  their  estimated
useful  lives.  At December 31, 2001 and 2000, gross land and buildings
totaled  $761.7 million and $738.9 million, respectively,  while  gross
machinery and equipment totaled $1,887.2 million and $1,827.7  million,
respectively.  Accumulated depreciation at December 31, 2001  and  2000
was $1,015.9 million and $913.2 million, respectively.

Intangible Assets: Goodwill, net, was $4.8 billion and $5.3 billion  at
December  31,  2001  and  2000, respectively. Accumulated  amortization
amounted to $554.4 million and $448.4 million at December 31, 2001  and
2000,   respectively.  In  accordance  with  Statement   of   Financial
Accounting  Standards  (SFAS) No. 142, "Goodwill and  Other  Intangible
Assets,"  goodwill associated with acquisitions consummated after  June
30,  2001 is not being amortized. All other goodwill has been amortized
on  a  straight-line basis over periods not to exceed 40 years  through
December 31, 2001. Amortization expense for goodwill for 2001, 2000 and
1999   was   $135.1   million,  $135.3  million  and  $102.3   million,
respectively.

Other intangible assets, net, were $877.7 million and $104.2 million at
December  31,  2001  and  2000,  respectively.  These  amounts  include
capitalized  software,  debt issuance costs,  and  costs  allocated  to
patents, trademarks and other specifically identifiable assets  arising
from  acquisitions, which are being amortized on a straight-line  basis
over  their  estimated useful lives. At December  31,  2001  and  2000,
accumulated amortization of other intangibles amounted to $86.0 million
and $43.0 million, respectively.

During 2001, the company reclassified certain amounts from goodwill  to
other  intangible assets as a result of final valuations  on  the  2000
acquisitions  and  increased  goodwill  associated  with  deferred  tax
liabilities.

The carrying value of goodwill and other intangibles is reviewed if the
facts and circumstances, such as significant decline in sales, earnings
or  cash  flows  or  material adverse changes in the business  climate,
suggest  that  it  may  be  impaired.  If this  review  indicates  that
goodwill  will not be recoverable as determined based on the  estimated
undiscounted cash flows of the entity acquired, impairment is  measured
by  comparing the carrying value of goodwill to fair value.  Fair value
is  determined based on quoted market values, discounted cash flows  or
appraisals.

Income  Taxes:   Deferred taxes are provided on  temporary  differences
between assets and liabilities for financial reporting and tax purposes
as  measured  by  enacted tax rates expected to  apply  when  temporary
differences  are  settled  or  realized.   A  valuation  allowance   is
established  for  deferred  tax assets for  which  realization  is  not
likely.

Environmental  Costs:  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.   Costs  to
prepare  environmental  site evaluations and  feasibility  studies  are
accrued  when  the  company commits to perform them.   Liabilities  for
remediation  costs are recorded when they are probable  and  reasonably
estimable,  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.

Revenue Recognition: Revenues are recognized on sales of product at the
time the goods are shipped and title has passed to the customer or when
services  are  performed.   Provisions for  discounts  and  rebates  to
customers and other adjustments are provided for at the time of sale as
a reduction of revenue.

Research and Development Costs:  Research and development expenditures,
including qualifying engineering costs, are expensed when incurred  and
amounted  to $215.4 million in 2001, $198.2 million in 2000 and  $186.2
million in 1999.

Comprehensive Income: Comprehensive income includes net income, foreign
currency translation adjustments, amounts relating to cash flow hedges,
and unrealized holding gains and losses on marketable securities.

Foreign  Currency:  Assets and liabilities of non-U.S. entities,  where
the local currency is the functional currency, have been translated  at
year-end  exchange rates, and income and expenses have been  translated
using   weighted  average-for-the-year  exchange  rates.    Adjustments
resulting  from  translation have been recorded  in  accumulated  other
comprehensive income and are included in net earnings only upon sale or
liquidation of the underlying foreign investment.

For non-U.S. entities where the U.S. dollar is the functional currency,
inventory  and property balances and related income statement  accounts
have  been  translated using historical exchange rates,  and  resulting
gains and losses have been credited or charged to net earnings.

Foreign  currency transactions and translations recorded in the  income
statement  decreased net earnings by $2.3 million and $7.6  million  in
2001  and 2000 respectively, and increased net earnings by $2.5 million
in  1999. Accumulated other comprehensive income decreased in 2001  and
2000 by $60.8 million and $73.8 million, respectively, primarily due to
foreign currency equity adjustments related to translation.

Earnings  Per Share: Basic earnings per share is based on the  weighted
average  number  of  common shares outstanding.  Diluted  earnings  per
share  is  based  on  the  weighted average  number  of  common  shares
outstanding as well as potentially dilutive common shares, which in the
company's case comprise shares issuable under stock benefit plans.  The
weighted average number of common shares outstanding for basic earnings
per  share  calculations were 165.1  million, 161.2 million  and  163.6
million for 2001, 2000 and 1999, respectively. For diluted earnings per
share  purposes, these balances increased by 1.2 million,  1.2  million
and  2.1  million  shares  for 2001, 2000 and 1999,  respectively.   At
December  31,  2001, 2000 and 1999, 5.6 million, 6.5  million  and  0.2
million shares, respectively, were excluded because the effect would be
anti-dilutive.

Stock-based Compensation: The company continues to apply the principles
of  APB  No.  25  "Accounting for Stock Issued to Employees,"  and  has
provided pro forma fair value disclosures in Note 14.

New  Accounting  Standards:  In August 2001, SFAS No. 144,  "Accounting
for  the Impairment or Disposal of Long-Lived Assets" was issued, which
provides  guidance on the accounting for the impairment or disposal  of
long-lived  assets  and was adopted January 1, 2002,  by  the  company.
Adoption  of  SFAS  No.  144  did not have a  material  effect  on  the
company's consolidated financial position or results of operations.

In   June   2001,  SFAS  No.  143,  "Accounting  for  Asset  Retirement
Obligations"  was issued. The standard requires that legal  obligations
associated  with  the  retirement  of  tangible  long-lived  assets  be
recorded at fair value when incurred and is effective January  1,  2003
for  the company. The company is currently reviewing the provisions  of
SFAS No. 143 to determine the standard's impact upon adoption.

Also  in  June  2001, the Financial Accounting Standards  Board  (FASB)
issued  SFAS  No.  141,  "Business Combinations,"  and  SFAS  No.  142,
"Goodwill  and Other Intangible Assets."  The requirements and  effects
of these pronouncements are discussed in Note 4.

In  September 2000, the FASB issued SFAS 140, "Accounting for Transfers
and  Servicing of Financial Assets and Extinguishments of Liabilities."
This  statement  is effective for transfers and services  of  financial
assets occurring after March 31, 2001, and is discussed in Note 10.

The company adopted SFAS No. 133 "Accounting for Derivative Instruments
and  Hedging Activities" and its amendments as of January 1, 2001.  The
requirements and effects of such adoption are discussed in Note 7.

NOTE   2  -  RESTRUCTURING:  During  2001,  the  company  continued   a
restructuring  program that was initiated in 2000, which includes  such
actions  as  employee severance, plant rationalizations, organizational
realignments  consistent with the company's market-based structure  and
the  consolidation of back-office processes. In response  to  continued
weakness in its major end markets, the company initiated a second phase
of  restructuring in the fourth quarter of 2001, which is  focussed  on
reducing  general  and administrative expense and  is  expected  to  be
completed  by  the  end  of 2002.  The programs have  resulted  in  the
closure  of  20  plants and a workforce reduction of  more  than  3,900
employees.   Charges for restructuring for full-year 2001 totaled $93.1
million.

The company recorded pretax restructuring charges by business  segment
for the year ended December 31, as follows:

In millions                                           2001        2000
Climate Control                                      $31.7      $ 36.6
Industrial Solutions
  Air and Productivity Solutions                      16.2        16.5
  Dresser-Rand                                         2.1        11.0
  Engineered Solutions                                19.6        11.5
Infrastructure                                         5.7        11.4
Security and Safety                                    3.0        15.1
Corporate                                             14.8        18.1
Total                                                $93.1       $87.2

A reconciliation of the restructuring provision is as follows:

                                  Employee
                               termination        Facility
In millions                          costs      exit costs       Total
Provision                            $74.2           $13.0       $87.2
Cash payments                        (33.7)           (1.7)      (35.4)
Non-cash write-offs                   (5.2)           (8.6)      (13.8)
Balance at December 31, 2000          35.3             2.7        38.0
Provision                             80.0            13.1        93.1
Cash payments                        (74.7)           (6.7)      (81.4)
Non-cash write-offs                   (6.1)           (2.0)       (8.1)
Balance at December 31, 2001         $34.5           $ 7.1       $41.6

NOTE 3 - DISCONTINUED OPERATIONS: In August 1999, the company announced
its plan to divest Ingersoll-Dresser Pump Company (IDP).  On August  8,
2000, the company sold IDP for $775.0 million. The company realized  an
after-tax  gain  of  $124.8 million. The net assets  of  IDP  had  been
classified as assets held for sale. IDP's results have been reported as
discontinued  operations  (net of tax) in  the  accompanying  financial
statements.

Earnings  from  discontinued operations included the following  results
for the years ended December 31:

In millions                                           2000        1999
Net sales                                           $421.8      $837.9
Operating income                                       5.3        63.9
Other income (expense), net                           (1.2)        7.4
Interest expense                                     (10.1)       (1.4)
Minority interest                                      -         (23.7)
Earnings (loss) before income taxes                   (6.0)       46.2
Income taxes                                          (4.4)       18.2
Earnings (loss) from operations                       (1.6)       28.0
Gain on disposal of discontinued
  operations (net of tax)                            124.8         -
Net earnings from discontinued
  operations                                        $123.2      $ 28.0

NOTE  4 - ACQUISITIONS OF BUSINESSES: In 2001, the company acquired  12
entities  for  cash  of  $158.3 million and  treasury  stock  of  $15.3
million.   The following acquisitions account for the majority  of  all
acquisitions during the year.

  Climate Control
  O  Grenco  Transportkoeling  B.V., based  in  the  Netherlands,  a
     transport refrigeration sales and service business.
  O  National Refrigeration Services, Inc. (NRS), based in Atlanta,
     Georgia, a leading provider of commercial refrigeration products and
     services for food storage, distribution and display throughout the
     United States.
  O  Taylor Industries Inc., based in Des Moines, Iowa and an
     affiliated business, Taylor Refrigeration (Taylor),  distributes,
     installs and services refrigeration equipment, food service
     equipment and electric doors.

 Engineered Solutions
  O  Nadella  S.A.,  based  in  France,  supplies  precision  needle
     bearings for automotive and industrial applications.  Nadella  was
     previously 50% owned by the company.

 Infrastructure
  O  Superstav spol. s.r.o., based in the Czech Republic, and  Earth
     Force  American, Inc., based in South Carolina, both of which  are
     manufacturers of compact tractor loader backhoes.

 Security and Safety
  O  Kryptonite  Corporation,  based  in  Massachusetts,  a  leading
     manufacturer  of  locks  for recreational  and  portable  security
     applications.
  O  ITO Emniyet Kilit Sistemleri A., based in Turkey, a leading
     manufacturer and distributor of locks, cylinders and keys.

In  June  2000,  the  company  acquired  Hussmann  International,  Inc.
(Hussmann),  for approximately $1.7 billion in cash after consideration
of  amounts  paid  for  outstanding  stock  options,  debt  retirement,
employee  contracts and transaction costs. Hussmann's business  is  the
design,  production,  installation and  service  of  merchandising  and
refrigeration  systems  for  the  global  food  industry.  Hussmann  is
included in Climate Control.

The  results  of  Hussmann's  operations  have  been  included  in  the
consolidated financial statements from acquisition date. The  following
unaudited  pro forma consolidated results for the years ended  December
31,  2000 and 1999 reflect the acquisition as though it occurred at the
beginning  of the respective periods after adjustments for interest  on
acquisition  debt,  and  depreciation  and  amortization   of   assets,
including goodwill:

In millions except per share amounts                2000         1999
Sales                                          $10,231.4      $9,134.0
Net earnings                                       614.1         534.5
Continuing operations
  Basic earnings per common share                  $3.04         $3.10
  Diluted earnings per common share                 3.02          3.05

The  above pro forma results are not necessarily indicative of what the
actual  results  would have been had the acquisition  occurred  at  the
beginning  of  the respective periods.  Further, the pro forma  results
are  not  intended to be a projection of future results of the combined
companies.

In  connection  with  the  Hussmann  acquisition,  purchase  accounting
reserves  were created for the closure and restructure of a  number  of
Hussmann facilities.  The amounts are as follows:

                                 Employee
                              termination        Facility
In millions                         costs      exit costs        Total
Original reserves recorded         $ 6.6            $17.3        $23.9
Cash payments                       (1.1)            (0.6)        (1.7)
Balance at December 31, 2000         5.5             16.7         22.2
Reserves                            14.2             28.5         42.7
Cash payments                       (7.6)           (22.1)       (29.7)
Balance at December 31, 2001       $12.1            $23.1        $35.2

In  February 2000, the company completed the purchase of  the  51%  of
Dresser-Rand  not  previously  owned by acquiring  the  joint  venture
partner's  share  for  a  net purchase price of  approximately  $543.0
million in cash.

For all business combinations subsequent to June 30, 2001, the company
applied  the  provisions of SFAS No. 141 "Business  Combinations"  and
SFAS  No.  142  "Goodwill  and Other Intangible  Assets."   Under  the
provisions  of these standards, goodwill and intangible assets  deemed
to  have indefinite lives are no longer subject to amortization, while
all  other  intangible assets are to be amortized over their estimated
useful  lives. Amortization related to goodwill was $135.1 million  in
2001, $135.3 million in 2000 and $102.3 million in 1999.

Additional  provisions of SFAS No. 141 and No. 142,  including  annual
impairment   testing  for  goodwill  and  intangible  assets,   became
effective  for  the  company  on January  1,  2002.   The  company  is
currently  determining the impact of adopting these  provisions  under
the  transition provisions of the statements, and anticipates that  it
may record an impairment charge.

NOTE 5 - DISPOSITIONS: During 2000, the company sold the Compression
Services business of Dresser-Rand for  a  gain  of  $50.4 million,  as
well  as the Corona Clipper business  for  approximately $43.0  million,
which approximated book value. The company  also  sold its  interests in
three joint ventures relating to the manufacture  of full  steering-column
assemblies for approximately  $37.0  million  in cash.  In  August 2000,
the company sold IDP for $775.0 million  (Note 3).

During  1999,  the company received proceeds of $47.0  million,  which
approximated  book  value, on the sale of  a  portion  of  the  Harrow
assets. In December 1999, the company also sold certain net assets  of
the Automation Division of the Air and Productivity Solutions Segment.
The  transaction resulted in a net gain of approximately $4.4 million.
The company also made several minor dispositions during 1999.

NOTE 6 - INVENTORIES:  At December 31, inventories were as follows:

In millions                                        2001           2000
Raw materials and supplies                     $  307.9       $  358.4
Work-in-process                                   395.5          372.9
Finished goods                                    733.1          654.4
                                                1,436.5        1,385.7
Less-LIFO reserve                                 141.2          143.4
Total                                          $1,295.3       $1,242.3

Work-in-process  inventories  are  stated  after  deducting   customer
progress  payments  of $139.5 million in 2001 and  $127.3  million  in
2000.  At  December  31,  2001  and 2000, LIFO  inventories  comprised
approximately 33% and 36%, respectively, of consolidated  inventories.
There  were  no material liquidations of LIFO layers for  all  periods
presented.

NOTE  7 - FINANCIAL INSTRUMENTS: The company, as a large multinational
company, maintains significant operations in countries other than  the
United States.  As a result of these global activities, the company is
exposed  to  changes in foreign currency exchange rates, which  affect
the  results  of  operations  and financial  condition.   The  company
manages exposure to changes in foreign currency exchange rates through
its  normal operating and financing activities, as well as through the
use   of   financial  instruments.  Generally,  the   only   financial
instruments  the company utilizes are forward exchange  contracts  and
options.

The  purpose  of  the  company's currency  hedging  activities  is  to
mitigate the impact of changes in foreign currency exchange rates. The
company  attempts  to  hedge  transaction  exposures  through  natural
offsets.  To  the extent that this is not practicable, major  exposure
areas  considered  for  hedging include foreign  currency  denominated
receivables   and   payables,  intercompany  loans,   firm   committed
transactions, and forecasted sales and purchases.  The following table
summarizes by major currency the contractual amounts of the  company's
forward  contracts  in  U.S. dollars.  Foreign  currency  amounts  are
translated  at year-end rates at the respective reporting  date.   The
"buy" amounts represent the U.S. equivalent of commitments to purchase
foreign  currencies,  and  the  "sell"  amounts  represent  the   U.S.
equivalent  of commitments to sell foreign currencies.   Some  of  the
forward  contracts  involve  the exchange of  two  foreign  currencies
according to local needs in foreign subsidiaries.

At December 31, the contractual amounts were:

In millions                              2001                  2000
                                    Buy       Sell        Buy       Sell
British pounds                     14.0     $  8.8     $ 59.5     $  4.6
Canadian dollars                  137.6        9.6      106.8       33.1
Euro and euro-linked
  currencies                       23.0      185.6       75.8      157.7
Japanese yen                       21.6       27.3       27.6        0.3
Other                              12.2       18.7        7.4       27.3
Total                            $208.4     $250.0     $277.1     $223.0

Starting  in  late  1999, the company began purchasing  on  a  limited
basis,  commodity contracts to hedge the costs of metals used  in  its
products.  Gains and losses on the derivatives are included in cost of
sales in the same period as the hedged transaction.

The following table summarized commodity contracts by maturity:

Commodity Contracts                    2002         2003         Total

Aluminum
  Contract amount in millions         $17.7           -          $17.7
  Contract quantity (in 000 lbs.)      28.9           -           28.9
Copper
  Contract amount in millions         $ 8.3           -          $ 8.3
  Contract quantity (in 000 lbs.)      10.9           -           10.9
Zinc
  Contract amount in millions           -            $2.1        $ 2.1
  Contract quantity (in 000 lbs.)       -             5.5          5.5
Total
  Contract amount in millions         $26.0          $2.1        $28.1
  Contract quantity (in 000 lbs.)      39.8           5.5         45.3

SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities," and its amendments, became effective for the  company  on
January  1,  2001.  The  statement  requires  all  derivatives  to  be
recognized as assets or liabilities on the balance sheet and  measured
at  fair  value.   Changes in the fair value of  derivatives  will  be
recognized in earnings or other comprehensive income, depending on the
designated purpose of the derivative.  If a  derivative qualifies  for
cash  flow hedge accounting the effective portion of changes  in  fair
value  is  recorded  temporarily in other comprehensive  income,  then
recognized  in earnings along with the related effects of  the  hedged
items.  If a derivative qualifies for fair value hedge accounting, the
changes  in  fair  value of the derivative and  the  hedged  item  are
recognized currently in earnings. There was no ineffective portion  of
hedges reported in earnings in  2001.

The  $1.2  million, after tax, recorded in equity at January 1,  2001,
upon the adoption of these new standards, was reclassified to earnings
during  the year.  Of the $1.5 million recorded in equity at  December
31, 2001, $0.3 million is expected to be reclassified to earnings over
the  twelve month period ending December 31, 2002, while $1.2 million,
related  to  an interest rate swap used as a cash flow  hedge  of  the
forecasted issuance of debt that occurred in the second quarter,  will
be  reclassified  to earnings over the next four  years.   The  actual
amounts  that  will be reclassified to earnings over the  next  twelve
months  will  vary from this amount as a result of changes  in  market
conditions. No amounts were reclassified to earnings during  the  year
in  connection  with  forecasted  transactions  that  were  no  longer
considered probable of occurring.

At  December 31, 2001, the maximum term of derivative instruments that
hedge  forecasted transactions, for foreign currency  hedges,  was  12
months.   At  December  31,  2001,  the  maximum  term  of  derivative
instruments that hedge forecasted transactions, for commodity  hedges,
was 24 months.

Derivatives not designated as hedges primarily consist of options  and
forward contracts.  Although these instruments are effective as hedges
from an economic perspective, they do not qualify for hedge accounting
under SFAS No. 133, as amended.

The  counterparties to the company's forward contracts  consist  of  a
number  of  major international financial institutions.   The  company
could  be  exposed  to  loss  in the event of  nonperformance  by  the
counterparties.  However, credit ratings and concentration of risk  of
these  financial institutions are monitored on a continuing basis  and
present no significant credit risk to the company.

The   carrying   value  of  cash  and  cash  equivalents,   marketable
securities,  accounts receivable, short-term borrowings  and  accounts
payable are a reasonable estimate of their fair value due to the short-
term nature of these instruments.  The following table summarizes  the
estimated  fair value of the company's remaining financial instruments
at December 31:

In millions                                        2001           2000
Long-term debt:
Carrying value                                 $2,900.7       $1,540.4
Estimated fair value                            2,996.7        1,537.4
Currency contracts:
Contract (notional) amounts:
  Buy contracts                                $  208.4       $  277.1
  Sell contracts                                  250.0          223.0
Fair (market) values:
  Buy contracts                                   206.7          289.7
  Sell contracts                                  247.5          242.3
Commodity contracts:
Contract (notional) amounts:
  Buy contracts                                $   28.1       $   34.0
Fair (market) values:
  Buy contracts                                    25.5           34.2

Fair  value  of  long-term debt was determined  by  reference  to  the
December  31,  2001 and 2000, market values of comparably  rated  debt
instruments.   Fair values of forward contracts are  based  on  dealer
quotes at the respective reporting dates.

NOTE 8 - LONG-TERM DEBT AND CREDIT FACILITIES:
At December 31, long-term debt consisted of:

In millions                                        2001           2000
5.75% Notes Due 2003                           $  600.0       $    -
6 7/8% Notes Due 2003                             100.0          100.0
5.80% Notes Due 2004                              249.8            -
6.25% Notes Due 2006                              574.4            -
9% Debentures Due 2021                            125.0          125.0
7.20% Debentures Due 2025                         150.0          150.0
6.48% Debentures Due 2025                         150.0          150.0
6.391% Debentures Due 2027                        200.0          200.0
6.443% Debentures Due 2027                        200.0          200.0
Medium-term Notes Due 2003-2028,
  at an average rate of 6.56%                     296.7          377.0
6.75% Senior Notes Due 2008                       124.4          124.0
6.29% Securities Due 2003                          32.5            -
Medium-term Notes Due 2023,
  at an average rate of 8.22%                      50.2           50.2
Other loans and notes, at end-
  of-year average interest
  rates of 3.997% in 2001
  and 6.248% in 2000, maturing
  in various amounts to 2015                       47.7           64.2
                                               $2,900.7       $1,540.4

Debt  retirements  for  the next five years  are  as  follows:  $192.3
million  in  2002,  $838.3 million in 2003, $573.2  million  in  2004,
$207.2 million in 2005 and $588.2 million in 2006.

In  February 2001, the company issued $600 million of 5.75% notes  due
February 2003.  In May 2001, the company issued notes with a par value
of  $575 million at 6.25% per annum due May 2006, and $250 million  at
5.80%  per  annum  due June 2004.  The proceeds from these  financings
were   used  to  refinance  short-term  borrowings  related   to   the
acquisition of Hussmann.

At  December 31, 2001, the company's committed revolving credit  lines
consisted  of  a 364-day line totaling $1.25 billion and  a  five-year
line  totaling  $1.25 billion.  These lines were  unused  and  provide
support for commercial paper and indirectly provide support for  other
financing instruments, such as letters of credit and comfort  letters,
as required in the normal course of business.  The company compensates
banks  for these lines with fees equal to a weighted average of  0.08%
per  annum.   Available foreign lines of credit were $1.0 billion,  of
which $786.5 million were unused at December 31, 2001.  No major  cash
balances  were  subject to withdrawal restrictions.  At  December  31,
2001  and  2000,  the  average  rate of interest  for  loans  payable,
excluding  the  current  portion of long-term  debt,  was  4.704%  and
6.914%, respectively.

Capitalized  interest  on  construction  and  other  capital  projects
amounted to $4.0 million, $4.4 million and $4.0 million in 2001,  2000
and  1999,  respectively.  Interest income, included in  other  income
(expense),  net,  was $9.8 million, $8.7 million and $5.4  million  in
2001, 2000 and 1999, respectively.

NOTE  9  -  COMMITMENTS AND CONTINGENCIES: The company is involved  in
various  litigations, claims and administrative proceedings, including
environmental matters, arising in the normal course of  business.   In
assessing its potential environmental liability, the company bases its
estimates  on current technologies and does not discount its liability
or  assume  any insurance recoveries.  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, management believes that recovery or
liability  with  respect to these matters would not  have  a  material
effect on the financial condition, results of operations, liquidity or
cash flows of the company for any year.

As of December 31, 2001, the company had no significant concentrations
of  credit  risk  in  trade receivables due to  the  large  number  of
customers  which  comprised its receivables base and their  dispersion
across  different industries and countries.  In the normal  course  of
business,   the  company  has  issued  several  direct  and   indirect
guarantees,   including  performance  letters  of   credit,   totaling
approximately  $239.0 million at December 31, 2001. The company  sells
product  under various arrangements through institutions that  provide
leasing  and  product financing alternatives to retail  and  wholesale
customers.   Under  these  arrangements, the company  is  contingently
liable  for  loan  guarantees  and residual  values  of  equipment  of
approximately $29.3 million after consideration of ultimate  net  loss
provisions.   The  risk  of  loss  to  the  company  is  minimal,  and
historically,  only immaterial losses have been incurred  relating  to
these  arrangements.   Management believes these guarantees  will  not
adversely affect the consolidated financial statements.

Certain  office and warehouse facilities, transportation vehicles  and
data processing equipment are leased.  Total rental expense was $108.8
million  in  2001,  $84.6 million in 2000 and $71.6 million  in  1999.
Minimum lease payments required under noncancellable operating  leases
with  terms  in  excess  of  one year for  the  next  five  years  and
thereafter,  are as follows: $77.9 million in 2002, $58.6  million  in
2003,  $39.7 million in 2004, $24.7 million in 2005, $19.4 million  in
2006 and $36.3 million thereafter.

NOTE 10 - SALES OF RECEIVABLES: The FASB issued Statement of Financial
Accounting  Standards ("SFAS") No. 140, "Accounting for Transfers  and
Servicing  of  Financial Assets and Extinguishments  of  Liabilities",
which  became  effective  for the company  on  March  31,  2001.   The
statement  revises  the accounting standards for  securitizations  and
other  transfers  of  financial assets  and  collateral  and  requires
certain  disclosures.  This statement is effective for  transfers  and
servicing  of  financial  assets  and extinguishments  of  liabilities
occurring  after  March 31, 2001.  Adoption of SFAS  No.  140  had  no
effect  on the company's consolidated financial position, consolidated
results of operations, or liquidity.

The  company  has  agreements under which  several  of  its  operating
subsidiaries sell a defined pool of trade accounts receivable  to  two
wholly  owned  special  purpose  subsidiaries  of  the  company.   The
subsidiaries, are separate legal entities, that hold these receivables
and sell undivided interests in such accounts receivable to financiers
who, in turn, purchase and receive ownership and security interests in
those receivables.  As collections reduce accounts receivable included
in  the  pool, the operating subsidiaries sell new receivables to  the
special  purpose subsidiaries.  The special purpose subsidiaries  have
the  risk of credit loss on the receivables and, accordingly, the full
amount of the allowance for doubtful accounts has been retained in the
Consolidated   Balance  Sheets.  The  operating  subsidiaries   retain
collection  and administrative responsibilities for the  participating
interests in the defined pool.  The availability under the programs in
2001  is  $300  million. At December 31, 2001,  2000  and  1999,  $275
million,  $210  million and $170 million, respectively, were  utilized
under  the  program.   Increases under the program  are  reflected  as
operating activities in the Consolidated Statement of Cash Flows.  The
proceeds  of sale are less than the face amount of accounts receivable
sold  by  an amount to issue commercial paper backed by these accounts
receivable.  The discount from the face amount is accounted for  as  a
loss  on the sale of receivables and has been included in other income
(expense), net, in the Consolidated Statements of Income, and amounted
to  $10.6  million, $11.4 million and $10.2 million in 2001, 2000  and
1999,  respectively.  The weighted average discount  rate  was  4.68%,
6.21% and 5.99% during the years 2001, 2000 and 1999, respectively.

The  agreements  between  the  special purpose  corporations  and  the
financial institutions do not have a predefined expiration date.   The
company is retained as the servicer of the pooled receivables.  During
2001,  2000  and 1999, such sales of receivables amounted to  $1,439.0
million, $753.0 million and $781.8 million, respectively.

Receivables,  excluding  the designated  pool  of  accounts  and  note
receivable, sold during 2001 and 2000 with recourse amounted to $310.7
million  and $240.3 million, respectively.  At December 31,  2001  and
2000,  $115.6  million  and  $108.2  million,  respectively,  of  such
receivables sold remained uncollected and on the Consolidated  Balance
Sheet.

NOTE  11  -  EQUITY-LINKED SECURITIES: In March 1998,  IR-New  Jersey,
together   with  Ingersoll-Rand  Financing  I,  a  Delaware  statutory
business  trust of IR-New Jersey (Finance Trust), issued an  aggregate
of  (a) 16,100,000 equity-linked securities, and (b) 1,610,000 Finance
Trust  6.22%  capital securities, each with a $25  stated  liquidation
amount   (the   capital  securities).  The  equity-linked   securities
consisted  of  (a) 14,490,000 income equity-linked securities  (income
securities), and (b) 1,610,000 growth equity-linked securities (growth
securities).

In  May 2001, equity-linked securities in the amount of $402.5 million
of  Ingersoll-Rand Financing I, a Delaware statutory business trust of
IR-New  Jersey, were exchanged for 8.3 million shares of common  stock
issued  by  IR-New  Jersey in accordance with  common  stock  purchase
contracts issued by IR-New Jersey.  Following the completion of  these
transactions, $32.5 million of securities remain outstanding  and  are
included  in long term debt.  The securities bear a distribution  rate
of 6.29% per annum and will mature in May 2003.

NOTE 12 - COMMON STOCK: Effective December 31, 2001, IR-Limited became
the  successor to IR-New Jersey, following a corporate reorganization.
The reorganization was accomplished through a merger of a newly-formed
merger  subsidiary into IR-New Jersey. Upon consummation of the merger
the  shares  of  IR-New Jersey common stock automatically  became  IR-
Limited Class A common shares.  As part of the reorganization,  IR-New
Jersey  and  certain  of its subsidiaries, immediately  prior  to  the
merger  transferred shares of certain IR-New Jersey  subsidiaries  and
issued   certain   debt  in  exchange  for  which  IR-Limited   issued
135,250,003 Class B common shares.  The Class B common shares are non-
voting and will pay comparable dividends to the Class A common shares.

The   authorized   share  capital  of  IR-Limited  is  $1,175,010,000,
consisting  of (1)  1,175,000,000 common shares, par value  $1.00  per
share,  which common shares consist of (a) 600,000,000 Class A  common
shares  and  (b) 575,000,000 Class B common shares, and (2) 10,000,000
preference shares, par value $0.001 per share, which preference shares
consist of 600,000 Series A preference shares and such other series of
preference  shares as may be designated from time  to  time  with  the
respective  rights  and  restrictions  determined  by  the  board   of
directors.   Class  A common shares (and associated  preference  share
purchase rights) were issued to holders of IR-New Jersey common  stock
in  the  merger.   None of the preference shares were  outstanding  at
December 31, 2001.

Class  A  common shares issued were 168,003,884 at $1.00 par value  at
December  31, 2001 compared to 171,466,627 common shares at $2.00  par
value  at December 31, 2000.  The decrease in the par value of  common
shares  from, $2.00 to $1.00 is recorded as an increase to capital  in
excess of par value and a decrease in common stock on the Consolidated
Statement of Shareholders' Equity.

At December 31, 2001, treasury shares outstanding of 12.2 million were
retired due to the reorganization by reducing capital in excess of par
by $503.8 million and common stock by $24.4 million.

The   company  has  adopted  a  shareholder  rights  plan  to  protect
shareholders  from attempts to acquire control of the  company  at  an
inadequate  price.  The plan will expire on December 22, 2008,  unless
earlier  redeemed  or exchanged by the company,  as  provided  in  the
rights plan.

NOTE  13  -  LEVERAGED  EMPLOYEE STOCK  OWNERSHIP  PLAN:  The  company
sponsors  a  Leveraged  Employee  Stock  Ownership  Plan  (LESOP)  for
eligible  employees.   The  LESOP was used to  fund  certain  employee
benefit  plans.  At  December 31, 2001, the LESOP  had  allocated  all
shares to employee accounts.

NOTE  14 - INCENTIVE STOCK PLANS: Under the company's Incentive  Stock
Plans,  key  employees have been granted options to purchase  Class  A
common  shares at prices not less than the fair market  value  at  the
date  of  the grant.  Options issued before December 31, 1998,  became
exercisable one year after the date of the grant and expire at the end
of 10 years.  Options issued after January 1, 1999, become exercisable
ratably  over a three-year period from their date of grant and  expire
at  the end of 10 years.  The plans, approved in 1990, 1995 and  1998,
also  authorize  stock appreciation rights (SARs)  and  stock  awards,
which result in compensation expense.

Under SFAS No. 123, compensation cost for the applicable provisions of
the company's incentive stock plans would be determined based upon the
fair  value  at the grant date for awards issued since 1996.  Applying
this  methodology would have reduced net earnings and diluted earnings
per share by approximately $30.5 million and $0.18 per share for 2001;
$16.7 million and $0.10 per share for 2000; and $8.5 million and $0.05
per  share  for 1999.  The average fair values of the options  granted
during  2001,  2000,  and 1999 were estimated at $14.60,  $16.89,  and
$14.15,  respectively, on the date of grant, using  the  Black-Scholes
option-pricing model, which included the following assumptions:

                                   2001            2000           1999
Dividend yield                     1.65%           1.32%          1.27%
Volatility                        37.59%          34.31%         29.59%
Risk-free interest rate            5.01%           6.45%          4.93%
Expected life                   5 years         4 years         4 years

Changes in options outstanding under the plans were as follows:

                Shares subject         Option Price    Weighted average
                     to option      range per share      exercise price
January 1, 1999      6,834,525      $14.77 - $47.03              $32.43
Granted              2,816,480       49.09 -  69.75               50.50
Exercised          (2,216,558)       14.77 -  46.00               31.74
Cancelled             (93,590)       26.21 -  26.63               48.99
December 31, 1999    7,340,857      $15.13 - $69.75              $39.35
Granted              2,626,785       37.63 -  53.03               51.41
Exercised            (243,499)       15.13 -  42.31               28.78
Cancelled            (392,630)       20.67 -  62.59               46.77
December 31, 2000    9,331,513      $15.13 - $69.75              $42.75
Granted              4,245,465       40.42 -  49.14               41.31
Exercised             (346,266)      15.13 -  42.31               27.52
Cancelled             (159,736)      33.67 -  53.03               49.40
December 31, 2001   13,070,976      $20.67 - $69.75              $42.77

At December 31, 2001, there were 761,239 SARs outstanding with no stock
options attached.  The company has reserved 8,397,409 shares for future
awards  at December 31, 2001.  In addition, 295,416 shares of  Class  A
common   shares  were  reserved  for  future  issue,  contingent   upon
attainment of certain performance goals and future service and  342,476
shares have been earned but deferred at December 31, 2001.

The   following   table  summarizes  information  concerning   currently
outstanding  and  exercisable options:


                                     Options                Options
                                   outstanding            exercisable
                               Weighted    Weighted               Weighted
                     Number     average     average    Number      average
     Range of     outstanding  remaining   exercise  exercisable  exercise
  exercise price  at 12/31/01     life      price    at 12/31/01    price
  $20.67-$26.21     1,559,150     2.99     $24.06      1,559,150   $24.06
   28.54- 40.47     1,000,900     5.85      34.68        891,198    34.13
   40.53- 40.53     3,093,053     9.01      40.53           -         -
   40.75- 42.31     1,587,170     6.56      42.00      1,332,544    42.24
   42.84- 48.13     1,091,926     8.57      45.47        712,896    45.11
   49.09- 49.09     1,857,310     6.94      49.09      1,352,993    49.09
   49.14- 51.09       443,100     7.92      50.46        266,666    51.09
   53.03- 53.03     2,199,117     8.05      53.03        785,303    53.03
   53.62- 65.41       221,250     7.54      62.21        147,493    62.21
   69.75- 69.75        18,000     7.34      69.75         18,000    69.75
  $20.67-$69.75    13,070,976     7.19     $42.77      7,066,243   $40.83

   The  weighted  average number of shares exercisable and  the  weighted
   average exercise prices were 5,466,455 shares at a price of $36.87 for
   December  31,  2000,  and 4,524,667 shares at a price  of  $32.53  for
   December 31, 1999.

   The company also maintains a shareholder-approved Management Incentive
   Unit  Award Plan. Under the plan, participating executives are awarded
   incentive  units.  When dividends are paid on Class A  common  shares,
   dividends  are awarded to unit holders, one-half of which is  paid  in
   cash,  the  remaining half of which is credited to  the  participant's
   account in the form of so-called Class A common share equivalents. The
   fair  value  of accumulated common share equivalents is paid  in  cash
   upon   the  participant's  retirement.  The  number  of  common  share
   equivalents  credited to participants' accounts at December  31,  2001
   and 2000, are 347,177 and 399,352, respectively.

NOTE 15 - INCOME TAXES: Earnings before income taxes for the years
ended December 31, were taxed within the following jurisdictions:

In millions                    2001          2000           1999
United States                $ 88.7        $674.8         $694.4
Non-U.S.                      154.6         155.8          175.8
Total                        $243.3        $830.6         $870.2

The provision for income taxes was as follows:

In millions                    2001          2000           1999
Current tax expense:
  United States              $(24.1)       $228.4         $227.7
  Non-U.S.                     46.5          43.5           37.6
  Total current                22.4         271.9          265.3
Deferred tax expense:
  United States               (15.2)         17.5           26.4
  Non-U.S.                    (10.1)         (5.0)          15.4
  Total deferred              (25.3)         12.5           41.8
Total provision for
    income taxes             $ (2.9)       $284.4         $307.1

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
                                     2001       2000       1999
Statutory U.S. rate                  35.0%      35.0%      35.0%
Increase (decrease) in rates
  resulting from:
  Amortization of goodwill           10.5        2.8        2.0
  Non-U.S. operations               (31.6)      (0.8)      (1.0)
 Foreign sales corporation           (9.5)      (3.1)      (1.7)
  State and local income taxes,
    net of U.S. tax                  (3.8)       2.2        2.1
  Puerto Rico - Sec 936 Credit       (6.0)      (1.7)      (1.7)
  Other                               4.2       (0.2)       0.6
Effective tax rate                   (1.2)%     34.2%      35.3%

A summary of the deferred tax accounts at December 31, follows:

In millions                                    2001     2000       1999
Current deferred assets and (liabilities):
  Differences between book and tax bases
    of inventories and receivables           $ 34.2   $ 34.4     $ 31.0
  Differences between book and tax
    expense for other employee related
    benefits and allowances                    67.3     75.8       43.6
  Other reserves and valuuation
    allowances in excess of tax deductions     71.7     26.3       42.0
  Other differences between tax and
    financial statement values                 21.7      9.2      (11.1)
    Gross current deferred net tax assets     194.9    145.7      105.5
Noncurrent deferred tax assets and
  (liabilities):
  Postretirement and postemployment
    benefits other than pensions in
    excess of tax deductions                  300.0    312.6      287.3
  Other reserves in excess of tax expense     153.3    125.9      119.2
  Tax depreciation/amortization in excess
    of book depreciation/amortization        (511.7)  (166.9)    (128.1)
  Pension contributions in excess of
    book expense                              (41.0)   (44.2)     (38.5)
  Taxes provided for undistributed
    accumulated subsidiary earnings            (5.8)   (22.5)     (22.5)
    Gross noncurrent deferred net tax
     assets and (liabilityies)               (105.2)   204.9      217.4
    Less:  deferred tax valuation
     allowances                               (64.9)   (52.0)     (37.9)
Total net deferred tax assets                $ 24.8   $298.6     $285.0

A  total  of  $5.8 million of deferred taxes have been provided  for  a
portion of the undistributed earnings of the company's subsidiaries. As
to  the  remainder, these earnings have been, and under current  plans,
will  continue to be reinvested and it is not practicable  to  estimate
the  amount of additional taxes which may be payable upon distribution.
During 2001, the company determined that it no longer required deferred
taxes  of $16.7 million, which had been recorded with respect  to  such
earnings  in  prior  years  and accordingly reduced  the  deferred  tax
liability recording a current tax benefit for such amount.

As  a  result  of the reincorporation from New Jersey to  Bermuda,  the
company recorded a one time tax benefit of $59.8 million related to the
utilization of previously limited foreign tax credits and net operating
loss carryforwards in certain non-U.S. jurisdictions.

NOTE  16  -  POSTRETIREMENT  BENEFITS OTHER  THAN  PENSIONS:  The  company
sponsors  several  postretirement plans that cover  most  U.S.  employees.
These  plans provide for health care benefits and in some instances,  life
insurance benefits.  Postretirement health plans are contributory and  are
adjusted  annually.   Life  insurance  plans  are  noncontributory.   When
fulltime employees retire from the company between age 55 and 65, most are
eligible  to  receive,  at  a  cost to the retiree,  certain  health  care
benefits  identical  to  those  available  to  active  employees.    After
attaining  age  65,  an  eligible retiree's health care  benefit  coverage
becomes  coordinated with Medicare.  The company funds the  benefit  costs
principally on a pay-as-you-go basis.  The company retained retiree health
care benefits as a liability for all qualified retired IDP employees.

Summary  information  on  the company's plans  at  December  31,  was  as
follows:

In millions                                       2001           2000
Change in benefit obligations:
Benefit obligation at beginning of year        $ 730.0        $ 566.4
Service cost                                       9.9            9.3
Interest cost                                     56.1           48.9
Plan participants' contributions                   4.3            4.3
Acquisitions                                       -            140.1
Actuarial losses                                 181.4            3.1
Benefits paid                                    (68.6)         (55.2)
Curtailment/special termination benefits           -             13.3
Other                                              0.5           (0.2)
Benefit obligation at end of year              $ 913.6        $ 730.0

Funded status:
Plan assets less than benefit obligations      $(913.6)       $(730.0)
Unrecognized:
 Prior service gains                             (45.4)         (49.9)
 Plan net losses/(gains)                         131.4          (55.0)
Accrued costs in the balance sheet             $(827.6)       $(834.9)

Weighted-average assumptions:
Discount rate                                     7.25%          7.75%
Current year medical inflation                   11.00%          6.75%
Ultimate inflation rate (2008)                    5.25%          5.25%

The components of net periodic postretirement benefits cost for
the years ended December 31, were as follows:

In millions                      2001             2000           1999
Service cost                    $ 9.9            $ 9.3          $ 8.8
Interest cost                    56.1             48.9           38.0
Net amortization of
  unrecognized prior
  service (gains)                (4.5)            (4.4)          (4.2)
Net periodic postretirement
  benefits cost                 $61.5            $53.8          $42.6

A 1% change in the medical trend rate assumed for postretirement
benefits would have the following effects at December 31, 2001:

In millions                               1% Increase      1% Decrease
Effect on total of service and
  interest cost components                   $ 5.1            $  4.5
Effect on postretirement
  benefit obligation                          74.3              58.2

NOTE  17 - PENSION PLANS: The company has noncontributory pension plans
covering substantially all U.S. employees.  In  addition,  certain employees
in other countries are  covered  by pension  plans.  The company's U.S.
salaried plans principally  provide benefits  based  on a career average
earnings formula.   The  company's hourly pension plans provide benefits
under flat benefit formulas.  Non-U.S.  plans  provide benefits based on
earnings and years  of  service.  Most of the non-U.S. plans require
employee contributions based on  the employee's   earnings.  In  addition,
the  company   maintains   other supplemental  benefit plans for officers
and other key  employees.  The company's policy is to fund an amount which
could be in excess  of  the pension  cost expensed, subject to the limitations
imposed  by  current statutes  or  tax regulations.  The company retained the
pension  plan liabilities   and  related  plan  assets  for  all  vested
IDP   plan participants.

Information regarding the company's pension plans at December 31, was
as follows:

In millions                                     2001          2000
Change in benefit obligations:
Benefit obligation at beginning of year     $2,372.7      $1,934.7
Service cost                                    47.0          42.6
Interest cost                                  170.6         151.7
Employee contributions                           4.4           4.7
Amendments                                       8.1           1.3
Acquisitions                                    10.8         386.1
Expenses paid                                   (3.6)         (2.3)
Actuarial losses/(gains)                        99.1         (17.9)
Benefits paid                                 (201.1)       (157.1)
Foreign exchange impact                        (17.5)        (44.4)
IDP obligation                                   -            65.7
Curtailments and other                           5.0           7.6
Benefit obligation at end of year           $2,495.5      $2,372.7

Change in plan assets:
Fair value at beginning of year             $2,640.0     $2,246.9
Actual return on assets                         10.8        106.4
Company contributions                           64.2         27.5
Employee contributions                           4.4          4.7
Acquisitions                                    12.7        407.2
Expenses paid                                   (3.6)        (1.9)
Benefits paid                                 (204.6)      (160.8)
Foreign exchange impact                        (14.2)       (40.8)
Assets from IDP                                  -           50.8
Other                                            0.1          -
Fair value of assets at end of year         $2,509.8     $2,640.0


In millions                                    2001         2000
Funded status:
Plan assets in excess of benefit
 obligations                                $   14.3     $  267.3
Unrecognized:
 Net transition asset                            5.1         19.0
 Prior service costs                            52.4         50.6
 Plan net losses (gains)                       119.5       (238.5)
Net amount recognized                       $  191.3     $   98.4

Costs included in the balance sheet:
Prepaid benefit cost                        $  270.9     $  196.9
Accrued benefit liability                      (79.6)      (103.3)
Intangible asset                                 -            4.8
Net amount recognized                       $  191.3     $   98.4

Weighted-average assumptions:
Discount rate:
  U.S. plans                                   7.25%         7.75%
  International plans                          6.00%         6.00%
Rate of compensation increase:
  U.S. plans                                   5.00%         5.50%
  International plans                          3.50%         3.50%
Expected return on plan assets:
  U.S. plans                                   9.00%         9.00%
  International plans                          7.75%         7.75%

The components of the company's pension related costs (income) for
the years ended December 31, include the following:

In millions                          2001        2000        1999
Service cost                      $  47.0     $  42.6     $  42.0
Interest cost                       170.6       151.7       132.1
Expected return on plan assets     (226.7)     (213.5)     (183.0)
Net amortization of unrecognized:
  Prior service costs                 6.0         6.1         5.9
  Transition amount                   0.2         0.7         0.7
  Plan net (gains)/losses            (4.6)       (8.5)        2.9
Net pension (income) cost            (7.5)      (20.9)        0.6
Curtailment losses                   11.2        11.5         0.4
Net pension cost (income) after
  curtailments                    $   3.7     $  (9.4)    $   1.0

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 $435.7 million, $397.1  million
and  $317.2  million, respectively, as of December 31, 2001 and  $199.5
million, $161.5 million and $75.8 million, respectively, as of December
31, 2000.

Plan  investment  assets  of  U.S. plans are  balanced  between  equity
securities and cash equivalents or debt securities.  Assets of non-U.S.
plans are invested principally in equity securities.

Most  of the company's U.S. employees are covered by savings and  other
defined  contribution  plans.   Employer contributions  and  costs  are
determined based on criteria specific to the individual plans
and  amounted to approximately $44.0 million, $44.7 million  and  $25.1
million  in  2001,  2000 and 1999, respectively.  The  company's  costs
relating  to  non-U.S. defined contribution plans,  insured  plans  and
other  non-U.S. benefit plans were $6.5 million, $6.7 million and  $4.1
million in 2001, 2000 and 1999, respectively.

NOTE 18 - BUSINESS SEGMENT INFORMATION: During 2001, the company expanded
its  Industrial  Solutions  Sector to include Dresser-Rand,  renamed  its
Bearings  and  Components Segment to Engineered Solutions and  aggregated
its   tools  and  related  production  equipment  operations,  previously
reported  as  part of the Industrial Products Segment,  in  the  Air  and
Productivity   Solution  Segment.  Club  Car  has  been  added   to   the
Infrastructure Segment.

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  disaggregates
financial  information  for internal review  and  decision  making.   The
company  evaluates  performance based on operating income  and  operating
income  contribution rates. Intercompany sales transactions are  entirely
contained within each segment and are eliminated at the segment level.  A
description of the company's reportable segments is as follows:

Climate  Control is engaged in the design, manufacture, sale and  service
of  transport  temperature  control  units,  HVAC  systems,  refrigerated
display merchandisers, beverage coolers, and walk-in storage coolers  and
freezers.  The segment includes Thermo King and Hussmann.

Industrial  Solutions  is composed of a group of  businesses  focused  on
providing  solutions  for  customers to  enhance  industrial  efficiency.
Industrial Solutions consists of the following:

 Air  and Productivity Solutions is engaged in the design, manufacture,
 sale and service of air compressors, fluid products, microturbines,  and
 industrial   tools.    It  comprises  Industrial   Air   Solutions   and
 Productivity Solutions, and has been aggregated based primarily  on  the
 nature  of  products  and services, and the nature of  their  production
 processes.

 Dresser-Rand is engaged in the design, manufacture, sale and service  of
 gas compressors, gas and steam turbines, and generators.

 Engineered  Solutions  is engaged in the design, manufacture,  sale  and
 service of precision bearing products and motion control components  and
 assemblies.   The  segment  includes  both  Automotive  and   Industrial
 Engineered  Solutions. Operating income in 2001 includes a  $25  million
 benefit  from  payments received from the U.S. Customs  for  antidumping
 claims.

Infrastructure is engaged in the design, manufacture, sale and service of
skid-steer  loaders, mini-excavators, electric and gasoline powered  golf
and  utility  vehicles,  portable  compressors  and  light  towers,  road
construction and repair equipment, and a broad line of drills  and  drill
accessories.   It  comprises  Bobcat,  Club  Car,  Portable  Power,  Road
Development, and Specialty Equipment.

Security  and  Safety  is engaged in the design,  manufacture,  sale  and
service  of  locks,  door closers, exit devices, door  control  hardware,
doors  and  frames,  decorative hardware, and  electronic  and  biometric
access control systems.

Sales by destination and long-lived assets by geographic area for
the years ended December 31 were as follows:

In millions                     2001           2000             1999
Sales
United States               $6,124.8        $5,989.4        $4,719.3
Non-U.S.                     3,557.2         3,608.2         3,099.7
Total                       $9,682.0        $9,597.6        $7,819.0

In millions                     2001            2000
Long-lived assets
United States               $1,352.6        $1,432.1
Non-U.S.                       689.3           545.1
Total                       $2,041.9        $1,977.2


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

Dollar amounts in millions          2001           2000          1999

Climate Control
Sales                           $2,438.2       $2,002.4      $1,202.6
Operating income                    21.7          206.3         166.5
Operating income as % of sales       0.9%          10.3%         13.8%
Depreciation and amortization      148.5          114.5          78.9

Industrial Solutions
Air and Productivity Solutions
Sales                            1,308.0        1,412.9       1,381.4
Operating income                    52.7          162.5         159.3
Operating income as % of sales       4.0%          11.5%         11.5%

Dresser-Rand
Sales                              881.3          834.0           -
Operating income                    21.4            4.6           -
Operating income as % of sales       2.4%           0.6%          -

Engineered Solutions
Sales                            1,077.8        1,185.4       1,239.5
Operating income                    78.0          159.8         145.8
Operating income as % of sales       7.2%          13.5%         11.8%

Total Industrial Solutions
Sales                            3,267.1        3,432.3       2,620.9
Operating income                   152.1          326.9         305.1
Operating income as % of sales       4.7%           9.5%         11.6%
Depreciation and amortization      107.5          105.2          86.2

Infrastructure
Sales                            2,570.3        2,752.5       2,707.3
Operating income                   219.7          389.7         416.9
Operating income as % of sales       8.5%          14.2%         15.4%
Depreciation and amortization       66.1           66.4          64.7

Security and Safety
Sales                            1,406.4        1,410.4       1,288.2
Operating income                   230.8          271.6         248.4
Operating income as % of sales      16.4%         19.3%         19.3%
Depreciation and amortization       27.8           35.1          39.4

Total sales                     $9,682.0       $9,597.6      $7,819.0
Operating income from reportable
  segments                         624.3        1,194.5       1,136.9
Unallocated corporate expenses    (101.1)        (105.1)        (57.2)
Total operating income          $  523.2       $1,089.4      $1,079.7
Total operating income as % of
  sales                              5.4%          11.4%         13.8%
Depreciation and amortization from
  reportable segments              349.9          321.2         269.2
Unallocated depreciation and
  amortization                      12.6            5.9           3.2
Total  depreciation and
  amortization                  $  362.5       $  327.1      $  272.4


NOTE  19 - INGERSOLL-RAND NEW JERSEY: As part of the reorganization  IR-
Limited  unconditionally  guaranteed  all  of  the  issued  public  debt
securities  of  IR-New  Jersey.   The following  condensed  consolidated
financial  information for IR-Limited (Parent), IR-New Jersey  (Issuer),
and  all their other subsidiaries is included so that separate financial
statements  of  IR-New  Jersey are not required to  be  filed  with  the
Securities  Exchange Commission.  The condensed consolidating  financial
statements   present  the  Parent  and  Issuer  investments   in   their
subsidiaries using the equity method of accounting.

Condensed Consolidating Balance Sheet
December 31, 2001
<TABLE>
                                                                 Other   Consolidating
(In millions)                  IR-Limited  IR-New Jersey  Subsidiaries     Adjustments      Total

Current assets:                      <c>              <c>           <c>            <c>         <c>
Cash and cash equivalents          $  -        $    23.4     $    90.6      $     -        $114.0
Marketable securities                 -              -             7.4            -           7.4
Accounts and notes receivable, net    -            128.3       1,354.6            -       1,482.9
Inventories                           -            134.8       1,160.5            -       1,295.3
Prepaid expenses and deferred income
 taxes                                -             57.8         230.4            -         288.2
Accounts and notes receivable
 affiliates                           -              -         2,957.9       (2,957.9)        -
      Total current assets            -            344.3       5,801.4       (2,957.9)    3,187.8

Investment in affiliates          5,547.5       12,825.5       8,708.2      (27,081.2)        -
Property, plant and equipment, net    -            238.9       1,394.1            -       1,633.0
Intangible assets, net                -            145.0       5,544.3            -       5,689.3
Note receivable affiliate         3,647.4            -             -         (3,647.4)        -
Other assets                          -            196.5         357.1            -         553.6
      Total assets               $9,194.9      $13,750.2     $21,805.1     $(33,686.5)  $11,063.7

Current liabilities:
Accounts payable                 $    -        $   100.8     $   660.2     $      -     $   761.0
Accrued expenses and other current
 liabilities                          -            218.5       1,307.8            -       1,526.3
Loans payable                         -            449.7         114.0            -         563.7
Accounts and notes payable
  affiliates                          -          2,650.0         307.9       (2,957.9)        -
      Total current liabilities       -          3,419.0       2,389.9       (2,957.9)    2,851.0

Long-term debt                        -          2,650.6         250.1            -       2,900.7
Deferred income taxes                 -              -           170.1            -         170.1
Minority interests                    -              -           110.5            -         110.5
Note payable affiliate                -          3,647.4           -         (3,647.4)        -
Other liabilities                     -            116.6         998.2            -        1,114.8
                                      -          9,833.6       3,918.8       (6,605.3)     7,147.1
Shareholders' equity:
Class A common shares               168.0            -             -              -          168.0
Class B common shares               135.3            -             -           (135.3)         -
Common shares                         -              -         2,362.8       (2,362.8)         -
Other shareholders' equity        8,891.6        4,039.4      15,787.8      (24,648.8)     4,070.0
Accumulated other comprehensive
  income                              -           (122.8)       (264.3)          65.7       (321.4)
      Total shareholders' equity  9,194.9        3,916.6      17,886.3      (27,081.2)     3,916.6
      Total liabilities and
        equity                   $9,194.9      $13,750.2     $21,805.1     $(33,686.5)   $11,063.7
</TABLE>


Condensed Consolidating Balance Sheet
December 31, 2000

<TABLE>

                                                                 Other   Consolidating
(In millions)                  IR-Limited  IR-New Jersey  Subsidiaries     Adjustments      Total
                                      <c>            <c>            <c>            <c>         <c>
Current assets:
Cash and cash equivalents$            -       $     -        $    97.0      $      -    $    97.0
Marketable securities                 -           120.3           10.1             -        130.4
Accounts and notes receivable, net    -           154.7        1,516.3             -      1,671.0
Inventories                           -           120.5        1,121.8             -      1,242.3
Prepaid expenses and deferred income
 taxes                                -           223.7           11.8             -        235.5
Accounts and notes receivable
 affiliates                           -             -          2,028.0        (2,028.0)       -
      Total current assets            -           619.2        4,785.0        (2,028.0)   3,376.2

Investment in affiliates              -         8,281.7            -          (8,281.7)       -
Property, plant and equipment, net    -           243.5        1,409.9             -      1,653.4
Intangible assets, net                -           112.5        5,259.7             -      5,372.2
Deferred income taxes                 -             -            152.9             -        152.9
Other assets                          -            99.7          398.2             -        497.9
      Total assets                $   -        $9,356.6      $12,005.7      $(10,309.7) $11,052.6

Current liabilities:
Accounts payable                  $   -        $  123.2      $   558.2      $      -    $   681.4
Accrued expenses and other current
 liabilities                          -           508.7        1,052.3             -      1,561.0
Loans payable                         -         1,880.6          245.5             -      2,126.1
Accounts and notes payable affiliates -         2,028.0            -          (2,028.0)       -
    Total current liabilities         -         4,540.5        1,856.0        (2,028.0)   4,368.5

Long-term debt                        -         1,306.6          233.8             -      1,540.4
Minority interests                    -             -            113.4             -        113.4
Other liabilities                     -            28.3        1,118.3             -      1,146.6
                                      -         5,875.4        3,321.5        (2,028.0)   7,168.9
Company obligated mandatorily
 redeemable preferred securities
 of subsidiary trust holding
 solely debentures of the company     -             -            402.5             -        402.5

Shareholders' equity:
Common stock                          -           343.1          164.9          (164.9)     343.1
Other shareholders' equity            -         3,398.7        8,368.3        (8,368.3)   3,398.7
Accumulated other comprehensive
 income                               -          (260.6)        (251.5)          251.5     (260.6)
      Total shareholders' equity      -         3,481.2        8,281.7        (8,281.7)   3,481.2
      Total liabilities and equity $  -        $9,356.6      $12,005.7      $(10,309.7) $11,052.6

</TABLE>

Condensed Consolidating Income Statement
For the year ended December 31, 2001

<TABLE>
                                                                 Other   Consolidating
(In millions)                 IR- Limited IR-New Jersey   Subsidiaries     Adjustments      Total

                                      <c>            <c>            <c>             <c>        <c>
Net sales                         $   -        $1,200.0       $8,482.0        $    -     $9,682.0
Cost of goods sold                    -           892.5        6,719.0             -      7,611.5
Selling and administrative expenses   -           245.3        1,208.9             -      1,454.2
Restructuring charges                 -            25.5           67.6             -         93.1
Operating income                      -            36.7          486.5             -        523.2
Equity earnings in affiliates
 (net of tax)                         -           336.9            -            (336.9)       -
Interest expense                      -          (203.0)         (50.0)            -       (253.0)
Intercompany interest and fees        -           (17.6)          17.6             -          -
Other income (expense), net           -           (85.0)          78.2             -         (6.8)
Minority interests                    -             -            (20.1)            -        (20.1)
Earnings before income taxes          -            68.0          512.2          (336.9)     243.3
(Benefit)/provision for income taxes  -          (178.2)         175.3             -         (2.9)
Net earnings                      $   -        $  246.2       $  336.9         $(336.9)  $  246.2

</TABLE>

Condensed Consolidating Income Statement
For the year ended December 31, 2000

<TABLE>

                                                                  Other   Consolidating
(In millions)                  IR-Limited  IR-New Jersey   Subsidiaries     Adjustments     Total

                                      <c>             <c>            <c>            <c>        <c>
Net sales                         $   -         $1,302.2       $8,295.4        $   -     $9,597.6
Cost of goods sold                    -            845.1        6,296.3            -      7,141.4
Selling and administrative expenses   -            212.8        1,066.8            -      1,279.6
Restructuring charges                 -             35.5           51.7            -         87.2
Operating income                      -            208.8          880.6            -      1,089.4
Equity earnings in affiliates
 (net of tax)                         -            725.8             -          (725.8)       -
Interest expense                      -           (219.3)         (36.0)           -       (255.3)
Intercompany interest and fees        -            (42.1)          42.1            -          -
Other income (expense), net           -            (68.0)         103.8            -         35.8
Minority interests                    -              -            (39.3)           -        (39.3)
Earnings before income taxes          -            605.2          951.2         (725.8)     830.6
(Benefit)/provision for income taxes  -            (64.2)         348.6            -        284.4
Earnings from continuing operations   -            669.4          602.6         (725.8)     546.2
Discontinued operations (net of tax)  -              -            123.2            -        123.2
Net earnings                      $   -         $  669.4       $  725.8        $(725.8)  $  669.4

</TABLE>

Condensed Consolidating Income Statement
For the year ended December 31, 1999

<TABLE>
                                                                   Other  Consolidating
(In millions)                   IR-Limited  IR-New Jersey   Subsidiaries    Adjustments     Total

                                       <c>             <c>            <c>           <c>        <c>
Net sales                         $   -          $1,340.0       $6,479.0       $   -     $7,819.0
Cost of goods sold                    -             944.9        4,728.3           -      5,673.2
Selling and administrative expenses   -             240.8          825.3           -      1,066.1
Operating income                      -             154.3          925.4           -      1,079.7
Equity earnings in affiliates
 (net of tax)                         -             640.4            -          (640.4)       -
Interest expense                      -            (153.7)        (29.8)           -       (183.5)
Intercompany interest and fees        -             (34.9)         34.9            -          -
Other income (expense), net           -             (26.5)         29.6            -          3.1
Minority interests                    -               -           (29.1)           -        (29.1)
Earnings before income taxes          -             579.6         931.0         (640.4)      870.2
(Benefit)/provision for income taxes  -             (11.5)        318.6             -        307.1
Earnings from continuing operations   -             591.1         612.4         (640.4)      563.1
Discontinued operations (net of tax)  -               -            28.0            -          28.0
Net earnings                      $   -        $    591.1      $  640.4        $(640.4)   $  591.1

</TABLE>


Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2001

<TABLE>

                                                                  Other   Consolidating
(In millions)                   IR-Limited  IR-New Jersey  Subsidiaries     Adjustments      Total

                                      <c>              <c>           <c>            <c>         <c>
Net cash provided by operating
 activities                      $   -             $213.0        $388.6         $   -       $601.6

Cash flows from investing activities:
Capital expenditures                 -              (21.5)       (179.1)            -       (200.6)
Proceeds from sale of property,
  plant and equipment                -                -            41.7             -         41.7
Acquisitions, net of cash            -               (9.2)       (149.1)            -       (158.3)
Proceeds from business dispositions  -                -            17.5             -         17.5
Decrease /(increase) in marketable
  securities                         -              103.9          (6.7)            -         97.2
Other, net                           -                -            15.7             -         15.7
Net cash provided by/(used in)
  investing activities               -               73.2        (260.0)            -       (186.8)

Cash flows from financing activities:
Net change in debt                   -              (86.9)       (127.2)            -       (214.1)
Proceeds from the exercise of stock
  options                            -                9.7           -               -          9.7
Dividends paid                       -             (113.1)          -               -       (113.1)
Purchase of treasury stock           -              (72.5)          -               -        (72.5)
Net cash (used in)/provided by
  financing activities               -             (262.8)       (127.2)            -       (390.0)

Effect of exchange rate changes on
  cash and and cash equivalents      -                -            (7.8)            -         (7.8)

Net increase/(decrease) in cash and
  cash equivalents                   -               23.4          (6.4)            -         17.0
Cash and cash equivalents - beginning
  of period                          -                -            97.0             -         97.0
Cash and cash equivalents - end of
  period                          $  -             $ 23.4        $ 90.6          $  -       $114.0

</TABLE>

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2000

<TABLE>
                                                                   Other    Consolidating
(In millions)                   IR-Limited   IR-New Jersey  Subsidiaries      Adjustments     Total

                                        <c>            <c>            <c>              <c>       <c>
Net cash(used in)/provided by
 operating activities              $   -          $(792.4)      $1,409.1           $120.3    $737.0

Cash flows from investing activities:
Capital expenditures	               -            (19.5)        (181.8)             -      (201.3)
Proceeds from sale of property,
  plant and equipment                  -              2.7           25.8              -        28.5
Acquisitions, net of cash              -              -         (2,288.0)             -    (2,288.0)
Proceeds from business dispositions    -              -            977.3              -       977.3
Decrease/(increase) in marketable
  securities                           -            120.3           (6.3)          (120.3)     (6.3)
Other, net                             -              -             12.2              -        12.2
Net cash provided by/(used in)
  investing activities                 -            103.5       (1,460.8)          (120.3) (1,477.6)

Cash flows from financing activities:
Net change in debt                     -            794.1           78.3               -      872.4
Proceeds from the exercise of stock
  options                              -              8.3              -               -        8.3
Dividends paid                         -           (109.8)             -               -     (109.8)
Purchase of treasury stock             -           (121.3)             -               -     (121.3)
Net cash provided by financing
  activities                           -            571.3           78.3               -      649.6

Net cash used in discontinued
  operations                           -              -            (22.1)              -      (22.1)
Effect of exchange rate changes on cash
  and cash equivalents                 -              -            (12.8)              -      (12.8)

Net decrease in cash and cash
  equivalents                          -           (117.6)          (8.3)              -     (125.9)
Cash and cash equivalents - beginning
  of period                            -            117.6          105.3               -      222.9
Cash and cash equivalents - end of
  period                            $  -          $   -         $   97.0            $  -     $ 97.0

</TABLE>

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 1999

<TABLE>
                                                                    Other    Consolidating
(In millions)                    IR-Limited  IR-New Jersey   Subsidiaries      Adjustments      Total

                                        <c>             <c>            <c>             <c>         <c>
Net cash provided by operating
  activities                        $  -            $663.2         $191.5           $  -       $854.7

Cash flows from investing activities:
Capital expenditures                   -             (36.1)        (154.4)             -       (190.5)
Proceeds from sale of property, plant
  and equipment                        -               0.3           30.1              -         30.4
Acquisitions, net of cash              -               -           (161.2)             -       (161.2)
Proceeds from business dispositions    -              23.8           61.0              -         84.8
Decrease in marketable securities      -               -              1.5              -          1.5
Other, net                             -               -             (2.0)             -         (2.0)
Net cash (used in) investing
  activities                           -             (12.0)        (225.0)             -       (237.0)

Cash flows from financing activities:
Net change in debt                     -            (292.7)          25.2              -       (267.5)
Proceeds from the exercise of stock
  options                              -              70.2            -                -         70.2
Dividends paid                         -            (105.3)           -                -       (105.3)
Purchase of treasury stock             -            (205.8)           -                -       (205.8)
Other, net                             -               -             63.3              -         63.3
Net cash (used in)/provided by
  financing activities                 -            (533.6)          88.5              -       (445.1)

Net cash provided by discontinued
  operations                           -               -             14.6              -         14.6
Effect of exchange rate changes on
  cash and and cash equivalents        -               -             (7.8)             -         (7.8)

Net increase in cash and cash
  equivalents                          -             117.6           61.8              -        179.4
Cash and cash equivalents - beginning
  of period                            -               -             43.5              -         43.5
Cash and cash equivalents - end of
  period                             $ -            $117.6         $105.3           $  -       $222.9

</TABLE>


Report of Independent Accountants

                                              PricewaterhouseCoopers
                                                    Dorchester House
                                                     7 Church Street
                                                      Hamilton HM 11
                                                             Bermuda


February 5, 2002

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


In  our opinion, the accompanying Consolidated Balance Sheet and the
related Consolidated Statements of Income, Shareholders' Equity  and
Cash  Flows present fairly, in all material respects, the  financial
position of Ingersoll-Rand Company Limited and its subsidiaries, the
successor  company to Ingersoll-Rand Company, at December 31,  2001,
and  the  results of their operations and their cash flows  for  the
year  then ended, in conformity with accounting principles generally
accepted   in  the  United  States  of  America.   These   financial
statements  are the responsibility of the Company's management;  our
responsibility   is  to  express  an  opinion  on  these   financial
statements  based  on our audit.  We conducted our  audit  of  these
statements in accordance with auditing standards generally  accepted
in  the  United States of America, which require that  we  plan  and
perform  the audit to obtain reasonable assurance about whether  the
financial  statements  are free of material misstatement.  An  audit
includes examining, on a test basis, evidence supporting the amounts
and   disclosures  in  the  financial  statements,   assessing   the
accounting  principles  used  and  significant  estimates  made   by
management,   and   evaluating  the  overall   financial   statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.


/s/PricewaterhouseCoopers
Report of Independent Accountants

                                          PricewaterhouseCoopers LLP
                                                    400 Campus Drive
                                              Florham Park, NJ 07932
                                                              U.S.A.



February 6, 2001

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


In  our opinion, the accompanying Consolidated Balance Sheet and the
related Consolidated Statements of Income, Shareholders' Equity  and
Cash  Flows present fairly, in all material respects, the  financial
position of Ingersoll-Rand Company Limited and its subsidiaries, the
successor  company to Ingersoll-Rand Company, at December  31,  2000
and the results of their operations and their cash flows for each of
the  two  years in the period ended December 31, 2000, in conformity
with  accounting principles generally accepted in the United  States
of  America.   These financial statements are the responsibility  of
the  Company's  management;  our responsibility  is  to  express  an
opinion  on  these  financial statements based on  our  audits.   We
conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America,  which
require  that  we  plan and perform the audit to  obtain  reasonable
assurance  about  whether  the  financial  statements  are  free  of
material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and disclosures  in  the  financial
statements, assessing the accounting principles used and significant
estimates  made by management, and evaluating the overall  financial
statement  presentation.   We believe  that  our  audits  provide  a
reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP