Table of Content
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________________
FORM 10-Q


____________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 2017
2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
___________to___________
Commission File Number: 001-38095
____________________________

Gardner Denver Holdings,Ingersoll Rand Inc.
(Exact Name of Registrant as Specified in Its Charter)

____________________________

Delaware46-2393770
Delaware46-2393770
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
222 East Erie800-A Beaty Street Suite 500
Milwaukee, Wisconsin 53202Davidson, North Carolina 28036
(Address of Principal Executive Offices) (Zip Code)
(414) 212-4700(704) 655-4000
(Registrant’s Telephone Number, Including Area Code)


____________________________
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 Par Value per shareIRNew York Stock Exchange
Indicate by check mark whether the registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý  No 
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerýAccelerated filer
Non-accelerated filer☒  (Do not check if a smaller reporting company)Smaller reporting company
Emerging growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ý
The registrant had outstanding 196,010,861420,154,805 shares of Common Stock, par value $0.01 per share, as of September 30, 2017.July 23, 2021.



Table of ContentsContent

GARDNER DENVER HOLDINGS,INGERSOLL RAND INC. AND SUBSIDIARIES

FORM 10-Q

INDEX
Page
No.
Page No.
PART I. FINANCIAL INFORMATION
5
35
53
53
PART II. OTHER INFORMATION
54
54
54
54
54
54
55
SIGNATURES
56
2

IndexTable of Content
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under “Risk“Item 1A. Risk Factors” inof our Annual Report on Form 10-K for the Company’s prospectus dated May 11, 2017 (the “Prospectus”), as filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2017 pursuant to Rule 424(b)(4) under the Securities Act, and in this report,fiscal year ended December 31, 2020, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov,, and also include the following:
The anticipated benefits of our acquisition of the Ingersoll Rand Industrial business may not be realized fully or at all, may take longer to realize than expected and the integration process will be complex, costly and time-consuming, which could adversely affect our business, financial results and financial condition.
·We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.
The COVID-19 pandemic has adversely affected our business and results of operations, and could have a material and adverse effect on our business, results of operations and financial condition in the future.
·More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.
We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.
·Our revenues and operating results, especially in the Energy segment, depend on the level of activity in the energy industry, which is affected by volatile oil and gas prices.
More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.
·Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.
Shareholder and customer emphasis on environmental, social, and governance responsibility may impose additional costs on us or expose us to new risks.
·Potential governmental regulations restricting the use, and increased public attention to and litigation regarding the impacts, of hydraulic fracturing or other processes on which it relies could reduce demand for our products.
Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.
·We face competition in the markets we serve, which could materially and adversely affect our operating results.
We face competition in the markets we serve, which could materially and adversely affect our operating results.
·Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability, or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.
Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.
·Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.
Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.
·The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.
Credit and counterparty risks could harm our business.
·Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.
Acquisitions and integrating such acquisitions create certain risks and may affect our operating results.
·Our success depends on our executive management and key personnel.
Dispositions create certain risks and may affect our operating results.
·Credit and counterparty risks could harm our business.
Income generated by one of our equity method investments depends on the level of activity in the energy industry, which is significantly affected by volatile oil and gas prices.
·If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.
The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.
·Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.
·The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.
·A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.
Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.
3


·Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.
Table of Content
·We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.
Our success depends on our executive management and other key personnel and our ability to attract and retain top talent throughout the Company.
·Acquisitions and integrating such acquisitions create certain risks and may affect our operating results.
If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.
·A natural disaster, catastrophe or other event could result in severe property damage, which could adversely affect our operations.
Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.
·Information systems failure may disrupt our business and result in financial loss and liability to our customers.
The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.
·The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.
Changes in tax or other laws, regulations, or adverse determinations by taxing or other governmental authorities could increase our effective tax rate and cash taxes paid or otherwise affect our financial condition or operating results.
·Environmental compliance costs and liabilities could adversely affect our financial condition.
A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.
·Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.
Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.
·We face risks associated with our pension and other postretirement benefit obligations.
We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.
·Our substantial indebtedness could have important adverse consequences and adversely affect our financial condition.
A natural disaster, catastrophe, pandemic or other event could adversely affect our operations.
·A significant portion of our total outstanding shares are restricted from immediate sale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
Information systems failure may disrupt our business and result in financial loss and liability to our customers.
·Our Sponsor (affiliates of Kohlberg Kravis Roberts & Co. L.P.) controls a majority of the voting power in the Company’s common stock and has significant influence over us, including control over decisions that require the approval of stockholders.
The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.

Environmental compliance costs and liabilities could adversely affect our financial condition.
Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.
We face risks associated with our pension and other postretirement benefit obligations.
Our substantial indebtedness could have important adverse consequences and adversely affect our financial condition.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities. This could further exacerbate the risks to our financial condition described above.
The terms of the credit agreement governing the Senior Secured Credit Facilities may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
When we utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness, we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.
If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our facility or reduce the borrowing base under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.
The Company may face risk associated with the discontinuation of and transition from currently used financial reference rates.
We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

4

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

Website Disclosure

We use our website www.gardnerdenver.comwww.irco.com as a channel of distribution of Company information. Financial and other important information regarding the Companyus is routinely accessible through and posted on our website. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Gardner Denver Holdings, IncIngersoll Rand Inc. when you enroll your e-mailemail address by visiting the “Email Alerts” section of our website at www.investors.gardnerdenver.cominvestors.irco.com. The contents of our website isare not, however, a part of this Quarterly Report on Form 10-Q.
4
5

IndexTable of Content
PART I.    FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Financial Statements

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
(Dollars in millions, except per share amounts)

  
For the Three Month
Period Ended
September 30,
  
For the Nine Month
Period Ended
September 30,
 
  2017  2016  2017  2016 
             
Revenues $649.6  $462.6  $1,710.4  $1,361.6 
Cost of sales  395.7   298.4   1,066.0   867.1 
Gross Profit  253.9   164.2   644.4   494.5 
Selling and administrative expenses  111.1   100.9   339.1   310.3 
Amortization of intangible assets  29.5   30.7   87.6   90.8 
Impairment of other intangible assets  -   -   -   1.5 
Other operating expense, net  17.4   12.4   186.7   26.1 
Operating Income  95.9   20.2   31.0   65.8 
Interest expense  30.1   43.0   115.4   128.7 
Loss on extinguishment of debt  34.1   -   84.5   - 
Other income, net  (0.7)  (0.7)  (2.6)  (2.6)
Income (Loss) Before Income Taxes  32.4   (22.1)  (166.3)  (60.3)
Provision (benefit) for income taxes  4.4   (9.1)  (41.2)  (33.3)
Net Income (Loss)  28.0   (13.0)  (125.1)  (27.0)
Less: Net (loss) income attributable to noncontrolling  interests  -   (0.1)  0.1   (0.6)
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc. $28.0  $(12.9) $(125.2) $(26.4)
Basic earnings (loss) per share $0.14  $(0.09) $(0.71) $(0.18)
Diluted earnings (loss) per share $0.13  $(0.09) $(0.71) $(0.18)
See Notes to Condensed Consolidated Financial Statements.
5

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in millions)

  
For the Three Month
Period Ended
September 30,
  
For the Nine Month
Period Ended
September 30,
 
  2017  2016  2017  2016 
Comprehensive Income (Loss) Attributable to Gardner Denver Holdings, Inc.            
Net income (loss) attributable to Gardner Denver Holdings, Inc. $28.0  $(12.9) $(125.2) $(26.4)
Other comprehensive income (loss), net of tax:                
Foreign currency translation adjustments, net  41.5   (29.4)  131.4   12.8 
Foreign currency (losses) gains, net  (14.8)  8.1   (44.3)  (10.8)
Unrecognized gains (losses) on cash flow hedges, net  4.0   (2.8)  5.5   (13.5)
Pension and other postretirement prior service cost and gain or loss, net  (0.6)  5.2   (1.9)  6.3 
Total other comprehensive income (loss), net of tax  30.1   (18.9)  90.7   (5.2)
Comprehensive income (loss) attributable to Gardner Denver Holdings, Inc. $58.1  $(31.8) $(34.5) $(31.6)
Comprehensive Income Attributable to Noncontrolling Interests                
Net (loss) income attributable to noncontrolling interests $-  $(0.1) $0.1  $(0.6)
Other comprehensive income, net of tax:                
Foreign currency translation adjustments, net  -   0.1   -   0.6 
Total other comprehensive income, net of tax  -   0.1   -   0.6 
Comprehensive income attributable to noncontrolling interests $-  $-  $0.1  $- 
Total Comprehensive Income (Loss) $58.1  $(31.8) $(34.4) $(31.6)

See Notes to Condensed Consolidated Financial Statements.
6

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions, except share and per share amounts)

  
September 30,
2017
  
December 31,
2016
 
Assets      
Current assets:      
Cash and cash equivalents $303.0  $255.8 
Accounts receivable, net of allowance for doubtful accounts of $19.4 and $18.7, respectively
  531.6   441.6 
Inventories  507.6   443.9 
Other current assets  61.2   47.2 
Total current assets  1,403.4   1,188.5 
Property, plant and equipment, net of accumulated depreciation of $188.5 and $146.1, respectively  352.0   358.4 
Goodwill  1,216.9   1,154.7 
Other intangible assets, net  1,449.7   1,469.9 
Deferred tax assets  0.9   1.4 
Other assets  129.7   143.1 
Total assets $4,552.6  $4,316.0 
Liabilities and Stockholders' Equity        
Current liabilities:        
Short-term borrowings and current maturities of long-term debt $21.1  $24.5 
Accounts payable  263.6   214.9 
Accrued liabilities  274.9   258.5 
Total current liabilities  559.6   497.9 
Long-term debt, less current maturities  2,006.9   2,753.8 
Pensions and other postretirement benefits  129.8   122.7 
Deferred income taxes  409.2   487.6 
Other liabilities  175.3   182.2 
Total liabilities  3,280.8   4,044.2 
Commitments and contingencies (Note 14)        
Stockholders' equity:        
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 198,130,973 and 150,552,360 shares issued at September 30, 2017 and December 31, 2016, respectively  2.0   1.5 
Capital in excess of par value  2,264.9   1,222.4 
Accumulated deficit  (721.4)  (596.2)
Accumulated other comprehensive loss  (251.7)  (342.4)
Treasury stock at cost; 2,120,112 and 1,897,454 shares at September 30, 2017 and December 31, 2016, respectively  (22.0)  (19.4)
Total Gardner Denver Holdings, Inc. stockholders' equity  1,271.8   265.9 
Noncontrolling interests  -   5.9 
Total stockholders' equity  1,271.8   271.8 
Total liabilities and stockholders' equity $4,552.6  $4,316.0 
See Notes to Condensed Consolidated Financial Statements.
7

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)

  
For the
Nine Month
Period Ended
September 30,
2017
  
For the
Nine Month
Period Ended
September 30,
2016
 
       
Cash Flows From Operating Activities:      
Net loss $(125.1) $(27.0)
Adjustments to reconcile net loss to net cash provided by operating activities:        
Amortization of intangible assets  87.6   90.8 
Depreciation in cost of sales  33.2   30.5 
Depreciation in selling and administrative expenses  6.1   5.6 
Impairment of other intangible assets  -   1.5 
Stock-based compensation expense  166.0   - 
Foreign currency transaction losses (gains), net  6.3   (2.6)
Net loss on asset dispositions  2.0   1.6 
Loss on extinguishment of debt  84.5   - 
Deferred income taxes  (68.1)  (45.8)
Changes in assets and liabilities:        
Receivables  (65.9)  18.1 
Inventories  (36.4)  (3.8)
Accounts payable  39.8   21.3 
Accrued liabilities  (19.8)  3.9 
Other assets and liabilities, net  (26.3)  12.7 
Net cash provided by operating activities  83.9   106.8 
Cash Flows From Investing Activities:        
Capital expenditures  (36.4)  (46.3)
Net cash paid in business combinations  (18.8)  (18.8)
Net cash received in business divestitures  -   4.9 
Proceeds from the termination of derivatives  6.2   - 
Disposals of property, plant and equipment  5.9   0.4 
Net cash used in investing activities  (43.1)  (59.8)
Cash Flows From Financing Activities:        
Principal payments on long-term debt  (2,872.2)  (20.1)
Premium paid on extinguishment of senior notes  (29.7)  - 
Proceeds from long-term debt  2,010.7   1.0 
Proceeds from the issuance of common stock, net of share issuance costs  893.3   2.9 
Purchase of treasury stock  (2.6)  (12.6)
Purchase of shares from noncontrolling interests  (5.2)  - 
Payments of debt issuance costs  (2.9)  (1.1)
Other  0.4   (0.9)
Net cash used in financing activities  (8.2)  (30.8)
Effect of exchange rate changes on cash and cash equivalents  14.6   (2.3)
Net increase in cash and cash equivalents  47.2   13.9 
Cash and cash equivalents, beginning of period  255.8   228.3 
Cash and cash equivalents, end of period $303.0  $242.2 
Supplemental Cash Flow Information        
Cash paid for income taxes $47.4  $22.7 
Cash paid for interest $118.1  $137.2 
Capital expenditures in accounts payable $3.0  $5.9 
Property and equipment acquired under capital leases $-  $7.7 
Expenditures directly related to our initial public offering in accounts payable $0.2  $- 

See Notes to Condensed Consolidated Financial Statements
8

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in millions)

  
For the
Nine Month
Period Ended
September 30,
2017
 
    
Number of Common Shares Issued (in thousands)   
Balance at beginning of period  150,552 
Exercise of stock options  84 
Common stock issued for initial public offering  47,495 
Balance at end of period  198,131 
Common Stock    
Balance at beginning of period $1.5 
Exercise of stock options  - 
Common stock issued for initial public offering  0.5 
Balance at end of period $2.0 
Capital in Excess of Par Value    
Balance at beginning of period $1,222.4 
Common stock issued for initial public offering, net of underwriting discounts and commissions  897.2 
Costs related to initial public offering  (4.6)
Stock-based compensation  147.3 
Exercise of stock options  0.2 
Purchase of noncontrolling interest  2.4 
Balance at end of period $2,264.9 
Accumulated Deficit    
Balance at beginning of period $(596.2)
Net loss attributable to Gardner Denver Holdings, Inc.  (125.2)
Balance at end of period $(721.4)
Accumulated Other Comprehensive Loss    
Balance at beginning of period $(342.4)
Foreign currency translation adjustments, net  131.4 
Foreign currency losses, net  (44.3)
Unrecognized losses on cash flow hedges, net  5.5 
Pension and other postretirement prior service cost and gain or loss, net  (1.9)
Balance at end of period $(251.7)
Treasury Stock    
Balance at beginning of period $(19.4)
Purchases of treasury stock  (2.6)
Balance at end of period $(22.0)
Total Gardner Denver Holdings, Inc. Stockholders' Equity $1,271.8 
Noncontrolling Interests    
Balance at beginning of period $5.9 
Net income attributable to noncontrolling interests  0.1 
Transfer of noncontrolling interest AOCI to consolidated AOCI  1.6 
Purchase of noncontrolling interest  (7.6)
Balance at end of period $- 
Total Stockholders' Equity $1,271.8 
See Notes to Condensed Consolidated Financial Statements.
9

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in millions, except share and per share amounts)

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Revenues$1,279.1 $1,025.4 $2,408.6 $1,642.2 
Cost of sales766.4 716.8 1,443.8 1,130.3 
Gross Profit512.7 308.6 964.8 511.9 
Selling and administrative expenses267.2 209.1 519.5 348.5 
Amortization of intangible assets80.3 96.4 164.5 143.1 
Other operating expense, net25.1 48.1 19.4 144.6 
Operating Income (Loss)140.1 (45.0)261.4 (124.3)
Interest expense22.7 30.8 45.8 57.9 
Loss on extinguishment of debt2.0 
Other income, net(34.1)(2.3)(36.6)(2.5)
Income (Loss) from Continuing Operations Before Income Taxes151.5 (73.5)252.2 (181.7)
Provision for income taxes12.5 78.4 23.1 11.5 
Loss on equity method investments(0.7)(0.7)
Income (Loss) from Continuing Operations138.3 (151.9)228.4 (193.2)
Income (loss) from discontinued operations, net of tax96.3 (24.6)(83.9)(20.2)
Net Income (Loss)234.6 (176.5)144.5 (213.4)
Less: Net income attributable to noncontrolling interests0.7 1.1 1.0 1.0 
Net Income (Loss) Attributable to Ingersoll Rand Inc.$233.9 $(177.6)$143.5 $(214.4)
Amounts attributable to Ingersoll Rand Inc. common stockholders:
Income (loss) from continuing operations, net of tax$137.6 $(153.0)$227.4 $(194.2)
Income (loss) from discontinued operations, net of tax96.3 (24.6)(83.9)(20.2)
Net income (loss) attributable to Ingersoll Rand Inc.$233.9 $(177.6)$143.5 $(214.4)
Basic earnings (loss) per share of common stock:
Earnings (loss) from continuing operations$0.33 $(0.37)$0.54 $(0.56)
Earnings (loss) from discontinued operations0.23 (0.06)(0.20)(0.06)
Net earnings (loss)0.56 (0.43)0.34 (0.62)
Diluted earnings (loss) per share of common stock:
Earnings (loss) from continuing operations$0.32 $(0.37)$0.53 $(0.56)
Earnings (loss) from discontinued operations0.23 (0.06)(0.20)(0.06)
Net earnings (loss)0.55 (0.43)0.34 (0.62)
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; in millions)
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Comprehensive Income (Loss) Attributable to Ingersoll Rand Inc.
Net income (loss) attributable to Ingersoll Rand Inc.$233.9 $(177.6)$143.5 $(214.4)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net49.1 44.9 (50.7)(47.3)
Unrecognized gain on cash flow hedges, net5.5 6.7 
Pension and other postretirement prior service cost and gain or (loss), net1.3 0.5 2.5 3.4 
Total other comprehensive income (loss), net of tax50.4 50.9 (48.2)(37.2)
Comprehensive income (loss) Attributable to Ingersoll Rand Inc.$284.3 $(126.7)$95.3 $(251.6)
Comprehensive Income (Loss) Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests$0.7 $1.1 $1.0 $1.0 
Other comprehensive loss, net of tax
Foreign currency translation adjustments, net(1.2)(0.4)(2.3)(4.4)
Total other comprehensive loss, net of tax(1.2)(0.4)(2.3)(4.4)
Comprehensive income (loss) attributable to noncontrolling interests(0.5)0.7 (1.3)(3.4)
Total Comprehensive Income (Loss)$283.8 $(126.0)$94.0 $(255.0)
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except share amounts)
June 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$3,669.9 $1,750.9 
Accounts receivable, net of allowance for credit losses of $49.3 and $50.9, respectively935.8 861.8 
Inventories796.8 716.7 
Other current assets236.2 195.3 
Assets of discontinued operations - current73.7 337.4 
Total current assets5,712.4 3,862.1 
Property, plant and equipment, net of accumulated depreciation of $326.8 and $291.1, respectively607.2 609.0 
Goodwill5,637.0 5,582.6 
Other intangible assets, net3,725.5 3,797.2 
Deferred tax assets21.2 15.6 
Other assets473.4 329.3 
Assets of discontinued operations - long-term1,862.8 
Total assets$16,176.7 $16,058.6 
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt$40.7 $40.4 
Accounts payable660.8 536.4 
Accrued liabilities1,053.6 708.9 
Liabilities of discontinued operations - current67.9 212.9 
Total current liabilities1,823.0 1,498.6 
Long-term debt, less current maturities3,823.3 3,859.1 
Pensions and other postretirement benefits255.7 272.5 
Deferred income taxes624.5 702.4 
Other liabilities303.8 343.7 
Liabilities of discontinued operations - long-term192.8 
Total liabilities$6,830.3 $6,869.1 
Commitments and contingencies (Note 16)
Stockholders’ equity
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 421,545,797 and 420,123,978 shares issued as of June 30, 2021 and December 31, 2020, respectively4.2 4.2 
Capital in excess of par value9,376.0 9,310.3 
Accumulated deficit(32.2)(175.7)
Accumulated other comprehensive income (loss)(35.5)14.2 
Treasury stock at cost; 1,479,039 and 1,496,169 shares as of June 30, 2021 and December 31, 2020, respectively(34.6)(33.3)
Total Ingersoll Rand Inc. stockholders’ equity$9,277.9 $9,119.7 
Noncontrolling interests68.5 69.8 
Total stockholders’ equity$9,346.4 $9,189.5 
Total liabilities and stockholders’ equity$16,176.7 $16,058.6 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in millions)
Three Month Period Ended June 30, 2021
Common StockCapital in Excess of Par ValueAccumulated DeficitAccumulated Other Comprehensive LossTreasury StockTotal Ingersoll Rand Inc. Stockholders' EquityNoncontrolling InterestsTotal Equity
Shares IssuedPar
Balance at beginning of period420.9 $4.2 $9,337.8 $(266.1)$(84.4)$(34.8)$8,956.7 $69.0 $9,025.7 
Net income— — — 233.9 — — 233.9 0.7 234.6 
Issuance of common stock for stock-based compensation plans0.6 — 7.6 — — — 7.6 — 7.6 
Purchases of treasury stock— — — — — (0.2)(0.2)— (0.2)
Issuance of treasury stock for stock-based compensation plans— — — — — 0.4 0.4 — 0.4 
Stock-based compensation— — 30.6 — — — 30.6 — 30.6 
Other comprehensive income (loss), net of tax— — — — 50.4 — 50.4 (1.2)49.2 
Divestiture of foreign subsidiaries— — — — (1.5)— (1.5)— (1.5)
Balance at end of period421.5 $4.2 $9,376.0 $(32.2)$(35.5)$(34.6)$9,277.9 $68.5 $9,346.4 
Three Month Period Ended June 30, 2020
Common StockCapital in Excess of Par ValueAccumulated DeficitAccumulated Other Comprehensive LossTreasury StockTotal Ingersoll Rand Inc. Stockholders' EquityNoncontrolling InterestsTotal Equity
Shares IssuedPar
Balance at beginning of period418.2 $4.2 $9,241.5 $(179.2)$(344.1)$(36.2)$8,686.2 $69.3 $8,755.5 
Net income (loss)— — — (177.6)— — (177.6)1.1 (176.5)
Issuance of common stock for stock-based compensation plans0.4 — 3.7 — — — 3.7 — 3.7 
Purchases of treasury stock— — — — — (0.5)(0.5)— (0.5)
Issuance of treasury stock for stock-based compensation plans— — (0.5)— — 0.9 0.4 — 0.4 
Stock-based compensation— — 11.8 — — — 11.8 — 11.8 
Other comprehensive income (loss), net of tax— — — — 50.9 — 50.9 (1.5)49.4 
Adjustments for shares tendered in open offer— — — — — — — (2.0)(2.0)
Balance at end of period418.6 $4.2 $9,256.5 $(356.8)$(293.2)$(35.8)$8,574.9 $66.9 $8,641.8 
The accompanying notes are an integral part of these condensed consolidated financial statements.
9

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)
(Unaudited; in millions)
Six Month Period Ended June 30, 2021
Common StockCapital in Excess of Par ValueAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Ingersoll Rand Inc. Stockholders' EquityNoncontrolling InterestsTotal Equity
Shares IssuedPar
Balance at beginning of period420.1 $4.2 $9,310.3 $(175.7)$14.2 $(33.3)$9,119.7 $69.8 $9,189.5 
Net income— — — 143.5 — — 143.5 1.0 144.5 
Issuance of common stock for stock-based compensation plans1.4 — 12.3 — — — 12.3 — 12.3 
Purchases of treasury stock— — — — — (3.2)(3.2)— (3.2)
Issuance of treasury stock for stock-based compensation plans— — (1.1)— — 1.9 0.8 — 0.8 
Stock-based compensation— — 54.5 — — — 54.5 — 54.5 
Other comprehensive loss, net of tax— — — — (48.2)— (48.2)(2.3)(50.5)
Divestiture of foreign subsidiaries— — — — (1.5)— (1.5)— (1.5)
Balance at end of period421.5 $4.2 $9,376.0 $(32.2)$(35.5)$(34.6)$9,277.9 $68.5 $9,346.4 
Six Month Period Ended June 30, 2020
Common StockCapital in Excess of Par ValueAccumulated DeficitAccumulated Other Comprehensive LossTreasury StockTotal Ingersoll Rand Inc. Stockholders' EquityNoncontrolling InterestsTotal Equity
Shares IssuedPar
Balance at beginning of period206.8 $2.1 $2,302.0 $(141.4)$(256.0)$(36.8)$1,869.9 $$1,869.9 
Net income (loss)— — — (214.4)— — (214.4)1.0 (213.4)
Acquisition of Ingersoll Rand Industrial211.0 2.1 6,934.9 — — — 6,937.0 72.3 7,009.3 
Costs of issuing equity securities— — (1.0)— — — (1.0)— (1.0)
Issuance of common stock for stock-based compensation plans0.8 — 5.9 — — — 5.9 — 5.9 
Purchases of treasury stock— — — — — (1.3)(1.3)— (1.3)
Issuance of treasury stock for stock-based compensation plans— — (1.5)— — 2.3 0.8 — 0.8 
Stock-based compensation— — 16.2 — — — 16.2 — 16.2 
Other comprehensive loss, net of tax— — — — (37.2)— (37.2)(4.4)(41.6)
Adoption of new accounting standard (ASU 2016-13)— — — (1.0)— — (1.0)— (1.0)
Adjustments for shares tendered in open offer— — — — — — — (2.0)(2.0)
Balance at end of period418.6 $4.2 $9,256.5 $(356.8)$(293.2)$(35.8)$8,574.9 $66.9 $8,641.8 
The accompanying notes are an integral part of these condensed consolidated financial statements.
10

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
For the Six Month Period Ended June 30,
20212020
Cash Flows From Operating Activities From Continuing Operations:
Net income (loss)$144.5 $(213.4)
Loss from discontinued operations, net of tax(83.9)(20.2)
Income (loss) from continuing operations228.4 (193.2)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
Amortization of intangible assets164.5 143.1 
Depreciation43.3 35.7 
Stock-based compensation expense43.1 15.4 
Foreign currency transaction losses (gains), net(14.7)6.9 
Deferred income taxes(81.1)25.1 
Non-cash adjustments to carrying value of LIFO inventories35.6 
Other non-cash adjustments(0.4)2.0 
Changes in assets and liabilities:
Receivables(73.0)64.6 
Inventories(80.7)(8.5)
Accounts payable80.8 15.1 
Accrued liabilities2.9 83.8 
Other assets and liabilities, net(78.3)(29.3)
Net cash provided by operating activities from continuing operations234.8 196.3 
Cash Flows From (Used In) Investing Activities From Continuing Operations:
Capital expenditures(25.9)(22.7)
Net cash acquired (paid) in business combinations(215.8)41.3 
Disposals of property, plant and equipment9.5 1.4 
Net cash provided by (used in) investing activities from continuing operations(232.2)20.0 
Cash Flows From (Used In) Financing Activities From Continuing Operations:
Principal payments on long-term debt(19.7)(1,599.6)
Proceeds from long-term debt1,980.1 
Purchases of treasury stock(3.2)(1.3)
Proceeds from stock option exercises12.8 6.8 
Payments of contingent consideration(0.7)
Payments of debt issuance costs(46.6)
Payments of costs incurred to issue shares for Ingersoll Rand Industrial acquisition(1.0)
Other financing(0.8)
Net cash provided by (used in) financing activities from continuing operations(10.1)336.9 
Cash Flows From Discontinued Operations:
Net cash provided by operating activities29.5 119.5 
Net cash provided by (used in) investing activities1,903.8 (2.7)
Net cash provided by discontinued operations1,933.3 116.8 
Effect of exchange rate changes on cash and cash equivalents(6.8)(1.9)
Net increase in cash and cash equivalents1,919.0 668.1 
Cash and cash equivalents, beginning of period1,750.9 505.5 
Cash and cash equivalents, end of period$3,669.9 $1,173.6 
Supplemental Cash Flow Information
Cash paid for income taxes$150.5 $30.5 
Cash paid for interest41.6 54.2 
The accompanying notes are an integral part of these condensed consolidated financial statements.
11

Table of Content
INGERSOLL RAND INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; in millions, except share and per share amounts)
Note 1. Condensed Consolidated Financial Statements

Basis of Presentation and Recent Accounting Pronouncements
Basis of Presentation

Gardner Denver Holdings,Ingersoll Rand Inc. is a holding company whose operating subsidiaries are Gardner Denver, Inc. (“GDI”) and certain of GDI’s subsidiaries.  Gardner Denver, Inc is a diversified, global manufacturer of highly engineered, application-critical flow control products and provider of related aftermarket parts and services.

The accompanying condensed consolidated financial statements include the accounts of Gardner Denver Holdings,Ingersoll Rand Inc. and its majority-owned subsidiaries (collectively referred to herein as “Gardner Denver”“Ingersoll Rand” or the “Company”).  The financial information presented as of any date other than December 31, 2016 has been prepared from the books and records of the Company without audit. 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principlesU.S. generally accepted in the United States of Americaaccounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include allreporting, the instructions for Form 10-Q and Article 10 of the informationU.S. Securities and notes required by GAAP for complete financial statements.Exchange Commission (“SEC”) Regulation S-X. In the Company’s opinion, of management, the condensed consolidated financial statements includereflect all adjustments consisting of adjustments associated with acquisition accounting anda normal recurring adjustments,nature necessary for a fair presentationstatement of such financial statements.  All intercompany transactions and accounts have been eliminated in consolidation.

the results for the interim periods presented. The Company’s unaudited interim condensed consolidated financial statements should be read in conjunction with ourthe Company’s audited consolidated financial statements and related notes included in our prospectus, dated May 11, 2017, filed withAnnual Report on Form 10-K for the Securities and Exchange Commission (“SEC”)year ended December 31, 2020. We have reclassified certain prior year amounts, including the results of discontinued operations, to conform to the current year presentation. Unless otherwise indicated, amounts provided in accordance with Rule 424(b) of the Securities Act of 1933, as amended,these Notes pertain to continuing operations. See Note 2 “Discontinued Operations” for information on May 15, 2017.

discontinued operations.
The results of operations for the interim periodsperiod ended SeptemberJune 30, 20172021 are not necessarily indicative of future results. The ongoing novel Coronavirus (“COVID-19”) pandemic is a continuously evolving situation around the globe that has negatively impacted and could continue to negatively impact the global economy. The Company’s operating results will be subject to fluctuations based on general economic conditions, and the extent to which COVID-19 may ultimately impact its business will depend on future developments, which are highly uncertain and cannot be expectedpredicted with confidence, such as the ultimate extent of the spread of the disease and the duration of the outbreak and business closures or business disruptions for the full year.  The balanceCompany, suppliers and customers.
Recently Adopted Accounting Standard Updates (“ASU”)
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which added an impairment model that is based on expected losses rather than incurred losses and is called the Current Expected Credit Losses (“CECL”) model. This impairment model is applicable to loans, debt securities, trade receivables, net investments in leases, off-balance sheet at December 31, 2016 has been derived from the Company’s auditedcredit exposures, reinsurance receivables as well as any other financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

The Company’s initial public offering of shares of common stock was completed in May 2017.  In connectionasset with the offering,contractual right to receive cash. Under the Company sold a total of 47,495,000 shares of common stock for cash consideration of $20.00 per share ($18.90 per share net of underwriting discounts) and received proceeds of $949.9 million.  Expenses for underwriting discounts and commissions related to this offering totaled approximately $52.2 million, resulting in net proceeds of $897.7 million.    Additional expenses directly relatednew model, an allowance equal to the initial public offeringestimate of $4.6 million were incurred andlifetime expected credit losses is recognized which will result in more timely loss recognition. The guidance is intended to reduce complexity by decreasing the number of credit impairment models. The Company adopted this guidance on January 1, 2020, using a modified retrospective transition method. The Company recorded as a reduction tocumulative-effect adjustment on the “Capital in excess of par value” lineadoption date increasing “Accumulated deficit” in the Condensed Consolidated Balance Sheets.  AsSheets by $1.0 million and decreasing “Accounts receivable, net of Septemberallowance for credit losses” in the Condensed Consolidated Balance Sheets by $1.0 million.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions and amending and clarifying existing guidance. The Company adopted this guidance on January 1, 2021. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for a limited time to ease the potential burden of accounting for reference rate reform on financial reporting. This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. The guidance is effective beginning on March 12, 2020 through December 31, 2022. The Company has not utilized any of the
12

Table of Content
optional expedients or exceptions available under this ASU. The Company will continue to assess whether this ASU is applicable throughout the effective period.
In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which explicitly clarifies which contracts, hedging relationships, and other transactions are within the scope of the optional expedients and exceptions allowed under Topic 848. The Company has not utilized any of the optional expedients or exceptions available under Topic 848. The Company will continue to assess whether this ASU is applicable throughout the effective period, in conjunction with our assessment of ASU 2020-4.
Note 2. Discontinued Operations
Discontinued operations comprise two formerly-owned businesses, Specialty Vehicle Technologies (“SVT” or “Club Car”) and High Pressure Solutions (“HPS”). The results of operations, financial positions and cash flows of these businesses are reported as discontinued operations for all periods presented in these Condensed Consolidated financial statements.
Specialty Vehicle Technologies
On April 9, 2021, the Company entered into an agreement to sell Club Car to private equity firm Platinum Equity Advisors, LLC (“Platinum Equity”) for $1.68 billion in cash. The sale was substantially completed on June 1, 2021. The transfer of legal ownership of certain of SVT's non-U.S. subsidiaries has not yet occurred as of June 30, 2017, $4.4 million2021 due to local regulatory and administrative requirements. Transfer of ownership of these entities is expected to be completed in the second half of 2021.
SVT has been paid frompresented as a discontinued operation and its net assets are classified as held for sale and comparable prior periods are recast to reflect this change.
The Company recognized a pre-tax gain on sale of $256.7 million in the second quarter of 2021. The sale proceeds and the related gain on sale are subject to further adjustment upon the finalization customary post-closing steps of the transaction. These steps are expected to be completed by the end of 2021.
High Pressure Solutions
On February 14, 2021, the Company entered into an agreement to sell its majority interest in High Pressure Solutions to private equity firm American Industrial Partners. In exchange for its majority interest of 55%, the Company received net cash proceeds of $278.3 million and retains a 45% common equity interest in the newly-formed entity comprising the HPS business. The Company expects to maintain its minority investment in HPS indefinitely and is unable to estimate when this interest may be disposed. This sale was substantially completed on handApril 1, 2021. The transfer of legal ownership of one of HPS's non-U.S. subsidiary has not yet occurred as of June 30, 2021 due to local regulatory and $0.2administrative requirements. Transfer of ownership of this entity is expected to be completed in the second half of 2021.
HPS has been presented as a discontinued operation and its net assets are classified as held for sale and comparable prior periods are recast to reflect this change.
The Company recognized a pre-tax loss on sale of $211.7 million is recordedin the six month period ended June 30, 2021. The sale proceeds and the related loss on sale are subject to further adjustment upon the “Accounts payable” linefinalization customary post-closing steps of the transaction. These steps are expected to be completed by the end of 2021.

13

Table of Content
Financial information of discontinued operations
The results of operations of SVT and HPS are presented as discontinued operations as summarized below:
Specialty Vehicle TechnologiesHigh Pressure SolutionsTotal
For the Three Month Period Ended June 30,
202120202021202020212020
Revenues$184.0 $217.5 $3.0 $21.5 $187.0 $239.0 
Cost of sales137.9 166.4 3.9 21.2 141.8 187.6 
Gross Profit46.1 51.1 (0.9)0.3 45.2 51.4 
Selling and administrative expenses16.9 18.2 0.6 20.4 17.5 38.6 
Amortization of intangible assets0.9 12.3 5.9 0.9 18.2 
Loss (gain) on sale(256.7)8.4 (248.3)
Other operating expense (income), net9.2 (0.1)7.4 1.9 16.6 1.8 
Income (Loss) from Discontinued Operations Before Income Taxes275.8 20.7 (17.3)(27.9)258.5 (7.2)
Provision (benefit) for income taxes162.8 29.2 (0.6)(11.8)162.2 17.4 
Income (Loss) from Discontinued Operations, Net of Tax$113.0 $(8.5)$(16.7)$(16.1)$96.3 $(24.6)
Specialty Vehicle TechnologiesHigh Pressure SolutionsTotal
For the Six Month Period Ended June 30,
202120202021202020212020
Revenues$424.3 $304.2 $65.4 $117.9 $489.7 $422.1 
Cost of sales314.9 238.7 54.4 90.8 369.3 329.5 
Gross Profit109.4 65.5 11.0 27.1 120.4 92.6 
Selling and administrative expenses35.3 26.0 4.9 28.6 40.2 54.6 
Amortization of intangible assets10.4 14.9 2.4 11.8 12.8 26.7 
Loss (gain) on sale(256.7)211.7 (45.0)
Other operating expense, net16.2 0.7 15.5 5.3 31.7 6.0 
Income (Loss) from Discontinued Operations Before Income Taxes304.2 23.9 (223.5)(18.6)80.7 5.3 
Provision (benefit) for income taxes169.7 30.0 (5.1)(4.5)164.6 25.5 
Income (Loss) from Discontinued Operations, Net of Tax$134.5 $(6.1)$(218.4)$(14.1)$(83.9)$(20.2)

14

Table of Content
The carrying amount of major classes of assets and liabilities classified that were included in discontinued operations at June 30, 2021 and December 31, 2020 related to SVT and HPS are shown in the table below. Long-term assets and liabilities as of June 30, 2021 have been reclassified as current in the Condensed Consolidated Balance Sheets.

June 30, 2021 (1)
December 31, 2020 (2)
Assets
Current assets:
Accounts receivable, net$18.7 $104.8 
Inventories19.6 226.9 
Other current assets4.5 5.7 
Total current assets42.8 337.4 
Property, plant and equipment, net2.1 188.3 
Goodwill0.8 721.0 
Other intangible assets, net28.0 935.4 
Deferred tax assets0.5 
Other assets17.6 
Total non-current assets30.9 1,862.8 
Total assets$73.7 $2,200.2 
Liabilities
Current liabilities:
Accounts payable$32.3 $134.7 
Accrued liabilities31.8 78.2 
Total current liabilities64.1 212.9 
Pensions and other postretirement benefits2.5 
Deferred income taxes3.8 173.3 
Other liabilities17.0 
Total non-current liabilities3.8 192.8 
Total liabilities$67.9 $405.7 
After(1)Primarily relates to non-U.S. subsidiaries for which legal ownership will transfer in the completionsecond half of the initial public offering, affiliates2021.
(2)Total assets and total liabilities related to SVT were $1,512.7 million and $354.1 million, respectively, at December 31, 2020.
The significant non-cash operating items and capital expenditures reflected in cash flows of Kohlberg Kravis Roberts & Co. L.P. continue to control a majority of the voting power of the Company’s common stock.  As a result, the Company is considered a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (“NYSE”).

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606).  The amendments in this update will replace most of the existing GAAP revenue recognition guidance.  The core principle of this ASU is that an entity should recognize revenuediscontinued operations for the transfer of goods or services equal tosix months periods ended June 30, 2021 and 2020 include the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, and changes in judgments. The ASU is effective for public companies beginning in the first quarter of 2018. The ASU allows for full retrospective adoption applied to all periods presented or modified retrospective adoption with the cumulative effect of initially applying the update recognized at the date of initial application. The Company will adopt this ASU using the modified retrospective approach.  The Company has completed an evaluation of its revenue activities against the requirements of the ASU. During the evaluation, the Company identified certain contractual arrangements involving customer specific application engineering in the Energy segment that may, in certain circumstances, meet the criteria for revenue recognition over time under the new standard. Currently, revenue on these arrangements is recognized when the contract is complete or substantially complete, provided all other revenue recognition criteria have been met. The Company is currently in the process of determining the necessary changes to information systems and business processes to effect the changes in the first quarter of 2018.  The Company has not yet determined the impact on reported revenues and earnings related to the adoption of the ASU.following:
Specialty Vehicle TechnologiesHigh Pressure SolutionsTotal
For the Six Month Period Ended June 30,
202120202021202020212020
Loss (gain) on sale$(256.7)$$211.7 $$(45.0)$
Depreciation and amortization14.8 19.8 4.0 18.2 18.8 38.0 
Stock-based compensation expense8.2 0.4 2.7 0.4 10.9 0.8 
Capital expenditures1.6 1.3 0.3 1.4 1.9 2.7 
10

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The amendments in this update will replace most of the existing GAAP lease accounting guidance in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  The ASU is effective for public companies beginning in the first quarter of 2019.  The ASU requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  This approach allows a Company to elect to use a number of optional practical expedients.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the method of adoption.

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  This update was intended to improve the presentation of net periodic pension costs and net periodic postretirement benefit costs in the financial statements.  The amendments in this ASU requires the Company to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period.  The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of operating income.  If a separate line item or items are not used to present the other components of net benefit cost, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed.  The amendment allows only the service cost component of net benefit cost to be eligible for capitalization.  The ASU is effective for public companies for the annual and interim reporting periods of 2018.  Disclosures of the nature of and reason for the change in accounting principle are required in the first interim and annual periods of adoption.  The amendments in this ASU are to be applied retrospectively for presentation in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets.  A practical expedient allows the Company to use the amount disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.  Disclosure must be made if the practical expedient was used.  The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.  This update was intended to improve the financial reporting of hedging relationships to better portray the economic results of the Company’s risk management activities in its financial statements through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.  The amendments in this ASU require the Company to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported.  This allows users of the financial statements to better understand the results and costs of the Company’s hedging program.  The Company is required to apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach.  The presentation and disclosure requirements must be applied prospectively.  The effective date for adoption is for annual and interim periods beginning after December 15, 2018.  This will require adoption in the first quarter of fiscal year 2019.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.
Note 2.3. Business Combinations

Acquisition of LeROI Compressors

Acquisitions in 2021
On June 5, 2017,January 31, 2021, the Company acquired 100%the Vacuum and Blower Systems division of the stock of LeROI Compressors (“LeROI”), a leading North American manufacturer of gas compression equipment and solutionsTuthill Corporation for vapor recovery, biogas and other process and industrial applications.  The Company acquired all of the assets and assumed certain liabilities of LeROI for total cash consideration of $20.5 million, net of cash acquired.  Included$184.4 million. The business operates under the tradenames M-D Pneumatics and Kinney Vacuum Pumps and is a leader in the cash consideration is an indemnity holdbackdesign and manufacture of $2.0 million recorded in “Accrued liabilities”positive displacement blowers, mechanical vacuum pumps, vacuum boosters and expected to be paid by
15

Table of Content
engineered blower and vacuum systems. The results of this business are reported within the end of 2021.  The revenuesIndustrial Technologies and operating income of LeROI are included in the Company’s consolidated financial statementsServices segment from the acquisition date and are included inof acquisition. Due to the Industrials segment.  Nonetiming of the acquisition, the allocation of purchase price is preliminary and will be refined as additional information becomes available. The preliminary goodwill recognized of $80.0 million is attributable to the expected cost synergies, anticipated growth of new and existing customers, and the assembled workforce. The goodwill resulting from this acquisition is expected to be deductible for tax purposes.
Also in the six months ended June 30, 2021, the Company acquired 5 sales and service businesses in the Industrial Technologies and Services segment and one pump technology business in the Precision Science and Technologies segment. The aggregate consideration for these acquisitions was $31.5 million.
11The following table summarizes the preliminary allocation of consideration to the fair values of identifiable assets acquired and liabilities assumed at the acquisition date.

M-D Pneumatics and Kinney Vacuum PumpsAll Others
Accounts receivable$4.8 $2.5 
Inventories3.8 2.7 
Other current assets0.6 
Property, plant and equipment16.2 2.5 
Goodwill80.0 3.5 
Other intangible assets82.5 23.9 
Total current liabilities(3.5)(1.8)
Total noncurrent liabilities(1.8)
Total consideration$184.4 $31.5 
The revenue and operating income included in the financial statements for these acquisitions subsequent to their date of acquisition is $31.5 million and $4.0 million, respectively.
Acquisition of the Non-Controlling InterestIngersoll Rand Industrial in Tamrotor Kompressorit Oy

2020
On March 3, 2017,February 29, 2020, Ingersoll Rand (formerly Gardner Denver Holdings, Inc.) completed the acquisition of and merger with Ingersoll Rand Industrial in exchange for shares of the Company's common stock with a fair value of $6,937.0 million.
Fair value of Ingersoll Rand common stock issued for Ingersoll Rand Industrial outstanding common stock$6,919.5 
Fair value attributable to pre-merger service for replacement equity awards8.6 
Fair value attributable to pre-merger service for deferred compensation plan8.9 
Total purchase consideration$6,937.0 
Ingersoll Rand Industrial was separated from Ingersoll Rand plc (subsequently renamed Trane Technologies Plc) through a distribution to shareholders of Trane Technologies and subsequently merged with Gardner Denver Holdings, Inc. This transaction was accounted for as a business combination. The assets and liabilities of Ingersoll Rand Industrial were measured at their fair values as of the date of the merger. The determination of fair values required the Company acquired the remaining 49% non-controlling interest of Tamrotor Kompressorit Oy (“Tamrotor”), a distributorto make estimates about expected future cash flows, discount rates, royalty rates and other subjective assumptions and future events that are highly uncertain. These measurements were finalized within one year of the Company’s Industrials segment air compression products.  closing date of the transaction.
16

Table of Content
The following table summarizes the allocation of consideration to the fair values of assets acquired and liabilities assumed of Ingersoll Rand Industrial as of February 29, 2020. Included in these amounts are assets and liabilities of SVT, which has been reported as a discontinued operation in these Condensed Consolidated financial statements. Refer to Note 2 for further information on the sale of SVT.
Fair value
Cash$38.8 
Accounts receivable585.8 
Inventories625.4 
Other current assets87.2 
Property, plant and equipment516.5 
Goodwill4,899.2 
Other intangible assets3,766.6 
Other noncurrent assets270.9 
Total current liabilities, including current maturities of long-term debt of $19.0 million(753.0)
Deferred tax liability(842.4)
Long-term debt, net of debt issuance costs and an original issue discount(1,851.7)
Other noncurrent liabilities(333.0)
Noncontrolling interest(73.3)
Total consideration$6,937.0 
The Company acquiredincurred $87.3 million of acquisition-related costs, including $42.3 million during the remaining interestthree-month period ended March 31, 2020. The remainder was incurred in Tamrotor for total cash consideration of $5.2 million, consisting entirely of payments to the former shareholders.  Included in the cash consideration was a holdback of $0.5 million that was paid in the third quarter of 2017.  This transaction resulted in an increase to “Capital in excess of par value” of $2.3 million and an increase to “Accumulated other comprehensive loss” of $1.5 million in the Condensed Consolidated Balance Sheets.

Acquisition of ILS Innovative Laborsysteme GmbH and Zinsser Analytic GmbH

On August 31, 2016, the Company acquired 100% of the stock of ILS Innovative Laborsysteme GmbH (“ILS”) and Zinsser Analytic GmbH (“Zinsser Analytic”).  ILS is a leading manufacturer of highly specialized micro-syringes and valves that2019. These costs are used in liquid handling instruments and is a global supplier to the world’s leading laboratory equipment manufacturers, laboratories and laboratory consumables distributors.  Zinsser Analytic is an established provider of customized automated liquid handling systems, and also offers consumables products including polyethylene that are used in diagnostic or clinical labs.  The Company acquired all of the assets and assumed certain liabilities of ILS and Zinsser Analytic for approximately $18.8 million, net of cash acquired.  The revenues and operating income of ILS and Zinsser Analytic are included in the Company’s consolidated financial statements from the acquisition date and are included in the Medical segment.  None of the goodwill resulting from this acquisition is deductible for tax purposes.  During the first quarter of 2017, an incremental working capital true-up payment was made for approximately $0.3 million.  This amount is presented within “Net cash paid in business combinations”“Other operating expenses, net” in the Condensed Consolidated Statements of Cash Flows.Operations. For additional information, see Note 2 “Business Combinations” of the annual report on Form 10-K for the year ended December 31, 2020.

Results of Ingersoll Rand Industrial Subsequent to the Acquisition
The operating results of Ingersoll Rand Industrial have been included in the Company’s condensed consolidated financial statements since the date of acquisition. The results of Ingersoll Rand Industrial in the year of acquisition are shown below. These amounts include the effects of purchase accounting adjustments, primarily the amortization of intangible assets and the impacts on operating expenses of fair value adjustments to acquired inventory and property, plant and equipment. The amounts below exclude the operating results of SVT, which has been reported as a discontinued operation as a result of the transaction discussed in Note 2.
For the Three Month Period Ended
June 30, 2020
For the Six Month Period Ended
June 30, 2020
Revenues$609.0 $815.7 
Income (Loss) from Continuing Operations Before Income Taxes(82.1)(124.8)
Unaudited Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for the Company and Ingersoll Rand Industrial as if the acquisition had been completed on January 1, 2019. The pro forma results have been prepared for comparative purposes only and do not necessarily represent what the revenue or results of operations would have been had the acquisition been completed on January 1, 2019. In addition, these results are not intended to be a projection of future operating results and do not reflect synergies that might be achieved. These amounts include revenue and net income attributable to SVT
17

Table of Content
that are reported within Income (loss) from discontinued operations, net of tax on the Condensed Consolidated Statement of Operations.
For the Three Month Period Ended
June 30, 2020
For the Six Month Period Ended
June 30, 2020
Revenues$1,271.6 $2,541.3 
Net Income (Loss)7.0 6.8 
The unaudited pro forma information regarding these acquisitions isincludes adjustments for the preliminary purchase price allocation (including, but not considered significantlimited to, amortization and has not been disclosed.depreciation for intangible assets and property, plant and equipment acquired, adjustments to stock-based compensation expense, fair value adjustments to acquired inventories, the purchase accounting effect on deferred revenue, interest expense and amortization of debt issuance costs, transaction costs and related tax impacts) and the alignment of accounting policies.

The table below reflects the impact of material and nonrecurring adjustments to the unaudited pro forma results for the three and six month periods ended June 30, 2020 that are directly attributable to the acquisition.
Note 3. Restructuring
For the Three Month Period Ended
June 30, 2020
For the Six Month Period Ended
June 30, 2020
Increase to revenue as a result of deferred revenue fair value adjustment, net of tax$5.6 $5.5 
Decrease to expense as a result of inventory fair value adjustment, net of tax(58.5)(89.6)
Decrease to expense as a result of transaction costs, net of tax(38.1)

Industrials Restructuring Program

Settlement of post-acquisition contingencies
During the three months ended June 30, 2021, the Company and Trane Technologies concluded several post-closing steps of the Ingersoll Rand Industrial transaction. These steps included determining the final measurements of transferred working capital, indebtedness and retirement plan funding. Upon finalizing these measurements, Trane Technologies agreed to make a net payment of $49.5 million to Ingersoll Rand. This payment was made in July 2021. The Company realized a gain of $30.1 million during the second quarter to adjust its receivables for these items. This gain is reported within "Other income, net" on the Condensed Consolidated Statement of 2016,Operations.
Other Acquisitions in 2020
On September 1, 2020, the Company revisedacquired a manufacturer of electric peristaltic pumps for cash consideration, net of cash acquired, of $15.5 million and expandeddeferred consideration of $0.9 million. The results of this business are reported within the Industrials restructuring program announcedPrecision and Science Technologies segment from the date of acquisition.
Also in the third quarter, within the Industrial Technologies and Services segment, the Company acquired 2 sales and service businesses for cash consideration of 2014.  $15.0 million and deferred consideration of $5.1 million.
The revisedrevenue and operating income for the six months ended June 30, 2020 included in the financial statements for these acquisitions subsequent to their date of acquisition is $5.3 million and $2.0 million, respectively.
Note 4. Restructuring
Restructuring Program 2020 to 2022
Subsequent to the acquisition of Ingersoll Rand Industrial, the Company announced a restructuring program maintains(“2020 Plan”) to create efficiencies and synergies, reduce the focus on rationalizingnumber of facilities and optimize operating margin within the European manufacturing footprint of the Industrials segment, including the consolidation of manufacturing and distribution operations in Europe and the relocation of certain production to China.  The revised program also includes employee and other actions designed to reduce selling, administrative, and other expenses.merged Company. The Company expects to generate significant cost savingsincur total expenses of approximately $350.0 million related to workforce reductions, lease termination costs, other facility rationalization costs and other business related transformation costs from 2020 until 2022. The Company continues to evaluate operating efficiencies and anticipates incurring additional costs in the coming years in connection with these efforts.activities, but is unable to estimate those amounts at this time as such plans are not yet finalized.

18

Table of Content
AsFor the three month period ended June 30, 2021, expense of September 30, 2017, $37.1$6.8 million has been charged to expense throughwas recognized within “Other operating expense, net” in the Condensed Consolidated Statements of Operations related to($2.5 million for Industrial Technologies and Services, $(0.2) million for Precision and Science Technologies and $4.5 million for Corporate). For the Industrials restructuring program.

The Company expects to incur approximately $40 to $45six month period ended June 30, 2021, expense of $9.2 million in restructuring charges related to the Industrials restructuring program.  The Company expects the Industrials restructuring program to conclude in 2017.

Energy Restructuring Program

In the fourth quarter of 2016, the Company committed to a restructuring program in the Energy segment (“Energy restructuring program”) to rationalize manufacturing facilities and to otherwise reduce operating costs.  Actions include employee reductions primarily in North America, Europe and China and the closure of a production facility in North America.  The Company expects to generate significant cost savings from these actions.

As of September 30, 2017, $6.1 million has been charged to expense throughwas recognized within “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($4.2 million for Industrial Technologies and Services, $0.1 million for Precision and Science Technologies and $4.9 million for Corporate). Through June 30, 2021, we recognized expense related to the Energy restructuring program.

The Company expects to incur approximately $6 to $72020 Plan of $74.5 million, in restructuring charges related to the Energy restructuring program.  The Company expects the Energy restructuring program to conclude in 2017.
12

Medical Restructuring Program

In the fourth quarter of 2016, the Company committed to a restructuring program in the Medical segment (“Medical restructuring program”) to rationalize manufacturing facilities$7.0 million and to otherwise reduce operating costs.  Actions include employee reductions primarily in North America, Europe,$10.9 million for Industrial Technologies and ChinaServices, Precision and the closure of a production facility in North America.  The Company expects to generate significant cost savings from these actions.

As of September 30, 2017, $4.2 million has been charged to expense through “Other operating expense, net” in the Condensed Consolidated Statements of Operations, related to the Medical restructuring program.

The Company expects to incur approximately $5 to $6 million in restructuring charges related to the medical restructuring program.  The Company expects the Medical restructuring program to conclude in 2017.

Science Technologies and Corporate, respectively.
The following table summarizes the activity associated with the Company’s restructuring programs by segment for the ninesix month periodsperiod ended SeptemberJune 30, 2017 and 2016:2021.

  
Industrials
Program
  
Energy
Program
  
Medical
Program
  Total 
Balance at December 31, 2016 $11.1  $5.6  $4.2  $20.9 
Charged to expense - termination benefits  2.3   (0.3)  (0.1)  1.9 
Charged to expense - other  2.1   0.7   0.2   3.0 
Payments  (10.7)  (4.2)  (2.4)  (17.3)
Other, net  0.7   -   0.3   1.0 
Balance at September 30, 2017 $5.5  $1.8  $2.2  $9.5 

 
Industrials
Program
  
Energy
Program
  
Medical
Program
  Total 
Balance at December 31, 2015 $2.0  $-  $-  $2.0 
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Balance at beginning of periodBalance at beginning of period$11.9 $27.8 $17.5 $4.8 
Charged to expense - termination benefits  14.7   -   -   14.7 Charged to expense - termination benefits6.2 29.7 8.6 64.9 
Charged to expense - other  0.7   -   -   0.7 Charged to expense - other0.6 (0.3)0.6 2.5 
Payments  (8.9)  -   -   (8.9)Payments(4.2)(26.3)(11.8)(41.3)
Other, net  -   -   -   - 
Balance at September 30, 2016 $8.5  $-  $-  $8.5 
Currency translation adjustment and otherCurrency translation adjustment and other0.2 (1.9)(0.2)(1.9)
Balance at end of periodBalance at end of period$14.7 $29.0 $14.7 $29.0 
As of September 30, 2017, restructuring reserves of $9.1 million were included in “Accrued liabilities” and restructuring reserves of $0.4 million were included in “Other liabilities” in the Condensed Consolidated Balance Sheets.  As of December 31, 2016, restructuring reserves of $20.2 million were included in “Accrued liabilities” and restructuring reserves of $0.7 million were included in “Other liabilities” in the Condensed Consolidated Balance Sheets.
13

Note 4.5. Inventories

Inventories as of SeptemberJune 30, 20172021 and December 31, 20162020 consisted of the following:following.

June 30, 2021December 31, 2020
Raw materials, including parts and subassemblies$490.4 $451.0 
Work-in-process87.0 62.2 
Finished goods210.6 194.7 
788.0 707.9 
Excess of LIFO costs over FIFO costs8.8 8.8 
Inventories$796.8 $716.7 
  
September 30,
2017
  
December 31,
2016
 
Raw materials, including parts and subassemblies $347.1  $312.9 
Work-in-process  69.2   45.3 
Finished goods  75.4   69.8 
   491.7   428.0 
Excess of LIFO costs over FIFO costs  15.9   15.9 
Inventories $507.6  $443.9 

Note 5.6. Goodwill and Other Intangible Assets

Goodwill
The changes in the carrying amount of goodwill attributable to each reportable segment for the ninesix month period ended SeptemberJune 30, 2017 are2021 is presented in the table below:below.

  Industrials  Energy  Medical  Total 
Balance as of December 31, 2016 $515.8  $439.9  $199.0  $1,154.7 
Acquisition  7.9   -   -   7.9 
Foreign currency translation and other (1)
  31.8   16.6   5.9   54.3 
Balance as of September 30, 2017 $555.5  $456.5  $204.9  $1,216.9 

Industrial Technologies and ServicesPrecision and Science TechnologiesTotal
Balance as of December 31, 2020$4,151.2 $1,431.4 $5,582.6 
Acquisitions76.7 76.7 
Foreign currency translation(18.4)(3.9)(22.3)
Balance as of June 30, 2021$4,209.5 $1,427.5 $5,637.0 
(1)During the nine month period ended September 30, 2017, the Company recorded an increase in goodwill of $0.4 million as a result of measurement period adjustments in the Medical segment.

On June 5, 2017, the Company acquired LeROI Compressors which is included in the Industrials segment.  The excess of the purchase price over the estimated fair values of tangible assets, identifiable assets, and assumed liabilities was recorded as goodwill.  As of SeptemberJune 30, 2017, the preliminary purchase price allocation resulted in a total of $7.9 million of goodwill.  The allocation of the purchase price is preliminary and subject to adjustment based on final fair values of the identified assets acquired and liabilities assumed.

At September 30, 2017,2021, goodwill included $563.9 million of accumulated impairment losses of $220.6 million within the EnergyIndustrial Technologies and Services segment.  There were no goodwill impairment charges recorded during the three month or nine month periods ended September 30, 2017.
14
19

Table of Content

Index
Other Intangible Assets, Net
Other intangible assets at Septemberas of June 30, 20172021 and December 31, 2016 consist2020 consisted of the following:following.

   September 30, 2017  December 31, 2016 
   
Gross
Carrying
Amount
  
Accumulated
Amortization
  
Gross
Carrying
Amount
  
Accumulated
Amortization
 
Amortized intangible assets:            
Customer lists and relationships $1,216.2  $(442.1) $1,160.5  $(345.5)
Acquired technology  8.0   (2.8)  7.1   (2.2)
Trademarks  30.2   (9.7)  27.4   (6.9)
Backlog  64.7   (64.7)  60.3   (60.3)
Other  47.6   (21.2)  36.4   (16.4)
Unamortized intangible assets:                
Trademarks  623.5   -   609.5   - 
Total other intangible assets $1,990.2  $(540.5) $1,901.2  $(431.3)
June 30, 2021December 31, 2020
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Amortized intangible assets
Customer lists and relationships$2,857.7 $(928.1)$1,929.6 $2,835.0 $(841.3)$1,993.7 
Technology293.9 (56.4)237.5 279.9 (38.1)241.8 
Tradenames41.5 (17.8)23.7 41.8 (15.6)26.2 
Other107.2 (71.7)35.5 102.8 (58.6)44.2 
Unamortized intangible assets
Tradenames1,499.2 — 1,499.2 1,491.3 — 1,491.3 
Total other intangible assets$4,799.5 $(1,074.0)$3,725.5 $4,750.8 $(953.6)$3,797.2 
AmortizationIntangible Asset Impairment Considerations
As of June 30, 2021, there were no indications that the carrying value of goodwill and other intangible assets for the three and nine month periods ended September 30, 2017 and 2016 was as follows:may not be recoverable.

  
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
 
  2017  2016  2017  2016 
             
Intangible asset amortization expense $29.5  $30.7  $87.6  $90.8 

Amortization of intangible assets is anticipated to be approximately $116.9 million annually in 2018 through 2022 based upon exchange rates as of September 30, 2017.

Note 6.7. Accrued Liabilities

Accrued liabilities as of SeptemberJune 30, 20172021 and December 31, 20162020 consisted of the following:following.

  
September 30,
2017
  
December 31,
2016
 
       
Salaries, wages and related fringe benefits $83.0  $56.5 
Restructuring  9.1   20.2 
Taxes  43.1   37.1 
Advance payments on sales contracts  55.5   43.0 
Product warranty  23.6   21.7 
Accrued interest  0.5   15.5 
Other  60.1   64.5 
Total accrued liabilities $274.9  $258.5 
15

June 30, 2021December 31, 2020
Salaries, wages and related fringe benefits$191.5 $197.0 
Contract liabilities189.2 164.6 
Product warranty42.0 41.1 
Operating lease liabilities40.2 47.1 
Restructuring14.7 17.5 
Taxes439.3 116.1 
Other136.7 125.5 
Total accrued liabilities$1,053.6 $708.9 
A reconciliation of the changes in the accrued product warranty liability for the three and ninesix month periods ended SeptemberJune 30, 20172021 and 20162020 are as follows:follows.

 
Three Months
Ended
September 30,
2017
  
Three Months
Ended
September 30,
2016
  
Nine Months
Ended
September 30,
2017
  
Nine Months
Ended
September 30,
2016
 For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
            2021202020212020
Balance at beginning of period $21.7  $24.2  $21.7  $27.6 Balance at beginning of period$40.4 $37.6 $41.1 $19.1 
Product warranty accruals  6.7   3.6   17.8   12.2 Product warranty accruals5.4 3.0 9.8 7.6 
Acquired warrantyAcquired warranty0.1 19.8 
Settlements  (5.0)  (5.5)  (17.1)  (17.2)Settlements(4.1)(2.5)(8.9)(7.9)
Charged to other accounts (1)
  0.2   (0.5)  1.2   (0.8)
Charged to other accounts(1)
0.3 0.6 (0.1)0.1 
Balance at end of period $23.6  $21.8  $23.6  $21.8 Balance at end of period$42.0 $38.7 $42.0 $38.7 
(1)Includes primarily the effects of foreign currency translation adjustments for the Company’s subsidiaries with functional currencies other than the USD, and changes in the accrual related to acquisitions.
(1)Primarily the effects of foreign currency translation adjustments

20

Table of Content
Note 7. Pension and Other Postretirement Benefits8. Benefit Plans

Net Periodic Benefit Cost
The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and ninesix month periods ended SeptemberJune 30, 20172021 and 2016:2020.

Pension BenefitsOther Postretirement Benefits
U.S. PlansNon-U.S. Plans
For the Three Month Period Ended June 30,
202120202021202020212020
Service cost$1.7 $1.7 $1.1 $1.2 $$
Interest cost2.8 2.8 1.1 1.5 0.1 0.2 
Expected return on plan assets(3.1)(3.9)(3.0)(2.7)
Recognition of:
Unrecognized prior service cost0.1 0.1 (0.1)
Unrecognized net actuarial loss1.2 0.7 
$1.4 $0.6 $0.5 $0.8 $$0.2 
 Pension Benefits  Other Postretirement Pension BenefitsOther Postretirement Benefits
U.S. Plans  Non-U.S. Plans  Benefits U.S. PlansNon-U.S. Plans
 
Three Months
Ended
September 30,
2017
  
Nine Months
Ended
September 30,
2017
  
Three Months
Ended
September 30,
2017
  
Nine Months
Ended
September 30,
2017
  
Three Months
Ended
September 30,
2017
  
Nine Months
Ended
September 30,
2017
 For the Six Month Period Ended June 30,
                  202120202021202020212020
Service cost -  $-  $0.5  $1.4  $-  $- Service cost$3.4 $2.3 $2.2 $1.9 $$
Interest cost  0.6   1.7   2.0   5.8   -   0.1 Interest cost5.5 4.0 2.3 3.0 0.3 0.3 
Expected return on plan assets  (1.1)  (3.3)  (2.7)  (7.7)  -   - Expected return on plan assets(6.2)(5.5)(6.1)(5.4)
Recognition of:                        Recognition of:
Unrecognized prior service cost  -   -   -   -   -   - Unrecognized prior service cost0.1 0.1 (0.2)
Unrecognized net actuarial loss  -   -   1.3   3.7   -   - Unrecognized net actuarial loss2.5 1.4 
 $(0.5) $(1.6) $1.1  $3.2  $-  $0.1 $2.7 $0.8 $1.0 $1.0 $0.1 $0.3 
    Pension Benefits  Other Postretirement 
     U.S. Plans  Non-U.S. Plans  Benefits 
Three Months
Ended
September 30,
2016
  
Nine Months
Ended
September 30,
2016
  
Three Months
Ended
September 30,
2016
  
Nine Months
Ended
September 30,
2016
  
Three Months
Ended
September 30,
2016
  
Nine Months
Ended
September 30,
2016
 
                   
Service cost $-  $-  $0.4  $1.3  $-  $- 
Interest cost  0.6   2.0   2.3   7.3   -   0.1 
Expected return on plan assets  (1.1)  (3.4)  (2.8)  (9.0)  -   - 
Recognition of:                        
Unrecognized prior service cost  -   -   -   -   -   - 
Unrecognized net actuarial loss   -   -   0.7   2.3   -   - 
  $(0.5) $(1.4) $0.6  $1.9  $-  $0.1 
The components of net periodic benefit cost other than the service cost component are included in “Other income, net” in the Condensed Consolidated Statements of Operations.
16
21

Index

Note 8.9. Debt

The Company’s debt at SeptemberDebt as of June 30, 20172021 and December 31, 20162020 is summarized as follows:follows.

  
September 30,
2017
  
December 31,
2016
 
       
Short-term borrowings $-  $- 
Long-term debt:        
Revolving credit facility, due 2020 $-  $- 
Receivables financing agreement, due 2020  -   - 
Term loan denominated in U.S. dollars, due 2020 (1) (3)
  -   1,833.2 
Term loan denominated in Euros, due 2020 (2) (4)
  -   405.5 
Term loan denominated in U.S. dollars, due 2024 (5)
  1,285.5   - 
Term loan denominated in Euros, due 2024 (6)
  726.4   - 
Senior notes, due 2021 (7)
  -   575.0 
Second mortgages (8)
  1.9   1.9 
Capitalized leases and other long-term debt  19.3   21.6 
Unamortized debt issuance costs  (5.1)  (58.9)
Total long-term debt, net, including current maturities  2,028.0   2,778.3 
Current maturities of long-term debt  21.1   24.5 
Total long-term debt, net $2,006.9  $2,753.8 
June 30, 2021December 31, 2020
Short-term borrowings$$
Long-term debt:
Revolving credit facility, due 2025$$
Dollar Term Loan B, due 2027(1)
1,874.3 1,883.7 
Dollar Term Loan, due 2027(2)
915.1 919.6 
Euro Term Loan, due 2027(3)
703.2 728.0 
Dollar Term Loan Series A, due 2027(4)
390.9 392.4 
Finance leases and other long-term debt17.9 17.2 
Unamortized debt issuance costs(37.4)(41.4)
Total long-term debt, net, including current maturities3,864.0 3,899.5 
Current maturities of long-term debt40.7 40.4 
Total long-term debt, net$3,823.3 $3,859.1 
(1)This amount is shown net of unamortized discounts of $5.0 million as of December 31, 2016.
(1)As of June 30, 2021, this amount is presented net of unamortized discounts of $1.9 million. As of June 30, 2021, the applicable interest rate was approximately 1.84% and the weighted-average interest rate was 1.86% for the six month period ended June 30, 2021.

(2)As of June 30, 2021, this amount is presented net of unamortized discounts of $0.9 million. As of June 30, 2021, the applicable interest rate was approximately 1.84% and the weighted average interest rate was 1.86% for the six month period ended June 30, 2021.
(2)This amount is shown net of unamortized discounts of $1.4 million as of December 31, 2016.
(3)As of June 30, 2021, this amount is presented net of unamortized discounts of $0.7 million. As of June 30, 2021, the applicable interest rate was 2.00% and the weighted average interest rate was 2.00% for the six month period ended June 30, 2021.

(3)The weighted-average interest rate was 4.56% for the period from January 1, 2017 through August 17, 2017.

(4)The weighted-average interest rate was 4.75% for the period from January 1, 2017 through August 17, 2017.

(5)At September 30, 2017, the applicable interest rate was 4.08% and the weighted-average rate was 4.01% for the period from August 17, 2017 through September 30, 2017.

(6)At September 30, 2017, the applicable interest rate was 3.00% and the weighted-average rate was 3.00% for the period from August 17, 2017 through September 30, 2017.

(7)This amount consists of the $575.0 million aggregate principal 6.875% senior notes due 2021 that were entered into in connection with the KKR transaction on July 30, 2013.  Interest on the Senior Notes is payable on February 15 and August 15 of each year.  The senior notes were redeemed in May 2017.

(8)This amount consists of a fixed-rate 4.80% commercial loan with an outstanding balance of €1.6 million at September 30, 2017.  This loan is secured by the Company’s facility in Bad Neustadt, Germany.
17

(4)As of June 30, 2021, this amount is presented net of unamortized discounts of $5.1 million. As of June 30, 2021, the applicable interest rate was approximately 2.84% and the weighted average interest rate was 2.86% for the six month period ended June 30, 2021.
Senior Secured Credit Facilities

Overview

In connection with the transaction in which the Company was acquired by an affiliate of Kohlberg Kravis Roberts & Co. L.P. on July 30, 2013 (the “KKR transaction”), the Company entered into a senior secured credit agreement with UBS AG, Stamford Branch, as administrative agent, and other agents and lenders party thereto (the “Senior Secured Credit Facilities”) on July 30, 2013.

The Senior Secured Credit Facilities entered into on July 30, 2013 provided senior secured financing in the equivalentconsisting of approximately $2,825.0 million, consisting of: (i) a senior secured term loan facility (thedenominated in U.S. dollars (as refinanced and otherwise modified from time to time prior to February 28, 2020, the “Original Dollar Term Loan Facility”Loan”) in an aggregate principal amount of $1,900.0 million;, (ii) a senior secured term loan facility (thedenominated in Euros (as refinanced and otherwise modified from time to time prior to February 28, 2020, the “Original Euro Term Loan Facility,” together with the Dollar Term Loan Facility, the “Term Loan Facilities”Loan”) in an aggregate principal amount of €400.0 million; and (iii) a senior secured revolving credit facility (the(as refinanced and otherwise modified from time to time the “Revolving Credit Facility”) in an aggregate principal amount of $400.0 million. The Revolving Credit Facility is available to be drawn in U.S. dollars (“USD”), Euros (“EUR”), Great British Pounds (“GBP”) and other reasonably acceptableaccepted foreign currencies, subject to certain sublimits for the foreign currencies.

The Company entered into Amendment No. 1See Note 10 “Debt” to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2020 for further information on the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and the lenders and other parties thereto on March 4, 2016 (“Amendment No.1”) and Amendment No. 2 to the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and other agents, lenders and parties thereto on August 17, 2017 (“Amendment No. 2”).Facilities.

Amendment No. 1 reducedAs of June 30, 2021, the aggregate principal borrowing capacityamount of commitments under the Revolving Credit Facility by $40.0was $1,100.0 million to $360.0 million, extendedand the term ofcapacity under the Revolving Credit Facility to Aprilissue letters of credit was $400.0 million. As of June 30, 2020 with respect to consenting lenders and provided for customary bail-in provisions to address certain European regulatory requirements.

Amendment No. 2 refinanced2021, the Original Dollar Term Loan Facility with a replacement $1,285.5 million senior secured U.S. dollar term loan facility (the ‘‘Dollar Term Loan Facility’’) and the Original Euro Term Loan Facility with a replacement €615.0 million senior secured euro term loan facility (the ‘‘Euro Term Loan Facility’’).  Further the maturity for both term loan facilities was extended to July 30, 2024 and LIBOR Floor was reduced from 1.0% to 0.0%.  The refinance of the Original Dollar Term Loan Facility and Euro Term Loan Facility resulted in the write-offs of unamortized debt issuance costs of $29.4 million and original issue discounts of $4.7 million which were recorded to the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.

On July 30, 2018,Company had 0 outstanding borrowings under the Revolving Credit Facility, principal amount will decrease to $269.9 million resulting from the maturity of the tranches of the Revolving Credit Facility which are owned by lenders which elected not to modify the original Revolving Credit Facility maturity date and any amounts then outstanding in excess of $269.9 million will be required to be paid.  Any principal amounts outstanding as of April 30, 2020 will be due at that time and required to be paid in full.

The borrower of the Dollar Term Loan Facility and the Euro Term Loan Facility is Gardner Denver, Inc.  Prior to the Company entering into Amendment No. 1, GD German Holdings II GmbH became an additional borrower and successor in interest to Gardner Denver Holdings GmbH & Co. KG. GD German Holdings II GmbH, GD First (UK) Limited and Gardner Denver, Inc. are the listed borrowers under the Revolving Credit Facility. The Revolving Credit Facility includes borrowing capacity available for letters of credit up to $200.0 million and for borrowings on same-day notice, referred to as swingline loans. At September 30, 2017, the Company had $8.0 million of outstanding letters of credit under the Revolving Credit Facility of $84.1 million and unused availability of $352.0 million.

The Senior Secured Credit Facilities provide that the Company will have the right at any time to request incremental term loans and/or revolving commitments in an aggregate principal amount of up to (i) if as of the last day of the most recently ended test period the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is equal to or less than 5.50 to 1.00, $250.0 million plus (ii) voluntary prepayments and voluntary commitment reductions of the Senior Secured Credit Facilities prior to the date of any such incurrence plus (iii) an additional amount if, after giving effect to the incurrence of such additional amount, the Company does not exceed a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio of 4.50 to 1.00. The lenders under the Senior Secured Credit Facilities are not under any obligation to provide any such incremental commitments or loans, and any such addition of, or increase in commitments or loans, will be subject to certain customary conditions.
18

To the extent that revolving credit loans and swingline loans plus non-cash collateralized letters of credit under the Revolving Credit Facility are outstandingof $1,015.9 million.
As of June 30, 2021, we were in an amount exceeding $300.0 million, pro forma compliance with a Consolidated Senior Secured Debt to Consolidated EBITDA Ratioall covenants of 7.00 to 1.00 is required for borrowings under the Revolving Credit Facility.

Interest Rate and Fees

Borrowings under the Dollar Term Loan Facility, the Euro Term Loan Facility and the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) the greater of LIBOR for the relevant interest period or 0.00% per annum, in each case adjusted for statutory reserve requirements, plus an applicable margin or (b) a base rate (the ‘‘Base Rate’’) equal to the highest of (1) the rate of interest publicly announced by the administrative agent as its prime rate in effect at its principal office in Stamford, Connecticut, (2) the federal funds effective rate plus 0.50% and (3) LIBOR for an interest period of one month, adjusted for statutory reserve requirements, plus 1.00%, in each case, plus an applicable margin. The applicable margin for (i) the Dollar Term Loan Facility is 2.75% for LIBOR loans and 1.75% for Base Rate loans, (ii) the Revolving Credit Facility is 3.25% for LIBOR loans and 2.25% for Base Rate loans and (iii) the Euro Term Loan is 3.00% for LIBOR loans.

The applicable margins under the Revolving Credit Facility may decrease based upon our achievement of certain Consolidated Senior Secured Debt to Consolidated EBITDA Ratios. In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee of 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The commitment fee rate will be reduced to 0.375% if our Consolidated Senior Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.0 to 1.0. The Company must also pay customary letter of credit fees.

Prepayments

The Senior Secured Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% of annual excess cash flow (as defined in the Senior Secured Credit Facilities) commencing with the fiscal year ended December 31, 2014 (which percentage will be reduced to 25% if the Company’s  Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and which prepayment will not be required if the Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.00 to 1.00); (ii) 100% of the net cash proceeds of non-ordinary course asset sales or other dispositions of property, subject to reinvestment rights; and (iii) 100% of the net cash proceeds of any incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The foregoing mandatory prepayments will be applied to the scheduled installments of principal of the Term Loan Facilities in direct order of maturity.

Subject to the following sentence, the Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time without premium or penalty, subject to certain customary conditions, including reimbursements of the lenders’ redeployment costs actually incurred in the case of a prepayment of LIBOR borrowings other than on the last day of the relevant interest period. Voluntary prepayments of the Dollar Term Loan Facility and/or the Euro Term Loan Facility prior to the date that is six months after the effective date of Amendment No. 2 in connection with any repricing transaction, the primary purpose of which is to decrease the effective yield of the Dollar Term Loan Facility or the Euro Term Loan Facility, as applicable, will require payment of a 1.00% prepayment premium.

Amortization and Final Maturity

The Dollar Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Dollar Term Loan Facility, with the balance being payable on July 30, 2024. The Euro Term Loan Facility includes repayments in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Euro Term Loan Facility, with the balance being payable on July 30, 2024.

Principal amounts outstanding under the Revolving Credit Facility are due and payable in full at maturity on July 30, 2018, in the case of portions held by non-consenting lenders, and April 30, 2020 with respect to all other borrowings thereunder.

Amendment No. 1 reduced the minimum aggregate principal amount for extension amendments to the facilities from $50.0 million to $35.0 million.
19

In May 2017, the Company used a portion of the proceeds from the initial public offering to repay $276.8 million principal amount of outstanding borrowings under the Original Dollar Term Loan Facility at par plus accrued and unpaid interest to the date of prepayment of $1.5 million.  The prepayment resulted in the write-off of unamortized debt issuance costs of $4.3 million and unamortized discounts of $0.7 million included in the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.

Guarantee and Security

All obligations of the borrowers under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company and all of its material, wholly-owned U.S. restricted subsidiaries, with customary exceptions including where providing such guarantees are not permitted by law, regulation or contract or would result in adverse tax consequences.

All obligations of the borrowers under the Senior Secured Credit Facilities, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by substantially all of the assets of the borrowers and each guarantor, including but not limited to: (i) a perfected pledge of the capital stock issued by the borrowers and each subsidiary guarantor and (ii) perfected security interests in substantially all other tangible and intangible assets of the borrowers and the guarantors (subject to certain exceptions and exclusions). The obligations of the non-U.S. borrowers are secured by certain assets in jurisdictions outside of the United States.

Certain Covenants and Events of Default

The Senior Secured Credit Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to: incur additional indebtedness and guarantee indebtedness; create or incur liens; engage in mergers or consolidations; sell, transfer or otherwise dispose of assets; create limitations on subsidiary distributions; pay dividends and distributions or repurchase its own capital stock; and make investments, loans or advances, prepayments of junior financings, or other restricted payments. In addition, certain restricted payments constituting dividends or distributions (subject to certain exceptions) are subject to pro forma compliance with a Consolidated Total Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) of 5.00 to 1.00. Investments in unrestricted subsidiaries are permitted up to an aggregate amount that does not exceed the greater of $100.0 million and 25% of Consolidated EBITDA.

The Revolving Credit Facility also requires the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio to not exceed 7.50 to 1.00 for each fiscal quarter when outstanding revolving credit loans and swingline loans plus non-cash collateralized letters of credit under the Revolving Credit Facility (excluding (i) letters of credit in an aggregate amount not to exceed $80.0 million existing on the date of the closing of the Senior Secured Credit Facilities and any extensions thereof, replacement letters of credit or letters of credit issued in lieu thereof, in each case, to the extent the face amount of such letters of credit is not increased above the face amount of the letter of credit being extended, replaced or substituted and (ii) other non-cash collateralized letters of credit in an aggregate amount not to exceed $25.0 million, provided that the aggregate amount of non-cash collateralized letters of credit outstanding excluded pursuant to this provision shall not exceed $50.0 million) exceed $120.0 million.

The Senior Secured Credit Facilities also contain certain customary affirmative covenants and events of default, including a change of control.

Receivables Financing Agreement

In May 2016, the Company entered into the Receivables Financing Agreement, providing for aggregated borrowing of up to $75.0 million governed by a borrowing base. The Receivables Financing Agreement provides for a lower cost alternative in the issuance of letters of credit with the remaining unused capacity providing additional liquidity.  On June 30, 2017, the Company signed the first amendment of the Receivables Financing Agreement which increased the aggregated borrowing capacity by $50.0 million to $125.0 million governed by a borrowing base and extended the term to June 30, 2020.  The Receivables Financing Agreement terminates on June 30, 2020, unless terminated earlier pursuant to its terms.  As of September 30, 2017, the Company had no outstanding borrowings under the Receivables Financing Agreement and $33.2 million of letters of credit outstanding. At September 30, 2017 there was $82.1 million of capacity available under the Receivables Financing Agreement.

Borrowings under the Receivables Financing Agreement accrue interest at a reserve-adjusted LIBOR or a base rate, plus 1.6%. Letters of credit accrue interest at 1.6%.  The Company may prepay borrowings or letters of credit or draw on the Receivables Financing Agreement upon one business day prior written notice and may terminate the Receivables Financing Agreement with 15 days’ prior written notice.
20

As part of the Receivables Financing Agreement, eligible accounts receivable of certain of our subsidiaries are sold to a wholly owned “bankruptcy remote” special purpose vehicle (“SPV”). The SPV pledges the receivables as security for loans and letters of credit. The SPV is included in our consolidated financial statements and therefore, the accounts receivable owned by it are included in our Condensed Consolidated Balance Sheets. However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent.

The Receivables Financing Agreement contains various customary representations and warranties and covenants, and default provisions which provide for the termination and acceleration of the commitments and loans under the agreement in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain insolvency events or failure to maintain the security interest in the trade receivables, a change in control and defaults under other material indebtedness.

Senior Notes

In connection with the KKR transaction, on July 30, 2013, the Company’s direct subsidiary, Gardner Denver, Inc., issued a $575.0 million aggregate principal amount of Senior Notes, which mature on August 15, 2021 pursuant to an indenture, dated as of July 30, 2013, among Renaissance Acquisition Corp. (which merged into Gardner Denver, Inc. in connection with the KKR transaction), the guarantors party thereto and Wells Fargo Bank, National Association, as trustee.

In May 2017, the Company used a portion of the proceeds from the initial public offering to redeem all $575.0 million aggregate principal amount of the Senior Notes at a price of 105.156% of the principal amount redeemed, equal to $604.6 million, plus accrued and unpaid interest to the date of redemption of $10.2 million.  The redemption of the Senior Notes resulted in the write-off of unamortized debt issuance costs of $15.8 million which was recorded to the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.  The premium paid on the Senior Notes, $29.7 million, is included in the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.

Note 9.10. Stock-Based Compensation

2013 Stock Incentive Plan

Plans
The Company adoptedhas outstanding stock-based compensation awards granted under the 2013 Stock Incentive Plan (“2013 Plan”) and the 2017 Omnibus Incentive Plan (“2017 Plan”) as described in Note 17, “Stock-Based Compensation Plans” to the consolidated financial statements in its annual report on October 14, 2013 as amended on April 27, 2015 under whichForm 10-K for the Company may grantyear ended December 31, 2020.
The Company’s stock-based compensation awards are typically granted in the first quarter of the year and primarily consist of stock options, restricted stock units and performance share units. Eligible employees were also granted restricted stock units, during the three months ended September 30, 2020, that vest ratably over two years, subject to employees, directorsthe passage of time and advisors.  The total numberthe
22

Table of shares availableContent
employee's continued employment during such period. In some instances, such as death, awards may vest concurrently with or following an employee's termination.
Stock-Based Compensation
Stock-based compensation expense for grantthe six month periods ended June 30, 2021 and 2020 are included in “Cost of sales” and “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations and are as follows.
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Stock-based compensation expense - continuing and discontinued operations$29.9 $12.7 $54.0 $16.2 
Stock-based compensation expense recognized in discontinued operations8.4 0.6 10.9 0.8 
Stock-based compensation expense recognized in continuing operations$21.5 $12.1 $43.1 $15.4 
Stock-Based Compensation - Continuing Operations
In the six month period ended June 30, 2021, the $43.1 million of stock-based compensation expense included expense for equity awards granted under the 2013 and 2017 Plan of $42.9 million and an increase in the liability for stock appreciation rights (“SAR”) of $0.2 million. Of the $42.9 million of expense for equity awards granted under the 2013 Plan and reserved for issuance is 20.92017 Plan, $28.9 million shares.  Allrelated to the $150 million equity grant to nearly 16,000 employees worldwide made in the third quarter of 2020 (“All-Employee Equity Grant”).
As of June 30, 2021, there was $132.4 million of total unrecognized compensation expense related to outstanding stock options, wererestricted stock unit awards and performance stock unit awards.
Stock-Based Compensation - Discontinued Operations
In the six month period ended June 30, 2021, the $10.9 million of stock-based compensation expense included expense for modifications of equity awards of $3.8 million and expense for equity awards granted under the 2013 and 2017 Plan of $7.1 million. The modifications allowed for the vesting of the first tranche of the All-Employee Equity Grant awarded to HPS and SVT employees despite their termination due to the divestitures. Of the $7.1 million of expense for equity awards granted under the 2013 Plan and 2017 Plan, $5.4 million related to the All-Employee Equity Grant.
Stock Option Awards
Stock options are granted to employees directors, and advisors with an exercise price equal to the fair value of the Company’s per share common stock.  Followingstock on the Company’s initial public offering, the Company may grant stock-based compensationdate of grant. Stock option awards pursuant to the 2017 Plan (defined below) and ceased granting new awards pursuant to the 2013 Plan.

Stock options awardstypically vest over eitherfour or five four, or three years with 50%and expire ten years from the date of each award vesting based on time and 50% of each award vesting based on the achievement of certain financial targets.

Prior to the Company’s initial public offering in May 2017, the Company had certain repurchase rights on stock acquired through the exercise of a stock option that created an implicit service period and created a condition in which an optionee may not receive the economic benefits of the option until the repurchase rights are eliminated. The repurchase rights creating the implicit service period are eliminated at the earlier of an initial public offering or change of control event.  Before the elimination of the repurchase rights, because an initial public offering or change of control were not probable of occurring, no compensation expense was recorded for equity awards.

The Company recognized a liability for compensation expense measured at intrinsic value when it was probable that an employee would receive benefits under the terms of the plan due to termination of employment.

Under the terms of the 2013 Plan, concurrent with the initial public offering, the Company no longer retains repurchase rights on stock acquired through the exercise of a stock option and the implicit service period was eliminated on outstanding stock options. For the three and nine months ended September 30, 2017, the Company recognized stock-based compensation expense of approximately $7.8 million and $69.2 million, respectively, related to time-based and performance-based stock options included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations. Certain stock awards are expected to be settled in cash (stock appreciation rights “SAR”) and are accounted for as liability awards. At September 30, 2017, a liability of approximately $13.1 million for SARs is included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.
21

As of September 30, 2017 there was $12.9 million of total unrecognized compensation expense related to outstanding stock options.
grant.
A summary of the Company’s stock-based award planstock option (including SARs) activity including stock options and SARs, for the ninesix month period ended SeptemberJune 30, 20172021 is presented in the following table (underlying shares in thousands):.
SharesWeighted-Average Exercise Price (per share)
Stock options outstanding as of December 31, 20207,742 $18.47 
Granted758 45.58 
Exercised or settled(800)16.83 
Forfeited(209)30.57 
Expired(5)9.07 
Stock options outstanding as of June 30, 20217,486 21.06 
Vested as of June 30, 20215,041 15.69 
  
Shares
  
Weighted-Average
Exercise Price
(per share)
 
Outstanding at December 31, 2016  13,285  $8.85 
Granted  799  $20.00 
Settled  (92) $8.17 
Forfeited  (938) $8.21 
Outstanding at September 30, 2017  13,054  $9.52 
         
Vested at September 30, 2017  6,676  $8.73 
23

Table of Content
The following assumptions were used to estimate the fair value of options granted during the ninesix month periodperiods ended SeptemberJune 30, 20172021 and 2020 using the Black-Scholes option-pricing model.

Nine Months
Ended
September 30,
2017
Assumptions:
Expected life of options (in years)5.00 - 6.25
Risk-free interest rate1.94 - 2.12%
Assumed volatility41.2 - 45.8%
Expected dividend rate0.00%
For the Six Month Period Ended June 30,
Assumptions20212020
Expected life of options (in years)6.36.3
Risk-free interest rate0.9% - 1.1%0.4% - 1.5%
Assumed volatility39.1% - 39.4%24.6% - 41.1%
Expected dividend rate0.0 %0.0 %
Concurrent withRestricted Stock Unit Awards
Restricted stock units are granted to employees and non-employee directors based on the market price of the Company’s initial public offeringcommon stock on the grant date and recognized in Maycompensation expense over the vesting period. A summary of 2017, the Company’s Board authorizedrestricted stock unit activity for the grantsix month period ended June 30, 2021 is presented in the following table (underlying shares in thousands).
SharesWeighted-Average Grant-Date Fair Value
Non-vested as of December 31, 20205,546 $33.09 
Granted326 45.58 
Vested(711)30.30 
Forfeited(532)34.15 
Non-vested as of June 30, 20214,629 34.28 
Performance Share Unit Awards
Performance share units are granted to employees and are subject to a three years performance period. The number of 5.5 million deferred stock units (“DSU”) to all permanent employees that had not previously received stock-based awards undershares issued at the 2013 Plan. The DSUs vested immediately upon grant, however contain restrictions such that the employee may not sell or otherwise realize the economic benefitsend of the award until certain dates through April 2019. Atperformance period is determined by the date ofCompany’s total shareholder return percentile rank versus the S&P 500 index for the three year performance period. The grant thedate fair value of these awards is determined using a DSU was determined to be $17.20 assumingMonte Carlo simulation pricing model and compensation cost is recognized straight-line overshare price at the pricing datethree year period.
A summary of the initial public offering of $20.00 and a discount for lack of marketability commensurate with the period of the sale restrictions.  Certain DSU awards are expected to be settled in cash and carried at fair value on the balance sheet date.  In the three and nine month periods ended September 30, 2017, the Company recognized expenseCompany’s performance stock unit activity for the DSU awards of $2.0 million and $96.8 million, respectively, included in “Other operating expense, net”six month period ended June 30, 2021 is presented in the Condensed Consolidated Statementsfollowing table (underlying shares in thousands).
SharesWeighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2020255 $29.72 
Granted158 55.84 
Forfeited(20)36.36 
Non-vested as of June 30, 2021393 39.89 
24

Table of Operations. A liability of $5.4 million is included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets as of September 30, 2017.Content

The following assumptions were used to estimate the fair value of DSUs atperformance share units granted during the time of grantsix month periods ended June 30, 2021 and 2020 using the Finnerty discount for lack of marketabilityMonte Carlo simulation pricing model:model.
Nine Months
For the Six Month Period Ended June 30,
Assumptions20212020
Expected term (in years)2.92.8
Risk-free interest rate0.2 %0.5 %
Assumed volatility36.9 %35.2 %
Expected dividend rate%%
Ended
September 30,
2017
Assumptions:
Average length of holding period restrictions (years)1.42
Assumed volatility5.15%

2017 Omnibus Incentive Plan

In May 2017, the Company’s Board approved the 2017 Omnibus Incentive Plan (“2017 Plan”). Under the terms of the Plan, the Company’s Board may grant up to 8.6 million stock based and other incentive awards. Any shares of common stock subject to outstanding awards granted under our 2013 Stock Incentive Plan that, after the effective date of the 2017 Plan, expire or are otherwise forfeited or terminated in accordance with their terms are also available for grant under the 2017 Plan.  As of September 30, 2017, no awards have been granted from the 2017 Plan.
22

Note 10.11. Accumulated Other Comprehensive Income (Loss) Income

The Company’s other comprehensive income (loss) consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations; (ii) realized and unrealized foreign currency gains and losses on intercompany notes of a long-term nature and certain hedges of net investments in foreign operations, net of income taxes; (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swaps), net of income taxes; and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes. See Note 8 “Benefit Plans” and Note 12 “Hedging Activities, Derivative Instruments and Fair Value Measurements.”
The before tax income (loss), and related income tax effect and accumulated balances are as follows:follows.

For the Three Month Period Ended June 30, 2021For the Three Month Period Ended June 30, 2020
Before-Tax AmountTax Benefit or (Expense)Net of Tax AmountBefore-Tax AmountTax Benefit or (Expense)Net of Tax Amount
Foreign currency translation adjustments, net$51.0 $(1.9)$49.1 $41.9 $3.0 $44.9 
Unrecognized gains on cash flow hedges, net7.3 (1.8)5.5 
Pension and other postretirement benefit prior service cost and gain or loss, net1.5 (0.2)1.3 0.4 0.1 0.5 
Other comprehensive income (loss)$52.5 $(2.1)$50.4 $49.6 $1.3 $50.9 
  
For the Three Months Ended
September 30, 2017
  
For the Nine Months Ended
September 30, 2017
 
  
Before-Tax
Amount
  
Tax
Benefit
or (Expense)
  
Net of Tax
Amount
  
Before-Tax
Amount
  
Tax
Benefit
or (Expense)
  
Net of Tax
Amount
 
                  
Foreign currency translation adjustments, net $41.5  $-  $41.5  $131.4  $-  $131.4 
Foreign currency (losses) gains, net  (23.5)  8.7   (14.8)  (71.2)  26.9   (44.3)
Unrecognized (losses) gains on cash flow hedges, net  5.5   (1.5)  4.0   8.9   (3.4)  5.5 
Pension and other postretirement benefit prior service cost and gain or loss, net  (1.1)  0.5   (0.6)  (3.4)  1.5   (1.9)
Other comprehensive income $22.4  $7.7  $30.1  $65.7  $25.0  $90.7 

For the Six Month Period Ended June 30, 2021For the Six Month Period Ended June 30, 2020
Before-Tax AmountTax Benefit or (Expense)Net of Tax AmountBefore-Tax AmountTax Benefit or (Expense)Net of Tax Amount
Foreign currency translation adjustments, net$(56.2)$5.5 $(50.7)$(47.7)$0.4 $(47.3)
Unrecognized gains on cash flow hedges, net8.8 (2.1)6.7 
Pension and other postretirement benefit prior service cost and gain or loss, net3.0 (0.5)2.5 3.9 (0.5)3.4 
Other comprehensive income (loss)$(53.2)$5.0 $(48.2)$(35.0)$(2.2)$(37.2)
  
For the Three Months Ended
September 30, 2016
  
For the Nine Months Ended
September 30, 2016
 
  
Before-Tax
Amount
  
Tax
(Expense)
or Benefit
  
Net of Tax
Amount
  
Before-Tax
Amount
  
Tax
(Expense)
or Benefit
  
Net of Tax
Amount
 
   
                  
Foreign currency translation adjustments, net $(29.4) $-   (29.4) $12.8  $-  $12.8 
Foreign currency gains (losses), net  11.2   (3.1)  8.1   (18.2)  7.4   (10.8)
Unrecognized gains (losses) on cash flow hedges, net  (4.5)  1.7   (2.8)  (21.7)  8.2   (13.5)
Pension and other postretirement benefit prior service cost and gain or loss, net  6.2   (1.0)  5.2   7.5   (1.2)  6.3 
Other comprehensive income (loss) $(16.5) $(2.4) $(18.9) $(19.6) $14.4  $(5.2)
The tables above include only the other comprehensive income (loss), net of tax, attributable to Ingersoll Rand Inc. Other comprehensive loss, net, attributable to noncontrolling interest holders was $1.2 million and $0.4 million for the three month periods ended June 30, 2021 and 2020, respectively, and $2.3 million and $4.4 million for the six month periods ended June 30, 2021 and 2020, respectively, and related entirely to foreign currency translation adjustments.
23


Table of Content
Changes in accumulated other comprehensive income (loss) income by component for the ninesix month periods ended SeptemberJune 30, 20172021 and 20162020 are presented in the following tables table(1):.

  
Cumulative
Currency
Translation
Adjustment
  
Foreign
Currency
Gains and
(Losses)
  
Unrealized
(Losses) Gains
on Cash Flow
Hedges
  
Pension and
Postretirement
Benefit Plans
  Total 
                
Balance at December 31, 2016 $(324.2) $88.6  $(42.2) $(64.6) $(342.4)
Other comprehensive income (loss) before reclassifications  131.4   (44.3)  (3.1)  (4.2)  79.8 
Amounts reclassified from accumulated other comprehensive (loss) income  -   -   8.6   2.3   10.9 
Net current-period other comprehensive income (loss)  131.4   (44.3)  5.5   (1.9)  90.7 
Balance at September 30, 2017 $(192.8) $44.3  $(36.7) $(66.5) $(251.7)

  
Cumulative
Currency
Translation
Adjustment
  
Foreign
Currency
Gains and
(Losses)
  
Unrealized
(Losses) Gains
on Cash Flow
Hedges
  
Pension and
Postretirement
Benefit Plans
  Total 
                
Balance at December 31, 2015 $(248.0) $75.0  $(41.3) $(51.3) $(265.6)
Other comprehensive income (loss) before reclassifications  12.8   (10.8)  (18.5)  4.8   (11.7)
Amounts reclassified from accumulated other comprehensive (loss) income  -   -   5.0   1.5   6.5 
Net current-period other comprehensive income (loss)  12.8   (10.8)  (13.5)  6.3   (5.2)
Balance at September 30, 2016 $(235.2) $64.2  $(54.8) $(45.0) $(270.8)

Foreign Currency Translation Adjustments, NetUnrecognized Gains (Losses) on Cash Flow HedgesPension and Other Postretirement Benefit PlansTotal
Balance as of December 31, 2020$74.6 $$(60.4)$14.2 
Other comprehensive income (loss) before reclassifications(50.7)0.6 (50.1)
Amounts reclassified from accumulated other comprehensive income (loss)1.9 1.9 
Other comprehensive income (loss)(50.7)2.5 (48.2)
Divestiture of foreign subsidiaries(1.5)(1.5)
Balance as of June 30, 2021$22.4 $$(57.9)$(35.5)
(1)All amounts are net of tax.  Amounts in parentheses indicate debits.
Foreign Currency Translation Adjustments, NetUnrecognized Gains (Losses) on Cash Flow HedgesPension and Other Postretirement Benefit PlansTotal
Balance as of December 31, 2019$(193.6)$(10.9)$(51.5)$(256.0)
Other comprehensive income (loss) before reclassifications(47.3)(3.2)2.3 (48.2)
Amounts reclassified from accumulated other comprehensive income (loss)9.9 1.1 11.0 
Other comprehensive income (loss)(47.3)6.7 3.4 (37.2)
Balance as of June 30, 2020$(240.9)$(4.2)$(48.1)$(293.2)
24


(1)All amounts are net of tax. Amounts in parentheses indicate debits.
Reclassifications out of accumulated other comprehensive income (loss) income for the ninesix month periods ended SeptemberJune 30, 20172021 and 20162020 are presented in the following table:table.

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income 
Details about Accumulated
Other Comprehensive
(Loss) Income Components
 
For the
Nine Months
Ended
September 30,
2017
  
For the
Nine Months
Ended
September 30,
2016
  
Affected Line in the
Statement Where Net
Income is Presented
 
Loss on cash flow hedges         
Interest rate swaps $13.9  $8.1  Interest expense 
   13.9   8.1  Total before tax 
   (5.3)  (3.1) Provision (benefit) for income taxes 
  $8.6  $5.0  Net of tax 
Amortization of defined benefit pension and other postretirement benefit items $3.7  $2.4  
(1) 
   3.7   2.4  Total before tax 
   (1.4)  (0.9) Provision (benefit) for income taxes 
  $2.3  $1.5  Net of tax 
Total reclassifications for the period $10.9  $6.5  Net of tax 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Details about Accumulated Other Comprehensive Income (Loss) ComponentsFor the Six Month Period Ended June 30, 2021Affected Line(s) in the Statement Where Net Income is Presented
20212020
Loss on cash flow hedges (interest rate swaps)$$13.2 Interest expense
Benefit for income taxes(3.3)Benefit for income taxes
Loss on cash flow hedges (interest rate swaps), net of tax$$9.9 
Amortization of defined benefit pension and other postretirement benefit items(1)
$2.6 $1.5 Cost of sales and Selling and administrative expenses
Benefit for income taxes(0.7)(0.4)Benefit for income taxes
Amortization of defined benefit pension and other postretirement benefit items, net of tax$1.9 $1.1 
Total reclassifications for the period, net of tax$1.9 $11.0 
(1)These components are included in the computation of net periodic benefit cost.  See Note 7 “Pension and Other Postretirement Benefits” for additional details.
(1)These components are included in the computation of net periodic benefit cost. See Note 8 “Benefit Plans” for additional details.

26

Table of Content
Note 11.12. Hedging Activities, Derivative Instruments and Fair Value Measurements

Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates and foreign currency exchange rates. The Company selectively uses derivative financial instruments (“derivatives”), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively. The Company does not purchase or hold derivatives for trading or speculative purposes. Fluctuations in interest rates and foreign currency exchange rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

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

A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the United States in currencies other than the USD. Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Other than the USD, the EUR, GBP, Chinese Renminbi and Chinese YuanIndian rupee are the principal currencies in which the Company and its subsidiaries enter into transactions. The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities and earnings into USD. The Company has certain U.S. subsidiaries borrow in currencies other than the USD.

The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly.at least quarterly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.
25

Derivative Instruments

The following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets at Septemberas of June 30, 20172021 and December 31, 2016:2020.

June 30, 2021June 30, 2021
Derivative ClassificationDerivative Classification
Notional Amount(1)
Fair Value(1) Other Current Assets
Fair Value(1) Other Assets
Fair Value(1) Accrued Liabilities
Fair Value(1) Other Liabilities
 September 30, 2017 
 
Derivative
Classification
 
Notional
Amount (1)
  
Fair Value (1)
Other Current
Assets
  
Fair Value (1)
Other Assets
  
Fair Value (1)
Accrued
Liabilities
  
Fair Value (1)
Other
Liabilities
 
Derivatives Designated as Hedging Instruments                 
Interest rate swap contracts Cash Flow $1,125.0  $-  $-  $8.0  $49.7 
Derivatives Not Designated as Hedging Instruments                      
Foreign currency forwards Fair Value $97.4  $0.8  $-  $-  $- 
     
 December 31, 2016 
 
Derivative
Classification
 
Notional
Amount (1)
  
Fair Value (1)
Other Current
Assets
  
Fair Value (1)
Other Assets
  
Fair Value (1)
Accrued
Liabilities
  
Fair Value (1)
Other
Liabilities
 
Derivatives Designated as Hedging Instruments                      
Cross currency interest rate swap contracts Net Investment $200.0  $-  $26.8  $-  $- 
Interest rate swap contracts Cash Flow $1,125.0  $-  $-  $16.3  $47.2 
Derivatives Not Designated as Hedging Instruments                      Derivatives Not Designated as Hedging Instruments
Foreign currency forwards Fair Value $79.0  $0.9  $-  $-  $- Foreign currency forwardsFair Value$78.3 $0.4 $$$
Foreign currency forwards Fair Value $42.8  $-  $-  $0.2  $- Foreign currency forwardsFair Value100.6 0.8 
(1)Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions.  The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.
December 31, 2020
Derivative Classification
Notional Amount(1)
Fair Value(1) Other Current Assets
Fair Value(1) Other Assets
Fair Value(1) Accrued Liabilities
Fair Value(1) Other Liabilities
Derivatives Not Designated as Hedging Instruments
Foreign currency forwardsFair Value$230.5 $2.9 $$$
Foreign currency forwardsFair Value51.2 0.7 

(1)Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.
Gains and losses
27

Table of Content
Losses on derivatives designated as cash flow hedges included in the Condensed Consolidated Statements of Comprehensive Income (Loss) Income for the three and ninesix month periods ended SeptemberJune 30, 20172021 and 2016,2020 are as presented in the table below:below.

  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
Interest rate swap contracts (1)
            
Gain (loss) recognized in AOCI on derivatives (effective portion) $1.4  $0.3  $(4.9) $(29.8)
Loss reclassified from AOCI into income (effective portion)  (4.1)  (1.7)  (13.9)  (8.1)
(Loss) gain recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)  (2.1)  (0.6)  (2.1)  0.2 
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Interest rate swap contracts
Loss recognized in AOCI on derivatives$$(0.6)$$(4.3)
Loss reclassified from AOCI into income (effective portion)(1)
(7.9)(13.2)
(1)Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income (effective portion) were included in “Interest expense” in the Condensed Consolidated Statements of Operations.  Ineffective portions of changes in the fair value of cash flow hedges were recognized in earnings and included in “Interest expense” in the Condensed Consolidated Statements of Operations.
(1)Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income were included within “Interest expense” in the Condensed Consolidated Statements of Operations.
26

At SeptemberAs of June 30, 2017,2021, the Company is the fixedhas 0 interest rate payor on 15swap contracts. Our previous interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on a total of $1,125.0 million of the Company’s LIBOR-based variable rate borrowings.  These contracts carry fixed rates ranging from 2.9% to 4.4% and have expiration dates ranging from 2017 to 2020.  These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments.  Based on LIBOR-based swap yield curves as of September 30, 2017, the Company expects to reclassify losses of $19.6 million out of AOCI into earningsexpired during the next 12 months.third quarter of 2020 and the remaining amounts in AOCI were reclassified to Interest expense during the same period. The Company’s LIBOR-based variable rate borrowings outstanding at Septemberas of June 30, 20172021 were $1,285.5$3,188.2 million and €615.0€593.6 million.

The Company had four7 foreign currency forward contracts outstanding as of SeptemberJune 30, 20172021 with notional amounts ranging from $2.8$10.8 million to $45.8$48.4 million. These contracts are used to hedge the change in fair value of recognized foreign currency denominated assets or liabilities caused by changes in currency exchange rates. The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included in thewithin “Other operating expense, net” line on the face ofin the Condensed Consolidated Statements of Operations. The Company’s foreign currency forward contracts are subject to master netting arrangements or agreements between the Company and each counterparty for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract with that certain counterparty. It is the Company’s practice to recognize the gross amounts in the Condensed Consolidated Balance Sheets. The amount available to be netted is not material.

The Company’s gains (losses) gains on derivative instruments not designated as accounting hedges and total net foreign currency (losses) gainslosses for the three and ninesix month periods ended SeptemberJune 30, 20172021 and 20162020 were as follows:follows.

  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
Foreign currency forward contracts (losses) gains $(1.8) $1.8  $(6.7) $14.0 
Total net foreign currency (losses) gains  (1.7)  (0.5)  (6.3)  2.6 
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Foreign currency forward contracts gains (losses)$0.7 $0.5 $(0.1)$(2.1)
Total foreign currency transaction gains (losses), net(3.4)(4.9)14.7 (6.9)
The Company has a significant investment in consolidated subsidiaries with functional currencies other than the USD, particularly the EUR. The Company designated its Original Euro Term Loan of approximately €387.0 million as of December 31, 2016 as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies.  The Original Euro Term Loan remained designated as a net investment hedge during 2017 until it was extinguished and replaced on August 17, 2017 by the €615.0 million Euro Term Loan, further described in Note 8 “Debt.”  On August 17, 2017, the Company designated the €615.0its €615.0 million Original Euro Term Loan as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies.

In December 2014,currencies until it was extinguished and replaced on February 28, 2020 by a €601.2 million Euro Term Loan, further described in Note 9 “Debt”. As of June 30, 2021, the Company entered into two cross currency interest rate swaps each with a USD notional amountEuro Term Loan of $100€593.6 million to further hedge the risk of changes in the USD equivalent value of its net investment in EUR functional currency subsidiaries. The cross currency interest rate swaps were designated as hedges for the three and nine month periods ended September 30, 2016 and for the period from January 1, 2017 until August 16, 2017 when they were terminated for proceeds of $6.2 million.  The proceeds from the termination of the cross currency interest rate swaps are included in the “Proceeds from the termination of derivatives” line in the Condensed Consolidated Statements of Cash Flows.  The recorded AOCI at the termination of the cross currency interest rate swaps will remain in AOCI until there is a substantial liquidation of the Company’s net investment in subsidiaries with EUR functional currencies.

The losses and gains from the change in fair value related to the effective portions of the net investment hedges were recorded through other comprehensive income.
27

remained designated.
The Company’s gains and (losses), net of income tax, associated with changes in the value of debt and designated cross currency interest rate swaps for the three month and ninesix month periods ended SeptemberJune 30, 20172021 and 2016, and the2020 were as follows.
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Gain, net of income tax, recorded through other comprehensive income$(5.7)$(9.1)$13.2 $0.9 
The net balance of such gains and (losses) included in accumulated other comprehensive income for(loss) as of June 30, 2021 and 2020 was $43.9 million and $74.9 million, respectively.
For the same periods were as follows:

  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
(Loss) gain, net of income tax, recorded through other comprehensive income $(13.6) $(5.1) $(43.2) $(11.6)
Balance included in accumulated other comprehensive (loss) income at September 30, 2017 and 2016, respectively         $39.2  $58.1 
With the exception of the cash proceeds from the termination of the cross currency interest rate swap contracts described earlier,presented, all cash flows associated with derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows.

28

Table of Content
Fair Value Measurements

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

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

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

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

Level 3Level 3    Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table summarizestables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of SeptemberJune 30, 2017:2021 and December 31, 2020.

June 30, 2021
 Level 1  Level 2  Level 3  Total Level 1Level 2Level 3Total
Financial Assets            Financial Assets
Foreign currency forwards (1)
 $-  $0.8  $-  $0.8 
Foreign currency forwards(1)
$$0.4 $$0.4 
Trading securities held in deferred compensation plan (2)
  5.3   -   -   5.3 
Trading securities held in deferred compensation plan(2)
11.2 11.2 
Total $5.3  $0.8  $-  $6.1 Total$11.2 $0.4 $$11.6 
Financial Liabilities                Financial Liabilities
Interest rate swaps (3)
 $-  $57.7  $-  $57.7 
Deferred compensation plan (2)
  5.3   -   -   5.3 
Foreign currency forwards(1)
Foreign currency forwards(1)
$$0.8 $$0.8 
Deferred compensation plans(2)
Deferred compensation plans(2)
25.1 25.1 
Total $5.3  $57.7  $-  $63.0 Total$25.1 $0.8 $$25.9 
(1)Based on calculations that use readily observable market parameters as their basis, such as spot and forward rates.
December 31, 2020
Level 1Level 2Level 3Total
Financial Assets
Foreign currency forwards(1)
$$2.9 $$2.9 
Trading securities held in deferred compensation plan(2)
9.1 9.1 
Total$9.1 $2.9 $$12.0 
Financial Liabilities
Foreign currency forwards(1)
$$0.7 $$0.7 
Deferred compensation plan(2)
25.7 25.7 
Total$25.7 $0.7 $$26.4 
(1)Based on calculations that use readily observable market parameters at their basis, such as spot and forward rates.
(2)Based on the quoted price of publicly traded mutual funds and other equity securities which are classified as trading securities and accounted for using the mark-to-market method.
(2)Based on the quoted price of publicly traded mutual funds which are classified as trading securities and accounted for using the mark-to-market method.
29


(3)Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of September 30, 2017.  The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.
Table of Content
Goodwill and Other Intangible Assets
Certain of our non-financial assets are subject to impairment analysis, including indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually. Any resulting impairment would require that the asset be recorded at its fair value. At December 31, 2020, we did not have any significant non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis. Refer to Note 6 Goodwill and Other Intangible Assetsfor further discussion pertaining to our annual and interim evaluation of goodwill and other intangible assets for impairment.
Note 13. Revenue from Contracts with Customers
Overview
The Company recognizes revenue when the Company has satisfied its obligation and control is transferred to the customer. The amount of revenue recognized includes adjustments for any variable consideration, such as rebates, sales discounts, liquidated damages, etc., which are included in the transaction price, and allocated to each performance obligation. The variable consideration is estimated throughout the course of the contract using the Company’s best estimates.
The majority of the Company’s revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered.
The Company has certain long duration engineered to order (“ETO”) contracts that require highly engineered solutions designed to customer specific applications. For contracts where the contractual deliverables have no alternative use and the contract termination clauses provide for the recovery of cost plus a reasonable margin, revenue is recognized over time based on the Company’s progress in satisfying the contractual performance obligations, generally measured as the ratio of actual costs incurred to date to the estimated total costs to complete the contract. For contracts with termination provisions that do not provide for recovery of cost and a reasonable margin, revenue is recognized at a point in time, generally at shipment or delivery to the customer. Identification of performance obligations, determination of alternative use, assessment of contractual language regarding termination provisions, and estimation of total project costs are all significant judgments required in the application of ASC 606.
Contractual specifications and requirements may be modified. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. In the event a contract modification is for goods or services that are not distinct in the contract, and therefore, form part of a single performance obligation that is partially satisfied as of the modification date, the effect of the contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized on a cumulative catch-up basis.
Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Sales commissions are generally due at either collection of payment from customers or recognition of revenue. Applying the practical expedient from ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations.
28
30

Table of Content

Disaggregation of Revenue
The following tables provide disaggregated revenue by reportable segment for the three month periods ended June 30, 2021 and 2020.
For the Three Month Period Ended June 30, 2021
Industrial Technologies and ServicesPrecision and Science TechnologiesTotal
Primary Geographic Markets
United States$391.9 $103.1 $495.0 
Other Americas66.6 3.5 70.1 
Total Americas458.5 106.6 565.1 
EMEIA336.3 83.1 419.4 
Asia Pacific252.7 41.9 294.6 
Total$1,047.5 $231.6 $1,279.1 
Product Categories
Original equipment$623.7 $198.5 $822.2 
Aftermarket423.8 33.1 456.9 
Total$1,047.5 $231.6 $1,279.1 
Pattern of Revenue Recognition
Revenue recognized at point in time(1)
$959.9 $231.0 $1,190.9 
Revenue recognized over time(2)
87.6 0.6 88.2 
Total$1,047.5 $231.6 $1,279.1 
For the Three Month Period Ended June 30, 2020
Industrial Technologies and ServicesPrecision and Science TechnologiesTotal
Primary Geographic Markets
United States$289.8 $83.7 $373.5 
Other Americas70.5 9.9 80.4 
Total Americas360.3 93.6 453.9 
EMEIA247.1 63.7 310.8 
Asia Pacific222.2 38.5 260.7 
Total$829.6 $195.8 $1,025.4 
Product Categories
Original equipment$502.0 $169.1 $671.1 
Aftermarket327.6 26.7 354.3 
Total$829.6 $195.8 $1,025.4 
Pattern of Revenue Recognition
Revenue recognized at point in time(1)
$750.1 $195.8 $945.9 
Revenue recognized over time(2)
79.5 79.5 
Total$829.6 $195.8 $1,025.4 
(1)Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when product delivery has occurred and services have been rendered.
(2)Revenues primarily from long duration ETO product contracts and certain contracts for delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.
Index
31

Table of Content
The following tables provide disaggregated revenue by reportable segment for the six month periods ended June 30, 2021 and 2020.
For the Six Month Period Ended June 30, 2021
Industrial Technologies and ServicesPrecision and Science TechnologiesTotal
Primary Geographic Markets
United States$745.0 $201.2 $946.2 
Other Americas126.8 7.0 133.8 
Total Americas871.8 208.2 1,080.0 
EMEIA655.7 163.2 818.9 
Asia Pacific433.8 75.9 509.7 
Total$1,961.3 $447.3 $2,408.6 
Product Categories
Original equipment$1,152.4 $377.2 $1,529.6 
Aftermarket808.9 70.1 879.0 
Total$1,961.3 $447.3 $2,408.6 
Pattern of Revenue Recognition
Revenue recognized at point in time(1)
$1,807.8 $445.8 $2,253.6 
Revenue recognized over time(2)
153.5 1.5 155.0 
Total$1,961.3 $447.3 $2,408.6 
For the Six Month Period Ended June 30, 2020
Industrial Technologies and ServicesPrecision and Science TechnologiesTotal
Primary Geographic Markets
United States$466.9 $133.0 $599.9 
Other Americas115.8 14.8 130.6 
Total Americas582.7 147.8 730.5 
EMEIA447.7 104.6 552.3 
Asia Pacific303.2 56.2 359.4 
Total$1,333.6 $308.6 $1,642.2 
Product Categories
Original equipment$805.2 $268.1 $1,073.3 
Aftermarket528.4 40.5 568.9 
Total$1,333.6 $308.6 $1,642.2 
Pattern of Revenue Recognition
Revenue recognized at point in time(1)
$1,209.6 $308.6 $1,518.2 
Revenue recognized over time(2)
124.0 124.0 
Total$1,333.6 $308.6 $1,642.2 
(1)Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when product delivery has occurred and services have been rendered.
(2)Revenues primarily from long duration ETO product contracts and certain contracts for delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.
Performance Obligations
The majority of the Company’s contracts have a single performance obligation as the promise to transfer goods and/or services. For contracts with multiple performance obligations, the Company utilizes observable prices to determine standalone selling price
32

Table of Content
or cost plus margin if a standalone price is not available. The Company has elected to account for shipping and handling activities as fulfillment costs and not a separate performance obligation. If control transfers and related revenue is recognized for the related good before the shipping and handling activities occur, the related costs of those shipping and handling activities are accrued.
The Company’s primary performance obligations include delivering standard or configured to order (“CTO”) goods to customers, designing and manufacturing a broad range of equipment customized to a customer’s specifications in ETO arrangements, rendering of services (maintenance and repair contracts), and certain extended or service type warranties. For incidental items that are immaterial in the context of the contract, costs are expensed as incurred or accrued at delivery.
As of June 30, 2021, for contracts with an original duration greater than one year, the Company expects to recognize revenue in the future related to unsatisfied (or partially satisfied) performance obligations of $429.4 million in the next twelve months and $390.6 million in periods thereafter. The performance obligations that are unsatisfied (or partially satisfied) are primarily related to orders for goods or services that were placed prior to the end of the reporting period and have not been delivered to the customer, on-going work on ETO contracts where revenue is recognized over time and service contracts with an original duration greater than one year.
Contract Balances
The following table provides the contract balances as of June 30, 2021 and December 31, 2020 presented in the Condensed Consolidated Balance Sheets.
June 30, 2021December 31, 2020
Accounts receivable, net$935.8 $861.8 
Contract assets52.3 60.4 
Contract liabilities190.5 166.2 
Accounts receivable, net – Amounts due where the Company’s right to receive cash is unconditional. Customer receivables are recorded at face amount less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and records the appropriate provision.
The allowance for credit losses for the three and six month periods ended June 30, 2021 consisted of the following.
For the Three Month Period Ended June 30, 2021For the Six Month Period Ended June 30, 2021
Balance at beginning of the period$49.2 $50.9 
Provision charged to expense1.3 1.6 
Write-offs, net of recoveries(1.7)(2.7)
Foreign currency translation and other0.5 (0.5)
Balance at end of the period$49.3 $49.3 
Contract assets – The Company’s rights to consideration for the satisfaction of performance obligations subject to constraints apart from timing. Contract assets are transferred to receivables when the right to collect consideration becomes unconditional. Contract assets are presented net of progress billings and related advances from customers.
Contract liabilities – Advance payments received from customers for contracts for which revenue is not yet recognized. Contract liability balances are generally recognized in revenue within twelve months.
Contract assets and liabilities are reported in the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are presented net on a contract level, where required.
Payments from customers are generally due 30-60 days after invoicing. Invoicing for sales of standard products generally coincides with shipment or delivery of goods. Invoicing for CTO and ETO contracts typically follows a schedule for billing at contractual milestones. Payment milestones normally include down payments upon the contract signing, completion of product design, completion of customer’s preliminary inspection, shipment or delivery, completion of installation, and customer’s on-site
33

Table of Content
inspection. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets.
The Company has elected the practical expedient from ASC 606-10-32-18 and does not adjust the transaction price for the effects of a financing component if, at contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
Note 12.14. Income Taxes

The following table summarizes the Company’s provision (benefit) for income taxes and effective income tax provision rate for the three and ninesix month periods ended SeptemberJune 30, 20172021 and 2016:2020.
  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
             
Income (loss) before income taxes $32.4  $(22.1) $(166.3) $(60.3)
Provision (benefit) for income taxes $4.4  $(9.1) $(41.2) $(33.3)
Effective income tax rate  13.6%  41.3%  24.8%  55.2%

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Income (loss) before income taxes$151.5 $(73.5)$252.2 $(181.7)
Provision for income taxes$12.5 $78.4 $23.1 $11.5 
Effective income tax provision rate8.3 %(106.7 %)9.2 %(6.3 %)
ForThe decrease in the provision for income taxes and increase in the effective income tax provision rate for the three month period ended SeptemberJune 30, 20172021 when compared to the same three month period of 2016,2020 is primarily due to the benefits in 2021 associated with the final settlement on the merger transaction and a restructuring benefit recognized during the second quarter.
The increase in the provision for income taxes is primarily due to theand increase in the pre-tax income.  The decrease in the effective income tax provision rate is due tofor the decrease in the U.S. loss at a higher tax rate combined with an increase in foreign profits at a lower tax rate.

For the ninesix month period ended SeptemberJune 30, 20172021 when compared to the same ninesix month period of 2016, the decrease in the provision for income taxes is due to the increase of the pre-tax loss.  The significant increase in the loss in the U.S. was caused by one-time expenses associated with the Company’s initial public offering.  This included offering-related expenses, early termination fees related to the pay down of debt, and stock-based compensation expense.  The decrease in the effective income tax rate2020 is primarily due to these expenses being benefited at aan increase in the pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rate.rates. This rate increase was mitigated by a reduction of unrecognized tax reserves as a result of the lapse of the limitation on statutes, a benefit associated with the final settlement on the merger transaction, and a restructuring benefit recognized during the second quarter.

Note 13. Supplemental Information

15. Other Operating Expense, Net
The components of “Other operating expense, net” for the three month and ninesix month periods ended SeptemberJune 30, 20172021 and 2016 are2020 were as follows:follows.

 
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
 2017  2016  2017  2016 
             
Other Operating Expense, Net            
Foreign currency losses (gains), net $1.7  $0.5  $6.3  $(2.6)
Restructuring charges, net (1)
  2.8   3.0   4.9   15.4 
Environmental remediation expenses (2)
  -   -   0.9   - 
Stock-based compensation expense (3)
  9.8   -   166.0   - 
Other, net  3.1   8.9   8.6   13.3 
Total other operating expense, net $17.4  $12.4  $186.7  $26.1 

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Other Operating Expense, Net
Foreign currency transaction losses (gains), net$3.4 $4.9 $(14.7)$6.9 
Restructuring charges, net(1)
6.8 29.4 9.2 67.4 
Acquisition and other transaction related expenses(2)
15.3 12.8 23.6 67.8 
Other, net(0.4)1.0 1.3 2.5 
Total other operating expense, net$25.1 $48.1 $19.4 $144.6 
(1)See Note 3 “Restructuring.”
(1)See Note 4 “Restructuring.”

(2)Represents costs associated with successful and/or abandoned acquisitions and divestitures, including third-party expenses and post-closure integration costs (including certain incentive and non-incentive cash compensation costs).
(2)Estimated environmental remediation costs recorded on an undiscounted basis for a former production facility.

(3)Represents stock-based compensation expense recognized for stock options outstanding for the three months and nine months ended September 30, 2017 of $7.8 million and $69.2 million, respectively, and DSUs granted to employees at the date of the initial public offering for the three months and nine months ended September 30, 2017 of $2.0 million and $96.8 million, respectively.  See Note 9 “Stock-Based Compensation”.
29

Note 14.16. Contingencies

The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. The Company believes that such proceedings, lawsuits and administrative actions will not materially adversely affect its operations, financial condition, liquidity or competitive position. A more detailed discussionFor further description of certainthe
34

Table of these proceedings, lawsuits and administrative actionsContent
Company’s contingencies, reference is set forth below.

made to Note 20, “Contingencies” in the notes to consolidated financial statements in the Company’s 2020 Form 10-K.
Asbestos and Silica Related Litigation

The Company has also been named as a defendant in a number of asbestos-related and silica-related personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources and typically the Company is one of approximately 25 or more named defendants.

Predecessors to the Company sometimes manufactured, distributed and/or sold products allegedly at issue in the pending asbestos and silica-related lawsuits (the “Products”). However, neither the Company nor its predecessors ever mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand, the materials that allegedly caused the injury underlying the lawsuits. Moreover, the asbestos-containing components of the Products, if any, were enclosed within the subject Products.

Although the Company has never mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand nor sold products that could result in a direct asbestos or silica exposure, many of the companies that did engage in such activities or produced such products are no longer in operation.  This has led to law firms seeking potential alternative companies to name in lawsuits where there has been an asbestos or silica related injury.

The Company believes that the pending and future asbestos and silica-related lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity, based on: the Company’s anticipated insurance and indemnification rights to address the risks of such matters; the limited potential asbestos exposure from the Products described above; the Company’s experience that the vast majority of plaintiffs are not impaired with a disease attributable to alleged exposure to asbestos or silica from or relating to the Products or for which the Company otherwise bears responsibility; various potential defenses available to the Company with respect to such matters; and the Company’s prior disposition of comparable matters. However, inherent uncertainties of litigation and future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in the Adams County Case (discussed below), or other inability to collect from the Company’s historical insurers or indemnitors, could cause a different outcome. While the outcome of legal proceedings is inherently uncertain, based on presently known facts, experience, and circumstances, the Company believes that the amounts accrued on its balance sheet are adequate and that the liabilities arising from the asbestos and silica-related personal injury lawsuits will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. “Accrued liabilities” and “Other liabilities” onof the Condensed Consolidated Balance SheetSheets include a total litigation reserve of $102.8$127.5 million and $108.5$131.4 million as of SeptemberJune 30, 20172021 and December 31, 20162020, respectively, with respectregards to potential liability arising from the Company’s asbestos-related litigation. Asbestos related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company’s consolidated financial position, results of operation or liquidity.

The Company has entered into a series of agreements with certain of its or its predecessors’ legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica-related lawsuits filed against the Company. The Company has also pursued litigation against certain insurers or indemnitors, where necessary.  The Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $97.3$132.1 million and $97.3$132.1 million as of SeptemberJune 30, 20172021 and December 31, 20162020, respectively, which was included in “Other assets” onin the Condensed Consolidated Balance Sheets.

The largest such recent action, Gardner Denver, Inc. v. Certain Underwriters at Lloyd’s, London, et al., was filed on July 9, 2010, in the Eighth Judicial Circuit, Adams County, Illinois, as case number 10-L-48 (the “Adams County Case”). In the lawsuit, the Company seeks, among other things, to require certain excess insurer defendants to honor their insurance policy obligations to the Company, including payment in whole or in part of the costs associated with the asbestos-related lawsuits filed against the Company. In October 2011, the Company reached a settlement with one of the insurer defendants, which had issued both primary and excess policies, for approximately the amount of such defendant’s policies which were subject to the lawsuit. Since then, the case has been proceeding through the discovery and motions process with the remaining insurer defendants.  On January 29, 2016, the Company prevailed on the first phase of that discovery and motions process (“Phase I”).  Specifically, the Court in the Adams County Case ruled that the Company has rights under all of the policies in the case, subject to their terms and conditions, even though the policies were sold to the Company’s former owners rather than to the Company itself.  On June 9, 2016, the Court denied a motion by several of the insurers who sought permission to appeal the Phase I ruling now rather than waiting until the end of the whole case as is normally required. The case is now proceeding through the discovery process regarding the remaining issues in dispute (“Phase II”).
30

A majority of the Company’s expected future recoveries of the costs associated with the asbestos-related lawsuits are the subject of the Adams County Case.

The amounts recorded by the Company for asbestos-related liabilities and insurance recoveries are based on currently available information and assumptions that the Company believes are reasonable based on an evaluation of relevant factors. The actual liabilities or insurance recoveries could be higher or lower than those recorded if actual results vary significantly from the assumptions.  There are a number of key variables and assumptions including the number and type of new claims to be filed each year, the resolution or outcome of these claims, the average cost of resolution of each new claim, the amount of insurance available, allocation methodologies, the contractual terms with each insurer with whom the Company has reached settlements, the resolution of coverage issues with other excess insurance carriers with whom the Company has not yet achieved settlements, and the solvency risk with respect to the Company’s insurance carriers.  Other factors that may affect the future liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, legal rulings that may be made by state and federal courts, and the passage of state or federal legislation.  The Company makes the necessary adjustments for the asbestos liability and corresponding insurance recoveries on an annual basis unless facts or circumstances warrant assessment as of an interim date.

Environmental Matters

The Company has been identified as a potentially responsible party (“PRP”) with respect to several sites designated for cleanup under U.S. federal “Superfund” or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. Persons potentially liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although these laws impose joint and several liability on PRPs, in application the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Based on currently available information, the Company was only a small contributor to these waste sites, and the Company has, or is attempting to negotiate, de minimis settlements for their cleanup. The cleanup of the remaining sites is substantially complete and the Company’s future obligations entail a share of the sites’ ongoing operating and maintenance expense. The Company is also addressing four on-site cleanups for which it is the primary responsible party. Three of these cleanup sites are in the operation and maintenance stage and one is in the implementation stage.

The Company has undiscounted accrued liabilities of $7.5$13.4 million and $7.6$13.7 million as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively, on its Condensed Consolidated Balance SheetSheets to the extent costs are known or can be reasonably estimated for its remaining financial obligations for thein relation to environmental matters discussed above and does not anticipate that any of these matters will result in material additional costs beyond amounts accrued. Based upon consideration of currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to these matters.
Note 15.17. Segment Results

A description of the Company’s three2 reportable segments includingis presented below. During the specific products manufacturedfirst quarter of 2021, the Company agreed to sell a majority interest in the business comprising its High Pressure Solutions segment. This sale was substantially completed on April 1, 2021. During the second quarter of 2021, the Company agreed to sell the business comprising its Specialty Vehicle Technologies segment. This sale was substantially completed on June 1, 2021. The HPS and sold follows below.

SVT businesses are presented as a discontinued operation in current and prior periods and has been excluded from the segment information below unless otherwise noted. Refer to Note 2 “Discontinued Operations” for further discussion of the sale of majority interest in the High Pressure Solutions business and of the Specialty Vehicle Technologies business.
In the IndustrialsIndustrial Technologies and Services segment, the Company designs, manufactures, markets and services a broad range of air compression and vacuum equipment as well as fluid transfer equipment, loading systems, power tools and blower products across a wide array of technologies and applications. Almost every manufacturing and industrial facility, and many service and process industries, use airlifting equipment. The Company’s compression and vacuum products are used worldwide in a variety of applications such as operation of pneumatic air tools, vacuum packaging ofindustrial manufacturing, transportation, chemical processing, food products and aeration of waste water. The Company maintains a leading position in its marketsbeverage production, energy, environmental and serves customers globally. Theother applications. In addition to equipment sales, the Company offers comprehensivea broad portfolio of service options tailored to customer needs and complete range of aftermarket parts, air treatment equipment, controls and an experienced direct and distributor-based service network world-wide to complement all of its products.

In the Energy segment, the Company designs, manufactures, markets and services a diverse range of positive displacement pumps, liquid ring vacuum pumps and compressors, and engineered loading systems and fluid transfer equipment, consumables, and associated aftermarket parts and services. It serves customers in the upstream, midstream, and downstream oil and gas markets, and various other markets including petrochemical processing, power generation, transportation, and general industrial.accessories. The Company is one of the largest suppliers in these markets and has long-standing customer relationships. Its positive displacement pumps are used in the oilfield for drilling, hydraulic fracturing, completion and well servicing. Its liquid ring vacuum pumps and compressors are used in many power generation, mining, oil and gas refining and processing, chemical processing and general industrial applications including flare gas and vapor recovery, geothermal gas removal, vacuum de-aeration, enhanced oil recovery, water extraction in mining and paper and chlorine compression in petrochemical operations.  ItsCompany’s engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials.
The Company’s power tools and lifting equipment are used by customers in industrial manufacturing, vehicle maintenance, energy and other markets for precision fastening, bolt removal, grinding, sanding, drilling, demolition and the safe and efficient lifting, positioning and movement of loads. The Company sells its products primarily through independent distributors worldwide and also sells directly to the customer.
31
35

IndexTable of Content
In the MedicalPrecision and Science Technologies segment, the Company designs, manufactures and markets a broad range of highly specialized gas, liquidpositive displacement pumps, fluid management equipment and precision syringe pumps and compressors primarilyaftermarket parts for use in the medical, laboratory, industrial manufacturing, water and biotechnology endwastewater, chemical processing, energy, food and beverage, agriculture and other markets. The Company’s customersproducts are mainly mediumused for a diverse set of applications including precision dosing of chemicals and large durable medicalsupplements, blood dialysis, oxygen therapy, food processing, fluid transfer and dispensing, spray finishing and coating, mixing, high-pressure air and gas management and others. The Company sells primarily through a broad global network of specialized and national distributors and original equipment suppliers thatmanufacturers (“OEM”) who integrate the Company’s products into their final equipment for use in applications such as oxygen therapy, blood dialysis, patient monitoring, wound treatment,devices and others.  Further, with the recent acquisitions, the Company has expanded into liquid handling components and systems used in biotechnology applications including clinical analysis instrumentation.  The Company also has a broad range of end use deep vacuum products for laboratory science applications.

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

The following table provides summarized information about the Company’s operations by reportable segment and reconciles Segment Adjusted EBITDA to Income (Loss) from Continuing Operations Before Income Taxes for the three month and ninesix month periods ended SeptemberJune 30, 20172021 and 2016:2020.
  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  
2016 (1)
  2017  
2016 (1)
 
             
Revenue            
Industrials $288.2  $265.6  $819.0  $803.6 
Energy  301.6   137.9   719.4   385.8 
Medical  59.8   59.1   172.0   172.2 
Total Revenue $649.6  $462.6  $1,710.4  $1,361.6 
Segment Adjusted EBITDA                
Industrials $63.1  $55.6  $173.7  $156.2 
Energy  98.6   22.0   199.2   70.2 
Medical  16.8   16.6   46.9   44.7 
Total Segment Adjusted EBITDA $178.5  $94.2  $419.8  $271.1 
Less items to reconcile Segment Adjusted EBITDA to                
Income (Loss) Before Income Taxes:                
Corporate expenses not allocated to segments $13.8  $5.2  $30.9  $18.8 
Interest expense  30.1   43.0   115.4   128.7 
Depreciation and amortization expense  43.5   42.9   126.9   126.9 
Impairment of goodwill and other intangible assets (a)  -   -   -   1.5 
Sponsor fees and expenses (b)  -   1.8   17.3   3.8 
Restructuring and related business transformation costs (c)  6.3   18.2   20.5   46.2 
Acquisition related expenses and non-cash charges (d)  1.2   1.9   3.1   3.6 
Environmental remediation loss reserve (e)  -   -   0.9   - 
Expenses related to initial stock offering (f)  0.5   -   3.6   - 
Establish public company financial reporting compliance (g)  3.8   0.1   7.2   0.1 
Stock-based compensation (h)  9.8   -   166.0   - 
Loss on extinguishment of debt (i)  34.1   -   84.5   - 
Other adjustments (j)  3.0   3.2   9.8   1.8 
Income (Loss) Before Income Taxes: $32.4  $(22.1) $(166.3) $(60.3)

(1)In the fourth quarter of fiscal 2016, the Company modified its methodology for presenting reconciling items from Income (Loss) Before Income Taxes.  The reconciling items for the three and nine month periods ended September 30, 2016 have been restated to conform to the methodology used in the three and nine month periods ended September 30, 2017, and included the following:
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Revenue
Industrial Technologies and Services$1,047.5 $829.6 $1,961.3 $1,333.6 
Precision and Science Technologies231.6 195.8 447.3 308.6 
Total Revenue$1,279.1 $1,025.4 $2,408.6 $1,642.2 
Segment Adjusted EBITDA
Industrial Technologies and Services$258.6 $183.8 $470.1 $278.6 
Precision and Science Technologies71.1 59.3 138.3 92.2 
Total Segment Adjusted EBITDA$329.7 $243.1 $608.4 $370.8 
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes:
Corporate expenses not allocated to segments$37.6 $25.6 $72.3 $41.1 
Interest expense22.7 30.8 45.8 57.9 
Depreciation and amortization expense (a)
101.3 118.9 205.8 177.9 
Restructuring and related business transformation costs (b)
6.7 31.0 9.4 69.6 
Acquisition and other transaction related expenses and non-cash charges (c)
14.3 90.3 24.8 179.8 
Stock-based compensation (d)
21.5 12.1 43.1 14.9 
Foreign currency transaction losses (gains), net3.4 4.9 (14.7)6.9 
Loss on extinguishment of debt (e)
2.0 
Gain on settlement of post-acquisition contingencies (f)
(30.1)(30.1)
Other adjustments (g)
0.8 3.0 (0.2)2.4 
Income (Loss) from Continuing Operations Before Income Taxes151.5 (73.5)252.2 (181.7)
Provision for income taxes12.5 78.4 23.1 11.5 
Loss on equity method investments(0.7)(0.7)
Income (Loss) from Continuing Operations138.3 (151.9)228.4 (193.2)
Income (loss) from discontinued operations, net of tax96.3 (24.6)(83.9)(20.2)
Net Income (Loss)$234.6 $(176.5)$144.5 $(213.4)
32


(a)Represents non-cash charges for impairment of goodwill and other intangible assets.
Table of Content

a)Depreciation and amortization expense excludes $1.0 million and $0.4 million of depreciation of rental equipment for the three month periods ended June 30, 2021 and 2020, respectively, and excludes $2.0 million and $0.9 million for the six month periods ended June 30, 2021 and 2020, respectively.
(b)Represents management fees and expenses paid to KKR, including a monitoring agreement termination fee of $16.2 million paid in the nine months ended September 30, 2017.
b)Restructuring and related business transformation costs consist of the following.

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Restructuring charges$6.8 $29.4 $9.2 $67.4 
Facility reorganization, relocation and other costs0.1 0.5 
Other, net(0.1)1.5 0.2 1.7 
Total restructuring and related business transformation costs$6.7 $31.0 $9.4 $69.6 
(c)Restructuring and related business transformation costs consist of the following:
c)Represents costs associated with successful and/or abandoned acquisitions and divestitures, including third-party expenses, post-closure integration costs (including certain incentive and non-incentive cash compensation costs) and non-cash charges and credits arising from fair value purchase accounting adjustments.

  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
             
Restructuring charges $2.8  $3.0  $4.9  $15.4 
Severance, sign-on, relocation and executive search costs  0.6   5.7   2.2   12.7 
Facility reorganization, relocation and other costs  1.0   2.9   3.9   6.5 
Information technology infrastructure transformation  0.8   0.6   3.4   1.0 
(Gains) losses on asset and business disposals  (0.6)  1.7   2.0   1.6 
Consultant and other advisor fees  0.5   3.2   1.7   6.9 
Other, net  1.2   1.1   2.4   2.1 
Total restructuring and related business transformation costs $6.3  $18.2  $20.5  $46.2 

d)Represents stock-based compensation expense recognized for the three and six month periods ended June 30, 2021 of $21.5 million and $43.1 million, respectively.
(d)Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.
Represents stock-based compensation expense recognized for the three and six month periods ended June 30, 2020 of $12.1 million and $15.4 million, respectively, and decreased by $0.5 million for the six month period ended June 30, 2020, due to costs associated with employer taxes.

e)Represents a loss on extinguishment of a portion of the U.S. term loan and the amendment of the revolving credit facility.
(e)Represents estimated environmental remediation costs and losses relating to a former production facility.
f)Represents a gain on settlement of post-acquisition contingencies outside of the measurement period related to adjustments to the transaction price for retirement plan funding and net working capital.

g)Includes (i) effects of amortization of prior service costs and amortization of losses in pension and other postemployment (“OPEB”) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.
(f)Represents expenses related to the Company’s initial stock offering.

(g)Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of the new revenue recognition standard (ASC 606 - Revenue from Contracts with Customers) in the first quarter of 2018, one year ahead of the required adoption date for a private company.  These expenses were previously included in ‘Expenses related to initial stock offering’ and prior periods have been restated to conform to current period presentation.

(h)Represents stock-based compensation expense recognized for stock options outstanding for the three months and nine months ended September 30, 2017 of $7.8 million and $69.2 million, respectively, and DSUs granted to employees at the date of the initial public offering for the three months and nine months ended September 30, 2017 of $2.0 million and $96.8 million, respectively.  See Note 9 “Stock-Based Compensation”.

(i)Represents losses on extinguishment of debt recognized on the redemption of the senior notes and pay down of a portion of the Original Dollar Term Loan Facility with proceeds from the initial public offering in May 2017($50.4 million) and in connection with the refinancing of the Original Dollar Term Loan Facility and Euro Term Loan Facility in August 2017 ($34.1 million).

(j)Includes (i) foreign exchange gains and losses, (ii) effects of amortization of prior service costs and amortization of gains in pension and other postretirement benefits (OPEB) expense, (iii) certain legal and compliance costs and (iv) other miscellaneous adjustments.
33

Note 16.18. Related Party Transactions

Affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”) own 29,788,635 shares of common stock, or approximately 7% of the total outstanding common stock based on the number of shares outstanding as of June 30, 2021.
Affiliates of KKR participated as (i) a lender in the Company’s Senior Secured Credit Facilities discussed in Note 8, “Debt,” (ii) an underwriter in the Company’s initial public offering, and (iii) a providerFacilities. As of services for the debt refinancing transaction.  KKR exited its position in the Dollar Term Loan Facility due 2020 during 2015 and did not hold a position in the Dollar Term Loan Facility due 2020 or the Euro Term Loan Facility due 2020 until their extinguishment on August 17, 2017.June 30, 2021, KKR held a position in the Euro Term Loan Facility due 2024 of €50.0€38.2 million forand a position in the periodDollar Term Loan B of August 17, 2017$39.5 million.
The Company incurred and paid underwriting fees of $0.8 million and $7.5 million in the three and six month periods ended June 30, 2020, respectively, to September 30, 2017. KKR Capital Markets LLC, an affiliate of our Sponsor, acted as an underwriter in connection with the initial public offering of the Company’s stock and received underwriter discounts and commissions of approximately $8.9 million.  In August 2017, KKR, Capital Markets LLC received $1.5 million for services rendered in connection with the debt refinancing transaction.term loan transactions.

The Company entered into a monitoring agreement, dated July 30, 2013, with KKR pursuant to which KKR will provide management, consulting and financial advisory services to the Company and its divisions, subsidiaries, parent entities and controlled affiliates.  Under the terms of the monitoring agreement the Company is, among other things, obligated to pay KKR (or such affiliate(s) as KKR designates) an aggregate annual management fee in the initial annual amount of $3.5 million, payable in arrears at the end of each fiscal quarter, plus upon request all reasonable out of pocket expenses ($0.0 million and $0.7 million of expenses were incurred for the three month periods ended September 30, 2017 and 2016 and $0.0 million and $0.7 million of expenses were incurred for the nine month periods ended September 30, 2017 and 2016) incurred in connection with the provision of services under the agreement.  The management fee increases at a rate of 5% per year effective on January 1, 2014.  In connection with the Company’s initial public offering, the monitoring agreement was terminated in accordance with its terms and the Company paid a termination fee of $16.2 million during the nine month period ended September 30, 2017 which is included in the “Selling and administrative expenses” line of the Condensed Consolidated Statements of Operations.  The Company incurred management fees to KKR of $1.1 million and $3.0 million for the nine month periods ended September 30, 2017 and 2016, respectively.
Note 17. Income19. Earnings (Loss) Per Share

The number of weighted-average shares outstanding used in the computations of basic and diluted incomeearnings (loss) per share are as follows:follows.
  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
             
Net income (loss) $28.0  $(13.0) $(125.1) $(27.0)
Less: Net income (loss) attributable to noncontrolling interests  -   (0.1)  0.1   (0.6)
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc. $28.0  $(12.9) $(125.2) $(26.4)
Income (Loss) per share:                
Basic $0.14  $(0.09) $(0.71) $(0.18)
Diluted $0.13  $(0.09) $(0.71) $(0.18)
Average shares outstanding:                
Basic  201.3   148.8   175.7   148.8 
Dilutive effect of share-based awards  6.8   -   -   - 
Diluted  208.1   148.8   175.7   148.8 

The DSUs described in Note 9 “Stock-Based Compensation” are considered outstanding shares for the purpose of computing basic earnings per share because they will become issued solely upon the passage of time.

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Average shares outstanding
Basic419.9 417.0 419.5 347.2 
Diluted426.8 417.0 426.4 347.2 
For the ninethree and six month periods ended June 30, 2021, 0.8 million and 0.7 million, respectively, of anti-dilutive shares were not included in the computation of diluted earnings per share. For the three and six month period ended SeptemberJune 30, 2017 there were 12.32020, 3.8 million and 3.9 million, respectively, of potentially dilutive stock-based awards that were not included in the computation of diluted loss per share because their inclusion would have been anti-dilutive.as we incurred a net loss during the period.

37
For both

Table of Content
Note 20. Subsequent Event
On July 30, 2021, the threeCompany completed the acquisition of Maximus Solutions for cash consideration of approximately C$135.4 million Canadian dollars, subject to post-closing adjustments. Maximus Solutions is a provider of digital controls and nine month periods ended September 30, 2016 there were 15.0 million potentially dilutive stock-based awards that were not includedIndustrial Internet of Things (IIoT) production management systems for the agritech software and controls market. The initial accounting for the business combination, including the estimated fair value of assets and liabilities acquired, is incomplete as a result of the timing of the acquisition. The results of operations of the acquired business will be reported within the Precision and Science Technologies segment beginning in the computationthird quarter of diluted loss per share because their inclusion would have been anti-dilutive.
2021.
34

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations


ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our prospectus dated May 11, 2017 (the “Prospectus”), as filed withAnnual Report on Form 10-K for the Securities and Exchange Commission (the “SEC”) on May 15, 2017 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, as such risk factors may be updated from time to time in our periodic filings with the SEC.fiscal year ended December 31, 2020. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.
Overview

Our Company

We are a leading global provider of mission-critical flow control and compression equipmentcreation technologies and associated aftermarket parts, consumables and services, which we sell across multiple attractive end-markets within the industrial, energy and medical industries.end-markets. We manufacture one of the broadest and most complete ranges of compressor, pump, vacuum and blower products in our markets, which, when combined with our global geographic footprint and application expertise, allows us to provide differentiated product and service offerings to our customers. Our products are sold under a collection of premier, market-leading brands, including Ingersoll Rand, Gardner Denver, CompAir, Nash, Elmo Rietschle, Robuschi, Thomas, Milton Roy, ARO, Emco Wheaton Robuschi, Elmo Rietschle and Thomas,Runtech Systems, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.

Recent Developments
Sale of Majority Interest in HPS Business
On February 14, 2021, the Company entered into an agreement to sell a majority interest in its High Pressure Solutions (“HPS”) business to private equity firm American Industrial Partners. In exchange for its majority interest of 55%, the Company received cash of $278.3 million at closing and retains a 45% common equity interest in the newly-formed entity comprising the HPS business. This transaction substantially closed on April 1, 2021. The sale of the majority interest in the HPS business significantly reduces our direct exposure to the upstream oil and gas market.
The historical financial results of the HPS Segment are reflected in our unaudited condensed consolidated financial statements as discontinued operations. Refer to Note 2 “Discontinued Operations” to our unaudited condensed consolidated financial statements for additional discussion of the sale of the HPS segment.
Sale of Special Vehicle Technologies Segment
On April 9, 2021, the Company entered into an agreement to sell its Specialty Vehicle Technologies segment (“SVT” or “Club Car”) to private equity firm Platinum Equity Advisors, LLC for an aggregate purchase price of $1.68 billion. This transaction substantially closed on June 1, 2021.
The historical financial results of the SVT Segment are reflected in our unaudited condensed consolidated financial statements as discontinued operations. Refer to Note 2 “Discontinued Operations” to our unaudited condensed consolidated financial statements for additional discussion of the SVT divestiture.
Recent and Pending Acquisitions
On June 19, 2021, the Company entered into an agreement to acquire Seepex GmbH, a global leader in progressive cavity (positive displacement) pump technology, for €431.5 million. This transaction is expected to close in Q3 2021, subject to regulatory approvals and customary closing conditions.
On June 25, 2021, the Company entered into an agreement to acquire Maximus Solutions, a provider of digital controls and Industrial Internet of Things (IIoT) production management systems for the agritech software and controls market, for C$135.4 million. This transaction closed on July 30, 2021. Refer to Note 20 “Subsequent Event” to our unaudited condensed consolidated financial statements for additional discussion of this acquisition.
39

Table of Content
Our Segments

We report our resultsEffective upon the presentation of the HPS business as discontinued operations, throughthe Company began operating with three reportable segments: Industrials, Energysegments and Medical.effective upon the presentation of the SVT business as discontinued operations, the Company began operating with two reportable segments. As a result of these changes, information that the Company’s chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the three month period ended June 30, 2021, we report utilizing the two reportable segments of Industrial Technologies and Services and Precision and Science Technologies. Our Chief Operating Decision Maker regularly reviews financial information to allocate resources and assess performance utilizing these reorganized segments. See Note 6 “Goodwill and Other Intangible Assets” for the allocation of goodwill to the remaining reportable segments. See Note 17 “Segment Results” for a description of the remaining reportable segments.

Industrials

Industrial Technologies and Services
We design, manufacture, market and service a broad range of air and gas compression, vacuum and blower products, fluid transfer equipment, loading systems, power tools and lifting equipment, including associated aftermarket parts, consumables and services,services. We primarily sell under the Ingersoll Rand, Gardner Denver, CompAir, Elmo Rietschle, Robuschi, Nash, Emco Wheaton and Runtech Systems brands. Our customers deploy our products across a wide array of technologies and applications for use in diverse end-markets. Compressors are used to increase the pressure of air or gas, vacuum products are used to remove air or gas in order to reduce the pressure below atmospheric levels, and blower products are used to produce a high volume of air or gas at low pressure. Almost every manufacturing and industrial facility, and many service and process industry applications, use air compression, vacuum and blower products in a variety of process-critical applications such as the operation of pneumatic tools, pumps and motion control components, air and gas separation, vacuum packaging of food products and aeration of waste water, among others. Our liquid ring vacuum pumps and compressors are used in many power generation, mining, oil and gas refining and processing, chemical processing and general industrial applications including flare gas and vapor recovery, geothermal gas removal, vacuum de-aeration, water extraction in mining and paper and chlorine compression in petrochemical operations. Our engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials. Our power tools and lifting equipment portfolio includes electric and cordless fastening systems, pneumatic bolting tools, drilling and material removal tools, hoists, winches and ergonomic handling devices. Typical applications for these products include the precision fastening of bolted joints in the production, assembly and servicing of industrial machinery, on-highway and off-highway vehicles, aircraft, electronics and other equipment.
Our compression products cover the full range of technologies, including rotary screw, reciprocating piston, scroll, rotary vane and centrifugal compressors. Our vacuum products and blowers also cover the full technology spectrum; vacuum technologies include side channel, liquid ring, claw vacuum, screw, turbo and rotary vane vacuum pumps among others, while blower technologies include rotary lobe blowers, screw, claw and vane, side channel and radial blowers. Our liquid ring vacuum pumps and compressors are highly engineered products specifically designed for continuous duty in harsh environments to serve a wide range of applications, including oil and gas refining and processing, mining, chemical processing and industrial applications. In addition to our vacuum and blower technology, our engineered fluid loading and transfer equipment and systems ensure the safe and efficient transportation and transfer of petroleum products as well as certain other liquid commodity products in a wide range of industries.
We complement these products with a broad portfolio of service options tailored to customer needs and a complete range of aftermarket parts, air treatment equipment, controls and other accessories delivered through our global network of manufacturing and service locations and distributor partners. The breadth and depth of our product offering creates incremental business opportunities by allowing us to cross-sell our full product portfolio and uniquely address customers’ needs in one complete solution.
We sell our Industrials products through an integrated network of direct sales representatives and independent distributors, which is strategically tailored to meet the dynamics of each target geography or end-market. Our large installed base also provides for a significant stream of recurring aftermarket revenue. For example, the useful life of a compressor is, on average, between 10 and 12 years. However, a customer typically services the compressor at regular intervals, starting within the first two years of purchase and continuing throughout the life of the product. The cumulative aftermarket revenue generated by a compressor over the product’s life cycle will typically exceed its original sale price.

40

Table of Content
Energy

We design, manufacture, marketPrecision and service a diverse range of positive displacement pumps, liquid ring vacuum pumps, compressors and integrated systems, engineered fluid loading and transfer equipment and associated aftermarket parts, consumables and services. The highly engineered products offered by our Energy segment serve customers across upstream, downstream and midstream energy markets, as well as petrochemical processing, transportation and general industrial sectors.

Medical

Science Technologies
We design, manufacture and market a broad range of highly specialized gas,highly-specialized positive displacement pumps, fluid management systems and aftermarket parts that provide liquid and precision syringe pumpsgas dosing, transfer, dispensing, compression, sampling, pressure management and compressors that are specified by medical and laboratory equipment suppliers and integrated into their final equipment for useflow control in applications, such as oxygen therapy, blood dialysis, patient monitoring, laboratory sterilization and wound treatment, among others. We offer a comprehensivespecialized or critical applications. Our product portfolio across a breadth of pump technologies to address the medical and laboratory sciences pump and fluid handling industry, as well asoffering covers a range of end-use vacuum products forpump and flow control technologies, including mechanically- and hydraulically-actuated diaphragm pumps, air-operated diaphragm and piston pumps, water-powered pumps, peristaltic pumps, gear pumps, flexible impeller pumps, self-priming centrifugal pumps, syringe pumps, motion control components, filtration/regulation/lubrication components, gas boosters, high pressure valves, hydrogen compression systems, liquid and gas sampling systems, odorant injection systems and more. These offerings are sold under brands that are highly recognized in their end markets including ARO, Dosatron, Haskel, Milton Roy, Oberdorfer, Thomas and Welch. Our customer base is composed of a wide range of end users in markets including medical, laboratory, science applications,industrial manufacturing, water and we recently expanded into liquid pumpswaste water, chemical processing, energy, food and automated liquid handling componentsbeverage, agriculture and systems.others. Our sales are realized primarily through a combination of independent specialty and national distributors and relationships directly with original equipment manufacturers (“OEM”).
35

Components of Our Revenue and Expenses

Revenues

We generate revenue from sales of our highly engineered, application-critical productsoriginal equipment and by providing associated aftermarket parts, consumables and services. We sell our products and deliver aftermarket services both directly to end-users and through independent distribution channels, depending on the product line and geography. Below is a description of our revenues by segment and factors impacting total revenues.

Industrials Revenue

Our Industrials Segment Revenues are generated primarily through sales of air compression, vacuum and blower products to customers in multiple industries and geographies. A significant portion of our sales in the Industrials segment are made to independent distributors. Revenue derived from short duration contracts is recognized at a single point in time when products are shipped or delivered, title and risk of loss are passedcontrol is transferred to the customer, and collection is reasonably assured. Our large installed base of products in our Industrials segment drives demand for recurring aftermarket support services primarily composed of replacement parts sales to our distribution partners and, to a lesser extent, by directly providing replacement parts and repair and maintenance services to end customers. Revenue for services is recognizedgenerally at shipment or when delivery has occurred or as services are performed. Historically, our shipments and revenues have peaked during the fourth quarter as our customers seek to fully utilize annual capital spending budgets.

Energy Revenue

Our Energy Segment Revenues are generated primarily through sales of positive displacement pumps, liquid ring vacuum pumps, compressors and integrated systems and engineered fluid loading and transfer equipment and associated aftermarket parts, consumables and services for use primarily in upstream, midstream, downstream and petrochemical end-markets across multiple geographies. Certain contracts with customers ininvolve significant design engineering to customer specifications, and depending upon the mid- and downstream and petrochemical markets are higher sales value and often have longer lead times and involve more application specific engineering. Revenuecontractual terms, revenue is recognized for these arrangements wheneither over the duration of the contract or at contract completion when equipment is complete or substantially complete, provided all other revenue recognition criteria have been met. The arrangement is considered substantially complete when the Company receives acceptance and remaining tasks are perfunctory or inconsequential and in control of the Company. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined to be probable. As a result, the timing of these contracts can result in significant variation in reported revenue from quarter to quarter. Our large installed base of products in our Energy segment drives demand for recurring aftermarket support services to customers, including replacement parts, consumables and repair and maintenance services. The mix of aftermarket to original equipment revenue within the Energy segment is impacted by trends in upstream energy activity in North America.  Revenue for services is recognized when services are performed. In response to customer demand for faster access to aftermarket parts and repair services, we expanded our direct aftermarket service locations in our Energy segment, particularly in North American markets driven by upstream energy activity. Energy segment products and aftermarket parts, consumables and services are sold both directly to end customers and through independent distributors, depending on the product category and geography.

Medical Revenue

Our Medical Segment Revenues are generated primarily through sales of highly specialized gas, liquid and precision syringe pumps that are specified by medical and laboratory equipment suppliers for use in medical and laboratory applications. Our products are often subject to extensive collaborative design and specification requirements, as they are generally components specifically designed for, and integrated into, our customers’ products. Revenue is recognized when products are shipped or delivered title and risk of loss pass to the customer, and collection is reasonably assured. Our Medical segment has no substantive aftermarket revenues.

customer.
Expenses

Cost of Sales

Cost of sales includes the costs we incur, including purchased materials, labor and overhead related to manufactured products and aftermarket parts sold during a period. Depreciation related to manufacturing equipment and facilities is included in cost of sales. Purchased materials represent the majority of costs of sales, with steel, aluminum, copper and partially finished castings representing our most significant materialsmaterial inputs. Stock-based compensation expense for employees associated with the manufacture of products or delivery of services to customers is included in cost of sales. We have instituted a global sourcing strategy to take advantage of coordinated purchasing opportunities of key materials across our manufacturing plant locations.
36

Cost of sales for services includes the direct costs we incur, including direct labor, parts and other overhead costs including depreciation of equipment and facilities, to deliver repair, maintenance and other field services to our customers.

Selling and Administrative Expenses

Selling and administrative expenses consist of (i) salaries and other employee-related expenses for our selling and administrative functions and other activities not associated with the manufacture of products or delivery of services to customers; (ii) facility operating expenses for selling and administrative activities, including office rent, maintenance, depreciation and insurance; (iii) marketing and direct costs of selling products and services to customers including internal and external sales commissions; (iv) research and development expenditures; (v) professional and consultant fees; (vi) sponsor feesexpenses related to our public stock offerings and expenses;to establish public company reporting compliance; (vii) employee related stock-based compensation for our selling and (vii)administrative functions and other activities not associated with the manufacture of products or delivery of services to customers; and (viii) other miscellaneous expenses. Certain corporate expenses, including those related to our shared service centers in the United States and Europe, that directly benefit our businesses are allocated to our business segments. Certain corporate administrative expenses, including corporate executive compensation, treasury, certain information technology, internal audit and tax compliance, are not allocated to the business segments.

41

Table of Content
Amortization of Intangible Assets

Amortization of intangible assets includes the periodic amortization of intangible assets recognized when an affiliate of KKR acquired us on July 30, 2013 and intangible assets recognized in connection with businesses we acquired since July 30, 2013, including customer relationships, tradenames, developed technology, backlog and trademarks.

Impairment of Goodwill and Other Intangible Assets

Impairment of goodwill and other intangible assets includes non-cash charges we recognized for the impairment of goodwill and other intangible assets.

internally developed software.
Other Operating Expense, net

Net
Other operating expense, net includes foreign currency transaction gains and losses, net, restructuring charges, certain shareholder litigation settlement recoveries, acquisition and contract settlementother transaction related expenses and non-cash charges, losses environmental remediation, stock-based compensation expense,and gains on asset disposals and other miscellaneous operating expenses.

Benefit or Provision for Income Taxes

The benefit or provision for income taxes includes U.S. federal, state and local income taxes and all non-U.S. income taxes. We are subject to income tax in approximately 3046 jurisdictions outside of the United States. Because we conduct operations on a global basis, our effective tax rate depends, and will continue to depend, on the geographic distribution of our pre-tax earnings among several different taxing jurisdictions. Our effective tax rate can also vary based on changes in the tax rates of the different jurisdictions, the availability of tax credits and non-deductible items.
Items Affecting our Reported Results

General Economic Conditions and Capital Spending in the Industries We Serve

Our financial results closely follow changes in the industries and end-markets we serve. Demand for most of our products depends on the level of new capital investment and planned and unplanned maintenance expenditures by our customers. The level of capital expenditures depends, in turn, on the general economic conditions as well as access to capital at reasonable cost. In particular, demand for our IndustrialsIndustrial Technologies and Services products generally correlates with the rate of total industrial capacity utilization and the rate of change of industrial production. Capacity utilization rates above 80% have historically indicated a strong demand environment for industrial equipment. In our Energy segment, demand for our products that serve upstream energy end-markets are influenced heavily by energy prices and the expectation as to future trends in those prices. Energy prices have historically been cyclical in nature and are affected by a wide range of factors. As energy prices start improving from low levels observed in the first half of 2016, we have observed increases in drilled but uncompleted wells, global land rig count, wells and footage drilled as well as drilling and completion capital expenditures to positively impact our results of operations. In the midstream and downstream portions of our EnergyIndustrial Technologies and Services segment, overall economic growth and industrial production, as well as secular trends, impact demand for our products. In our MedicalPrecision and Science Technologies segment we expect demand for our products to be driven by favorable trends, including the growth in healthcare spend and expansion of healthcare systems due to an aging population requiring medical care and increased investment in health solutions and safety infrastructures in emerging economies. Over longer time periods, we believe that demand for all of our products also tends to follow economic growth patterns indicated by the rates of change in the GDP around the world, as augmented by secular trends in each segment. Our ability to grow and our financial performance will also be affected by our ability to address a variety of challenges and opportunities that are a consequence of our global operations, including efficiently utilizing our global sales, manufacturing and distribution capabilities and engineering innovative new product applications for end-users in a variety of geographic markets.
37

Foreign Currency Fluctuations

A significant portion of our revenues, approximately 61%58% for the yearsix month period ended December 31, 2016,June 30, 2021, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion.

Seasonality

Historically, our shipments and revenues have peaked during the fourth quarter as our customers seek to fully utilize annual capital spending budgets. Also, our EMEA operations generally experience a slowdown during July, August and December holiday seasons. General economic conditions may, however, impact future seasonal variations.
Factors Affecting the Comparability of our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Key factors affecting the comparability of our results of operations are summarized below.

Acquisition of Ingersoll Rand Industrial
UpstreamOn February 29, 2020, we completed the acquisition of Ingersoll Rand Industrial. We reorganized our reportable segments as a result of the Ingersoll Rand Industrial acquisition and formed four new reportable segments.
42

Table of Content
Industrial Technologies and Services segment – Ingersoll Rand Industrial’s Compression Technologies and Services (“CTS”) and Power Tools and Lift (“PTL”) businesses joined the legacy Gardner Denver Industrial segment (excluding the Specialty Pump businesses) and the midstream and downstream portions of the Gardner Denver Energy segment to form the new “Industrial Technologies and Services” segment.

Precision and Science Technologies segment – Ingersoll Rand Industrial’s Precision Flow Systems (“PFS”) and ARO businesses joined the legacy Gardner Denver Medical segment and Specialty Pump businesses from the legacy Gardner Denver Industrial segment to form the new “Precision and Science Technologies” segment.
Specialty Vehicle Technologies segment – Ingersoll Rand Industrial’s Club Car golf, utility and consumer low-speed vehicles business formed the new “Specialty Vehicle Technologies” segment. On April 9, 2021, we entered into an agreement to sell the Specialty Vehicle Technologies segment. For additional information, see “―Recent Developments” above and refer to Note 2 “Discontinued Operations” for discussion on the sale of the Specialty Vehicle Technologies segment that closed on June 1, 2021.
High Pressure Solutions segment – The upstream energy portion of the legacy Gardner Denver Energy segment was disaggregated to form the new “High Pressure Solutions” segment. For additional information, see “―Recent Developments” above and refer to Note 2 “Discontinued Operations” for discussion on the sale of the High Pressure Solutions segment that closed on April 1, 2021.
Ingersoll Rand Industrial is included in our results of operations beginning on the acquisition date (close of business February 29, 2020). Comparability between the six month periods ended June 30, 2021 and 2020 will be affected by two months of activity from Ingersoll Rand Industrial.
See Note 3 “Business Combinations” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further discussion of the acquisition of Ingersoll Rand Industrial.
Impact of Coronavirus (COVID-19)
We sellcontinue to assess and actively manage the impact of the ongoing COVID-19 pandemic on our global operations and also the operations of our suppliers and customers. Demand for our products and provide serviceswas negatively impacted throughout the majority of 2020 as a result of the pandemic. Demand began to customers in upstream energy markets, primarilyimprove in the United States. For the upstream energy end-market, in our Energy segment we manufacture pumpsfourth quarter of 2020 and associated aftermarket products and services used in drilling, hydraulic fracturing and well service applications, while in our Industrials segment we sell dry bulk frac sand blowers, which are used in hydraulic fracturing operations. We refer to these products and services in the Energy and Industrial segments as “upstream energy.” Our Medical segment is not exposed to the upstream energy industry.

Our exposure to upstream energy production levels, coupled with reduced exploration activity and the deferral of maintenance and growth capital expenditures by upstream energy companies, negatively impacted our financial resultsaccelerated in the first half of 2016.

The average daily closing of West Texas Intermediate spot market crude oil prices for the nine month period ended September 30, 2017 increased2021 as markets strengthened and gained greater visibility to $49.30 from $41.35vaccine roll-out strategies in various regions. Order rates in the same period in 2016. As a result, there has been increased exploration activityfirst half of 2021 were particularly strong and capital expenditures by upstream energy companies. Accordingwe believe represents some deferred demand from 2020. In order to Baker Hughes, Inc.,position ourselves to fulfill demand we continue to monitor the average weekly U.S. land rig count increasedsupply chain closely and are taking proactive steps to 841 during the nine month period ended September 30, 2017 from 459 in 2016,ensure continuity of supply. We are adhering to all state and according to Spears & Associates, Inc., the annual average monthly new wells drilledcountry mandates and guidelines wherever we operate. Currently all our major manufacturing locations in the United States, increasedUnited Kingdom, Germany, Italy, Brazil and China are operational. We have taken certain actions to 1,944reduce costs and preserve cash given the uncertain environment. The degree to which the pandemic will continue to impact our operations, and the operations of our customers and suppliers remains uncertain. See “The COVID-19 pandemic has adversely affected our business and results of operations, and could have a material and adverse effect on our business, results of operations and financial condition in the future” in Part I Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the nineyear ended December 31, 2020.
Restructuring and Other Business Transformation Initiatives
Subsequent to the acquisition of Ingersoll Rand Industrial, we announced a restructuring program (“2020 Plan”) to drive efficiencies and synergies, reduce the number of facilities and optimize operating margins within our merged Company. We expect total expenses of approximately $350.0 million related to workforce reductions, lease termination costs, other facility rationalization costs and other business related transformation costs from 2020 until 2022. We expect to realize approximately $300.0 million in annualized cost synergies by the end of 2022. We continue to evaluate operating efficiencies and anticipate incurring additional costs in the coming years in connection with these activities, but we are unable to estimate those amounts at this time as such plans are not yet finalized.
For the three month period ended SeptemberJune 30, 2017 compared to 1,2442021, expense of $6.8 million was recognized within “Other operating expense, net” in the same period in 2016. We have experienced significant improvement in demandCondensed Consolidated Statements of Operations ($2.5 million for our upstream energy productsIndustrial Technologies and services inServices, $(0.2) million for Precision and Science Technologies and $4.5 million for Corporate). For the three and nine month periods ended September 30, 2017.

Sponsor Management Fees and Expenses

Through the date of our initial public offering, our Sponsor charged an annual management fee, as well as expenses for services provided under a monitoring agreement. As the date of our initial public offering, the monitoring agreement was terminated and a fee was paid of $16.2 million during the ninesix month period ended SeptemberJune 30, 2017.
38

Stock-based Compensation

Under the terms of the 2013 Plan, subsequent to the initial public offering, the Company recognized stock-based compensation2021, expense of approximately $69.2$9.2 million related to time-basedwas recognized within “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($4.2 million for Industrial Technologies and performance-based stock options. As of SeptemberServices, $0.1 million for Precision and Science Technologies and $4.9 million for Corporate). Through June 30, 2017, there was $12.9 million of unrecognized stock-based compensation2021, we recognized expense related to outstanding stock options that will be recognized in future periods. The Company also recognized $96.8the 2020 Plan of $74.5 million, $7.0 million, and $10.9 million for Industrial Technologies and Services, Precision and Science Technologies, and Corporate, respectively.
43

Table of compensation expense related to a grant of 5.5 million deferred stock units (“DSU”) to employees at the date of the initial public offering. The Company expects to make stock-based awards to employees and recognize stock-based compensation expenses in future periods.Content
Outlook

IndustrialsIndustrial Technologies and Services Segment

The mission-critical nature of our Industrials products across manufacturing processes drives a demand environment and outlook that are highly correlated with global and regional industrial production, capacity utilization and long-term GDP growth. Economic conditions remain uncertain with regard to COVID-19, and its impact on end markets, however, recent order rates have begun to improve as markets strengthened and gained greater visibility to vaccine roll-out strategies in various regions. In the United States and Europe, we are poised to continue benefiting from expected growth in real GDP, along with an expected rebound in industrial production activity in 2017 and 2018. In APAC, despite the recent deceleration, GDP growth remains robust. In the thirdsecond quarter of 2017,2021, we had $294.4$1,204.0 million of orders in our IndustrialsIndustrial Technologies and Services segment, an increase of 14%52.8% over the thirdsecond quarter of 2016, or an 11% increase on a constant currency basis.2020.

EnergyPrecision and Science Technologies Segment

Our EnergyDuring the COVID-19 pandemic, the Precision and Science Technologies segment has a diverse rangeseen increased demand for our vacuum pump and compressor solutions used in respirator and ventilator applications. Demand of equipment and associated aftermarket parts, consumablesother products and services for a number of market sectors with energy exposure, spanning upstream, midstream, downstreamwhich had been negatively impacted in 2020 have begun to recover in 2021 as markets strengthened and petrochemical applications. Demand for certain of our Energy products has historically correspondedgained greater visibility to the supply and demand dynamics related to oil and natural gas products, and has been influenced by oil and natural gas prices, the level and intensity of hydraulic fracturing activity, rig count, drilling activity and other economic factors. These factors have caused the level of demand for certain of our Energy products to change at times (both positively and negatively) and we expect these trends to continuevaccine roll-out strategies in the future.various regions. In the thirdsecond quarter of 2017,2021, we had $251.1$255.2 million of orders in our EnergyPrecision and Science Technologies segment, an increase of 48%26.8% over the third quarter of 2016, or a 46% increase on a constant currency basis.2020.

An increased number of drilling rigs have reentered the market as crude oil prices have improved from lowpoints observed during the first half of 2016 and the number of drilled but uncompleted wells has grown 72% from December 2013 to September 2017. We believe we are well positioned to benefit from the expected growth in drilling rigs and improvements in crude oil prices. In addition, secular industry trends that are driving increased demand of newer, fit-for-purpose equipment with innovations that increase productivity and are increasing the frequency of replacement, refurbishment and upgrade cycles of pumping equipment and associated consumable products used in drilling and particularly hydraulic fracturing activity by increasing the intensity of such activities. As a result of our expanded direct aftermarket service locations, particularly within North America, we believe we are well positioned to benefit from both the increasing intensity of hydraulic fracturing activity and the increase in the backlog of drilled but uncompleted wells. We expect both trends to positively impact our hydraulic fracturing and drilling product mix and our aftermarket to original equipment ratio within the Energy segment.

Our midstream and downstream products provide relatively stable demand with attractive, long-term growth trends related to an expected increase in the production and transportation of hydrocarbons. Demand for our petrochemical industry products correlates with growth in the development of new petrochemical plants as well as activity levels therein. Advancements in the development of unconventional natural gas resources in North America over the past decade have resulted in the abundant availability of locally-sourced natural gas as feedstock for petrochemical plants in North America, supporting long-term growth.

Medical Segment

We believe that demand for products and services in the Medical space will continue to benefit from attractive secular growth trends in the aging population requiring medical care, emerging economies modernizing and expanding their healthcare systems and increased investment globally in health solutions. In addition, we expect growing demand for higher healthcare efficiency, requiring premium and high performance systems. During 2016, we focused on the development and introduction of new products and applications to access the liquid pump market, leveraging our technology and expertise in gas pumps. We expect 2017 to be a transition year; while a large customer has elected to dual source its requirements for gas pumps, we are also expanding into the liquid pump market and diversifying our customer base. Revenues for the third quarter of 2017 increased 7% when excluding the impacts of foreign currency and the dual sourcing customer transition. In the third quarter of 2017, we had $61.1 million of orders in our Medical segment, an increase of 19% over the third quarter of 2016, or a 17% increase on a constant currency basis.
39

How We Assess the Performance of Our Business

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

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

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

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

Adjusted EBITDA, Adjusted Net Income and Free Cash Flow should not be considered as alternatives to net lossincome (loss) or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.

Included in our discussion of our consolidated and segment results below are changes in revenues and Adjusted EBITDA on a Constant Currency basis. Constant Currency information compares results between periods as if exchange rates had remained constant period over period. We define Constant Currency revenues and Adjusted EBITDA as total revenues and Adjusted EBITDA excluding the impact of foreign exchange rate movements and use it to determine the Constant Currency revenue and Adjusted EBITDA growth on a year-over-year basis. Constant Currency revenues and Adjusted EBITDA are calculated by translating current period revenues and Adjusted EBITDA using corresponding prior period exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a Constant Currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.  See “Results of Operations—Non-GAAP“Non-GAAP Financial Measures” below for reconciliation information.
Results of Continuing Operations

Consolidated results should be read in conjunction with the segment results section herein and the Note 17 “Segment Results note to our unaudited condensed consolidated financial statements included elsewhere in this report,Form 10-Q, which provides more detailed
44

Table of Content
discussions concerning certain components of our consolidated statementsCondensed Consolidated Statements of operations.Operations. All intercompany accounts and transactions have been eliminated within the consolidated results.
40

The following table presents selected consolidated resultsConsolidated Results of operationsOperations of our business for the three month and ninesix month periods ended SeptemberJune 30, 20172021 and 2016:2020.

 
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
 2017  2016  2017  2016 2021202020212020
Condensed Consolidated Statement of Operations:            Condensed Consolidated Statement of Operations:
Revenues $649.6  $462.6  $1,710.4  $1,361.6 Revenues$1,279.1 $1,025.4 $2,408.6 $1,642.2 
Cost of sales  395.7   298.4   1,066.0   867.1 Cost of sales766.4 716.8 1,443.8 1,130.3 
Gross profit  253.9   164.2   644.4   494.5 Gross profit512.7 308.6 964.8 511.9 
Selling and administrative expenses  111.1   100.9   339.1   310.3 Selling and administrative expenses267.2 209.1 519.5 348.5 
Amortization of intangible assets  29.5   30.7   87.6   90.8 Amortization of intangible assets80.3 96.4 164.5 143.1 
Impairment of other intangible assets  -   -   -   1.5 
Other operating expense, net  17.4   12.4   186.7   26.1 Other operating expense, net25.1 48.1 19.4 144.6 
Operating income  95.9   20.2   31.0   65.8 
Operating income (loss)Operating income (loss)140.1 (45.0)261.4 (124.3)
Interest expense  30.1   43.0   115.4   128.7 Interest expense22.7 30.8 45.8 57.9 
Loss on extinguishment of debt  34.1   -   84.5   - Loss on extinguishment of debt— — — 2.0 
Other income, net  (0.7)  (0.7)  (2.6)  (2.6)Other income, net(34.1)(2.3)(36.6)(2.5)
Income (loss) before income taxes  32.4   (22.1)  (166.3)  (60.3)Income (loss) before income taxes151.5 (73.5)252.2 (181.7)
Provision (benefit) for income taxes  4.4   (9.1)  (41.2)  (33.3)
Provision for income taxesProvision for income taxes12.5 78.4 23.1 11.5 
Loss on equity method investmentsLoss on equity method investments(0.7)— (0.7)— 
Income (Loss) from Continuing OperationsIncome (Loss) from Continuing Operations138.3 (151.9)228.4 (193.2)
Income (loss) from discontinued operations, net of taxIncome (loss) from discontinued operations, net of tax96.3 (24.6)(83.9)(20.2)
Net income (loss)  28.0   (13.0)  (125.1)  (27.0)Net income (loss)234.6 (176.5)144.5 (213.4)
Less: Net (loss) income attributable to noncontrolling interest  -   (0.1)  0.1   (0.6)
Net income (loss) attributable to Gardner Denver Holdings, Inc. $28.0  $(12.9) $(125.2) $(26.4)
Less: Net income attributable to noncontrolling interestsLess: Net income attributable to noncontrolling interests0.7 1.1 1.0 1.0 
Net income (loss) attributable to Ingersoll Rand Inc.Net income (loss) attributable to Ingersoll Rand Inc.$233.9 $(177.6)$143.5 $(214.4)
                
Percentage of Revenues:                Percentage of Revenues:
Gross profit  39.1%  35.5%  37.7%  36.3%Gross profit40.1 %30.1 %40.1 %31.2 %
Selling and administrative expenses  17.1%  21.8%  19.8%  22.8%Selling and administrative expenses20.9 %20.4 %21.6 %21.2 %
Operating income  14.8%  4.4%  1.8%  4.8%
Net income (loss)  4.3%  (2.8%)  (7.3%)  (2.0%)
Operating income (loss)Operating income (loss)11.0 %(4.4)%10.9 %(7.6)%
Income (loss) from continuing operationsIncome (loss) from continuing operations10.8 %(14.8)%9.5 %(11.8)%
Adjusted EBITDA  25.4%  19.2%  22.7%  18.5%Adjusted EBITDA22.8 %21.2 %22.3 %20.1 %
                
Other Financial Data:                Other Financial Data:
Adjusted EBITDA(1)
  164.7   89.0   388.9   252.3 
Adjusted EBITDA (1)
$292.1 $217.5 $536.1 329.7 
Adjusted Net Income (1)
  85.2   23.3   149.2   67.2 
Adjusted Net Income (1)
194.8 123.3 362.8 177.8 
Cash flows - operating activities  63.9   37.8   83.9   106.8 Cash flows - operating activities147.3 198.8 234.8 196.3 
Cash flows - investing activities  (2.4)  (34.0)  (43.1)  (59.8)Cash flows - investing activities(25.0)(14.3)(232.2)20.0 
Cash flows - financing activities  (9.1)  (8.3)  (8.2)  (30.8)Cash flows - financing activities(2.3)378.8 (10.1)336.9 
Free Cash Flow (1)
  54.3   17.5   47.5   60.5 
Free Cash Flow (1)
135.7 183.2 208.9 173.6 
(1)See the “Non-GAAP Financial Measures” section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.

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

Revenues for the three month period ended SeptemberJune 30, 20172021 were $649.6$1,279.1 million, an increase of $187.0$253.7 million, or 40.4%24.7%, compared to $462.6$1,025.4 million for the same three month period in 2016.2020. The increase in revenues was primarily due primarily to higher revenue from upstream energy exposed markets (27.3% or $126.1 million), higher volume in other markets in our Energy segment as well as in our Industrials segment including acquisitions and net
45

Table of divestitures (9.9% or $45.6 million), by theContent
organic volumes of $132.0 million, favorable impact of foreign currencies (2.5% or $11.4 million),of $62.9 million and improvedhigher pricing of $31.7 million. Organic volume growth included the adverse impact of COVID-19 in other markets in our Energy segment as well as in our Industrials and Medical segments (1.1% or $5.0 million), partially offset by lower volume including acquisitions in our Medical segment (0.2% or $1.1 million).the three month period ended June 30, 2020. The percentage of consolidated revenues derived from aftermarket parts and services was 40.5%35.7% in the three month period ended SeptemberJune 30, 20172021 compared to 37.6%34.6% in the same three month period in 2016.

2020.
Revenues for the ninesix month period ended SeptemberJune 30, 20172021 were $1,710.4$2,408.6 million, an increase of $348.8$766.4 million, or 25.6%46.7%, compared to $1,361.6$1,642.2 million for the same ninesix month period in 2016.2020. The increase in revenues was primarily due primarily to acquisitions of $448.3 million, higher revenues from upstream energy exposed markets (22.6% or $308.0 million), higher volume in other markets in our Energy segment as well as in our Industrials segment including acquisitions and netorganic volumes of divestitures (2.4% or $32.6 million), and improved pricing (0.9% or $12.6 million), partially offset by the unfavorable$179.7 million, favorable impact of foreign currencies (0.2% or $2.9 million),of $92.4 million and lowerhigher pricing of $46.0 million. Organic volume including acquisitionsgrowth included the adverse impact of COVID-19 in our Medical segment (0.1% or $1.5 million).the six month period ended June 30, 2020. The percentage of consolidated revenues derived from aftermarket parts and services was 42.1%36.5% in the ninesix month period ended SeptemberJune 30, 20172021 compared to 34.9%34.6% in the same ninesix month period in 2016.
41

2020.
Gross Profit

Gross profit for the three month period ended SeptemberJune 30, 20172021 was $253.9$512.7 million, an increase of $89.7$204.1 million, or 54.6%66.1%, compared to $164.2$308.6 million for the same three month period in 2016,2020, and as a percentage of revenues was 39.1%40.1% for the three month period ended SeptemberJune 30, 20172021 and 35.5%30.1% for the same three month period in 2016.2020. The increase reflectsin gross profit is primarily due to higher organic volumes discussed above. The increase in gross profit as a percentage of revenues is due to the runoff of the fair valuation adjustments related to purchase price allocation from upstream energy exposed markets, higher volumeinventory into cost of sales in other marketsthe 2020 period that did not recur in our Energy segment as well as in our Industrials segment including acquisitions and net of divestitures, improved pricing in our Industrials, Energy and Medical segments, and by favorable impact of foreign currencies, partially offset by lower volume including acquisitions in our Medical segment.
the 2021 period.
Gross profit for the ninesix month period ended SeptemberJune 30, 20172021 was $644.4$964.8 million, an increase of $149.9$452.9 million, or 30.3%88.5%, compared to $494.5$511.9 million infor the same ninesix month period in 2016,2020, and as a percentage of revenues was 37.7%40.1% for the ninesix month period ended SeptemberJune 30, 20172021 and 36.3%31.2% for the same ninesix month period in 2016.2020. The increase reflects higherin gross profit is primarily due to acquisitions, including Ingersoll Rand Industrial, and the runoff of the fair valuation adjustments related to purchase price allocation from inventory into cost of sales in the 2020 period that did not recur in the 2021 period. The increase in gross profit as a percentage of revenues is primarily due to the runoff of the fair valuation adjustments related to purchase price allocation from upstream energy exposed markets, higher volumeinventory into cost of sales in other marketsthe 2020 period that did not recur in our Energy segment as well as in our Industrials segment including acquisitions, improved pricing in our Industrials and Medical segments, partially offset by the unfavorable impact of foreign currencies, lower volume in our Medical segment including acquisitions, and lower pricing in other markets in our Energy segment.
2021 period.
Selling and Administrative Expenses

Selling and administrative expenses were $111.1$267.2 million for the three month period ended SeptemberJune 30, 2017,2021, an increase of $10.2$58.1 million, or 10.1%27.8%, compared to $100.9$209.1 million for the same three month period in 2016.2020. Selling and administrative expenses as a percentage of revenues decreasedincreased to 17.1%20.9% for the three month period ended SeptemberJune 30, 20172021 from 21.8%20.4% in the same three month period in 2016.2020. The increase in selling and administrative expenses is primarily reflects higher salary and other employee related costs, and professional and consulting fees, partially offset by a decline in Sponsor fees.

due to increased incentive compensation.
Selling and administrative expenses were $339.1$519.5 million for the ninesix month period ended SeptemberJune 30, 2017,2021, an increase of $28.8$171.0 million, or 9.3%49.1%, compared to $310.3$348.5 million for the same ninesix month period in 2016.2020. Selling and administrative expenses as a percentage of revenues decreasedincreased to 19.8%21.6% for the ninesix month period ended SeptemberJune 30, 20172021 from 22.8%21.2% in the same ninesix month period in 2016.2020. The increase in selling and administrative expenses is primarily reflect a sponsor monitoring termination fee, expenses relateddue to our initial public offering, higher professionalacquisitions, including Ingersoll Rand Industrial and consulting fees, higher salary and other employee costs, partially offset by lower facilities operating expenses.  Excluding Sponsor fees and initial public offering expenses, selling and administrative expenses as a percentage of revenues decreased to 18.6% for the nine month period ended September 30, 2017 from 22.5% in the same nine month period in 2016.

increased incentive compensation.
Amortization of Intangible Assets

Amortization of intangible assets was $29.5$80.3 million for the three month period ended SeptemberJune 30, 2017 and $30.7 million for the three month period ended September 30, 2016.  The decrease was primarily due to changes in foreign currencies.

Amortization of intangible assets was $87.6 million for the nine month period ended September 30, 2017,2021, a decrease of $3.2$16.1 million, compared to $90.8 million in the same nine month period in 2016.  The decrease was primarily due to changes in foreign currencies and intangibles which became fully amortized in 2016.

Other Operating Expense, Net

Other operating expense, net for the three month period ended September 30, 2017 was $17.4 million, an increase of $5.0 million, compared to $12.4$96.4 million in the same three month period in 2016.2020. The decrease was primarily due to certain intangible assets, primarily backlog, related to the acquisition of Ingersoll Rand Industrial becoming fully amortized during the period.
Amortization of intangible assets was $164.5 million for the six month period ended June 30, 2021, an increase of $21.4 million, compared to $143.1 million in the same six month period in 2020. The increase was primarily due to the recognitionamortization of stock-based compensation expense for stock options and deferred stock units ($9.8 million),intangible assets related to the acquisition of Ingersoll Rand Industrial, partially offset by lower employee severance costs ($4.7 million).certain intangible assets, primarily backlog, also related to the acquisition of Ingersoll Rand Industrial becoming fully amortized during the period.

Other Operating Expense, Net
Other operating expense, net for the nine month period ended September 30, 2017 was $186.7$25.1 million an increase of $160.6 million, compared to $26.1 million in the same nine month period in 2016.  The increase was primarily due to the recognition of stock-based compensation expense for stock options and deferred stock units ($166.0 million), a portion of which ($156.2 million) was related to our initial public offering, an increase in foreign currency losses (gains), net ($8.9 million), and a charge for environmental remediation expense ($0.9 million) partially offset by a decrease in restructuring charges, net ($10.5 million).
42

Interest Expense

Interest expense for the three month period ended SeptemberJune 30, 2017 was $30.1 million,2021, a decrease of $12.9$23.0 million, compared to $43.0$48.1 million in the same three month period in 2016.2020. The decrease was primarily due to reduced debt as a resultlower restructuring charges
46

Table of debt payments made with the proceeds from the Company’s initial public offering,Content
of $22.6 million and a flat weighted-average interest ratelower foreign currency transaction losses, net of approximately 6.0% in 2017$1.5 million, partially offset by higher acquisition and 2016.other transaction related expenses and non-cash charges of $2.5 million.

InterestOther operating expense, net was $19.4 million for the ninesix month period ended SeptemberJune 30, 2017 was $115.4 million,2021, a decrease of $13.3$125.2 million, compared to $128.7$144.6 million in the same ninesix month period in 2016.2020. The decrease was primarily due to reduced debt aslower restructuring charges of $58.2 million, lower acquisition and other transaction related expenses and non-cash charges of $44.2 million, and higher foreign currency transaction gains, net of $21.6 million.
Interest Expense
Interest expense was $22.7 million for the three month period ended June 30, 2021, a resultdecrease of $8.1 million, compared to $30.8 million in the same three month period in 2020. The decrease was primarily due to a decrease in the weighted-average interest rate. The weighted average interest rate was approximately 2.0% for the three month period ended June 30, 2021 and 3.4% in the same period in 2020.
Interest expense was $45.8 million for the six month period ended June 30, 2021, a decrease of $12.1 million, compared to $57.9 million in the same six month period in 2020. The decrease was primarily due to the weighted average interest rate decreasing to approximately 2.0% for the six month period ended June 30, 2021 when compared to 4.2% in the same period in 2020.
Loss on Extinguishment of Debt
Loss on extinguishment of debt payments made withwas $2.0 million for the proceeds fromsix month period ended June 30, 2020, which was related to the Company’s initial public offering, partially offset by a higher weighted-average interest raterefinancing of approximately 6.2% in 2017 compared to 6.0% in 2016.
the Original Dollar Term Loan and the Original Euro Term Loan.
Other Income, Net

Other income, net was $0.7$34.1 million and $2.3 million in the three month periodperiods ended SeptemberJune 30, 20172021 and 2016, respectively, consisting2020, respectively. The increase was primarily of investment income and realized and unrealized gains and lossesdue to a gain on investments.

post close settlements.
Other income, net was $2.6$36.6 million and $2.5 million in the ninesix month periodperiods ended SeptemberJune 30, 20172021 and 2016, respectively, consisting2020, respectively. The increase was primarily of investment income and realized and unrealized gains and lossesdue to a gain on investments.

post close settlements.
Provision (Benefit) for Income Taxes

The provision for income taxes was $4.4$12.5 million resulting in a 13.6%8.3% effective income tax provision rate for the three month period ended SeptemberJune 30, 2017,2021, compared to a benefitprovision for income taxes of $9.1$78.4 million resulting in a 41.3%(106.7)% effective income tax benefitprovision rate in the same three month period in 2016.2020. The increasedecrease in the tax provision for income taxesthe three month period ended June 30, 2021 is primarily due to the increasebenefits in pre-tax income.  2021 associated with the final settlement on the merger transaction and a restructuring benefit recognized during this quarter.
The decreaseprovision for income taxes was $23.1 million resulting in thea 9.2% effective income tax provision rate for the six month period ended June 30, 2021, compared to a provision for income taxes of $11.5 million resulting in a (6.3)% effective income tax provision rate in the same six month period in 2020. The increase in the tax provision for the six month period ended June 30, 2021 is primarily due to the decrease in the U.S. loss at a higher tax rate combined with an increase in foreign profits at athe pretax book income in jurisdictions with higher effective tax rates combined with decreased earnings in jurisdictions with lower tax rate.

The benefit for income taxesrates. This rate increase was $41.2 million resulting inmitigated by a 24.8% effective income benefitreduction of unrecognized tax rate forreserves as a result of the nine month period ended September 30, 2017, compared tolapse of the limitation on statues, a benefit for income taxes of $33.3 million resulting in a 55.2% effective income tax benefit rate in the same nine month period in 2016.  The decrease in the provision for income taxes is due to the increase of the pre-tax loss.  The significant loss in the U.S. was caused by one-time expenses associated with the Company’s initial public offering.  This included offering-related expenses, early termination fees relating tofinal settlement on the pay down of debt,merger transaction, and stock-based compensation expense.  The decrease in the effective income tax rate is primarily due to these expenses being benefited at a lower tax rate.

restructuring benefit recognized during this quarter.
Net Income (Loss)

The netNet income was $28.0$234.6 million for the three month period ended SeptemberJune 30, 20172021 compared to a net loss of $13.0$176.5 million in the same three month period in 2016.2020. The increase in net income was primarily due to higher operating incomethe gain on sale (see “―Results of Discontinued Operations” below), higher revenues, gross profit on increased revenues, increased other income, net, decreased other
47

Table of Content
operating expenses, net, lower amortization of intangible assets, and lower interest expense, partially offset by stock-based compensation expensehigher selling and loss on extinguishment of debt.administrative expenses.

The net lossNet income was $125.1$144.5 million for the ninesix month period ended SeptemberJune 30, 20172021 compared to a net loss of $27.0$213.4 million in the same ninesix month period in 2016.2020. The increasedchange in net lossincome (loss) was primarily due to higher gross profit on increased revenues, the gain on sale (see “―Results of Discontinued Operations” below), decreased other operating expenses, associated with the initial public offering, stock-based compensationnet, increased other income, net, and lower interest expense, and loss on the extinguishment of debt, partially offset by higher revenuesselling and gross profit.

administrative expenses and higher amortization.
Adjusted EBITDA

Adjusted EBITDA increased $75.7$74.6 million to $164.7$292.1 million for the three month period ended SeptemberJune 30, 20172021 compared to $89.0$217.5 million in the same three month period in 2016.2020. Adjusted EBITDA as a percentage of revenues increased 620160 basis points to 25.4%22.8% for the three month period ended SeptemberJune 30, 20172021 from 19.2%21.2% for the same three month period in 2016.2020. The increase in Adjusted EBITDA was primarily due to higher organic sales volume in our Energy segmentof $50.7 million, higher pricing of $31.7 million and Industrials segment including acquisitions and net of divestitures of  ($80.9 million), improved pricing ($9.8 million), and the favorable impact of foreign currencies ($3.3 million),of $16.4 million, partially offset by higher selling and administrative costs ($11.3 million), higher materialexpenses of $41.8 million. The increase in Adjusted EBITDA as a percentage of revenues is primarily attributable to productivity related actions implemented subsequent to the acquisition of Ingersoll Rand Industrial including procurement initiatives, Innovate 2 Value (“I2V”) initiatives and other manufacturing costs ($5.8 million)structural selling and lower volume including acquisitions in our Medical segment ($1.2 million).
43

administrative cost actions.
Adjusted EBITDA increased $136.6$206.4 million to $388.9$536.1 million for the ninesix month period ended SeptemberJune 30, 20172021 compared to $252.3$329.7 million in the same ninesix month period in 2016.2020. Adjusted EBITDA as a percentage of revenues increased 420220 basis points to 22.7%22.3% for the ninesix month period ended SeptemberJune 30, 20172021 from 18.5%20.1% for the same ninesix month period in 2016.2020. The increase in Adjusted EBITDA was primarily due to acquisitions, including Ingersoll Rand Industrial, of $105.7 million, higher organic sales volume in our Energy segmentof $69.8 million, higher pricing of $46.0 million and Industrials segment including acquisitions and netfavorable impact of divestitures ($135.1 million), lower material and other manufacturing costs ($2.6 million), and improved pricing ($15.9 million),foreign currencies of $23.9 million, partially offset by higher selling and administrationadministrative expenses ($13.7 million), lower volumeof $51.8 million. The increase in Adjusted EBITDA as a percentage of revenues is primarily attributable to productivity related actions implemented subsequent to the acquisition of Ingersoll Rand Industrial including acquisitions in our Medical segment ($2.6 million),procurement initiatives, I2V initiatives and the unfavorable impact of foreign currencies ($0.7 million).

structural selling and administrative cost actions.
Adjusted Net Income

Adjusted Net Income increased $61.9$71.5 million to $85.2$194.8 million for the three month period ended SeptemberJune 30, 2017,2021 compared to $23.3$123.3 million in the same three month period in 2016.2020. The increase was primarily due to increased Adjusted EBITDA and lower interest expense , partially offset by an increased income tax provision, as adjusted.
Adjusted Net Income increased $185.0 million to $362.8 million for the six month period ended June 30, 2021 compared to $177.8 million in the same six month period in 2020. The increase was primarily due to increased Adjusted EBITDA and lower interest expense, partially offset by an increase in theincreased income tax provision, as adjusted.

48
Adjusted Net Income increased $82.0 million to $149.2 million for the nine month period ended September 30, 2017 compared to $67.2 million in the same nine month period in 2016.  The increase was primarily due to increased Adjusted EBITDA and lower interest expense, partially offset by an increase in the income tax provision, as adjusted.

Table of Content
Non-GAAP Financial Measures

Set forth below are the reconciliations of Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income and Cash Flows from Operating Activities to Free Cash Flow:Flow.
  
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
Net Income (Loss) (1)
 $28.0  $(13.0) $(125.1) $(27.0)
Plus:                
Interest expense  30.1   43.0   115.4   128.7 
Provision (benefit) for income taxes  4.4   (9.1)  (41.2)  (33.3)
Depreciation expense  13.9   12.2   39.3   36.1 
Amortization expense (a)  29.5   30.7   87.6   90.8 
Impairment of goodwill and other intangible assets (b)  -   -   -   1.5 
Sponsor fees and expenses (c)  -   1.8   17.3   3.8 
Restructuring and related business transformation costs  (d)  6.3   18.2   20.5   46.2 
Acquisition related expenses and non-cash charges (e)  1.2   1.9   3.1   3.6 
Environmental remediation loss reserve (f)  -   -   0.9   - 
Expenses related to initial stock offering (g)  0.5   -   3.6   - 
Establish public company financial reporting compliance (h)  3.8   0.1   7.2   0.1 
Stock-based compensation (i)  9.8   -   166.0   - 
Loss on extinguishment of debt (j)  34.1   -   84.5   - 
Other adjustments (k)  3.1   3.2   9.8   1.8 
Adjusted EBITDA $164.7  $89.0  $388.9  $252.3 
Minus:                
Interest expense  30.1   43.0   115.4   128.7 
Income tax provision, as adjusted (l)  33.3   7.4   77.8   12.7 
Depreciation expense  13.9   12.2   39.3   36.1 
Amortization of non-acquisition related intangible assets  2.2   3.1   7.2   7.6 
Adjusted Net Income $85.2  $23.3  $149.2  $67.2 
Free Cash Flow                
Cash flows - operating activities  63.9   37.8   83.9   106.8 
Minus:                
Capital expenditures  9.6   20.3   36.4   46.3 
Free Cash Flow $54.3  $17.5  $47.5  $60.5 

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Net Income (Loss)$234.6 $(176.5)$144.5 $(213.4)
Less: Income (loss) from discontinued operations258.5 (7.2)80.7 5.3 
Less: Income tax provision from discontinued operations(162.2)(17.4)(164.6)(25.5)
Income (loss) from continuing operations, net of tax138.3 (151.9)228.4 (193.2)
Plus:
Interest expense22.7 30.8 45.8 57.9 
Provision for income taxes12.5 78.4 23.1 11.5 
Depreciation expense (a)
21.0 22.5 41.3 34.8 
Amortization expense (b)
80.3 96.4 164.5 143.1 
Restructuring and related business transformation costs (c)
6.7 31.0 9.4 69.6 
Acquisition related expenses and non-cash charges (d)
14.3 90.3 24.8 179.8 
Stock-based compensation (e)
21.5 12.1 43.1 14.9 
Foreign currency transaction losses (gains), net3.4 4.9 (14.7)6.9 
Loss on equity method investments0.7 — 0.7 — 
Loss on extinguishment of debt (f)
— — — 2.0 
Gain on settlement of post-acquisition contingencies (g)
(30.1)— (30.1)— 
Other adjustments (h)
0.8 3.0 (0.2)2.4 
Adjusted EBITDA$292.1 $217.5 $536.1 $329.7 
Minus:
Interest expense$22.7 $30.8 $45.8 $57.9 
Income tax provision, as adjusted (i)
49.6 38.5 77.6 56.1 
Depreciation expense21.0 22.5 41.3 34.8 
Amortization of non-acquisition related intangible assets4.0 2.4 8.6 3.1 
Adjusted Income from Continuing Operations, Net of Tax$194.8 $123.3 $362.8 $177.8 
Free Cash Flow from Continuing Operations:
Cash flows - operating activities$147.3 $198.8 $234.8 $196.3 
Minus:
Capital expenditures11.6 15.6 25.9 22.7 
Free Cash Flow from Continuing Operations$135.7 $183.2 $208.9 $173.6 
(1)In the fourth quarter of fiscal year 2016, the Company modified its methodology for presenting reconciling items from Net Income (Loss).  The reconciling items for the three month and nine month periods ended September 30, 2016 have been reclassified to conform to the methodology used in the three month and nine month periods ended September 30, 2017, and include the following:
(a)Depreciation expense excludes $1.0 million and $0.4 million of depreciation of rental equipment for the three month periods ended June 30, 2021 and 2020, respectively, and excludes $2.0 million and $0.9 million for the six month periods ended June 30, 2021 and 2020.
(b)Represents $76.3 million and $94.0 million of amortization of intangible assets arising from the acquisition of Ingersoll Rand Industrial and other acquisitions (customer relationships, technology, tradenames and backlog) and $4.0 million and $2.4 million of amortization of non-acquisition related intangible assets, in each case for the three month periods ended June 30, 2021 and 2020, respectively.
Represents $155.9 million and $140.0 million of amortization of intangible assets arising from the acquisition of Ingersoll Rand Industrial and other acquisitions (customer relationships, technology, tradenames and backlog) and $8.6 million and $3.1 million of amortization of non-acquisition related intangible assets, in each case for the six month periods ended June 30, 2021 and 2020, respectively.
44

(a)Represents $27.3 million and $27.6 million of amortization of intangible assets arising from the KKR transaction and other acquisitions (customer relationships and trademarks) and $2.2 million and $3.1 million of amortization of non-acquisition related intangible assets, in each case for the three month periods ended September 30, 2017 and 2016, respectively.  Represents $80.4 million and $83.2 million of amortization of intangible assets arising from the KKR transaction and other acquisitions (customer relationships and trademarks) and $7.2 million and $7.6 million of amortization of non-acquisition related intangible assets, in each case for the nine month periods ended September 30, 2017 and 2016, respectively.
(b)Represents non-cash charges for impairment of goodwill and other intangible assets.

(c)Represents management fees and expenses paid to KKR, including a monitoring agreement termination fee of $16.2 million paid in the nine month period ended September 30, 2017.

(d)Restructuring and related business transformation costs consist of the following:
 
 
 
 
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
             
Restructuring charges $2.8  $3.0  $4.9  $15.4 
Severance, sign-on, relocation and executive search costs  0.6   5.7   2.2   12.7 
Facility reorganization, relocation and other costs  1.0   2.9   3.9   6.5 
Information technology infrastructure transformation  0.8   0.6   3.4   1.0 
(Gains) losses on asset and business disposals  (0.6)  1.7   2.0   1.6 
Consultant and other advisor fees  0.5   3.2   1.7   6.9 
Other, net  1.2   1.1   2.4   2.1 
Total restructuring and related business transformation costs $6.3  $18.2  $20.5  $46.2 
(e)Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

(f)Represents estimated environmental remediation costs and losses relating to a former production facility.

(g)Represents expenses related to the Company’s initial stock offering.

(h)Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of the new revenue recognition standard (ASC 606 - Revenue from Contracts with Customers) in the first quarter of 2018, one year ahead of the required adoption date for a private company.  These expenses were previously included in ‘Expenses related to initial stock offering’ and prior periods have been restated to conform to current period presentation.

(i)Represents stock-based compensation expense recognized for stock options outstanding for the three months and nine months ended September 30, 2017 of $7.8 million and $69.2 million, respectively, and DSUs granted to employees at the date of the initial public offering for the three months and nine months ended September 30, 2017 of $2.0 million and $96.8 million, respectively.  See Note 9 “Stock-Based Compensation”.

(j)Represents losses on extinguishment of debt recognized on the redemption of the senior notes and pay down of a portion of the Original Dollar Term Loan Facility with proceeds from the initial public offering in May 2017 ($50.4 million) and in connection with the refinancing of the Original Dollar Term Loan Facility and Euro Term Loan Facility in August 2017 ($34.1 million).

(k)Includes (i) foreign exchange gains and losses, (ii) effects of amortization of prior service costs and amortization of gains in pension and other postemployment benefits (OPEB) expense, (iii) certain legal and compliance costs, and (iv) other miscellaneous adjustments.

45

(l)Represents the Company’s income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items.  The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances.  Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances.
(c)Restructuring and related business transformation costs consisted of the following.

For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Restructuring charges$6.8 $29.4 $9.2 $67.4 
Facility reorganization, relocation and other costs— 0.1 — 0.5 
Other, net(0.1)1.5 0.2 1.7 
Total restructuring and related business transformation costs$6.7 $31.0 $9.4 $69.6 
 
 
 
 
For the Three
Months Ended
September 30,
  
For the Nine
Months Ended
September 30,
 
  2017  2016  2017  2016 
Provision (Benefit) for income taxes $4.4  $(9.1) $(41.2) $(33.3)
Tax impact of pre-tax income adjustments  30.3   16.4   119.0   43.9 
Discrete tax items  (1.4)  0.1   -   2.1 
Income tax provision, as adjusted $33.3  $7.4  $77.8  $12.7 
(d)Represents costs associated with successful and/or abandoned acquisitions and divestitures, including third-party expenses, post-closure integration costs (including certain incentive and non-incentive cash compensation costs), and non-cash charges and credits arising from fair value purchase accounting adjustments.
(e)Represents stock-based compensation expense recognized for the three and six month periods ended June 30, 2021 of $21.5 million and $43.1 million.
Represents stock-based compensation expense recognized for the three and six month periods ended June 30, 2020 of $12.1 million and $15.4 million, decreased by $0.5 million for the six month period ended June 30, 2020 due to costs associated with employer taxes.
(f)Represents losses on extinguishment of a portion of the U.S. term loan and the amendment of the revolving credit facility.
(g)Represents a gain on settlement of post-acquisition contingencies outside of the measurement period related to adjustments to the transaction price for retirement plan funding and net working capital.
(h)Includes (i) effects of the amortization of prior service costs and amortization of losses in pension and other postemployment (“OPEB”) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.
(i)Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items. The tax effect of pre-tax items excluded from Adjusted Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances. The adjusted amounts are then used to calculate an adjusted provision for the quarter.
The income tax provision, as adjusted for each of the periods presented below consisted of the following.
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Provision for income taxes$12.5 $78.4 $23.1 $11.5 
Tax impact of pre-tax income adjustments36.4 (39.5)44.6 48.6 
Discrete tax items0.7 (0.4)9.9 (4.0)
Income tax provision, as adjusted$49.6 $38.5 $77.6 $56.1 
Segment Results

We classify our businessesbusiness into threetwo segments: Industrials, EnergyIndustrial Technologies and Medical.

Services and Precision and Science Technologies. Our Corporate operations (as described below) are not discussed separately as any results that had a significant impact on operating results are included in the consolidated results“Results of Operations” discussion above.

 We recast certain prior period amounts to conform to the way we are internally managed and how we monitor segment performance during the current fiscal year.
We evaluate the performance of our Segmentssegments based on Segment Revenues and Segment Adjusted EBITDA. Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.

The Segmentsegment measurements provided to and evaluated by the chief operating decision maker are described in Note 15 “Segment Results” in the “Notes17 “Segment Results to Condensed Consolidated Financial Statements”our unaudited condensed consolidated financial statements included elsewhere in this Report.

Included in our discussion of our segment results below are changes in Segment Revenues and Segment Adjusted EBITDA on a Constant Currency basis. Constant Currency information compares results between periods as if exchange rates had remained constant period over period. We define Constant Currency as changes in Segment Revenues and Segment Adjusted EBITDA excluding the impact of foreign exchange rate movements. We use these measures to determine the Constant Currency Segment Revenues and Segment Adjusted EBITDA growth on a year-on-year basis. Constant Currency Segment Revenues and Segment Adjusted EBITDA are calculated by translating current period Segment Revenues and Segment Adjusted EBITDA using prior period exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.

Form 10-Q.
Segment Results for the Three and NineSix Month Periods Ended SeptemberJune 30, 20172021 and 2016

2020
The following tables display Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our SegmentsSegments.
50

Table of Content
Industrial Technologies and illustrate, on a percentage basis, the impact of foreign currency fluctuations on Segment Revenues and Segment Adjusted EBITDA growth.

IndustrialsServices Segment Results
          
Constant Currency
Percent Change
 
 For the Three Months Ended September 30,  Percent ChangeFor the Three Month Period Ended June 30,Percent Change
 2017  2016  2017 vs. 2016  2017 vs. 2016 202120202021 vs. 2020
Segment Revenues $288.2  $265.6   8.5%  5.9%Segment Revenues$1,047.5 $829.6 26.3 %
Segment Adjusted EBITDA $63.1  $55.6   13.5%  10.1%Segment Adjusted EBITDA$258.6 $183.8 40.7 %
Segment Margin  21.9%  20.9%        Segment Margin24.7 %22.2 %250  bps
Segment Revenues for the three month period ended SeptemberJune 30, 20172021 were $288.2$1,047.5 million, an increase of $22.6$217.9 million, or 8.5%26.3%, compared to $265.6$829.6 million in the same three month period in 2016.2020. The increase in Segment Revenues was due to higher volume including acquisitions and netorganic volumes of divestitures (4.5%$112.5 million or 12.0 million)13.6%, the favorable impact of foreign currencies (2.6%of $52.6 million or $6.9 million)6.3%, higher pricing of $28.1 million or 3.4%, and higher pricing (1.4%acquisitions of $24.7 million or $3.7 million)3.0%. The percentageOrganic volume growth included the adverse impact of Segment Revenues derived from aftermarket parts and services was 33.4%COVID-19 in the three month period ended SeptemberJune 30, 2017 compared to 35.6% in the same three month period in 2016.
46

Segment Adjusted EBITDA for the three month period ended September 30, 2017 was $63.1 million, an increase of $7.5 million, or 13.5%, compared to $55.6 million in the same three month period in 2016.  Segment Adjusted EBITDA Margin increased 100 basis points to 21.9% from 20.9% in 2016.  The increase in Segment Adjusted EBITDA was due primarily to higher volume including acquisitions and net of divestitures ($4.3 million), improved pricing ($3.7 million), the favorable impact of foreign currencies ($1.9 million), partially offset by higher material and other manufacturing costs ($2.2 million), and higher selling and administrative expense ($0.2 million).

             
Constant Currency
Percent Change
  
  For the Nine Months Ended September 30,  Percent Change
  2017  2016  2017 vs. 2016  2017 vs. 2016 
Segment Revenues $819.0  $803.6   1.9%  2.3%
Segment Adjusted EBITDA $173.7  $156.2   11.2%  11.7%
Segment Margin  21.2%  19.4%        

Segment Revenues for the nine month period ended September 30, 2017 were $819.0 million, an increase of $15.4 million, or 1.9%, compared to $803.6 million in the same nine month period in 2016.  The increase in Segment Revenues was due to improved pricing (1.4% or $11.4 million), and higher volume including acquisitions and net of divestitures (0.9% or $6.7 million), partially offset by the unfavorable impact of foreign currencies (0.4% or $2.7 million).2020. The percentage of Segment Revenues derived from aftermarket parts and service was 34.6%40.5% in the nine month period ended September 30, 2017, compared to 35.0% in the same nine month period in 2016.

Segment Adjusted EBITDA for the nine month period ended September 30, 2017 was $173.7 million, an increase of $17.5 million, or 11.2%, compared to $156.2 million in the same nine month period in 2016.  Segment Adjusted EBITDA Margin increased 180 basis points to 21.2% from 19.4% in 2016.  The increase in Segment Adjusted EBITDA was due primarily to improved pricing ($11.4 million), lower material and other manufacturing costs ($4.8 million), higher volume including acquisitions and net of divestitures ($1.2 million), lower selling and administrative expense ($0.9 million), partially offset by the unfavorable impact of foreign currencies ($0.8 million).

Energy Segment Results
  For the Three Months Ended September 30,  Percent Change  
Constant Currency
Percent Change
 
  2017  2016  2017 vs. 2016  2017 vs. 2016 
Segment Revenues $301.6  $137.9   118.7%  115.9%
Segment Adjusted EBITDA $98.6  $22.0   348.2%  342.7%
Segment Margin  32.7%  16.0%        

Segment Revenues for the three month period ended SeptemberJune 30, 2017 were $301.6 million, an increase of $163.7 million, or 118.7%,2021 compared to $137.9 million39.5% in the same three month period in 2016.  The increase in Segment Revenues was due to higher revenues from upstream energy exposed markets (91.4% or $126.1 million), higher volume  in other markets of our Energy segment (24.4% or $33.6 million), the favorable impact of foreign currencies (2.5% or $3.4 million), and improved pricing in other markets of our Energy segment (0.4% or $0.6 million).  The percentage of Segment Revenues derived from aftermarket parts and services was 54.7% in the three month period ended September 30, 2017 compared to 57.7% in the same three month period in 2016.

2020.
Segment Adjusted EBITDA for the three month period ended SeptemberJune 30, 20172021 was $98.6$258.6 million, an increase of $76.6$74.8 million, or 348.2% compared to $22.040.7%, from $183.8 million in the same three month period in 2016.2020. Segment Adjusted EBITDA Margin increased 1670250 basis points to 32.7%24.7% from 16.0%22.2% in 2016.2020. The increase in Segment Adjusted EBITDA was primarily due primarily to higher organic sales volume ($76.8 million)of $41.8 million or 22.7%, , improvedhigher pricing ($5.3 million)of $28.1 million or 15.3%, and the favorable impact of foreign currencies ($1.3 million)of $13.8 million or 7.5%, productivity related procurement and I2V initiatives of $12.3 million or 6.7%, and acquisitions of $7.7 million or 4.2%, partially offset by higher material and manufacturing costs ($4.1 million), and higher selling and administrative expense ($2.7 million)costs of $25.5 million or 13.9%.
47

           
Constant Currency
Percent Change
  
 For the Nine Months Ended September 30,  Percent Change For the Six Month Period Ended June 30,Percent Change
 2017  2016  2017 vs. 2016  2017 vs. 2016 202120202021 vs. 2020
Segment Revenues $719.4  $385.8   86.5%  86.3%Segment Revenues$1,961.3 $1,333.6 47.1 %
Segment Adjusted EBITDA $199.2  $70.2   183.8%  183.2%Segment Adjusted EBITDA$470.1 $278.6 68.7 %
Segment Margin  27.7%  18.2%        Segment Margin24.0 %20.9 %310  bps
Segment Revenues for the ninesix month period ended SeptemberJune 30, 20172021 were $719.4$1,961.3 million, an increase of $333.6$627.7 million, or 86.5%47.1%, compared to $385.8 million$1,333.6 in the same ninesix month period in 2016.2020. The increase in Segment Revenues was primarily due to higher revenues from upstream energy exposed markets (79.8%acquisitions, including of Ingersoll Rand Industrial, of $361.8 million or $308.0 million)27.1%, higher organic volume in other markets of our Energy segment (6.7%$148.2 million or $25.8 million)11.1%, the favorable impact of foreign currencies (0.2%of $77.0 million or $0.4 million), partially offset by5.8% and higher pricing (0.2%of $40.7 million or $0.6 million)3.1%. Organic volume growth includeded the adverse impact of COVID-19 in the six month period ended June 30, 2020. The percentage of Segment Revenues derived from aftermarket parts and service was 59.9%41.2% in the ninesix month period ended SeptemberJune 30, 20172021 compared to 50.3%39.6% in the same ninesix month period in 2016.

2020.
Segment Adjusted EBITDA for the ninesix month period ended SeptemberJune 30, 20172021 was $199.2$470.1 million, an increase of $129.0$191.5 million, or 183.8%68.7%, compared to $70.2from $278.6 million in the same ninesix month period in 2016.2020. Segment Adjusted EBITDA Margin increased 950 basis points310 bps to 27.7%24.0% from 18.2%20.9% in 2016.2020. The increase in Segment Adjusted EBITDA was primarily due primarily to acquisitions, including Ingersoll Rand Industrial, of $82.7 million or 29.7%, higher volume ($134.0 million)organic sales volumes of $55.6 million or 20.0%, improvedhigher pricing ($2.7 million)of $40.7 million or 14.6%, and the favorable impact of foreign currencies ($0.2 million)of $20.0 million or 7.2%, and productivity related procurement and I2V initiatives of $18.9 million or 6.8%, partially offset by higher material and other manufacturing costs ($4.4 million) and higher selling and administrative expense ($3.5 million)costs of $22.7 million or 8.1%.

MedicalPrecision and Science Technologies Segment Results

For the Three Month Period Ended June 30,Percent Change
202120202021 vs. 2020
Segment Revenues$231.6 $195.8 18.3 %
Segment Adjusted EBITDA$71.1 $59.3 19.9 %
Segment Margin30.7 %30.3 %40  bps
            
Constant Currency
Percent Change
  
  For the Three Months Ended September 30,  Percent Change 
  2017  2016  2017 vs. 2016  2017 vs. 2016 
Segment Revenues $59.8  $59.1   1.2%  (0.9%)
Segment Adjusted EBITDA $16.8  $16.6   1.2%  (1.4%)
Segment Margin  28.1%  28.1%        

51

Table of Content
Segment Revenues for the three month period ended SeptemberJune 30, 20172021 were $59.8$231.6 million, an increase of $0.7$35.8 million, or 1.2%18.3%, compared to $59.1$195.8 million in the same three month period in 2016.2020. The increase in Segment Revenues was primarily due to thehigher organic volume of $19.5 million or 10.0%, favorable impact of foreign currencies (1.7%of $10.3 million or $1.0 million)5.3%, higher pricing of $3.6 million or 1.8%, and improved pricing (1.3%acquisitions of $2.4 million or $0.8 million), partially offset by lower1.2%. Organic volume including acquisitions (1.8% or $1.1 million).   The percentagegrowth included the adverse impact of Segment Revenues derived from aftermarket parts and services was 3.3%COVID-19 in the three month period ended SeptemberJune 30, 2017 compared to 0.0% in the same three month period in 2016.

Segment Adjusted EBITDA for the three month period ended September 30, 2017 was $16.8 million, an increase of $0.2 million, or 1.2%, compared to $16.6 million in the same three month period in 2016.  Segment Adjusted EBITDA Margin was 28.1%, flat with the same three month period in 2016.  The increase in Segment Adjusted EBITDA was due primarily to improved pricing ($0.8 million), lower material and other manufacturing costs ($0.2 million), the favorable impact of foreign currencies ($0.3 million), and lower selling and administrative expense ($0.1 million), partially offset by lower volume including acquisitions ($1.2 million).

            
Constant Currency
Percent Change
  
  For the Nine Months Ended September 30,  Percent Change 
  2017  2016  2017 vs. 2016  2017 vs. 2016 
Segment Revenues $172.0  $172.2   (0.1%)  0.2%
Segment Adjusted EBITDA $46.9  $44.7   4.9%  5.1%
Segment Margin  27.3%  26.0%        

Segment Revenues for the nine month period ended September 30, 2017 were $172.0 million, a decrease of $0.2 million, or 0.1%, compared to $172.2 million in the same nine month period in 2016.  The decrease in Segment Revenues was due to lower volume including acquisitions (0.8% or $1.5 million), and the unfavorable impact of foreign currencies (0.3% or $0.5 million), partially offset by improved pricing (1.1% or $1.8 million).2020. The percentage of Segment Revenues derived from aftermarket parts and service was 3.8%14.3% in the ninethree month period ended SeptemberJune 30, 20172021 compared to 0.0%13.6% in the same ninethree month period in 2016.

2020.
Segment Adjusted EBITDA for the ninethree month period ended SeptemberJune 30, 20172021 was $46.9$71.1 million, an increase of $2.2$11.8 million, or 4.9% compared to $44.719.9%, from $59.3 million in the same ninethree month period in 2016.2020. Segment Adjusted EBITDA Margin increased 13040 basis points to 27.3%30.7% from 26.0%30.3% in 2016.2020. The increase in Segment Adjusted EBITDA was primarily due primarily to improvedhigher organic sales volume of $8.9 million or 15.0%, favorable impact of foreign currencies of $3.6 million or 6.1%, higher pricing ($1.8 million), lower selling and administrative expense ($1.7 million)of $3.6 million or 6.1%, and lower material and other manufacturing costs ($1.5 million)acquisitions of $0.6 million or 1.0%, partially offset by lowerhigher selling and administrative costs of $2.6 million or 4.4%.
For the Six Month Period Ended June 30,Percent Change
202120202021 vs. 2020
Segment Revenues$447.3 $308.6 44.9 %
Segment Adjusted EBITDA$138.3 $92.2 50.0 %
Segment Margin30.9 %29.9 %100  bps
Segment Revenues for the six month period ended June 30, 2021 were $447.3 million, an increase of $138.7 million, or 44.9%, compared to $308.6 million in the same six month period in 2020. The increase in Segment Revenues was primarily due to acquisitions, including Ingersoll Rand Industrial, of $86.5 million or 28.0%, higher organic volume including acquisitions ($2.6 million)of $31.5 million or 10.2%, and the unfavorablefavorable impact of foreign currencies ($0.2 million)of $15.4 million or 5.0% and higher pricing of $5.3 million or 1.7%. Organic volume growth included the adverse impact of COVID-19 in the six month period ended June 30, 2020. The percentage of Segment Revenues derived from aftermarket parts and service was 15.7% in the six month period ended June 30, 2021 compared to 13.1% in the same six month period in 2020.
Segment Adjusted EBITDA for the six month period ended June 30, 2021 was $138.3 million, an increase of $46.1 million, or 50.0%, from $92.2 million in the same six month period in 2020. Segment Adjusted EBITDA Margin increased 100 bps to 30.9% from 29.9% in 2020. The increase in Segment Adjusted EBITDA was primarily due to acquisitions, including Ingersoll Rand Industrial, of $25.0 million or 27.1%, higher organic sales volume of $14.2 million or 15.4%, favorable impact of foreign currencies of $5.5 million or 6.0% and higher pricing of $5.3 million or 5.7%, partially offset by higher selling and administrative costs of $2.1 million or 2.3%.

48
52

Table of Content
Results of Discontinued Operations
Results of Discontinued Operations - SVT
The following table presents selected Consolidated Results of Operations of our business for the three and six month periods ended June 30, 2021 and 2020.
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Revenues$184.0 $217.5 $424.3 $304.2 
Cost of sales137.9 166.4 314.9 238.7 
Gross profit46.1 51.1 109.4 65.5 
Selling and administrative expenses16.9 18.2 35.3 26.0 
Amortization of intangible assets0.9 12.3 10.4 14.9 
Gain on sale(256.7)— (256.7)— 
Other operating expense, net9.2 (0.1)16.2 0.7 
Income before income taxes275.8 20.7 304.2 23.9 
Provision for income taxes162.8 29.2 169.7 30.0 
Income (Loss) from Continuing Operations$113.0 $(8.5)$134.5 $(6.1)
Revenues
Revenues for the three month period ended June 30, 2021 were $184.0 million, a decrease of $33.5 million, or 15.4%, compared to $217.5 million in the same three month period in 2020. The decrease in revenues from discontinued operations was primarily due to the sale being substantially completed on June 1, 2021.
Revenues for the six month period ended June 30, 2021 were $424.3 million, an increase of $120.1 million, or 39.5%, compared to $304.2 million in the same six month period in 2020. The increase in revenues from discontinued operations was primarily due to five months of activity for the six month period ended June 30, 2021 compared to four months in the same six month period in 2020.
Gross Profit
Gross profit for the three month period ended June 30, 2021 was $46.1 million, a decrease of $5.0 million, or 9.8%, compared to $51.1 million for the same three month period in 2020, and as a percentage of revenues was 25.1% for the three month period ended June 30, 2021 and 23.5% for the same three month period in 2020. The decrease in gross profit is primarily due to the sale being substantially completed on June 1, 2021 described above.
Gross profit for the six month period ended June 30, 2021 was $109.4 million, an increase of $43.9 million, or 67.0%, compared to $65.5 million for the same six month period in 2020, and as a percentage of revenues was 25.8% for the six month period ended June 30, 2021 and 21.5% for the same six month period in 2020. The increase in gross profit is primarily due to five months of activity for the six month period ended June 30, 2021 compared to four months in the same six month period in 2020 described above.
Gain on Sale
Gain on sale for the three and six month periods ended June 30, 2021 of $256.7 million and was due to the purchase price exceeding the carrying value of the SVT business.
Other Operating Expense (Income), Net
Other operating expense (income), net was $9.2 million for the three month period ended June 30, 2021, an increase of $9.3 million, compared to $(0.1) million in the same three month period in 2020. The increase was primarily due to higher separation related expenses and non-cash charges of $9.2 million.

Table of Content
Other operating expense, net was $16.2 million for the six month period ended June 30, 2021, an increase of $15.5 million, compared to $0.7 million in the same six month period in 2020. The increase was primarily due to higher separation related expenses and non-cash charges of $16.2 million, partially offset by lower restructuring charges of $0.7 million.
Provision (Benefit) for Income Taxes
The provision for income taxes was $162.8 million resulting in a 59.0% effective income tax rate for the three month period ended June 30, 2021, compared to a provision for income taxes of $29.2 million resulting in a 141.1% effective income tax rate in the same three month period in 2020. The increase in the tax provision for the three month period ended June 30, 2021 is primarily due to one-time discrete items associated with the sale of the SVT business.
The provision for income taxes was $169.7 million resulting in a 55.8% effective income tax rate for the six month period ended June 30, 2021, compared to a provision for income taxes of $30.0 million resulting in a 125.5% effective income tax rate in the same six month period in 2020. The increase in the tax provision for the six month period ended June 30, 2021 is primarily due to one-time discrete items associated with the sale of the SVT business.
Results of Discontinued Operations - HPS
The following table presents selected Consolidated Results of Operations of our business for the three and six month periods ended June 30, 2021 and 2020.
For the Three Month Period Ended June 30,For the Six Month Period Ended June 30,
2021202020212020
Revenues$3.0 $21.5 $65.4 $117.9 
Cost of sales3.9 21.2 54.4 90.8 
Gross profit(0.9)0.3 11.0 27.1 
Selling and administrative expenses0.6 20.4 4.9 28.6 
Amortization of intangible assets— 5.9 2.4 11.8 
Loss on sale8.4 — 211.7 — 
Other operating expense, net7.4 1.9 15.5 5.3 
Loss before income taxes(17.3)(27.9)(223.5)(18.6)
Benefit for income taxes(0.6)(11.8)(5.1)(4.5)
Income (Loss) from Continuing Operations$(16.7)$(16.1)$(218.4)$(14.1)
Revenues
Revenues for the three month period ended June 30, 2021 were $3.0 million, a decrease of $18.5 million, or 86.0%, compared to $21.5 million in the same three month period in 2020. The decrease in revenues from discontinued operations was primarily due to the sale of substantially all of the HPS business on April 1, 2021.
Revenues for the six month period ended June 30, 2021 were $65.4 million, a decrease of $52.5 million, or 44.5%, compared to $117.9 million in the same six month period in 2020. The decrease in revenues from discontinued operations was primarily due to three months of activity for the six month period ended June 30, 2021 compared to six months in the same six month period in 2020.
Gross Profit
Gross profit for the three month period ended June 30, 2021 was $(0.9) million, a decrease of $1.2 million, or 400.0%, compared to $0.3 million for the same three month period in 2020, and as a percentage of revenues was (30.0)% for the three month period ended June 30, 2021 and 1.4% for the same three month period in 2020. The decrease in gross profit is primarily due to the revenue decline described above.
Gross profit for the six month period ended June 30, 2021 was $11.0 million, a decrease of $16.1 million, or 59.4%, compared to $27.1 million for the same six month period in 2020, and as a percentage of revenues was 16.8% for the six month period ended
54

Table of Content
June 30, 2021 and 23.0% for the same six month period in 2020. The decrease in gross profit is primarily due to the revenue decline described above.
Loss on Sale
Loss on sale for the three month period ended June 30, 2021 of $8.4 million was a charge taken to reduce the carrying value of the HPS business to the estimated fair value of the net proceeds and residual equity interest from the transaction.
Loss on sale for the six month period ended June 30, 2021 of $211.7 million was a charge taken to reduce the carrying value of the HPS business to the estimated fair value of the net proceeds and residual equity interest from the transaction.
Other Operating Expense, Net
Other operating expense, net was $7.4 million for the three month period ended June 30, 2021, an increase of $5.5 million, compared to $1.9 million in the same three month period in 2020. The increase was primarily due to expenses incurred in connection with the separation of $7.0 million, partially offset by lower restructuring charges of $1.0 million.
Other operating expense, net was $15.5 million for the six month period ended June 30, 2021, an increase of $10.2 million, compared to $5.3 million in the same six month period in 2020. The increase was primarily due to expenses incurred in connection with the separation of $13.8 million, partially offset by lower restructuring charges of $3.5 million.
Provision (Benefit) for Income Taxes
The benefit for income taxes was $0.6 million resulting in a 3.5% effective income tax rate for the three month period ended June 30, 2021, compared to a benefit for income taxes of $11.8 million resulting in a 42.3% effective income tax rate in the same three month period in 2020. The increase in the tax provision for the three month period ended June 30, 2021 is primarily due to one-time discrete items associated with the sale of the HPS business.
The benefit for income taxes was $5.1 million resulting in a 2.3% effective income tax rate for the six month period ended June 30, 2021, compared to a benefit for income taxes of $4.5 million resulting in a 24.2% effective income tax rate in the same six month period in 2020. The decrease in the tax provision for the six month period ended June 30, 2021 is primarily due to one-time discrete items associated with the sale of the HPS business.
Liquidity and Capital Resources

Our operations and strategic objectives require continuing investment. Ourinvestment resources include cash on hand, cash generated from operations and borrowings under our Revolving Credit FacilityFacility. We also have the ability to seek additional secured and the Receivables Financing Agreement.  At Septemberunsecured borrowings, subject to Credit Agreement restrictions.
As of June 30, 2017, the Company2021, we had $8.0$84.1 million of outstanding letters of credit written against the Revolving Credit Facility and $352.0$1,015.9 million of unused availability.  The Company also had $33.2 million of letters of credit outstanding against the Receivables Financing Agreement and $82.1 million of unused availability.  On June 30, 2017, we entered into the first amendment to the Receivables Financing Agreement which increased the aggregated borrowing capacity by $50.0 million to $125.0 million governed by a borrowing base and also extended the term to June 30, 2020.

See the description of these line-of-credit resources as well as our outstanding debt obligations in Note 8 “Debt”10 “Debt to the Condensed Consolidated Financial Statements.

consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2020 and Note 9 “Debt” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.
As of SeptemberJune 30, 2017 and 2016, the Company was2021, we were in compliance with all of itsour debt covenants and no event of default had occurred or was ongoing.

55

Table of Content
Liquidity

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

 
September 30,
2017
  
December 31,
2016
 June 30, 2021December 31, 2020
Cash and cash equivalents $303.0  $255.8 Cash and cash equivalents$3,669.9 $1,750.9 
Short-term borrowings and current maturities of long-term debt  21.1   24.5 Short-term borrowings and current maturities of long-term debt$40.7 $40.4 
Long-term debt  2,006.9   2,753.8 Long-term debt3,823.3 3,859.1 
Total debt $2,028.0  $2,778.3 Total debt$3,864.0 $3,899.5 
We can increase the borrowing availability under the senior secured credit agreement that we and certain of our subsidiaries entered into with UBS AG, Stamford Branch, as administrative agent, and other agents and lenders party thereto on July 30, 2013, as amended by Amendment No. 1 on March 4, 2016 and Amendment No. 2 on August 17, 2017 (the “SeniorSenior Secured Credit Facilities”),Facilities by up to $250$1,600.0 million in the form of additional commitments under the senior secured revolving credit facility (the “RevolvingRevolving Credit Facility”) thereunderFacility and/or incremental term loans plus an additional amount so long as we do not exceed a specified senior secured leverage ratio. We can incur additional secured indebtedness under the senior secured term loan facilities under the Senior Secured Credit Facilities if certain specified conditions are met under the credit agreement governing the Senior Secured Credit Facilities. Our liquidity requirements are significant primarily due to debt service requirements. For a complete description of our credit facilities, refer toSee Note 810 “Debt” in the “Notes to the Condensed Consolidated Financial Statements.consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2020 and Note 9 “Debt

to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.
Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Secured Credit Facilities. Our principal uses of cash will be to provide working capital, meet debt service requirements, fund capital expenditures and finance strategic plans, including possible acquisitions. We may also seek to finance capital expenditures under capital leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. In the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings. As market conditions warrant, we and our major equity holders, including KKR and its affiliates, may from time to time, seek to repurchase debt securities that we have issued orrepay loans that we have borrowed, including the notes and borrowings under the Senior Secured Credit Facilities, in privately negotiated or open market transactions, by tender offer or otherwise.Facilities. Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility, and the Receivables Financing Agreement, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future. Our business may not generate sufficient cash flows from operations or future borrowings may not be available to us under our Revolving Credit Facility or the Receivables Financing Agreement in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to do so depends on, among other factors, prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change in control, we could be required to repay or refinance our indebtedness. We may not be able to refinance any of our indebtedness, including the Senior Secured Credit Facilities, on commercially reasonable terms or at all. Any future acquisitions, joint ventures, or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms or at all.
49

The majorityA substantial portion of our cash is in jurisdictions outside of the U.S.  However, we believe our U.S. operations will generate sufficient cash flows from operations along with our availability under the Revolving Credit Facility and the Receivables Financing Agreement to satisfy our cash needs in the U.S.  As a result of the KKR transaction and the significant increase in our long-term debt balance as of July 30, 2013, we modified our former assertion concerning the permanentUnited States. We do not assert ASC 740-30 (formerly APB 23) indefinite reinvestment of undistributedour historical non-U.S. earnings foror future non-U.S. subsidiaries in theseearnings. The Company records a deferred foreign operations. We intendtax liability to repatriate certaincover all estimated withholding, state income tax and foreign income tax associated with repatriating all non-U.S. earnings forback to the purpose of servicing our Senior Secured Credit Facilities in the future, which will result in net U.S. tax liabilities as these foreign earnings are distributed.  Accordingly, we recorded aUnited States. Our deferred income tax liability and the balance at Septemberas of June 30, 20172021 was $78.2$42.8 million associated with the repatriationwhich primarily consisted of certain foreign earnings based upon accumulated earningswithholding taxes.
56

Table of approximately $200.0 million.Content

Working Capital
 
September 30,
2017
  
December 31,
2016
 June 30, 2021December 31, 2020
Net Working Capital:      Net Working Capital:
Current assets of continuing operations:Current assets of continuing operations:
Current assets $1,403.4  $1,188.5 Current assets$5,712.4 $3,862.1 
Less: Current liabilities  559.6   497.9 
Net working capital $843.8  $690.6 
Less: Assets of discontinued operations - currentLess: Assets of discontinued operations - current73.7 337.4 
Current assets of continuing operationsCurrent assets of continuing operations5,638.7 3,524.7 
Current liabilities of continuing operations:Current liabilities of continuing operations:
Current liabilitiesCurrent liabilities1,823.0 1,498.6 
Less: Liabilities of discontinued operations - currentLess: Liabilities of discontinued operations - current67.9 212.9 
Current liabilities of continuing operationsCurrent liabilities of continuing operations1,755.1 1,285.7 
Net working capital of continuing operationsNet working capital of continuing operations$3,883.6 $2,239.0 
        
Operating Working Capital:        Operating Working Capital:
Accounts receivable $531.6  $441.6 
Accounts receivable and contract assetsAccounts receivable and contract assets$988.1 $922.2 
Plus: Inventories (excluding LIFO)  491.7   428.0 Plus: Inventories (excluding LIFO)788.0 707.9 
Less: Accounts payable  263.6   214.9 Less: Accounts payable660.8 536.4 
Less: Advance payments on sales contracts  55.5   43.0 
Less: Contract liabilities (current)Less: Contract liabilities (current)189.2 164.6 
Operating working capital $704.2  $611.7 Operating working capital$926.1 $929.1 
InNet working capital of continuing operations increased $1,644.6 million to $3,883.6 million as of June 30, 2021 from $2,239.0 million as of December 31, 2020. Operating working capital decreased $3.0 million to $926.1 million as of June 30, 2021 from $929.1 million as of December 31, 2020. The decrease in operating working capital is primarily due to higher accounts payable, higher contract liabilities and lower contract assets, partially offset by higher inventories and higher accounts receivable.
The increase in accounts receivable was primarily due to the increase in revenue in the second quarter of 2017 we revised our definition of operating working capital to, accounts receivable, plus inventories excluding LIFO, less accounts payable, less advance payments on sales contracts. Prior periods have been restated to conform2021 compared to the current presentation. Net working capital increased $153.2 million to $843.8 million at September 30, 2017 from $690.6 million at December 31, 2016.  Operating working capital increased $92.5 million to $704.2 million at September 30, 2017 from $611.7 million at December 31, 2016 due to higher accounts receivable and inventories partially offset by higher accounts payable and advance payments on sales contracts.fourth quarter of 2020. The increasedecrease in accounts receivablescontract assets was primarily due to significantly higher revenues and the difference in the sales mix between the fourth quarter of 2016 and the third quarter of 2017.  A higher portion of revenues in the fourth quarter of 2016 were related to highly engineered solution product contracts with higher advance payments aheadtiming of revenue recognition than in the third quarter of 2017.and billing on our overtime contracts. The increase in inventories was primarily due to higher inventory costs related to projects expected to ship later in the year and additions to inventory in anticipation of increased demand for certain products. The increase in accounts payablespayable was primarily due to the increase in inventories and timing of vendor cash disbursements. The increase in advance payments on sales contractscontract liabilities was primarily due to an increased levelthe timing of in processcustomer milestone payments for in-process engineered to order contracts at the end of the third quarter of 2017 compared to the end of the fourth quarter of 2016.
50

contracts.
Cash Flows

  For the Nine Months Ended September 30, 
  2017  2016 
Cash flows - operating activities $83.9  $106.8 
Cash flows - investing activities  (43.1)  (59.8)
Cash flows - financing activities  (8.2)  (30.8)
Free cash flow (1)
  47.5   60.5 
The following table reflects the major categories of cash flows for the six month periods ended June 30, 2021 and 2020, respectively.
(1)See the “Non-GAAP Financial Measures” section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.
For the Six Month Period Ended June 30,
20212020
Cash flows from (used in) continuing operations:
Cash flows from operating activities$234.8 $196.3 
Cash flows from (used in) investing activities(232.2)20.0 
Cash flows used in financing activities(10.1)336.9 
Cash flows from discontinued operations1,933.3 116.8 
Free cash flow(1)
208.9 173.6 

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

Cash provided by operating activities decreased $22.9increased $38.5 million to $83.9$234.8 million infor the ninesix month period ended SeptemberJune 30, 20172021 from $106.8$196.3 million in the same ninesix month period in 2016,2020, primarily due to cash used by operating working capital of $55.4 millionan increase in the nine month period ended September 30, 2017 compared to cash provided by operating working capital of $49.5 million in the same period in 2016 as well as increased cash paid for taxes and higher incentive compensation,income from continuing operations, partially offset by higher gross profits on increased revenues and decreased cash paid for interest.  Changesincreases in accounts receivable used cashand inventories and a decrease in accrued liabilities.
57

Table of $65.9 million in the nine month period ended September 30, 2017 compared to generating cash of $18.1 million in the same nine month period in 2016.  Changes in inventory used cash of $36.4 million in the nine month period ended September 30, 2017 compared to using cash of $3.8 million in the same nine month period in 2016.  Changes in accounts payable generated cash of $39.8 million in the nine month period ended September 30, 2017 compared to generating cash of $21.3 million in the same nine month period ended September 30, 2016.  Changes in advance payments on sales contracts generated cash of $7.1 million in the nine month period ended September 30, 2017 compared to generating cash of $13.9 million in the same nine month period ended September 30, 2016.Content

Investing Activities

Cash used byin investing activities included capital expenditures of $36.4$25.9 million and $46.3$22.7 million for the ninesix month periods ended SeptemberJune 30, 20172021 and 2016,2020, respectively. We currently expect capital expenditures to total approximately $50.0Net cash paid in a business combination was $215.8 million to $60.0 million forin the full year in 2017.  Cash paidsix month period ended June 30, 2021 and cash acquired in business combinations for the ninesix month periodsperiod ended SeptemberJune 30, 2017 and 2016 were $18.8 million and $18.8 million, respectively.  Proceeds from the termination2020 was $41.3 million.
Financing Activities
Cash used in financing activities of derivatives for the nine month periods ended September 30, 2017 and 2016 were $6.2 million and $0.0 million, respectively.  Net proceeds from business divestitures and disposals of property, plant and equipment were $5.9 million and $5.3$10.1 million for the nine month periods ended September 30, 2017 and 2016, respectively.

Financing Activities

Cash used by financing activities of $8.2 million for the ninesix month period ended SeptemberJune 30, 2017 reflects a premium paid on the extinguishment2021 primarily reflected repayments of senior noteslong term debt of $29.7$19.7 million and purchases of treasury stock of $2.6 million, purchases of shares of noncontrolling interests of $5.2 million, the payment of debt issuance costs of $2.9 million, and net repayments of long-term borrowings of $861.5$3.2 million, partially offset by proceeds from the issuancestock option exercises of common stock, net of share issuance costs of $893.3$12.8 million.
Cash used byin financing activities of $30.8$336.9 million for the ninesix month period ended SeptemberJune 30, 2016 reflects net2020 primarily reflected proceeds from long-term debt of $1,980.1 million offset by repayments of long-term borrowings of $19.1 million, purchases of treasury stock of $12.6$1,599.6 million and the paymentpayments of debt issuance costs of $1.1$46.6 million.
Discontinued Operations
Cash provided by discontinued operations increased $1,816.5 million partially offset byto $1,933.3 million for the six month period ended June 30, 2021 from $116.8 million in the same six month period in 2020, primarily due to proceeds from the issuancesale of common stock of $2.9 million.
discontinued operations.
Free Cash Flow

Free cash flow decreased $13.0increased $35.3 million to a free cash inflow of $47.5$208.9 million in the ninesix month period ended SeptemberJune 30, 20172021 from a free cash inflow of $60.5$173.6 million in the same ninesix month period in 2016.  The decrease in free cash flow was2020 primarily due to decreasedincreased cash flows fromprovided by operating activities of $22.9 million partially offset by decreased capital expenditures of $9.9 million in the nine month period ended September 30, 2017 compared to the same period in 2016.activities.
Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are materially likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations

The following table and accompanying disclosures summarize our significant contractual obligations at September 30, 2017, and the effects such obligations are expected to have on our liquidity and cash flow in future periods:

     Payments Due by Period 
(dollars in millions)
Contractual Obligations
 Total  
Remainder
of 2017
   2018-2019   2020-2021  
After
2022
 
Debt $2,013.8  $5.2  $40.9  $40.9  $1,926.8 
Estimated interest payments (1)
  688.9   25.9   221.2   198.9   242.9 
Capital leases  19.3   0.4   3.5   3.8   11.6 
Operating leases  75.2   6.7   38.8   17.2   12.5 
Purchase obligations (2)
  320.0   238.7   80.0   0.9   0.4 
Total $3,117.2  $276.9  $384.4  $261.7  $2,194.2 
(1)Estimated interest payments for variable rate term debt were calculated based on the principal amortization schedules as defined in the Senior Secured Credit Facilities using three month LIBOR interest rate yield curves and the fixed rates on our interest rate swap contracts.  No borrowings or outstanding balances on the variable rate revolving credit facility are anticipated during the analysis period.

(2)Purchase obligations consist primarily of agreements to purchase inventory or services made in the normal course of business to meet operational requirements.  The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which we are contractually obligated as of September 30, 2017.  For this reason, these amounts will not provide a complete and reliable indicator of our expected future cash outflows.
Critical Accounting Policies and Estimates

Management has evaluated the accounting policiesestimates used in the preparation of the Company’s condensed consolidated financial statements and related notes and believe those policiesestimates to be reasonable and appropriate. Certain of these accounting policiesestimates require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the Prospectus, in thesection “Critical Accounting Policies and Estimates” section of “Management’s“Item 7. Management’s Discussion and Analysis”Analysis of Financial Condition and Results of Operations” and in Note 1 “Summary of Significant Accounting Policies” of “Item 8. Financial Statements and Supplementary Data” included in our annual report on Form 10-K for the “Notes to Consolidated Financial Statements.”  There have been no material changes to our critical accounting policies as compared to the critical accounting policies described in the Prospectus.

fiscal year ended December 31, 2020.
Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 1816 “Contingencies” to the condensed consolidated financial statements. We believe that as of June 30, 2021, there have been no material changes to the Consolidated Financial Statementsenvironmental matters disclosed in our Prospectusannual report on Form 10-K for the fiscal year ended December 31, 2016.  We believe that at September 30, 2017, there have been no material change to this information.
52

2020.
Recent Accounting Pronouncements

The information set forth in Note 1 “Condensed Consolidated Financial Statements” to our Condensed Consolidated Financial Statements under Part I,1 Item 1 “Financial Statements” under the heading “Recently Issued Accounting Pronouncements” is incorporated herein by reference.
58
Item 3.
Quantitative and Qualitative Disclosures About Market Risk


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to interest rate risk as a result of our variable-rate borrowings. We manage our exposure to interest rate risk by maintaining a mixture of fixed and variable debt, andusing pay-fixed interest rate swaps, from time to time, use pay-fixed interest rate swaps as cash flow hedges of our variable rate debt in order to adjust the relative fixed and variable portions.

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

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

at least quarterly.
As of SeptemberJune 30, 2017,2021, there have been no material changes to our market risk assessment previously disclosed in the Prospectus.annual report on Form 10-K for the fiscal year ended December 31, 2020.
59
Item 4.
Controls and Procedures


ITEM 4.    CONTROLS AND PROCEDURES
Disclosure Controls and Procedures

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

Internal Control Overover Financial Reporting: Reporting
There hashave not been any changechanges in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
60
PART II.    OTHER INFORMATION

Item 1.
Legal Proceedings
ITEM 1.    LEGAL PROCEEDINGS

The information set forth in Note 14 “Contingencies”16 “Contingencies to our Condensed Consolidated Financial Statements under Part I Item 1 “Financial Statements,” is incorporated herein by reference.
Item 1A.
Risk Factors

ITEM 1A.    RISK FACTORS
As of SeptemberJune 30, 2017,2021, there have been no material changes to our risk factors included in our annual report on Form 10-K for the Prospectus.year ended December 31, 2020 (the “Annual Report”).
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Company Purchases
On May 17, 2017, we completed an initial public offeringThe following table contains detail related to the repurchase of our common stock based on the date of trade during the three month period ended June 30, 2021.
2021 Second Quarter Months
Total Number of Shares Purchased(1)
Average Price Paid Per Share(2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2021 - April 30, 20211,046 $49.61 — $— 
May 1, 2021 - May 31, 2021301 $48.54 — $— 
June 1, 2021 - June 30, 20213,613 $49.75 — $— 
(1)All of the shares purchased during the three month period ended June 30, 2021 were in which we issued and sold 47,495,000connection with net exercises of stock options or the surrender to us of shares of common stock including 6,195,000 sharesto satisfy tax withholding obligations in connection with the vesting of commoncertain restricted stock pursuant to the exercise in full of the underwriters’ option to purchase additional shares. units.
(2)The shares sold in the offering were registered under the Securities Act pursuant to our Registration Statement on Form S-1 (File No. 333-216320), which was declared effective by the SEC on May 11, 2017. The common stock is listed on the New York Stock Exchange under the symbol “GDI.” The Company’s shares of common stock were sold at an initial offeringaverage price of $20.00paid per share which generated net proceeds of approximately $897.7 million to the Company, after deducting underwriting discounts and commissions of approximately $52.2 million. We estimated that we incurred offering expenses of approximately $4.6 million (exclusive of underwriting discounts and commissions). We used the net proceeds from this offering to redeem all $575.0 million aggregate principal amount of our Senior Notes, including applicable redemption premiums, to repay $276.8 million of borrowings under our U.S. dollar-denominated senior secured term loan facility and to pay related fees and expenses.includes brokerage commissions.

Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., KKR Capital Markets LLC and UBS Securities LLC acted as joint bookrunning managers and as representatives of the underwriters in the offering. Piper Jaffray & Co., Deutsche Bank Securities Inc., Robert W. Baird & Co. Incorporated, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC were also bookrunners in the offering. William Blair & Company, L.L.C., Stifel, Nicolaus & Company, Incorporated, HSBC Securities (USA) Inc., Macquarie Capital (USA) Inc., Credit Agricole Securities (USA) Inc. and Mizuho Securities USA LLC acted as co-managers in the offering.
Item 3.
Defaults Upon Senior Securities

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.
Mine Safety Disclosures

ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
Item 5.
Other Information

ITEM 5.    OTHER INFORMATION
None.
54

Item 6.

Exhibits

ITEM 6.    EXHIBITS
The following is a list of all exhibits filed or furnished as part of this report:

Exhibit
No.
Description
Amendment No. 2 to the Credit Agreement, dated as of August 17, 2017, among Gardner Denver Holdings, Inc., Gardner Denver, Inc., GD German Holdings II GmbH, GD First (UK) Limited, UBS AG, Stamford Branch, as administrative agent, and the other parties and lenders party thereto. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on August 18, 2017 (File no. 001-38095)
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
report.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosuredisclosures other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual statestatement of affairs as of the date they were made or at any other time.
Exhibit No.Description
2.1Agreement and Plan of Merger, dated as of April 30, 2019, by and among Ingersoll-Rand plc, Gardner Denver Holdings, Inc., Ingersoll-Rand U.S. HoldCo, Inc. and Charm Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Ingersoll-Rand plc on May 6, 2019).
2.2Separation and Distribution Agreement, dated as of April 30, 2019, by and between Ingersoll-Rand plc and Ingersoll-Rand U.S. HoldCo, Inc. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Ingersoll-Rand plc on May 6, 2019).
Securities Purchase Agreement, dated as of April 9, 2021, by and among Ingersoll Rand Inc., Club Car, LLC and MajorDrive Holdings IV, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on April 12, 2021).
Restated Certificate of Incorporation of Ingersoll Rand Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on June 21, 2021).
Second Amended and Restated Bylaws of Ingersoll Rand Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Company on June 21, 2021).
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INSInline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHInline XBRL Taxonomy Extension Scheme Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)

55



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: October 27, 2017GARDNER DENVER HOLDINGS, INC.
Date: July 30, 2021
INGERSOLL RAND INC.
By:/s/ Mark R. Sweeney
Name: Mark R. SweeneyBy:/s/ Michael J. Scheske
Name: Michael J. Scheske
Vice President and Chief Accounting Officer
Corporate Controller
(Principal Accounting Officer)

56

63