10q10k10q10k.net
Trane Technologies

Trane TechnologiesTTEarnings & Financial Report

NYSE · Industrials · Building Products

Trane Technologies plc is an Irish domiciled company focused on heating, ventilation, and air conditioning (HVAC) and refrigeration systems. The company traces its corporate history back more than 150 years and was created after a series of mergers and spin-offs. In 2008, HVAC manufacturer Trane was acquired by Ingersoll Rand, a US industrial tools manufacturer. In 2020, the tools business was spun off as Ingersoll Rand and the remaining company was renamed Trane Technologies.

What changed in Trane Technologies's 10-K — 2023 vs 2024

Top changes in Trane Technologies's 2024 10-K

301 paragraphs added · 317 removed · 246 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

106 edited+27 added−24 removed147 unchanged
This Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on our Internet website (www.tranetechnologies.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission.
This Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all the foregoing reports, are made available free of charge on our Internet website (www.tranetechnologies.com) as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission.
Such transactions involve numerous other risks, including: • diversion of management time and attention from daily operations; • difficulties integrating acquired businesses, technologies and personnel into our business, including doing so without high costs; • difficulties in obtaining and verifying the financial statements and other business and other due diligence information of acquired businesses; • inability to obtain required regulatory approvals and/or required financing on favorable terms; • potential loss of key employees, key contractual relationships or key customers of either acquired businesses or our business; • assumption of the liabilities and exposure to unforeseen or undisclosed liabilities of acquired businesses and exposure to regulatory sanctions; • inheriting internal control deficiencies; 20 Table of Contents • dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities; and • in the case of joint ventures and other investments, interests that diverge from those of our partners without the ability to direct the management and operations of the joint venture or investment in the manner we believe most appropriate to achieve the expected value.
Such transactions involve numerous other risks, including: • diversion of management time and attention from daily operations; • difficulties integrating acquired businesses, technologies and personnel into our business, including doing so without high costs; • difficulties in obtaining and verifying the financial statements and other business and other due diligence information of acquired businesses; • inability to obtain required regulatory approvals and/or required financing on favorable terms; • potential loss of key employees, key contractual relationships or key customers of either acquired businesses or our business; 19 Table of Contents • assumption of the liabilities and exposure to unforeseen or undisclosed liabilities of acquired businesses, and exposure to regulatory sanctions; • inheriting internal control deficiencies; • dilution of interests of holders of our common shares through the issuance of equity securities or equity-linked securities; and • in the case of joint ventures and other investments, interests that diverge from those of our partners without the ability to direct the management and operations of the joint venture or investment in the manner we believe most appropriate to achieve the expected value.
We face increasing complexity related to product design, the availability and use of regulated materials, the associated energy consumption and efficiency related to the use of products, the transportation and shipping of products, climate change regulations, and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life as we adjust to new and future requirements relating to our transition to a more circular economy.
We face increasing complexity related to product design, the availability and use of materials, the associated energy consumption and efficiency related to the use of products, the transportation and shipping of products, climate change regulations, and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life as we adjust to new and future requirements relating to our transition to a more circular economy.
The program, started in 1926, is recognized as the industry’s most comprehensive training program and provides intensive technical, business, sales, and leadership training. • Accelerated Development Program (ADP) – An early career rotational program focused on both functional and leadership development, designed to build a pipeline of strong talent for key roles in the organization.
The program, started in 1926, is recognized as the industry's most comprehensive training program and provides intensive technical, business, sales, and leadership training. • Accelerated Development Program – An early career rotational program focused on both functional and leadership development, designed to build a pipeline of strong talent for key roles in the organization.
Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States. In addition, Irish law does not allow for any form of legal proceedings directly equivalent to the class action available in the United States.
Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States. In addition, Irish law does not allow for any form of legal proceedings directly equivalent to the shareholder class action available in the United States.
There are a number of risks and uncertainties associated with these Chapter 11 cases, including, among others, those related to: • the ability to consummate the agreement in principle reached with the court appointed legal representative of future asbestos claimants (the FCR); • the outcome of negotiations with the committee representing current asbestos claimants (ACC) and other participants in the Chapter 11 cases, including insurers, concerning the terms of a plan of reorganization, including the size and structure of a potential section 524(g) trust to pay the asbestos liability of Aldrich and Murray and the means for funding that trust, and the risk that the ACC will object to, and the risk that insurers will not support, a plan of reorganization having terms acceptable to Aldrich and Murray; • the actions of representatives of the asbestos claimants, including the ACC ’ s pursuit of certain causes of action against us, following the Bankruptcy Court ’ s grant of the ACC ’ s motion seeking standing to investigate and pursue certain causes of action at a hearing held on January 27, 2022, and other potential actions by the ACC in 16 Table of Contents opposition to, or otherwise inconsistent with, the efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization; • the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 cases, including in connection with a proceeding by Aldrich and Murray to estimate their aggregate liability for asbestos claims, following the Bankruptcy Court ’ s grant of their motion seeking such a proceeding, and other efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to actions of representatives of the asbestos claimants or otherwise; • the ultimate determination of the asbestos liability of Aldrich and Murray to be satisfied under a plan of reorganization pursuant to the court-approved estimation proceeding; • the ability of Aldrich and Murray to obtain the necessary approvals of the Bankruptcy Court or the United States District Court for the Western District of North Carolina (the District Court) of a plan of reorganization; • the decisions of the appellate courts regarding any orders of the Bankruptcy Court or the District Court that may be appealed, including the Bankruptcy Court's order dated December 28, 2023 denying the motions to dismiss the Chapter 11 cases brought by the ACC and certain individual claimants and any orders of the Bankruptcy Court or District Court approving a plan of reorganization; • any orders approving a plan of reorganization and issuing the channeling injunction not becoming final and non-appealable; • the terms and conditions of any plan of reorganization that is ultimately confirmed in the Chapter 11 cases; • delays in the confirmation or effective date of a plan of reorganization due to factors beyond the Company’s control; and • the risk that the ultimate amount required under any final plan of reorganization may exceed the amounts agreed to with the FCR in the Plan.
There are a number of risks and uncertainties associated with these Chapter 11 cases, including, among others, those related to: • the ability to consummate the agreement in principle reached with the court appointed legal representative of future asbestos claimants (the FCR); • the outcome of negotiations with the committee representing current asbestos claimants (ACC) and other participants in the Chapter 11 cases, including insurers, concerning the terms of a plan of reorganization, including the size and structure of a potential section 524(g) trust to pay the asbestos liability of Aldrich and Murray and the means for funding that trust, and the risk that the ACC will object to, and the risk that insurers will not support, a plan of reorganization having terms acceptable to Aldrich and Murray; • the actions of representatives of the asbestos claimants, including the ACC's pursuit of certain causes of action against us, following the Bankruptcy Court's grant of the ACC's motion seeking standing to investigate and pursue certain causes of action at a hearing held on January 27, 2022, and other potential actions by the ACC in opposition to, or otherwise inconsistent with, the efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization; 15 Table of Contents • the decisions of the Bankruptcy Court relating to numerous substantive and procedural aspects of the Chapter 11 cases, including in connection with a proceeding by Aldrich and Murray to estimate their aggregate liability for asbestos claims, following the Bankruptcy Court's grant of their motion seeking such a proceeding, and other efforts by Aldrich and Murray to diligently prosecute the Chapter 11 cases and ultimately seek Bankruptcy Court approval of a plan of reorganization, whether such decisions are in response to actions of representatives of the asbestos claimants or otherwise; • the ultimate determination of the asbestos liability of Aldrich and Murray to be satisfied under a plan of reorganization pursuant to the court-approved estimation proceeding; • the ability of Aldrich and Murray to obtain the necessary approvals of the Bankruptcy Court or the United States District Court for the Western District of North Carolina (the District Court) of a plan of reorganization; • the decisions of the appellate courts regarding any orders of the Bankruptcy Court or the District Court that may be appealed, including the Bankruptcy Court's order dated December 28, 2023 denying the motions to dismiss the Chapter 11 cases brought by the ACC and certain individual claimants and any orders of the Bankruptcy Court or District Court approving a plan of reorganization; • any orders approving a plan of reorganization and issuing the channeling injunction not becoming final and non-appealable; • the terms and conditions of any plan of reorganization that is ultimately confirmed in the Chapter 11 cases; • delays in the confirmation or effective date of a plan of reorganization due to factors beyond the Company's control; and • the risk that the ultimate amount required under any final plan of reorganization may exceed the amounts agreed to with the FCR in the Plan.
These activities are subject to risks that are inherent in operating globally, including: • changes in local laws and regulations including potential imposition of currency restrictions, new or changing tax laws, variations in monetary policies, and other restraints; • limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; • sovereign debt crises and currency instability in developed and developing countries; • trade protection measures such as import or export restrictions and requirements, the imposition of burdensome tariffs and quotas or revocation or material modification of trade agreements; • difficulty in staffing and managing global operations including supply chain disruptions which may be exacerbated by pandemics or other public health crises, natural disasters, or other events affecting the supply of labor, materials and components; • difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems; • national and international conflict, including war, civil disturbances and terrorist acts; and • recessions, economic downturns, price instability, slowing economic growth and social and political instability.
These activities are subject to risks that are inherent in operating globally, including: • changes in local laws and regulations including potential imposition of currency restrictions; new or changing tax laws, including the implementation of a global minimum tax; variations in monetary policies; and other restraints; • trade protection measures such as import or export restrictions and requirements, the imposition of tariffs and quotas or revocation or material modification of trade agreements; • limitation of ownership rights, including expropriation of assets by a local government, and limitation on the ability to repatriate earnings; • sovereign debt crises and currency instability in developed and developing countries; • difficulty in staffing and managing global operations including supply chain disruptions which may be exacerbated by pandemics or other public health crises, natural disasters, or other events affecting the supply of labor, materials and components; • difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems; • national and international conflict, including war, civil disturbances and terrorist acts; and • recessions, economic downturns, price instability, inflation, slowing economic growth and social and political instability.
We and some of our third-party suppliers have experienced cyber-based attacks, and, due to the evolving threat landscape, may continue to experience attacks, potentially with more frequency and severity.
We and some of our third-party suppliers have experienced cyber attacks, and, due to the evolving threat landscape, may continue to experience attacks, potentially with more frequency and severity.
If the merger were taxable, U.S. holders of the common stock of Ingersoll Rand Industrial would be considered to have made a taxable sale of their Ingersoll Rand Industrial common stock to Ingersoll Rand, and such U.S. holders of Ingersoll Rand Industrial would generally recognize taxable gain or loss on their receipt of Ingersoll Rand common stock in the merger. 23 Table of Contents Risks Related to Our Irish Domicile Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.
If the merger were taxable, U.S. holders of the common stock of Ingersoll Rand Industrial would be considered to have made a taxable sale of their Ingersoll Rand Industrial common stock to Ingersoll Rand, and such U.S. holders of Ingersoll Rand Industrial would generally recognize taxable gain or loss on their receipt of Ingersoll Rand common stock in the merger. 22 Table of Contents Risks Related to Our Irish Domicile Irish law differs from the laws in effect in the United States and may afford less protection to holders of our securities.
Therefore, the attendant risks of manufacturing or selling in a particular country, such as currency devaluation, nationalization and establishment of common markets, may have an adverse impact on our non-U.S. operations. Customers We have no customer that accounted for more than 10% of our consolidated net revenues in 2023, 2022 or 2021.
Therefore, the attendant risks of manufacturing or selling in a particular country, such as currency devaluation, nationalization and establishment of common markets, may have an adverse impact on our non-U.S. operations. Customers We have no customer that accounted for more than 10% of our consolidated net revenues in 2024, 2023 or 2022.
In addition, governmental authorities are actively engaged in formulating new legislative proposals. Any future legislative changes to the tax laws and judicial or regulatory interpretation thereof, the geographic mix of earnings, changes in overall profitability, and other factors could also materially impact our effective tax rate. 21 Table of Contents We continue to monitor for other tax changes, U.S.
In addition, governmental authorities are actively engaged in formulating new legislative proposals. Any future legislative changes to the tax laws and judicial or regulatory interpretation thereof, the geographic mix of earnings, changes in overall profitability, and other factors could also materially impact our effective tax rate. 20 Table of Contents We continue to monitor for other tax changes, U.S.
If the Distribution ultimately is determined to be taxable for Irish tax purposes, we and the Spin-off Shareholders could have significant Irish tax liabilities as a result of the 22 Table of Contents Distribution, and there could be a material adverse impact on our business, financial condition, results of operations and cash flows in future reporting periods.
If the Distribution ultimately is determined to be taxable for Irish tax purposes, we and the Spin-off Shareholders could have significant Irish tax liabilities as a result of the 21 Table of Contents Distribution, and there could be a material adverse impact on our business, financial condition, results of operations and cash flows in future reporting periods.
We anticipate that we will continue to make significant expenditures for research and development and sustaining activities as we look to maintain and improve our competitive position. Patents and Licenses Our intellectual property rights are important to our business and include numerous patents, trademarks, copyrights, trade secrets, proprietary technology, technical data, business processes, and other confidential information.
We anticipate that we will continue to make significant expenditures for research and development and sustaining activities to maintain and improve our competitive position. Patents and Licenses Our intellectual property rights are important to our business and include numerous patents, trademarks, copyrights, trade secrets, proprietary technology, technical data, business processes, and other confidential information.
If we are unable to effectively respond to changes to applicable laws and regulations, interpretations of applicable laws and regulations, or comply with existing and future laws and regulations, our competitive position, results of operations, financial condition and cash flows could be materially adversely impacted. 19 Table of Contents Global climate change and related regulations could negatively affect our business.
If we are unable to effectively respond to changes to applicable laws and regulations, interpretations of applicable laws and regulations, or comply with existing and future laws and regulations, our competitive position, results of operations, financial condition and cash flows could be materially adversely impacted. 18 Table of Contents Global climate change and related regulations could negatively affect our business.
The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures. 7 Table of Contents For detailed information on the bankruptcy cases of Aldrich and Murray, see: • Part I, Item 1A, "Risk Factors - Risks Related to Litigation," • Part I, Item 3, "Legal Proceedings," • Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Events," and • Part II, Item 8, Consolidated Financial Statements, Note 1, "Description of Company," and Note 20, "Commitments and Contingencies." Human Capital Management Our people and culture are critical to achieving our operational, financial and strategic success.
The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures. 7 Table of Contents For detailed information on the bankruptcy cases of Aldrich and Murray, see: • Part I, Item 1A, "Risk Factors - Risks Related to Litigation," • Part I, Item 3, "Legal Proceedings," • Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Matters," and • Part II, Item 8, Consolidated Financial Statements and Note 20, "Commitments and Contingencies." Human Capital Management Our people and culture are critical to achieving our operational, financial and strategic success.
The ability of other PRPs to participate has been taken into account, based on our understanding of the parties’ financial condition and probable contributions on a per site basis. For a further discussion of our potential environmental liabilities, see Note 20 "Commitments and Contingencies" to the Consolidated Financial Statements.
The ability of other PRPs to participate has been taken into account, based on our understanding of the parties' financial condition and probable contributions on a site-by-site basis. For a further discussion of our potential environmental liabilities, see Note 20 "Commitments and Contingencies" to the Consolidated Financial Statements.
Commodity and raw material shortages, supply chain risks and price increases could adversely affect our financial results. We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, and third-party parts and components required for the manufacture of our products.
Commodity and raw material shortages, supply chain risks and price increases could adversely affect our financial results. We rely on suppliers to secure commodities, particularly steel and non-ferrous metals, and third-party parts and components, including electronic components, required for the manufacture of our products.
If these systems cease to function properly, if these systems experience security breaches or disruptions or if these systems do not provide the anticipated benefits or if we are unable to commit sufficient resources to maintain and enhance our information technology infrastructure to keep pace with continuous development in information processing technology, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
If these systems cease to function properly, if these systems experience security breaches or disruptions or if these systems do not provide the anticipated benefits or if we are unable to commit sufficient resources to maintain and enhance our information technology infrastructure to keep 16 Table of Contents pace with continuous development in information processing technology, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
Despite having instituted security policies and business continuity plans, and implementing and regularly reviewing and updating processes and procedures to protect against unauthorized access and requiring similar protections from our vendors, the ever-evolving threats mean we are continually evaluating and adapting our systems and processes and ask our vendors to do the same, and there is no guarantee that such systems and processes will be adequate to safeguard against all data security breaches or misuses of data.
Despite having instituted security policies and enhancing business continuity plans, and implementing and regularly reviewing and updating security controls and related processes and procedures to protect against unauthorized access and requiring similar protections from our vendors, the ever-evolving threats mean we are continually evaluating and adapting our systems and processes and ask our vendors to do the same, and there is no guarantee that such systems and processes will be adequate to safeguard against all data security breaches or misuses of data.
However, orders for specialized machinery or specific customer applications are submitted with extended lead times and are subject to revision and deferral, and to a lesser extent cancellation or termination. To the extent projects are delayed or there are resource constraints, the timing of our revenue could be affected.
However, orders for specialized equipment or specific customer applications are submitted with extended lead times and are subject to revision and deferral, and to a lesser extent cancellation or termination. To the extent projects are delayed or there are resource constraints, the timing of our revenue could be affected.
Pittard (58) 7/1/2021 Executive Vice President, Chief Integrated Supply Chain Officer (since January 2024); Executive Vice President, Supply Chain, Engineering and Information Technology (July 2021 to January 2024); Transformation Office Leader (December 2019 to June 2021); Vice President, SBU President of Transport Solutions North America and EMEA (December 2013 to December 2019) Evan M.
Pittard (59) 7/1/2021 Executive Vice President, Chief Integrated Supply Chain Officer (since January 2024); Executive Vice President, Supply Chain, Engineering and Information Technology (July 2021 to January 2024); Transformation Office Leader (December 2019 to June 2021); Vice President, SBU President of Transport Solutions North America and EMEA (December 2013 to December 2019) Evan M.
Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. 18 Table of Contents Data privacy and protection laws are evolving and present increasing compliance challenges.
Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. 17 Table of Contents Data privacy and protection laws are evolving and present increasing compliance challenges.
We continue to analyze and evaluate the acquisition and divestiture of strategic businesses and product lines, technologies and capabilities, plants and other assets, joint ventures and investments with the potential to, among other things, strengthen our industry position, enhance our existing set of product and services offerings, increase productivity and efficiencies, grow revenues, earnings and cash flow, help us stay competitive or reduce costs.
Consistent with our growth strategy, we continue to analyze and evaluate the acquisition and divestiture of strategic businesses and product lines, technologies and capabilities, plants and other assets, joint ventures and investments with the potential to, among other things, strengthen our industry position, enhance our existing set of product and services offerings, increase productivity and efficiencies, grow revenues, earnings and cash flow, help us stay competitive or reduce costs.
Additionally, we offer our Trane Technologies people leaders learning programs to develop their skills in leading their teams, such as building diverse and inclusive teams, increasing engagement, and coaching skills. • Professional development – We have numerous online courses in professional development skills as varied as working virtually, resiliency, Microsoft Teams, unconscious bias, and strategic capability initiatives such as product management and other programs that support our strategy of being a world class lean enterprise. • Dependent Scholarships - To support learning in our employees' families, we offer $2,500 scholarships to support their dependent children's pursuits beyond high school, whether for a traditional degree, or a trade certification. • Compliance Training – Our Compliance Training curriculum covers key topics that are important to protect our Company, our people and our customers.
Additionally, we offer our Trane Technologies people leaders learning programs to develop their skills in leading their teams, such as building inclusive environments, increasing engagement, and coaching. • Professional Development – We have numerous online courses in professional development skills as varied as working virtually, resiliency, and Microsoft Teams, as well as strategic capability initiatives such as product management and other programs that support our strategy of being a world class lean enterprise. • Dependent Scholarships – To support learning in our employees' families, we offer $2,500 scholarships to support their dependent children's pursuits beyond high school, whether for a traditional degree or a trade certification. • Compliance Training – Our Compliance Training curriculum covers key topics that are important to protect our Company, our people and our customers.
Our shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability to Irish income tax on the dividends unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Trane Technologies plc. Item 1B. UNRESOLVED STAFF COMMENTS None.
Our shareholders who receive their dividends subject to Irish dividend withholding tax will generally have no further liability to Irish income tax on the dividends unless the beneficial owner of the dividend has some connection with Ireland other than his or her shareholding in Trane Technologies plc. 23 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
A major portion of our residential products are built in advance of order and either shipped or assembled from stock. We expect to ship a majority of the December 31, 2023 backlog during 2024.
A major portion of our residential products are built in advance of order and either shipped or assembled from stock. We expect to ship a majority of the December 31, 2024 backlog during 2025.
New product development (NPD) programs complete a Design for Sustainability module within our NPD process to ensure that programs have a positive impact on sustainability. We also have a strong focus on sustaining activities, which include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities.
New product development (NPD) programs complete a Design for Sustainability module within our NPD process to ensure that programs consider environmental impact. We also have a strong focus on sustaining activities, which include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities.
See Part II Item 7A, “Quantitative and Qualitative Disclosure About Market Risk.” We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
See Part II Item 7A, "Quantitative and Qualitative Disclosure About Market Risk." We have operations throughout the world that manufacture and sell products in various international markets. As a result, we are exposed to movements in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world.
We are one of the leading manufacturers in the world of HVAC systems and services and transport temperature control products and services. Distribution Our products are distributed by a number of methods, which we believe are appropriate to the type of product. U.S. sales are made through branch sales offices, distributors and dealers across the country.
We are one of the leading manufacturers in the world of HVAC systems and services and transport temperature control products and services. 5 Table of Contents Distribution Our products are distributed by a number of methods, which we believe are appropriate to the type of product. U.S. sales are made through branch sales offices, distributors and dealers across the country.
Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations and cash flows. There are additional risks related to our Reverse Morris Trust transaction, see Part IA, Item 1A, “ Risk Factors - Risks Related to the Transactions ” for more information.
Any acquisitions, divestitures, joint ventures or investments may ultimately harm our business, financial condition, results of operations and cash flows. There are additional risks related to our Reverse Morris Trust transaction, see Part I, Item 1A, "Risk Factors - Risks Related to the Transactions" for more information.
Risks associated with the Russian-Ukrainian conflict, as well as other world geopolitical conflicts that have arisen or could arise in the future, include, but are not limited to, adverse effects on political developments and on general economic conditions, including inflation and consumer spending; disruptions to our supply chains; disruptions to our information systems, including through network failures, malicious or disruptive software, or cyberattacks; trade disruptions; energy shortages or rationing that may adversely impact our manufacturing facilities and consumer spending, particularly in Europe; rising fuel and/or rising costs of producing, procuring and shipping our products; our exposure to foreign currency exchange rate fluctuations; and constraints, volatility or disruption in the financial markets.
Risks associated with world geopolitical conflicts that have arisen or could arise in the future, include, but are not limited to, adverse effects on political developments and on general economic conditions, including inflation and consumer spending; disruptions to our supply chains; disruptions to our information systems, including through network failures, malicious or disruptive software, or cyberattacks; trade disruptions; energy shortages or rationing that may adversely impact our manufacturing facilities and consumer spending, particularly in Europe; rising fuel and/or rising costs of producing, procuring and shipping our products; our exposure to foreign currency exchange rate fluctuations; and constraints, volatility or disruption in the financial markets.
Our operations are subject to regulatory risks. Our U.S. and non-U.S. operations are subject to a number of laws and regulations, including among others, laws related to the environment, commercial trade, and health and safety. We have made, and will be required to continue to make, significant expenditures to comply with these laws and regulations.
Our U.S. and non-U.S. operations are subject to a number of laws and regulations, including among others, laws related to the environment, commercial trade, technology, and health and safety. We have made, and will be required to continue to make, significant expenditures to comply with these laws and regulations.
Natural disasters, epidemics or other unexpected events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.
Natural disasters or other unexpected catastrophic events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.
All officers are elected to hold office for one year or until their successors are elected and qualified. 12 Table of Contents Item 1A .
All officers are elected to hold office for one year or until their successors are elected and qualified. 11 Table of Contents Item 1A .
In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases. 13 Table of Contents Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality.
In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases. 12 Table of Contents Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, regulatory requirements, uniqueness of design, or product quality.
Our insurance coverage may not be adequate to cover all the costs related to a cybersecurity attack or disruptions resulting from such attacks.
Our insurance coverage may not be adequate to cover all the costs related to a cyber attack or disruptions resulting from such attacks.
While we use financial derivatives or supplier price locks to partially hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and could experience lower margins in periods of declining commodity prices.
While we use financial derivatives, supplier price locks or indices-based pricing mechanisms to partially hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and could experience lower margins in periods of declining commodity prices.
While we understand our markets and competitive landscape, there is always the risk of disruptive technologies coming from companies that are not traditionally manufacturers or service providers of our products. As we integrate acquisitions into our portfolio of solutions, we may face new competitors in our target markets.
While we understand our markets and competitive landscape, there is always the risk of disruptive technologies coming from companies that are not traditionally manufacturers or service providers of our products. As we integrate acquisitions into our portfolio of solutions, we may face new competitors in our target markets and incur increased competition from alternative solutions.
A failure or inability to effectively address market trends and compete in our market may adversely affect demand for our products and services, which may cause a material adverse effect on our financial condition. Our growth is dependent, in part, on the timely development, commercialization and acceptance of new and enhanced products and services.
A failure or inability to effectively address market trends, adapt to changes in customer preferences, and compete in our market may adversely affect demand for our products and services, which may cause a material adverse effect on our financial condition. Our growth is dependent, in part, on the timely development, commercialization and acceptance of new and enhanced products and services.
Refrigerants are essential to many of our products and there is concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies are being implemented to curtail the use of certain refrigerants.
Refrigerants are essential to many of our products and there is concern regarding the global warming potential of such materials. As such, national, regional and international regulations and policies have been implemented to curtail the use of certain refrigerants.
See Note 11 – “Pensions and Postretirement Benefits Other Than Pensions.” 14 Table of Contents Currency exchange rate fluctuations and other related risks may adversely affect our results. We are exposed to a variety of market risks, including the effects of changes in currency exchange rates.
See Note 11 – "Pensions and Postretirement Benefits Other Than Pensions." 13 Table of Contents Currency exchange rate fluctuations and other related risks may adversely affect our results. We are exposed to a variety of market risks, including the effects of changes in currency exchange rates.
Such a resolution, if achieved, would likely include a channeling injunction to enjoin asbestos claims resolved in the Chapter 11 cases from being filed or pursued against us or our affiliates. The Chapter 11 cases remain pending as of February 8, 2024.
Such a resolution, if achieved, would likely include a channeling injunction to enjoin asbestos claims resolved in the Chapter 11 cases from being filed or pursued against us or our affiliates. The Chapter 11 cases remain pending as of February 6, 2025.
On December 12, 2022, the European Union (EU) Member States agreed in principle on the introduction of a global minimum tax rate (proposed 15% minimum tax rate). On December 18, 2023, Ireland enacted laws related to this minimum tax, effective January 1, 2024.
On December 12, 2022, the European Union (EU) Member States agreed in principle on the introduction of a global minimum tax rate (proposed 15% minimum tax rate). On December 18, 2023, Ireland (our parent company jurisdiction) enacted laws related to this minimum tax, effective January 1, 2024.
For many components we procure, we have an effective supply chain resiliency plan and multiple capable sources to ensure sufficient supply, however there are certain categories of components that could occasionally see limited availability or shortages in line with industry trends. Seasonality Demand for certain products and services is influenced by weather conditions.
For many components we procure, we have an effective supply chain resiliency plan and multiple capable sources to ensure sufficient supply, however there are certain categories of components that could occasionally see limited availability or shortages. Seasonality Demand for certain products and services is influenced by weather conditions.
Hardware, software or applications we develop or obtain from third parties sometimes contain defects in design or deployment or other problems that could unexpectedly result in security breaches or disruptions. Open source software components embedded into certain software that we use has in the past contained vulnerabilities and others may be discovered in the future.
Hardware, software, artificial intelligence technology, or applications we develop or obtain from third parties sometimes contain defects in design or deployment or other problems that could unexpectedly result in security breaches or disruptions. Open source software components embedded into certain software that we use have in the past contained vulnerabilities and others may be discovered in the future.
How a resurgence of COVID-19 or other public health crises will affect us will depend on future developments that are highly uncertain and cannot be accurately predicted. Such events may also exacerbate other risks discussed herein, any of which could have a material adverse effect on us.
How a pandemic, epidemic, or other public health crises will affect us will depend on future developments that are highly uncertain and cannot be accurately predicted. Such events may also exacerbate other risks discussed herein, any of which could have a material adverse effect on us.
Beyond tariffs and sanctions, countries also could adopt other measures, such as controls on imports or exports of goods, technology, or data, which could adversely affect our operations and supply chain and limit our ability to offer our products and services as intended.
In addition to tariffs, trade embargoes, and sanctions, countries also could adopt other measures, such as controls on imports or exports of goods, technology, or data, which could adversely affect our operations and supply chain and limit our ability to offer our products and services as intended.
See also Part I, Item 3, “Legal Proceedings,” and Part II, Item 8, Consolidated Financial Statements Note 20, “Commitments and Contingencies.” The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us.
See also Part I, Item 3, "Legal Proceedings," and Part II, Item 8, Consolidated Financial Statements Note 20, "Commitments and Contingencies." The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us.
This segment had 2023 net revenues of $1,444.4 million. 4 Table of Contents Products and Services Our principal products and services include the following: Air conditioners Multi-pipe HVAC systems Air exchangers Package heating and cooling systems Air handlers Packaged rooftop units Airside and terminal devices Parts and supplies (aftermarket and OEM) Air-sourced heat pumps Rail refrigeration systems Asset management systems Rate chambers Auxiliary power units (electric and diesel) Refrigerant reclamation Building management systems Renewable energy projects Bus air purification systems Repair and maintenance services Bus and rail HVAC systems Rental services Chillers Residential air filters Coils and condensers Residential air filtration system Container refrigeration systems and gensets Residential hybrid heating solutions Control systems Self-powered truck refrigeration systems Cryogenic refrigeration systems Service agreements Decarbonization programs Telematics solutions Dehumidifiers Temporary heating and cooling systems Ductless systems Thermal energy storage Energy efficiency programs Thermostats/controls & associated digital solutions Energy infrastructure programs Trailer refrigeration systems (diesel, electric and hybrid) Energy management services Transport heater products Furnaces Truck refrigeration systems (diesel, electric and hybrid) Geothermal systems Ultra-low temperature freezers Home automation Unitary systems (light and large) Humidifiers Variable refrigerant flow systems HVAC Performance-monitoring applications Vehicle-powered truck refrigeration systems Indoor air quality assessments and related products for HVAC and Transport solutions Ventilation Industrial refrigeration Water source heat pumps Installation contracting These products are sold primarily under our tradenames including Trane ® and Thermo King ® .
This segment had 2024 net revenues of $1,378.3 million. 4 Table of Contents Products and Services Our principal products and services include the following: Air conditioners Industrial process refrigeration Air exchangers Installation contracting Air handlers Lighting retrofit solutions Airside and terminal devices Medical grade refrigeration solutions Air-sourced heat pumps Multi-pipe HVAC systems Asset management systems Package heating and cooling systems Auxiliary power units (electric and diesel) Packaged rooftop units Building management systems Parts and supplies (aftermarket and OEM) Bus air purification systems Rail refrigeration systems Bus and rail HVAC systems Rate chambers Chillers Refrigerant reclamation Coils and condensers Renewable energy and storage projects Cold storage units Repair and maintenance services Condensing units Rental services Container refrigeration systems and gensets Residential air filters Control systems Residential air filtration system Controls contracting and commissioning Residential hybrid heating solutions Cryogenic refrigeration systems Self-powered truck refrigeration systems Data center HVAC systems Service agreements Decarbonization programs Smart and AI-enabled services Dehumidifiers Telematics solutions Ductless systems Temporary heating and cooling systems Energy and water efficiency programs Thermal energy storage Energy infrastructure programs Thermostats/controls & associated digital solutions Energy management services Trailer refrigeration systems (diesel, electric and hybrid) Energy recovery ventilators Transport heater products Energy storage (battery) Truck refrigeration systems (diesel, electric and hybrid) Furnaces Ultra-low temperature freezers Geothermal systems Unitary systems (light and large) Home automation Variable refrigerant flow systems Humidifiers Vehicle-powered truck refrigeration systems HVAC Performance-monitoring applications Ventilation Indoor air quality assessments and related products for HVAC and Transport solutions Water source heat pumps These products are sold primarily under our tradenames including Trane ® and Thermo King ® .
We are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-human trafficking, anti-bribery, export and import compliance, anti-trust, cybersecurity, data privacy, and money laundering, due to our global operations.
We are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies, including laws related to anti-corruption, anti-human trafficking, anti-bribery including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, export and import compliance, anti-trust, cybersecurity, data privacy, and money laundering, due to our global operations.
Our climate commitment requires us to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers’ footprint by 2030.
We are on track with our climate commitment to offer a full line of next generation products by 2030 without compromising safety or energy efficiency. Additionally, in 2019, we announced our 2030 commitment which targets reducing one gigaton – one billion metric tons – of carbon emissions (CO2e) from our customers' footprint by 2030.
We recognize the pervasiveness of mental health challenges facing employees and their families. We continue efforts to overcome mental health stigmas and promote a culture that encourages and supports open discussion about mental health issues. We implemented a global mental health training program targeted towards people leaders and available to all employees.
We recognize the pervasiveness of mental health challenges facing employees and their families. We continue efforts to overcome stigma and promote a culture that encourages and supports open discussion about mental health issues. We implemented a global mental health training program, offered in 10 languages, targeted towards people leaders and available to all employees.
In 2023, we spent $252.3 million on research and development, focused on product and system sustainability improvements such as increasing energy efficiency, developing products that allow for use of lower global warming potential refrigerants, reducing material content in products, and designing products for circularity.
In 2024, we spent $309.6 million on research and development, focused on product and system sustainability improvements such as increasing energy efficiency, developing products that allow for use of lower global warming potential refrigerants, reducing material content in products, and designing products for circularity.
This segment had 2023 net revenues of $2,401.2 million. • Our Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
This segment had 2024 net revenues of $2,556.7 million. • Our Asia Pacific segment innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
The outcome and future impacts of the conflict remain highly uncertain, continue to evolve and may grow more severe the longer the military action and sanctions remain in effect.
The outcome and future impacts of these world conflicts remain highly uncertain, continue to evolve and may grow more severe the longer the military action and sanctions remain in effect.
Non-U.S. sales are made through numerous subsidiary sales and service companies with a supporting chain of distributors throughout the world. 5 Table of Contents Operations by Geographic Area Approximately 28% of our net revenues in 2023 were derived outside the U.S. and we sold products in approximately 100 countries.
Non-U.S. sales are made through numerous subsidiary sales and service companies with a supporting chain of distributors throughout the world. Operations by Geographic Area Approximately 26% of our net revenues in 2024 were derived outside the U.S. and we sold products in approximately 100 countries.
Security breaches or disruptions of the technology systems, infrastructure or products of the Company or our vendors could negatively impact our business and financial results. Our information technology systems, networks and infrastructure and technology embedded in certain of our control products have been and are at risk to cyber attacks and unauthorized security intrusions.
Security breaches or disruptions of the technology systems, infrastructure or products of the Company or our vendors could negatively impact our business and financial results. Our information technology systems, networks, connected services, and infrastructure and technology, including artificial intelligence technology, embedded in certain of our control products have been and are at risk to cyber attacks and unauthorized access.
This strategy supports our efforts to create opportunity for all by providing underrepresented students with a range of resources, from classroom curriculum that introduces them to careers at a climate innovation company, to soft-skill development for landing a STEM job.
This strategy supports our efforts to create opportunity for all by providing under-served communities and schools with a range of resources, from classroom curriculum that introduces them to careers at a climate innovation company, to soft-skill development for landing a STEM job.
In certain circumstances, we are required to deduct Irish dividend withholding tax (currently at the rate of 25%) from dividends paid to our shareholders.
Dividends received by our shareholders may be subject to Irish dividend withholding tax. In certain circumstances, we are required to deduct Irish dividend withholding tax (currently at the rate of 25%) from dividends paid to our shareholders.
Our business and global operations have been impacted by supply chain delays, higher material costs and product prices, lower revenues for some quarters, and unfavorable foreign currency exchange rates. The COVID-19 pandemic has also at times affected our ability to obtain needed products and services, operate in certain locations, maintain our distribution channels, and attract and retain talent.
Although our operations have stabilized since the peak of the COVID-19 pandemic, our business and global operations were impacted by supply chain delays, higher material costs and product prices, lower revenues for some quarters, unfavorable foreign currency exchange rates, and, at times, our abilities to obtain needed products and services, operate in certain locations, maintain our distribution channels, and attract and retain talent were affected.
Regnery (61) 8/5/2017 Chair of the Board (since January 2022); Chief Executive Officer and Director (since July 2021); President and Chief Operating Officer (January 2020 to June 2021); Executive Vice President (September 2017 to December 2019) Christopher J.
Regnery (62) 8/5/2017 Chair of the Board (since January 2022); Chief Executive Officer and Director (since July 2021); President and Chief Operating Officer (January 2020 to June 2021) Christopher J.
This segment had 2023 net revenues of $13,832.0 million. • Our EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
This segment had 2024 net revenues of $15,903.2 million. • Our EMEA segment innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
A disruption in deliveries from our suppliers or decreased availability of commodities and third-party parts and components could have an adverse effect on our ability to meet our commitments to customers, increase our operating costs, or impact timing and delivery of products and services.
A disruption in deliveries from our suppliers or decreased availability of commodities and third-party parts and components could adversely affect our ability to meet our commitments to customers, impact pricing, increase our operating costs, or impact timing and delivery of products and services.
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, “Business - Asbestos-Related Matters,” Part I, Item 3, “Legal Proceedings,” Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Events,” and Part II, Item 8, Consolidated Financial Statements, Note 1, “Description of Company,” and Note 20, “Commitments and Contingencies.” Risks Related to Cybersecurity and Technology We are subject to risks relating to our information technology systems.
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, "Business - Asbestos-Related Matters," Part I, Item 3, "Legal Proceedings," Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Matters," and Part II, Item 8, Consolidated Financial Statements, and Note 20, "Commitments and Contingencies." Risks Related to Cybersecurity and Technology We are subject to risks relating to our information technology systems.
We partner with best-in-class external leadership development experts such as INSEAD, Center for Creative Leadership, and the NeuroLeadership Institute to deliver these programs globally each year.
We partner with best-in-class external leadership development experts such as INSEAD, Center for Creative Leadership, and the NeuroLeadership Institute to deliver programs such as our Executive Leadership Program, Leading for Impact, and our Women's Leadership Program globally each year.
The extent to which COVID-19 or other widespread outbreaks of infectious disease or other public health crises may impact our business going forward will depend on factors such as the duration and scope of infections; governmental, business, and individuals' actions in response to the health crisis; travel and other restrictions; and the impact on economic activity including the possibility of financial market instability or recession.
The extent to which a pandemic, epidemic, or other widespread outbreaks of infectious disease or other public health crises, including a resurgence of any previously identified outbreaks of infectious diseases, may impact our business going forward 14 Table of Contents will depend on factors such as the duration and scope of infections; governmental, business, and individuals' actions in response to the health crisis; travel and other restrictions; and the impact on economic activity including the possibility of financial market instability or recession.
World geopolitical conflict, including the Russia Ukraine conflict, has created a humanitarian crisis, materially impacted economic activities, and may materially impact our global and regional operations. The global economy has been negatively impacted by the military conflict between Russia and Ukraine.
World geopolitical conflicts have created humanitarian crises, materially impacted economic activities, and may materially impact our global and regional operations. The global economy has been negatively impacted by geopolitical conflicts, including the military conflict between Russia and Ukraine and conflict in the Middle East.
Our systems, networks and certain of our control products and those of our vendors are at risk to system damage, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events.
Our systems, networks and certain of our control products and those of our vendors are at risk to system damage, cyber attacks, human errors or misconduct, malware, power and utility outages, and other catastrophic events.
The COVID-19 pandemic has had widespread, rapidly evolving and unpredictable impacts on global society, economics, financial markets and business practices. Government efforts to contain COVID-19 have included travel bans and restrictions, quarantines, shelter in place orders and shutdowns.
Prior experience with the Coronavirus Disease 2019 (COVID-19) pandemic demonstrated widespread, rapidly evolving and unpredictable impacts on global society, economics, financial markets and business practices. Government efforts to contain the pandemic included travel bans and restrictions, quarantines, shelter in place orders and shutdowns.
The Board of Directors of our Company has also adopted and posted in the Investor Relations section of our website the Corporate Governance Guidelines and charters for each of the Board’s standing committees.
The Board of Directors of our Company has also adopted and posted in the Investor Relations section of our website the Corporate Governance Guidelines and charters for each of the Board's standing committees. The contents of our website are not incorporated by reference in this report.
Available Information We have used, and intend to continue to use, the homepage, the investor relations and the “News” section of our website (www.tranetechnologies.com), among other sources such as press releases, public conference calls and webcasts, as a means of disclosing additional information, which may include future developments regarding the Company and/or material non-public information.
We also continue to maintain all our locations globally as tobacco free workplaces. 10 Table of Contents Available Information We have used, and intend to continue to use, the homepage, the Investor Relations and the "News" sections of our website (www.tranetechnologies.com), among other sources such as press releases, public conference calls and webcasts, as a means of disclosing additional information, which may include future developments regarding the Company and/or material non-public information.
Disruptions have occurred due to the COVID-19 pandemic, geopolitical events, electronic parts shortages, supplier capacity constraints, labor shortages, port congestion, logistical problems, political unrest, and other issues. Some of these disruptions have resulted in supply chain constraints affecting our business including our ability to timely produce and ship our products.
Disruptions have previously occurred and may occur in the future due to global pandemics, natural disasters, regulatory changes, geopolitical events, electronic component shortages, supplier capacity constraints, labor shortages, port congestion, logistical problems, political unrest, and other issues. Some of these disruptions have resulted in supply chain constraints affecting our business including our ability to timely produce and ship our products.
Examples of these programs include: • Team Leader Development Program – A seven-week experiential development program that engages, teaches and empowers front-line plant leaders to apply continuous improvement methods, make sound business decisions, solve problems, and serve as a coach to their teams. • Graduate Training Program (GTP) – A five-month development program designed to prepare university graduate engineers for a rewarding career in technical sales.
Examples of these programs include: • Team Leader Development Program – A seven-week experiential development program that engages, teaches and empowers hourly team leaders in our manufacturing facilities to apply continuous improvement methods, make sound business decisions, solve problems, and serve as a coach to their teams. • Group Leader Development Program – A three-week cohort program for salaried, front-line leaders in our manufacturing facilities focuses on enhancing knowledge, skills and ability to lead front-line workers within a world class lean enterprise. • Graduate Training Program – A five-month development program designed to prepare university graduate engineers for a rewarding career in technical sales.
These information technology systems can be damaged, disrupted or shut down due to cyberattacks, computer viruses, ransomware, human error or malfeasance (including by employees), power outages, 17 Table of Contents hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events.
These information technology systems can be damaged, disrupted, compromised, or shut down due to cyber attacks, malware, human error or malfeasance (including by employees), power and utility outages, hardware failures, telecommunication issues, or catastrophes or other unforeseen events.
Our business and competitive position could be harmed by such events. Our ability to protect our intellectual property rights by legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are inadequate or undeveloped.
Our ability to protect our intellectual property rights by legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are inadequate or undeveloped. Our inability to enforce our IP rights under any of these circumstances could have an impact on our competitive position and business.
Our inability to enforce our IP rights under any of these circumstances could have an impact on our competitive position and business. Risks Related to Regulatory Matters Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents or business partners.
Risks Related to Regulatory Matters Our reputation, ability to do business and results of operations could be impaired by improper conduct by any of our employees, agents or business partners.
The contents of our website are not incorporated by reference in this report. 11 Table of Contents Executive Officers of the Registrant The following is a list of our executive officers as of February 8, 2024. Name and Age Date of Service as an Executive Officer Principal Occupation and Other Information for Past Five Years David S.
Executive Officers of the Registrant The following is a list of our executive officers as of February 6, 2025. Name and Age Date of Service as an Executive Officer Principal Occupation and Other Information for Past Five Years David S.
Risks Related to Litigation Material adverse legal judgments, fines, penalties or settlements could adversely affect our results of operations or financial condition. We and certain of our subsidiaries are currently and may in the future become involved in legal and regulatory proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities.
We and certain of our subsidiaries are currently and may in the future become involved in legal and regulatory proceedings and disputes incidental to the operation of our business or the business operations of previously-owned entities.
While we are committed to pursuing these sustainability objectives, there can be no assurance that we will successfully achieve our commitments. Failure to meet these commitments could result in reputational and other harm to our company. Changes regarding climate risk management and practices may result in higher regulatory, compliance risks and costs.
While we are committed to pursuing these sustainability objectives, our ability to achieve our sustainability objectives is subject to numerous risks and uncertainties, including increased operation costs and future changes in regulation, and there can be no assurance that we will successfully achieve our commitments. Failure to meet these commitments could result in reputational and other harm to our company.
In our opinion, engineering, production skills and experience are more responsible for our market position than our intellectual property rights. 6 Table of Contents Backlog Our backlog of orders, believed to be firm, at December 31, was as follows: In millions 2023 2022 Americas $ 5,302.9 $ 5,325.2 EMEA 614.9 616.1 Asia Pacific 1,012.7 941.8 Total $ 6,930.5 $ 6,883.1 These backlog figures are based on orders received and only include amounts associated with our equipment and contracting and installation performance obligations.
Risk Factors." 6 Table of Contents Backlog Our backlog of orders, believed to be firm, at December 31, was as follows: In millions 2024 2023 Americas $ 5,323.1 $ 5,302.9 EMEA 585.3 614.9 Asia Pacific 839.3 1,012.7 Total $ 6,747.7 $ 6,930.5 These backlog figures are based on orders received and only include amounts associated with our equipment and contracting and installation performance obligations.

… 77 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+0 added−0 removed5 unchanged
Item 1C. CYBERSECURITY We maintain a cybersecurity risk assessment program and framework as set forth in our cybersecurity policies and standards. The foundation of our cybersecurity program is based on the National Institute of Standards and Technology ("NIST") Cybersecurity Framework, which includes a set of controls to prevent, detect, and respond to cybersecurity threats and incidents.
Item 1C. CYBERSECURITY We maintain a cybersecurity program and framework as set forth in our cybersecurity policies and standards. The foundation of our cybersecurity program is based on the National Institute of Standards and Technology ("NIST") Cybersecurity Framework, which includes a set of controls to prevent, detect, and respond to cybersecurity threats and incidents.
For more information about these and other cybersecurity risks faced by us, see Part IA, Item 1A, “Risk Factors - Risks Related to Cybersecurity and Technology.” Our Board of Directors has ultimate oversight for risks relating to our cybersecurity program and practices and receives regular updates from our internal cybersecurity team on cybersecurity risks and threats.
For more information about these and other cybersecurity risks faced by us, see Part IA, Item 1A, "Risk Factors - Risks Related to Cybersecurity and Technology." Our Board of Directors has ultimate oversight for risks relating to our cybersecurity program and practices and receives regular updates from our internal cybersecurity team on cybersecurity risks and threats.
Additionally, in furtherance of assessing, identifying and managing material cybersecurity risks, we: • Leverage technology solutions, including proactive detection tools, to protect our assets and detect threats in our environment; 24 Table of Contents • Perform regular internal assessments of our cybersecurity program against the NIST Cybersecurity Framework.
Additionally, in furtherance of assessing, identifying and managing material cybersecurity risks, we: • Leverage technology solutions, including proactive detection tools, to protect our assets and detect threats in our environment; • Perform regular internal assessments of our cybersecurity program against the NIST Cybersecurity Framework.
The ERIC is charged with providing guidance and direction for integrating enterprise risk intelligence with important business processes, such as strategic planning, business forecasting, operational management, and investment allocation to ensure consistent consideration of risks in decision making.
The ERIC is charged with providing guidance and direction for integrating enterprise risk 24 Table of Contents intelligence with important business processes, such as strategic planning, business forecasting, operational management, and investment allocation to ensure consistent consideration of risks in decision making.
Finally, we maintain an Enterprise Cybersecurity Governance Committee that presents updates on cybersecurity initiatives, known and emerging issues and risks, and program updates to a cross-section of our senior management. 25 Table of Contents
Finally, we maintain an Enterprise Cybersecurity Governance Committee that presents updates on cybersecurity initiatives, known and emerging issues and risks, and program updates to a cross-section of our senior management.
Findings from such analyses are then reviewed and utilized to create action plans where applicable and relevant to our environment and industry; • Maintain an enterprise-wide disaster recovery governance program, which includes cybersecurity-related disaster recovery standards and compliance procedures related thereto; • Regularly perform cybersecurity-related disaster recovery testing to ensure that the Company’s mission-critical systems are recoverable, in support of the business continuity needs of our various business lines; and • Integrate each of our business and corporate groups with our internal cybersecurity team to ensure cybersecurity requirements are embedded into operating environments as appropriate, which drives business strategies, budgeting, and similar processes.
Findings from such analyses are then reviewed and utilized to create action plans where applicable and relevant to our environment and industry; • Maintain an enterprise-wide disaster recovery governance program, which includes cybersecurity-related disaster recovery standards and compliance procedures related thereto; • Regularly perform cybersecurity-related disaster recovery testing to ensure that the Company's mission-critical systems are recoverable, in support of the business continuity needs of our various business lines; • Maintain an operational technology (OT) security program to address cyber risks that are inherent and unique to our industry and manufacturing environment; • Maintain a centralized product security program that unifies company-wide strategy to ensure our customer-facing products and services are secure by design; and • Integrate each of our business and corporate groups with our internal cybersecurity team to ensure cybersecurity requirements are embedded into operating environments as appropriate, which drives business strategies, budgeting, and similar processes.
Department of Defense, cybersecurity capability maturity benchmarking and voluntary certifications by us, such as the Service Organization Control Type 2 (SOC 2). The results of these audits and assessments are promptly reviewed and enhancements are made to our cybersecurity program and practices based on such findings as appropriate.
The results of these audits and assessments are promptly reviewed and enhancements are made to our cybersecurity program and practices based on such findings as appropriate.
In addition, senior and executive management, as well as our Board of Directors, regularly review our financial planning processes for these areas, inclusive of our cybersecurity programs.
In addition, senior and executive management, as well as our Board of Directors, regularly review our financial planning processes for these areas, inclusive of our cybersecurity programs. Any changes or additions to our cybersecurity program and related practices and procedures described above in response to cybersecurity needs are reviewed by our executive management, Board of Directors and Audit Committee.
The effectiveness of our cybersecurity environment is regularly tested by internal personnel and these third-parties. These assessments are performed in connection with standards and requirements under the Payment Card Industry (PCI) data security standard, Sarbanes-Oxley Act (SOX), and the U.S.
These assessments are performed in connection with standards and requirements under the Payment Card Industry (PCI) data security standard, Sarbanes-Oxley Act (SOX), and the U.S. Department of Defense, cybersecurity capability maturity benchmarking and voluntary certifications by us, such as the Service Organization Control Type 2 (SOC 2).
Any changes or additions to our cybersecurity risk assessment program and related practices and procedures described above in response to cybersecurity needs are reviewed by our executive management, Board of Directors and Audit Committee. We regularly engage independent third-parties and auditors to assess our cybersecurity program and practices and assist in the mitigation of risk.
We regularly engage independent third-parties and auditors to assess our cybersecurity program and practices and assist in the mitigation of risk. The effectiveness of our cybersecurity environment is regularly tested by internal personnel and these third-parties.
We also maintain a cybersecurity third party risk management program which evaluates systems and applications hosted by external parties for cybersecurity risks and assesses the security posture and features of those services.
We also maintain a cybersecurity third party risk management program which evaluates third parties that either host or have access to our data and/or systems to ensure that they are aligned with our security requirements.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
The locations by segment of our principal plant facilities at December 31, 2023 were as follows: Americas EMEA Asia Pacific Arecibo, Puerto Rico Barcelona, Spain Bangkok, Thailand Charlotte, North Carolina Bari, Italy Taicang, China Clarksville, Tennessee Charmes, France Wujiang, China Columbia, South Carolina Conselve, Italy Zhongshan, China Fort Smith, Arkansas Essen, Germany Fremont, Ohio Galway, Ireland Grand Rapids, Michigan Golbey, France Greenville, South Carolina Jettingen-Scheppach, Germany Hastings, Nebraska King Abdullah Economic City, Saudi Arabia La Crosse, Wisconsin Kolin, Czech Republic Lynn Haven, Florida Tribano, Italy Marietta, Ohio Wittenberg, Germany Monterrey, Mexico Newberry, South Carolina Noblesville, Indiana Pueblo, Colorado Rushville, Indiana St.
The locations of our principal plant facilities, by segment, at December 31, 2024 were as follows: Americas EMEA Asia Pacific Arecibo, Puerto Rico Barcelona, Spain Bangkok, Thailand Charlotte, North Carolina Bari, Italy Taicang, China Clarksville, Tennessee Charmes, France Wujiang, China Columbia, South Carolina Conselve, Italy Zhongshan, China Fort Smith, Arkansas Essen, Germany Fremont, Ohio Galway, Ireland Grand Rapids, Michigan Golbey, France Greenville, South Carolina Jettingen-Scheppach, Germany Hastings, Nebraska King Abdullah Economic City, Saudi Arabia La Crosse, Wisconsin Kolin, Czech Republic Lynn Haven, Florida Tribano, Italy Monterrey, Mexico Wittenberg, Germany Noblesville, Indiana Pueblo, Colorado Rushville, Indiana St.
Item 2. PROPERTIES As of December 31, 2023, we owned or leased approximately 29 million square feet of space worldwide. Manufacturing and assembly operations are conducted in 39 plants across the world. We also maintain various warehouses, offices, technology centers, and repair centers throughout the world.
Item 2. PROPERTIES As of December 31, 2024, we owned or leased approximately 30 million square feet of space worldwide. Manufacturing and assembly operations are principally conducted in 36 plants across the world. We also maintain various warehouses, offices, technology centers, and repair centers throughout the world.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, "Business - Asbestos-Related Matters," Part I, Item 1A, "Risk Factors - Risks Related to Litigation," Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Events," and Part II, Item 8, Consolidated Financial Statements, Note 1, "Description of Company," and Note 20, "Commitments and Contingencies."
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, "Business - Asbestos-Related Matters," Part I, Item 1A, "Risk Factors - Risks Related to Litigation," Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Matters," Part II, Item 8, Consolidated Financial Statements, and Note 20, "Commitments and Contingencies."

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−14 removed1 unchanged
The graph assumes an investment of $100 in our ordinary shares, the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 Industrial Index on December 31, 2018 and assumes the reinvestment of dividends.
The graph assumes an investment of $100 in our ordinary shares, the Standard & Poor's 500 Stock Index and the Standard & Poor's 500 Industrial Index on December 31, 2019 and assumes the reinvestment of dividends.
(b) We may also reacquire shares outside of the repurchase program from time to time in connection with the surrender of shares to cover taxes on vesting of share-based awards. We reacquired 335 shares in October and 320 shares in December in transactions outside the repurchase programs.
(b) We may also reacquire shares outside of the repurchase program from time to time in connection with the surrender of shares to cover taxes on vesting of share-based awards.
During the fourth quarter of 2023, we repurchased approximately $209 million of our ordinary shares, consistent with our capital allocation strategy, leaving $2.5 billion remaining under the 2022 Authorization as of December 31, 2023.
During the fourth quarter of 2024, we repurchased approximately $355 million of our ordinary shares, consistent with our capital allocation strategy, leaving $1.2 billion remaining under the 2022 Authorization and $5.0 billion remaining under the 2024 Authorization.
Repurchases occur in the open market or through one or more other public or private transactions pursuant to plans complying with Rules 10b5-1 under the Exchange Act. In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares (2022 Authorization).
Repurchases occur in the open market or through one or more other public or private transactions pursuant to plans complying with Rules 10b5-1 under the Exchange Act.
As of February 2, 2024, the approximate number of record holders of ordinary shares was 2,315.
As of January 31, 2025, the approximate number of record holders of ordinary shares was 2,171.
Issuer Purchases of Equity Securities The following table provides information with respect to purchases of our ordinary shares during the quarter ended December 31, 2023: Period Total number of shares purchased (000's) (a) (b) Average price paid per share (a) (b) Total number of shares purchased as part of program (000's) (a) Approximate dollar value of shares still available to be purchased under the program ($000's) (a) October 1 - October 31 454.1 $ 198.69 453.8 $ 2,649,773 November 1 - November 30 186.7 226.59 186.7 2,607,465 December 1 - December 31 326.9 235.53 326.6 2,530,541 Total 967.7 $ 216.52 967.1 (a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements.
Issuer Purchases of Equity Securities The following table provides information with respect to purchases of our ordinary shares during the quarter ended December 31, 2024: Period Total number of shares purchased (000's) (a) (b) Average price paid per share (a) (b) Total number of shares purchased as part of program (000's) (a) Approximate dollar value of shares still available to be purchased under the program ($000's) (a) October 1 - October 31 266.8 $ 393.81 266.0 $ 1,499,772 November 1 - November 30 354.6 402.91 354.6 1,356,912 December 1 - December 31 268.0 400.06 267.8 1,249,772 Total 889.4 $ 399.32 888.4 (a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements.
The actual number of PSUs that may vest can vary between 0% - 200% of the target award amount, subject to the achievement of certain performance conditions as set forth in the PSU award agreement. 28 Table of Contents Performance Graph The following graph compares the cumulative total shareholder return on our ordinary shares with the cumulative total return on (i) the Standard & Poor’s 500 Stock Index and (ii) the Standard & Poor’s 500 Industrial Index for the five years ended December 31, 2023.
We reacquired 791 shares in October, 14 shares in November, and 168 shares in December in transactions outside the repurchase programs. 26 Table of Contents Performance Graph The following graph compares the cumulative total shareholder return on our ordinary shares with the cumulative total return on (i) the Standard & Poor's 500 Stock Index and (ii) the Standard & Poor's 500 Industrial Index for the five years ended December 31, 2024.
Company/Index 2018 2019 2020 2021 2022 2023 Trane Technologies 100 148 213 300 254 374 S&P 500 100 131 156 200 164 207 S&P 500 Industrials Index 100 129 144 174 164 194 Item 6. [Reserved] 29 Table of Contents
Company/Index 2019 2020 2021 2022 2023 2024 Trane Technologies 100 144 202 171 252 386 S&P 500 100 118 152 125 157 197 S&P 500 Industrials Index 100 111 134 127 150 176 Item 6. [Reserved] 27 Table of Contents
Removed
Securities Trading Plans of Directors and Executive Officers Our director compensation program, which consists of an annual cash retainer and grant of restricted stock units (RSUs), is designed to compensate non-employee directors fairly for work required for a company of our size and scope and to align their interests with the long-term interests of our shareholders.
Added
In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares (2022 Authorization) and in December 2024, our Board of Directors authorized the repurchase of up to an additional $5.0 billion of our ordinary shares (2024 Authorization) upon the completion of the 2022 Authorization.
Removed
Similarly, a portion of the compensation of our executive officers is delivered in the form of our Long-Term Incentive Program (LTI), which is comprised of stock options, RSUs and performance share units (PSUs).
Removed
We believe compensating our directors and executive officers with a mix of equity-based awards effectively links compensation to long-term shareholder value creation, Environmental, Social, and Governance (ESG), and financial results.
Removed
Subject to the satisfaction of our share ownership requirements, our directors and executive officers may, from time to time, engage in transactions to sell some of the shares granted to them as part of our director and executive compensation programs after such shares vest following the expiration of any time-based restrictions or achievement of certain pre-established performance goals.
Removed
In addition, our directors and executive officers may also, from time to time, engage in other transactions involving our securities, which may entail the purchase or sale of our common stock outside of these compensation programs on an open-market basis.
Removed
All transactions in our securities by our directors and executive officers must occur in accordance with our Insider Trading Policy, which, among other things, requires that such transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information.
Removed
Rule 10b5-1 of the Securities Exchange Act provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information.
Removed
Our insider trading policy permits our directors and executive officers to enter trading plans designed to prearrange transactions in our securities in accordance with Rule 10b5-1. 27 Table of Contents The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted by our directors and executive officers during the fourth quarter of 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), referred to as Rule 10b5-1 trading plans: Name and Title Action Date of Action Scheduled Expiration Date (1) Aggregate Number of Securities to be Purchased or Sold (2) David S.
Removed
Regnery Chair and Chief Executive Officer Adopt 11/14/2023 5/13/2024 Sale of up to 19,772 (3) shares of common stock Christopher J.
Removed
Kuehn Executive Vice President and Chief Financial Officer Adopt 11/14/2023 5/13/2024 Sale of up to 10,699 (4) shares of common stock (1) In each case a trading plan may also expire prior to the scheduled expiration date if all transactions under the trading plan are completed before the scheduled expiration date.
Removed
(2) Aggregate number of shares in this column includes shares that may be forfeited or withheld to satisfy exercise price and tax obligations at the time of vesting.
Removed
(3) This figure includes a grant of 8,727 unvested PSUs that are expected to vest during the term of the Rule 10b5-1 trading plans, which are assumed to vest at 100% of the target award amount.
Removed
The actual number of PSUs that may vest can vary between 0% - 200% of the target award amount, subject to the achievement of certain performance conditions as set forth in the PSU award agreement.
Removed
(4) This figure includes a grant of 6,713 unvested PSUs that are expected to vest during the term of the Rule 10b5-1 trading plans, which are assumed to vest at 100% of the target award amount.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

113 edited+27 added−33 removed58 unchanged
Our geographic diversity and the breadth of our product and services portfolios have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results. Given our broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the Company.
Our geographic diversity and the breadth of our products and services portfolios have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results. Given our broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the Company.
As quoted market prices are not available for our reporting units, the calculation of their estimated fair value is determined using three valuation techniques: a discounted cash flow model (an income approach), a market-adjusted multiple of earnings and revenues (a market approach), and a similar transactions method (also a market approach).
As quoted market prices are not available for our reporting units, the calculation of their estimated fair value is determined using three valuation techniques: a discounted cash flow model (an income approach), a market-adjusted multiple of earnings or revenues (a market approach), and a similar transactions method (also a market approach).
For financial market risk impacting the Company, see Part II, Item 7A, "Quantitative and Qualitative Disclosure About Market Risk." 41 Table of Contents Capitalization Financing rates and conditions associated with future borrowings under our commercial paper program or term debt offerings will be affected by general financing conditions and our credit ratings.
For financial market risk impacting the Company, see Part II, Item 7A, "Quantitative and Qualitative Disclosure About Market Risk." 38 Table of Contents Capitalization Financing rates and conditions associated with future borrowings under our commercial paper program or term debt offerings will be affected by general financing conditions and our credit ratings.
See Note 7, "Debt and Credit Facilities", to the Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees. 39 Table of Contents Cash Flows The following table reflects the major categories of cash flows for the years ended December 31, respectively.
See Note 7, "Debt and Credit Facilities," to the Consolidated Financial Statements and further below in Supplemental Guarantor Financial Information for additional information regarding the terms of our long-term obligations and their related guarantees. 36 Table of Contents Cash Flows The following table reflects the major categories of cash flows for the years ended December 31, respectively.
The multiple of earnings and revenues approach reflects the market's expectations for future growth and risk, with adjustments to account for differences between the guideline publicly traded companies and the subject reporting units. The similar transactions method considers prices paid in transactions that have recently occurred in our industry or in related industries.
The market-adjusted multiple of earnings or revenues approach reflects the market's expectations for future growth and risk, with adjustments to account for differences between the guideline publicly traded companies and the subject reporting units. The similar transactions method considers prices paid in transactions that have recently occurred in our industry or in related industries.
See Note 11, "Pensions and Postretirement Benefits Other Than Pensions", to the Consolidated Financial Statements for additional information regarding postretirement benefits other than pensions. 42 Table of Contents Supplemental Guarantor Financial Information Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries of Plc.
See Note 11, "Pensions and Postretirement Benefits Other Than Pensions," to the Consolidated Financial Statements for additional information regarding postretirement benefits other than pensions. 39 Table of Contents Supplemental Guarantor Financial Information Trane Technologies plc (Plc or Parent Company) and certain of its 100% directly or indirectly owned subsidiaries provide guarantees of public debt issued by other 100% directly or indirectly owned subsidiaries of Plc.
Discussions of 2021 significant items and year-to-year comparisons between 2022 and 2021 have been excluded in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for year ended December 31, 2022.
Discussions of 2022 significant items and year-to-year comparisons between 2023 and 2022 have been excluded in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for year ended December 31, 2023.
The following tables present summarized financial information for the Parent Company and subsidiary debt issuers and guarantors on a combined basis (together, "obligor group") after elimination of intercompany transactions and balances based on the Company’s legal entity ownerships and guarantees outstanding at December 31, 2023.
The following tables present summarized financial information for the Parent Company and subsidiary debt issuers and guarantors on a combined basis (together, "obligor group") after elimination of intercompany transactions and balances based on the Company's legal entity ownerships and guarantees outstanding at December 31, 2024.
A 0.25% rate decrease in the discount rate for postretirement benefits would increase expected 2023 net periodic postretirement benefit cost by $0.3 million. Recent Accounting Pronouncements See Note 2, "Summary of Significant Accounting Policies" to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.
A 0.25% rate decrease in the discount rate for postretirement benefits would increase expected 2025 net periodic postretirement benefit cost by $0.3 million. Recent Accounting Pronouncements See Note 2, "Summary of Significant Accounting Policies" to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.
Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion as of December 31, 2023. We had no commercial paper outstanding at December 31, 2023 and December 31, 2022.
Under the program, the maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, is $2.0 billion as of December 31, 2024. We had no commercial paper outstanding at December 31, 2024 and December 31, 2023.
The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion, of which we had no outstanding balance as of December 31, 2023.
The maximum aggregate amount of unsecured commercial paper notes available to be issued, on a private placement basis, under the commercial paper program is $2.0 billion, of which we had no outstanding balance as of December 31, 2024.
See Note 7, "Debt and Credit Facilities", to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations. Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 2025 and 2049.
See Note 7, "Debt and Credit Facilities," to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations. Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 2026 and 2049.
Each quarter until such contingent amounts are earned, the fair value of the liability is remeasured at each reporting period and adjusted as a component of operating expenses based on changes to the underlying assumptions.
Each quarter until such contingent amounts are earned, the fair value of the liability is evaluated at each reporting period and adjusted as a component of operating expenses based on changes to the underlying assumptions.
To the extent that the ultimate results differ from our original or adjusted estimates, the effect will be recorded in the provision for income taxes in the period that the matter is finally resolved. 46 Table of Contents • Employee benefit plans – We provide a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits.
To the extent that the ultimate results differ from our original or adjusted estimates, the effect will be recorded in the provision for income taxes in the period that the matter is finally resolved. • Employee benefit plans – We provide a range of benefits to eligible employees and retirees, including pensions, postretirement and postemployment benefits.
Our public debt does not contain financial covenants and our revolving credit lines have a debt-to-total capital covenant of 65%. As of December 31, 2023, our debt-to-total capital ratio was significantly beneath this limit.
Our public debt does not contain financial covenants and our revolving credit lines have a debt-to-total capital covenant of 65%. As of December 31, 2024, our debt-to-total capital ratio was significantly beneath this limit.
The discounted cash flow approach relies on our estimates of future cash flows and explicitly addresses factors such as timing, growth and margins, with due consideration given to forecasting risk.
The discounted cash flow approach relies on our estimates of future cash flows and explicitly addresses factors such as timing, revenue growth rates, and margins, with due consideration given to forecasting risk.
We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. We regularly perform detailed evaluations of the different market segments we are serving to proactively detect trends and to adapt our strategies accordingly, including potential triggers and actions to be taken under recessionary scenarios.
We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. We regularly perform detailed evaluations of the different market segments we serve to proactively detect trends and to adapt our strategies accordingly, including potential triggers and actions to be taken under recessionary scenarios.
Additional items that impact the effective tax rate are excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate offset by an impairment of an equity investment, which is currently nondeductible, and U.S. state and local taxes.
Additional items that impact the effective tax rate are excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate offset by an impairment of an equity investment, and U.S. state and local taxes.
During the third quarter of 2021, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million QSF. The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
During the third quarter of 2021, Aldrich and Murray filed a motion with the Bankruptcy Court to create a $270.0 million qualified settlement fund (QSF). The funds held in the QSF would be available to provide funding for the Section 524(g) Trust upon effectiveness of the Plan.
Our approach to asset allocation is to increase fixed income assets as the plan's funded status improves. We monitor plan funded status and asset allocation regularly in addition to investment manager performance. In addition, we monitor the impact of market conditions on our defined benefit plans on a regular basis.
We use a dynamic approach to asset allocation to increase fixed income assets as the plan's funded status improves. We monitor plan funded status and asset allocation regularly in addition to investment manager performance. In addition, we monitor the impact of market conditions on our defined benefit plans on a regular basis.
As of December 31, 2023, our credit ratings were as follows: Short-term Long-term Moody’s P-2 Baa1 Standard and Poor’s A-2 BBB+ The credit ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.
As of December 31, 2024, our credit ratings were as follows: Short-term Long-term Moody's P-2 A3 Standard and Poor's A-2 BBB+ The credit ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.
Selected references are made to revenue growth on an organic basis so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates and with the impacts of acquisitions, thereby providing comparisons of operation performance from period to period of the business that we have owned during both periods presented.
Selected references are made to revenue growth on an organic basis so that certain financial results can be viewed without the impacts of fluctuations in foreign currency rates and acquisitions, thereby providing comparisons of operating performance from period to period of the business that we have owned during both periods presented.
The test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the 44 Table of Contents reporting unit is not impaired.
The test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the 41 Table of Contents reporting unit is not impaired.
Segment Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP.
Segment Adjusted EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for net earnings or other results as determined in accordance with GAAP.
This section discusses 2023 and 2022 significant items affecting our consolidated operating results, financial condition and liquidity and provides a year-to-year comparison between 2023 and 2022.
This section discusses 2024 and 2023 significant items affecting our consolidated operating results, financial condition and liquidity and provides a year-to-year comparison between 2024 and 2023.
Revenues from non-U.S. jurisdictions accounted for approximately 28% of our total 2023 revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates ranging from 0% to 38%.
Revenues from non-U.S. jurisdictions accounted for approximately 28% of our total 2023 revenues, such that a material portion of our pretax income was earned and taxed outside the U.S. at rates up to 38%.
The following table shows our guarantor relationships as of December 31, 2023: Parent, issuer or guarantors Notes issued Notes guaranteed Trane Technologies plc (Plc) None All registered notes and debentures Trane Technologies Irish Holdings Unlimited Company (TT Holdings) None All notes issued by TTFL and TTC HoldCo Trane Technologies Lux International Holding Company S.à.r.l.
The following table shows our guarantor relationships as of December 31, 2024: Parent, issuer or guarantors Notes issued Notes guaranteed Trane Technologies plc (Plc) None All registered notes and debentures Trane Technologies Irish Holdings Unlimited Company (TT Holdings) None All notes issued by TTFL and TTC HoldCo Trane Technologies Global Holding II Company (TT Global II) None All notes issued by TTFL and TTC HoldCo Trane Technologies Lux International Holding Company S.à.r.l.
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, "Business - Asbestos-Related Matters," Part I, Item 1A, "Risk Factors - Risks Related to Litigation," Part I, Item 3, "Legal Proceedings," and Part II, Item 8, Consolidated Financial Statements, Note 1, "Description of Company," and Note 20, "Commitments and Contingencies." Trends and Economic Events We are a global corporation with worldwide operations.
For detailed information on the bankruptcy cases of Aldrich and Murray, see Part I, Item 1, "Business - Asbestos-Related Matters," Part I, Item 1A, "Risk Factors - Risks Related to Litigation," Part I, Item 3, "Legal Proceedings," and Part II, Item 8, Consolidated Financial Statements, and Note 20, "Commitments and Contingencies." 29 Table of Contents Trends and Economic Events We are a global corporation with worldwide operations.
The following discussion compares our results for each of our three reportable segments for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The following discussion compares our results for each of our three reportable segments for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The capital expenditure program for 2024 is estimated to be approximately 2.5% of revenues, including amounts approved in prior periods. Many of these projects are subject to review and cancellation at our option without incurring substantial charges.
The capital expenditure program for 2025 is estimated to be approximately 2.0% of revenues, including amounts approved in prior periods. Many of these projects are subject to review and cancellation at our option without incurring substantial charges.
We currently expect that we will contribute approximately $61 million to our enterprise plans worldwide in 2024. The timing and amounts of future contributions are dependent upon the funding status of the plan, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors.
We currently expect that we will contribute approximately $30 million to our enterprise plans worldwide in 2025. The timing and amounts of future contributions are dependent upon the funding status of the plans, which is expected to vary as a result of changes in interest rates, returns on underlying assets, and other factors.
Future interest payments on long-term debt total $2,324.5 million, with $218.2 million payable within 12 months. See Note 7, "Debt and Credit Facilities", to the Consolidated Financial Statements for additional information regarding debt. Purchase Obligations Purchase obligations include commitments under legally enforceable contracts or purchase orders.
Future interest payments on long-term debt total $2,348.6 million, with $220.5 million payable within 12 months. See Note 7, "Debt and Credit Facilities," to the Consolidated Financial Statements for additional information regarding debt. Purchase Obligations Purchase obligations include commitments under legally enforceable contracts or purchase orders.
At December 31, 2023, we had purchase obligations of $1,096.1 million, which are primarily payable within 12 months. Pensions It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required.
At December 31, 2024, we had purchase obligations of $1,161.2 million, which are primarily payable within 12 months. Pensions It is our objective to contribute to the pension plans to ensure adequate funds are available in the plans to make benefit payments to plan participants and beneficiaries when required.
As a global business, our operations are affected by worldwide, regional and industry-specific economic factors as well as political and social factors wherever we operate or do business.
As a global business, our operations are affected by worldwide, regional and industry-specific economic factors as well as geopolitical, environmental and social factors wherever we operate or do business.
These valuation techniques are weighted 50%, 40% and 10%, respectively. Under the income approach, we assumed a forecasted cash flow period of five years with discount rates ranging from 10.0% to 12.5% and a terminal growth rate of 3.0%.
These valuation techniques are weighted 50%, 40% and 10%, respectively. Under the income approach, we assumed a forecasted cash flow period of five to ten years with discount rates ranging from 8.5% to 15.5% and a terminal growth rate of 3.5% to 4.0%.
Estimated sensitivities to the expected 2023 net periodic pension cost of a 0.25% rate decline in the two basic assumptions are as follows: the decline in the discount rate would increase expense by $0.5 million and the decline in the estimated return on assets would increase expense by $5.2 million.
Estimated sensitivities to the expected 2025 net periodic pension cost of a 0.25% rate decline in the two basic assumptions are as follows: the decline in the discount rate would increase expense by $0.2 million and the decline in the estimated return on assets would increase expense by $4.8 million.
Total commitments of $2.0 billion were unused at December 31, 2023 and December 31, 2022.
Total commitments of $2.0 billion were unused at December 31, 2024 and December 31, 2023.
The primary drivers of the usage was attributable to acquisition of businesses, which totaled $862.8 million, net of cash acquired, and capital expenditures of $300.7 million. During the year ended December 31, 2022, net cash used in investing activities from continuing operations was $539.8 million.
During the year ended December 31, 2023, net cash used in investing activities from continuing operations was $1,172.2 million. The primary drivers of the usage was attributable to acquisition of businesses, which totaled $862.8 million, net of cash acquired, and capital expenditures of $300.7 million.
In addition, we believe our backlog and order levels are indicative of future revenue and thus are a key measure of anticipated performance. We expect market conditions to remain mixed across our end markets and geographies where we serve customers.
In addition, we believe our backlog and order levels are indicative of future revenue and thus are a key measure of anticipated performance. We expect conditions to remain mixed across our served end markets and geographies.
The components of the period change were as follows: Pricing 4.4 % Volume 4.3 % Organic revenue (1) 8.7 % Acquisitions 2.1 % Currency translation (0.3) % Total 10.5 % (1) Represents a non-GAAP measure.
The components of the period change were as follows: Volume 9.4 % Pricing 2.3 % Organic revenue (1) 11.7 % Acquisitions 1.0 % Currency translation (0.5) % Total 12.2 % (1) Represents a non-GAAP measure.
Debt At December 31, 2023, we had outstanding aggregate long-term debt principal payments of $4,809.8 million, with $802.5 million payable within 12 months. The amount payable within 12 months includes $295.0 million of debt redeemable at the option of the holder. The scheduled maturities of these bonds range between 2027 and 2028.
Debt At December 31, 2024, we had outstanding aggregate long-term debt principal payments of $4,802.2 million, with $452.2 million payable within 12 months. The amount payable within 12 months includes $295.0 million of debt redeemable at the option of the holder. The scheduled maturities of these bonds range between 2027 and 2028.
Aldrich, Murray and the FCR filed responses in opposition to each of these motions, and the Company filed papers joining in Aldrich and Murray's opposition. A hearing on the motions to dismiss was held on July 14, 2023. On December 28, 2023, the Bankruptcy Court entered an order denying the motions to dismiss the Chapter 11 cases.
Aldrich, Murray and the FCR filed responses in opposition to the Motions to Dismiss, and the Company filed papers joining in Aldrich and Murray's opposition. A hearing on the Motions to Dismiss was held on July 14, 2023. On December 28, 2023, the Bankruptcy Court entered an order denying the Motions to Dismiss.
When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate. The 2022 effective tax rate was 17.3% which was lower than the U.S.
When comparing the results of multiple reporting periods, among other factors, the mix of earnings between U.S. and foreign jurisdictions can cause variability in our overall effective tax rate. The 2023 effective tax rate was 19.4% which was lower than the U.S.
In testing our other indefinite-lived intangible assets for impairment, we assumed forecasted revenues for a period of five years with discount rates ranging from 10.0% to 15.0%, terminal growth rates of 3.0%, and royalty rates ranging from 0.5% to 4.5%.
In testing our other indefinite-lived intangible assets for impairment, we forecasted revenues for a period of five years with discount rates ranging from 8.5% to 14.0%, terminal growth rates of 3.5%, and royalty rates ranging from 1.0% to 4.5%.
On April 6, 2023, certain individual claimants filed a motion to dismiss the Chapter 11 cases. Subsequently, on May 15, 2023, the committee representing current asbestos claimants (the ACC) filed its own motion to dismiss the Chapter 11 cases.
On April 6, 2023, certain individual claimants filed a motion to dismiss the Chapter 11 cases (Claimant Motion to Dismiss). Subsequently, on May 15, 2023, the committee representing current asbestos claimants (the ACC) filed its own motion to dismiss the Chapter 11 cases (ACC Motion to Dismiss, and, together with the Claimant Motion to Dismiss, the Motions to Dismiss).
Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $30 million in 2024.
Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $29 million in 2025.
Capital expenditures were $300.7 million, $291.8 million and $223.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Our investments continue to improve manufacturing productivity, reduce costs, provide environmental enhancements, upgrade information technology infrastructure and security and advanced technologies for existing facilities.
Capital expenditures were $370.6 million, $300.7 million and $291.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. Our investments continue to improve manufacturing productivity, expand capacity, reduce costs, provide environmental enhancements, upgrade information technology infrastructure and security and advanced technologies for existing facilities.
For all indefinite-lived intangible assets, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) exceeded 35%.
For significant indefinite-lived intangible assets, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) exceeded 400%.
For more information, see "Non-GAAP Financial Measures." The increase in Net revenues was primarily driven by realization of inflation-based price increases, higher volumes driven by increased end-customer demand within all our reportable segments and incremental revenue from acquisitions, partially offset by an unfavorable impact from foreign currency translation.
For more information, see "Non-GAAP Financial Measures." The increase in Net revenues was primarily driven by higher volumes as a result of stronger end-customer demand within our Americas and EMEA segments, realization of price increases and incremental revenue from acquisitions, partially offset by an unfavorable impact from foreign currency translation.
(TT International) (1) None All notes issued by TTFL and TTC HoldCo Trane Technologies Global Holding II Company (TT Global II) (2) None All notes issued by TTFL and TTC HoldCo Trane Technologies Americas Holding Corporation (TT Americas) (3) None All notes issued by TTFL and TTC HoldCo Trane Technologies Financing Limited (TTFL) 3.550% Senior notes due 2024 3.500% Senior notes due 2026 3.800% Senior notes due 2029 5.250% Senior notes due 2033 4.650% Senior notes due 2044 4.500% Senior notes due 2049 All notes and debentures issued by TTC HoldCo and TTC Trane Technologies HoldCo Inc.
(TT International) None All notes issued by TTFL and TTC HoldCo Trane Technologies Americas Holding Corporation (TT Americas) None All notes issued by TTFL and TTC HoldCo Trane Technologies Financing Limited (TTFL) 3.500% Senior Notes due 2026 3.800% Senior Notes due 2029 5.250% Senior Notes due 2033 5.100% Senior Notes due 2034 4.650% Senior Notes due 2044 4.500% Senior Notes due 2049 All notes and debentures issued by TTC HoldCo and TTC Trane Technologies HoldCo Inc.
Net cash provided by continuing operating activities for the year ended December 31, 2022 was $1,698.7 million, of which net income provided $2,248.8 million after adjusting for non-cash transactions. The year-over-year increase in net cash from continuing operating activities was primarily due to higher net earnings and improved cash conversion cycle.
Net cash provided by continuing operating activities for the year ended December 31, 2023 was $2,426.8 million, of which net income provided $2,499.6 million after adjusting for non-cash transactions. The year-over-year increase in net cash from continuing operating activities was primarily due to higher net earnings and an improved cash conversion cycle.
In addition, we are investing substantial resources to innovate and develop new products and services which we expect to drive future growth. 32 Table of Contents Results of Operations Non-GAAP Financial Measures Organic Revenue We define organic revenue as net revenues adjusted for the impact of currency, acquisitions and divestitures .
Additionally, we are investing substantial resources to innovate and develop new products and services which we expect to drive future growth. 30 Table of Contents Results of Operations Non-GAAP Financial Measures Organic Revenue We define organic revenue as net revenues adjusted for the impact of currency, acquisitions and divestitures . Organic revenue is not defined under U.S.
In millions 2023 2022 Net cash provided by continuing operating activities $ 2,426.8 $ 1,698.7 Net cash used in continuing investing activities (1,172.2) (539.8) Net cash used in continuing financing activities (1,350.3) (1,852.2) Operating Activities Net cash provided by continuing operating activities for the year ended December 31, 2023 was $2,426.8 million, of which net income provided $2,499.6 million after adjusting for non-cash transactions.
In millions 2024 2023 Net cash provided by continuing operating activities $ 3,177.7 $ 2,426.8 Net cash used in continuing investing activities (562.9) (1,172.2) Net cash used in continuing financing activities (2,020.6) (1,350.3) Operating Activities Net cash provided by continuing operating activities for the year ended December 31, 2024 was $3,177.7 million, of which net income provided $2,938.8 million after adjusting for non-cash transactions.
Organic revenue is not defined under generally accepted accounting principles in the United States of America (GAAP) and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for revenue as determined in accordance with GAAP.
Generally Accepted Accounting Principles (GAAP) and may not be comparable to similarly-titled measures used by other companies and should not be considered a substitute for revenue as determined in accordance with GAAP.
However, to the extent that we repatriate funds from non-U.S. subsidiaries for which we assert permanent reinvestment to fund our U.S. operations, we would be required to accrue and pay applicable non-U.S. taxes.
However, to the extent that we repatriate funds from non-U.S. subsidiaries for which we assert permanent reinvestment to fund our U.S. operations, we would be required to accrue and pay applicable non-U.S. taxes. As of December 31, 2024, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.
It is not possible to predict how the Bankruptcy Court will rule on these pending motions, whether an appellate court will affirm or reverse the Bankruptcy Court order denying the motions to dismiss, whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.
It is not possible to predict how the District Court will rule on these pending motions, whether an appellate court will affirm or reverse the Bankruptcy Court orders denying the Motions to Dismiss and the Stay Relief Motion, whether the Bankruptcy Court will approve the terms of the Plan, what the extent of the asbestos liability will be or how long the Chapter 11 cases will last.The Chapter 11 cases remain pending as of February 6, 2025.
As of December 31, 2023, we had $1,095.3 million of cash and cash equivalents on hand, of which $949.0 million was held by non-U.S. subsidiaries.
As of December 31, 2024, we had $1,590.1 million of cash and cash equivalents on hand, of which $1,423.0 million was held by non-U.S. subsidiaries.
Segment Adjusted EBITDA margin for the year ended December 31, 2023 increased by 90 basis points to 19.3% compared to 18.4% for the same period of 2022 primarily due to price realization and gross productivity, partially offset by inflation and business reinvestment.
Segment Adjusted EBITDA margin for the year ended December 31, 2024 increased by 160 basis points to 20.9% compared to 19.3% for the same period of 2023 primarily due to price realization, gross productivity and higher volumes, partially offset by inflation and continued business reinvestment.
Refer to “Results by Segment” below for a discussion of Net revenues by segment. Gross Profit Margin Gross profit margin for the year ended December 31, 2023 increased 210 basis points to 33.1% compared to 31.0% for the same period of 2022 primarily due to price realization and gross productivity, partially offset by inflation and business reinvestment.
Refer to "Results by Segment" below for a discussion of Net revenues by segment. Gross Profit Margin Gross profit margin for the year ended December 31, 2024 increased 260 basis points to 35.7% compared to 33.1% for the same period of 2023 primarily due to gross productivity and price realization, partially offset by inflation.
Under the guideline public company method, we used an adjusted multiple ranging from 10.0 to 17.0 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies. Additionally, we compared the estimated aggregate fair value of our reporting units to our overall market capitalization.
Under the guideline public company method, we used multiples of earnings before interest, taxes, depreciation and amortization (EBITDA) or revenues based on the market information of comparable companies. Additionally, we compared the estimated aggregate fair value of our reporting units to our overall market capitalization.
Cash and cash equivalents held by our non-U.S. subsidiaries are generally available for use in our U.S. operations via intercompany loans, equity infusions or via distributions from direct or indirectly owned non-U.S. subsidiaries for which we do not assert permanent reinvestment.
Cash and cash equivalents held by our non-U.S. subsidiaries are generally available for use in our U.S. operations via intercompany loans, equity infusions or via distributions from direct or indirectly owned non-U.S. subsidiaries for which we do not assert permanent reinvestment. In general, repatriation of cash to the U.S. can be completed with no significant incremental U.S. tax.
Segment Adjusted EBITDA margin for the year ended December 31, 2023 increased by 330 basis points to 22.2% compared to 18.9% for the same period of 2022 primarily due to price realization, higher volumes and gross productivity, partially offset by lower margin attribution from the recent acquisition, inclusive of integration costs, and continued business reinvestment.
Segment Adjusted EBITDA margin for the year ended December 31, 2024 increased by 170 basis points to 23.9% compared to 22.2% for the same period of 2023 primarily due to gross productivity and price realization, partially offset by lower volumes, inflation and continued business reinvestment.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which was funded on March 2, 2022. 38 Table of Contents Liquidity The following table contains several key measures of our financial condition and liquidity at the periods ended December 31: In millions 2023 2022 Cash and cash equivalents $ 1,095.3 $ 1,220.5 Short-term borrowings and current maturities of long-term debt 801.9 1,048.0 Long-term debt 3,977.9 3,788.3 Total debt 4,779.8 4,836.3 Total Trane Technologies plc shareholders’ equity 6,995.2 6,088.6 Total equity 7,017.0 6,105.2 Debt-to-total capital ratio 40.5 % 44.2 % Debt and Credit Facilities As of December 31, 2023, our short-term obligations primarily consist of current maturities of $499.4 million of long-term debt that matures in November 2024 and $295.0 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date.
Liquidity The following table contains several key measures of our financial condition and liquidity at the periods ended December 31: In millions 2024 2023 Cash and cash equivalents $ 1,590.1 $ 1,095.3 Short-term borrowings and current maturities of long-term debt 452.2 801.9 Long-term debt 4,318.1 3,977.9 Total debt 4,770.3 4,779.8 Total Trane Technologies plc shareholders' equity 7,457.4 6,995.2 Total equity 7,486.9 7,017.0 Debt-to-total capital ratio 38.9 % 40.5 % Debt and Credit Facilities As of December 31, 2024, our short-term obligations primarily consist of current maturities of $157.2 million that mature in June 2025 and $295.0 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date.
Neither Aldrich's wholly-owned subsidiary, 200 Park, Murray's wholly-owned subsidiary, ClimateLabs, nor the Trane Companies are part of the Chapter 11 filings. 30 Table of Contents The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures.
The goal of these Chapter 11 filings is to resolve equitably and permanently all current and future asbestos-related claims in a manner beneficial to claimants, Aldrich and Murray through court approval of a plan of reorganization that would create a trust pursuant to section 524(g) of the Bankruptcy Code, establish claims resolution procedures for all current and future asbestos-related claims against Aldrich and Murray and channel such claims to the trust for resolution in accordance with those procedures. 28 Table of Contents Aldrich and its wholly-owned subsidiary 200 Park and Murray and its wholly-owned subsidiary ClimateLabs were deconsolidated as of the Petition Date and their respective assets and liabilities were derecognized from our Consolidated Financial Statements.
Significant Events Reorganization of Aldrich and Murray On June 18, 2020 (Petition Date), our indirect wholly-owned subsidiaries, Aldrich and Murray each filed a voluntary petition for reorganization under the Bankruptcy Code.
The results of the acquisitions will be included in our consolidated financial statements from the date of the acquisitions. Significant Matters Reorganization of Aldrich and Murray On June 18, 2020 (Petition Date), our indirect wholly-owned subsidiaries, Aldrich and Murray each filed a voluntary petition for reorganization under the Bankruptcy Code.
If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. In November 2023, we paid $45.8 million of principal to holders who elected to exercise their put options.
If exercised, we are obligated to repay in whole or in part, at the holder's option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder.
Our obligor groups as of December 31, 2023 were as follows: Obligor group 1 consists of Plc, TT Holdings, TT International, TT Global II, TT Americas, TTFL, TTC HoldCo and TTC; Obligor group 2 consists of Plc, TTFL and TTC. 43 Table of Contents Summarized Statements of Earnings Year ended December 31, 2023 In millions Obligor group 1 Obligor group 2 Net revenues $ — $ — Gross profit (loss) — — Intercompany interest and fees 63.4 386.9 Earnings (loss) from continuing operations (164.0) 207.8 Discontinued operations, net of tax (20.6) (25.5) Net earnings (loss) (184.6) 182.3 Less: Net earnings attributable to noncontrolling interests — — Net earnings (loss) attributable to Trane Technologies plc $ (184.6) $ 182.3 Summarized Balance Sheet December 31, 2023 In millions Obligor group 1 Obligor group 2 ASSETS Intercompany receivables $ 1,517.3 $ 3,302.6 Current assets 1,609.1 3,378.3 Intercompany notes receivable 1,837.1 7,687.1 Noncurrent assets 2,522.3 8,263.6 LIABILITIES Intercompany payables 4,693.4 1,611.6 Current liabilities 5,979.0 2,856.4 Intercompany notes payable 4,000.0 4,000.0 Noncurrent liabilities 8,561.8 7,201.0 Critical Accounting Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
Our obligor groups as of December 31, 2024 were as follows: Obligor group 1 consists of Plc, TT Holdings, TT Global II, TT International, TT Americas, TTFL, TTC HoldCo and TTC; Obligor group 2 consists of Plc, TTFL and TTC. 40 Table of Contents Summarized Statements of Earnings Year ended December 31, 2024 In millions Obligor group 1 Obligor group 2 Net revenues $ — $ — Gross profit (loss) — — Intercompany interest and fees 1,232.3 2,956.9 Earnings (loss) from continuing operations 844.1 2,071.4 Discontinued operations, net of tax (20.9) (23.7) Net earnings (loss) 823.2 2,047.7 Less: Net earnings attributable to noncontrolling interests — — Net earnings (loss) attributable to Trane Technologies plc $ 823.2 $ 2,047.7 Summarized Balance Sheet December 31, 2024 In millions Obligor group 1 Obligor group 2 ASSETS Intercompany receivables $ 265.6 $ 4,363.2 Current assets 413.8 4,469.0 Intercompany notes receivable 500.0 4,900.0 Noncurrent assets 1,320.0 5,603.5 LIABILITIES Intercompany payables 5,290.2 2,530.3 Current liabilities 6,305.0 3,490.0 Intercompany notes payable 4,000.0 4,000.0 Noncurrent liabilities 9,014.6 7,650.2 Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
On January 11, 2024, the ACC and the individual claimants filed motions seeking leave to appeal the order denying the motions to dismiss and to certify the appeals directly to the Court of Appeals for the Fourth Circuit. Aldrich and Murray filed responses in opposition to these motions on January 31, 2024.
On January 11, 2024, the ACC and the individual claimants filed motions with the United States District Court for the District of North Carolina (the District Court) seeking leave to appeal the order denying the Motions to Dismiss (Motions for Leave to Appeal) and to certify the appeals directly to the Court of Appeals for the Fourth Circuit.
Selling and Administrative Expenses Selling and administrative expenses for the year ended December 31, 2023 increased by 16.4%, or $417.3 million, compared with the same period of 2022.
Selling and Administrative Expenses Selling and administrative expenses for the year ended December 31, 2024 increased by 20.8%, or $617.2 million, compared with the same period of 2023.
On April 4, 2023, Moody's announced that it upgraded our long-term credit rating from Baa2 to Baa1 and put the Company on positive outlook. On August 18, 2023, Standard and Poor's announced that it upgraded our long-term credit rating from BBB to BBB+.
On April 10, 2024, Moody's announced that it upgraded our long-term credit rating from Baa1 to A3 and put the Company on positive outlook. On October 31, 2024, Standard and Poor's announced that it revised our long-term credit rating from BBB+ stable to BBB+ positive.
Dollar amounts in millions 2023 2022 % Change Americas Net revenues $ 13,832.0 $ 12,640.8 9.4 % Segment Adjusted EBITDA 2,669.6 2,326.3 14.8 % Segment Adjusted EBITDA as a percentage of net revenues 19.3 % 18.4 % EMEA Net revenues $ 2,401.2 $ 2,034.5 18.0 % Segment Adjusted EBITDA 464.7 338.1 37.4 % Segment Adjusted EBITDA as a percentage of net revenues 19.4 % 16.6 % Asia Pacific Net revenues $ 1,444.4 $ 1,316.4 9.7 % Segment Adjusted EBITDA 321.3 248.3 29.4 % Segment Adjusted EBITDA as a percentage of net revenues 22.2 % 18.9 % Total Net revenues $ 17,677.6 $ 15,991.7 10.5 % Total Segment Adjusted EBITDA 3,455.6 2,912.7 18.6 % Total Segment Adjusted EBITDA as a percentage of net revenues 19.5 % 18.2 % 35 Table of Contents Americas Net revenues for the year ended December 31, 2023 increased by 9.4% or $1,191.2 million, compared with the same period of 2022.
Dollar amounts in millions 2024 2023 % Change Americas Net revenues $ 15,903.2 $ 13,832.0 15.0 % Segment Adjusted EBITDA 3,318.3 2,669.6 24.3 % Segment Adjusted EBITDA as a percentage of net revenues 20.9 % 19.3 % EMEA Net revenues $ 2,556.7 $ 2,401.2 6.5 % Segment Adjusted EBITDA 505.1 464.7 8.7 % Segment Adjusted EBITDA as a percentage of net revenues 19.8 % 19.4 % Asia Pacific Net revenues $ 1,378.3 $ 1,444.4 (4.6) % Segment Adjusted EBITDA 329.3 321.3 2.5 % Segment Adjusted EBITDA as a percentage of net revenues 23.9 % 22.2 % Total Net revenues $ 19,838.2 $ 17,677.6 12.2 % Total Segment Adjusted EBITDA 4,152.7 3,455.6 20.2 % Total Segment Adjusted EBITDA as a percentage of net revenues 20.9 % 19.5 % 33 Table of Contents Americas Net revenues for the year ended December 31, 2024 increased by 15.0% or $2,071.2 million, compared with the same period of 2023.
A reconciliation of Net cash provided by (used in) continuing operating activities to free cash flow the years ended December 31 is as follows: In millions 2023 2022 Net cash provided by (used in) continuing operating activities $ 2,426.8 $ 1,698.7 Capital expenditures (300.7) (291.8) Cash payments for restructuring 12.3 17.9 Transformation costs paid 3.9 9.6 Acquisition related transaction costs 18.9 — QSF funding (continuing operations component) — 91.8 Compensation related payment to a retired executive — 64.3 Insurance settlements on property claims (10.0) (25.0) Free cash flow (1) $ 2,151.2 $ 1,565.5 (1) Represents a non-GAAP measure.
A reconciliation of Net cash provided by (used in) continuing operating activities to free cash flow the years ended December 31 is as follows: In millions 2024 2023 Net cash provided by (used in) continuing operating activities $ 3,177.7 $ 2,426.8 Capital expenditures (370.6) (300.7) Cash payments for restructuring 8.6 12.3 Legacy legal liability 2.7 — Transformation costs paid — 3.9 M&A transaction costs 1.7 18.9 Insurance settlements on property claims — (10.0) Adjustment for Outperformance Incentive Program (2) (31.1) — Free cash flow (1) $ 2,789.0 $ 2,151.2 (1) Represents a non-GAAP measure.
The increase in Selling and administrative expenses was primarily driven by an increase in human capital costs related to investing in our people, higher sales commissions and merger and acquisition costs, including additional headcount, amortization of intangibles and transaction driven costs.
The increase in Selling and administrative expenses was primarily driven by an increase in human capital costs related to investing in our people, higher sales commissions, incremental selling and administrative expenses of acquired businesses and higher levels of business reinvestment.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 - Consolidated Results Dollar amounts in millions 2023 2022 Period Change 2023 % of revenues 2022 % of revenues Net revenues $ 17,677.6 $ 15,991.7 $ 1,685.9 Cost of goods sold (11,820.4) (11,026.9) (793.5) 66.9% 69.0% Gross profit 5,857.2 4,964.8 892.4 33.1% 31.0% Selling and administrative expenses (2,963.2) (2,545.9) (417.3) 16.7% 15.9% Operating income 2,894.0 2,418.9 475.1 16.4% 15.1% Interest expense (234.5) (223.5) (11.0) Other income/(expense), net (92.2) (23.3) (68.9) Earnings before income taxes 2,567.3 2,172.1 395.2 Provision for income taxes (498.4) (375.9) (122.5) Earnings from continuing operations 2,068.9 1,796.2 272.7 Discontinued operations, net of tax (27.2) (21.5) (5.7) Net earnings $ 2,041.7 $ 1,774.7 $ 267.0 33 Table of Contents Net Revenues Net revenues for the year ended December 31, 2023 increased by 10.5%, or $1,685.9 million, compared with the same period of 2022.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 - Consolidated Results Dollar amounts in millions 2024 2023 Period Change 2024 % of revenues 2023 % of revenues Net revenues $ 19,838.2 $ 17,677.6 $ 2,160.6 Cost of goods sold (12,757.7) (11,820.4) (937.3) 64.3% 66.9% Gross profit 7,080.5 5,857.2 1,223.3 35.7% 33.1% Selling and administrative expenses (3,580.4) (2,963.2) (617.2) 18.1% 16.7% Operating income 3,500.1 2,894.0 606.1 17.6% 16.4% Interest expense (238.4) (234.5) (3.9) Other income/(expense), net (19.9) (92.2) 72.3 Earnings before income taxes 3,241.8 2,567.3 674.5 Provision for income taxes (627.6) (498.4) (129.2) Earnings from continuing operations 2,614.2 2,068.9 545.3 Discontinued operations, net of tax (24.7) (27.2) 2.5 Net earnings $ 2,589.5 $ 2,041.7 $ 547.8 31 Table of Contents Net Revenues Net revenues for the year ended December 31, 2024 increased by 12.2%, or $2,160.6 million, compared with the same period of 2023.
Holders who had the option to exercise puts up to $37.2 million for settlement in February 2024 did not exercise such option. Holders will have the option to exercise puts up to $257.8 million for settlement in November 2024. We also maintain a commercial paper program which is used for general corporate purposes.
In accordance with notice requirements as specified in the offering documents, holders will have the option to exercise puts up to $257.8 million for settlement in November 2025. We also maintain a commercial paper program which is used for general corporate purposes.
In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares (2022 Authorization) upon the completion of our $2.0 billion ordinary share repurchase program authorized in 2021 (2021 Authorization).
In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares (2022 Authorization) and in December 2024, our Board of Directors authorized the repurchase of up to an additional $5.0 billion of our ordinary shares (2024 Authorization) upon the conclusion of the 2022 Authorization.
In order to achieve these cost savings, we incurred approximately $134 million of costs cumulatively through December 31, 2023. We believe that our existing cash flow, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, research and development, sustaining activities, business portfolio changes and ongoing restructuring actions.
We believe that our existing cash balances, anticipated cash flow from operations, committed credit lines and access to the capital markets will be sufficient to fund share repurchases, dividends, research and development, sustaining activities, business portfolio changes and ongoing restructuring actions.
Sustaining activities include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities. Our research and development and sustaining costs account for approximately two percent of annual Net revenues.
We achieve this partly through engaging in research and development and sustaining activities and partly through acquisitions. Sustaining activities include costs incurred to reduce production costs, improve existing products, create custom solutions for customers and provide support to our manufacturing facilities.
Additionally, through January 31, 2024, we repurchased approximately $81 million of our ordinary shares under the 2022 Authorization. We expect to pay a competitive and growing dividend. Since the launch of Trane Technologies in March 2020, we have increased our quarterly share dividend by 42%, from $0.53 to $0.75 per ordinary share, or $2.12 to $3.00 per share annualized.
We expect to pay a competitive and growing dividend. Since the launch of Trane Technologies in March 2020, we have increased our quarterly dividend per share by 58%, from $0.53 to $0.84 per ordinary share, or $2.12 to $3.36 per share annualized. All four 2024 quarterly dividends were paid during the year ended December 31, 2024.
During the year ended December 31, 2023, we repurchased and canceled approximately $669 million of ordinary shares, completing the 2021 Authorization and initiating repurchases under the 2022 Authorization of approximately $469 million of our ordinary shares, leaving $2.5 billion remaining under the 2022 Authorization.
During the year ended December 31, 2024, we repurchased and canceled approximately $1.3 billion of ordinary shares, leaving $1.2 billion remaining under the 2022 Authorization and $5.0 billion remaining under the 2024 Authorization. Additionally, during the period after December 31, 2024 through January 31, 2025, we repurchased approximately $100 million of our ordinary shares under the 2022 Authorization.

… 93 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed6 unchanged
These amounts, when realized, would be offset by changes in the fair value of the underlying commodity purchases. 47 Table of Contents Interest Rate Exposure Our debt portfolio mainly consists of fixed-rate instruments, and therefore any fluctuation in market interest rates is not expected to have a material effect on our results of operations.
These amounts, when realized, would be offset by changes in the fair value of the underlying commodity purchases. Interest Rate Exposure Our debt portfolio mainly consists of fixed-rate instruments, and therefore any fluctuation in market interest rates is not expected to have a material effect on our results of operations. 44 Table of Contents
Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency. Our largest concentration of revenues from non-U.S. operations as of December 31, 2023 are in Euros and Chinese Yuan.
Therefore, our reported results will be higher or lower depending on the weakening or strengthening of the U.S. dollar against the respective foreign currency. Our largest concentration of revenues from non-U.S. operations as of December 31, 2024 are in Euros and Chinese Yuan.
A hypothetical 10% unfavorable change in the average exchange rate used to translate Net revenues for the year ended December 31, 2023 from either Euros or Chinese Yuan-based operations into U.S. dollars would result in a decline of approximately $165 million and $70 million, respectively. We use derivative instruments to partially hedge those material exposures that cannot be naturally offset.
A hypothetical 10% unfavorable change in the average exchange rate used to translate Net revenues for the year ended December 31, 2024 from either Euros or Chinese Yuan-based operations into U.S. dollars would result in a decline of approximately $170 million and $60 million, respectively. We use derivative instruments to partially hedge those material exposures that cannot be naturally offset.
Based on the currency derivative instruments in place at December 31, 2023, a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an unrealized loss of $6.5 million, as compared with $7.5 million at December 31, 2022.
Based on the currency derivative instruments in place at December 31, 2024, a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an unrealized loss of $15.5 million, as compared with $6.5 million at December 31, 2023.
Based on the commodity derivative instruments in place at December 31, 2023, a hypothetical change in fair value of those derivative instruments assuming a 10% decrease in commodity prices would result in an unrealized loss of $8.2 million, as compared with $9.0 million at December 31, 2022.
Based on the commodity derivative instruments in place at December 31, 2024, a hypothetical change in fair value of those derivative instruments assuming a 10% decrease in commodity prices would result in an unrealized loss of $12.7 million, as compared with $8.2 million at December 31, 2023.

Other TT 10-K year-over-year comparisons