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What changed in Trane Technologies's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Trane Technologies's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+297 added−271 removedSource: 10-K (2024-02-08) vs 10-K (2023-02-10)

Top changes in Trane Technologies's 2023 10-K

297 paragraphs added · 271 removed · 217 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

107 edited+28 added−22 removed142 unchanged
Biggest changeThere are a number of risks and uncertainties associated with these Chapter 11 cases, including, among others, those related to: • the ultimate determination of the asbestos liability of Aldrich and Murray to be satisfied under a Chapter 11 plan and the ability to consummate the settlement 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 the FCR and other participants in the Chapter 11 cases, including insurers, concerning, among other things, 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; • 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; • 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 risk that Aldrich and Murray may be unable 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 risk that any orders approving a plan of reorganization and issuing the channeling injunction do not become final; • 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; • 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; 16 Table of Contents • the risk that the insurance carriers do not support the Plan and the risk that the ACC objects to the Plan; and • the decisions of appellate courts regarding approval of a plan of reorganization or relating to orders of the Bankruptcy Court or the District Court that may be appealed.
Biggest changeThere 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.
Reportable Segments We operate under three reportable segments. • Our Americas segment innovates for customers in North America and Latin America. The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions.
Reportable Segments We operate under three reportable segments. • Our Americas segment innovates for customers in North America and Latin America. The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls and solutions, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions.
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, to enhance our existing set of product and services offerings, to increase productivity and efficiencies, to grow revenues, earnings and cash flow, to help us stay competitive or to reduce costs.
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.
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; 19 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; • 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.
We face increasing complexity related to product design, the 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 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.
When Russia invaded Ukraine in February 2022, we immediately halted new orders and shipments into and out of Russia and Belarus. As of December 31, 2022, we have exited all business activity within these markets. To date, the Russia-Ukraine war has not had a material adverse effect on our business or financial performance.
When Russia invaded Ukraine in February 2022, we immediately halted new orders and shipments into and out of Russia and Belarus. As of December 31, 2022, we had exited all business activity within these markets. To date, the Russia-Ukraine war has not had a material adverse effect on our business or financial performance.
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 IA, Item 1A, “ Risk Factors - Risks Related to the Transactions ” for more information.
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 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 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.
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 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, 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 may use financial derivatives or supplier price locks to hedge against this volatility, by using these instruments we may potentially forego the benefits that might result from favorable fluctuations in prices and could experience lower margins in periods of declining commodity prices.
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.
There can be no assurance that climate change or environmental regulation or deregulation will not have a negative competitive impact on our ability to sell these products or that economic returns will match the investment that we are making in new product development.
There can be no assurance that climate change or environmental regulation or deregulation will not have a negative competitive impact on our ability to sell our products or that economic returns will match the investment that we are making in new product development.
At the time of the Distribution, we received an opinion from our U.S. tax counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) substantially to the effect that, for U.S. federal income tax purposes, the Distribution together with certain related transactions undertaken in anticipation of the Distribution and taking into account the merger of Ingersoll Rand Industrial with the wholly-owned subsidiary of Ingersoll Rand will qualify as a tax-free transaction under Sections 368(a), 361 and 355 of the Code, with the result that we and the Spin-off Shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the spin-off.
At the time of the Distribution, we received an opinion from our U.S. tax counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) substantially to the effect that, for U.S. federal income tax purposes, the Distribution together with certain related transactions undertaken in anticipation of the Distribution and taking into account the merger of Ingersoll Rand Industrial with the wholly-owned subsidiary of Ingersoll Rand will qualify as a tax-free transaction under Sections 368(a), 361 and 355 of the Internal Revenue Code (the Code), with the result that we and the Spin-off Shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the spin-off.
Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects and asbestos-related matters) that cannot be predicted with certainty.
Our business may be adversely affected by the outcome of these proceedings and other contingencies (including, without limitation, contract claims or other commercial disputes, product liability, product defects, environmental matters, and asbestos-related matters) that cannot be predicted with certainty.
If the Distribution together with certain related transactions do not qualify as tax-free under Sections 355 and 368(a) of the Code, including as a result of subsequent acquisitions of stock of the Company or Ingersoll Rand, then the Company and the Spin-off Shareholders may be required to pay substantial U.S. federal income taxes, and Ingersoll Rand may be obligated to indemnify the Company for such taxes imposed on the Company.
If the Distribution together with certain related transactions do not qualify as tax-free under Sections 355 and 368(a) of the Internal Revenue Code, including as a result of subsequent acquisitions of stock of the Company or Ingersoll Rand, then the Company and the Spin-off Shareholders may be required to pay substantial U.S. federal income taxes, and Ingersoll Rand may be obligated to indemnify the Company for such taxes imposed on the Company.
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.
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.
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.
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.
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.
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 we are unable to effectively respond to changes to applicable laws and regulations, interpretations of applicable 18 Table of Contents 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. 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. 19 Table of Contents Global climate change and related regulations could negatively affect our business.
Turtz (54) 4/3/2019 Senior Vice President and General Counsel (since April 2019); Secretary (since October 2013); Vice President (2008-2019); Deputy General Counsel, Industrial, General Counsel, CTS (2016-2019) Keith A. Sultana (53) 10/12/2015 Senior Vice President, Supply Chain and Operational Services (since January 2020); Senior Vice President, Global Operations and Integrated Supply Chain (October 2015-December 2019) Mairéad A.
Turtz (55) 4/3/2019 Senior Vice President and General Counsel (since April 2019); Secretary (since October 2013); Vice President (2008-2019); Deputy General Counsel, Industrial, General Counsel, CTS (2016-2019) Keith A. Sultana (54) 10/12/2015 Senior Vice President, Supply Chain and Operational Services (since January 2020); Senior Vice President, Global Operations and Integrated Supply Chain (October 2015-December 2019) Mairéad A.
Our operations are subject to regulatory risks. Our U.S. and non-U.S. operations are subject to a number of laws and regulations, including among others, laws related to the environment and health and safety. We have made, and will be required to continue to make, significant expenditures to comply with these laws and regulations.
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.
Majocha (51) 12/1/2022 Vice President and Chief Accounting Officer (since December 2022); Vice President, Finance CHVAC Americas (April 2020-November 2022); Vice President, Corporate Development (July 2018 - April 2020) No family relationship exists between any of the above-listed executive officers of our Company.
Majocha (52) 12/1/2022 Vice President and Chief Accounting Officer (since December 2022); Vice President, Finance CHVAC Americas (April 2020-November 2022); Vice President, Corporate Development (July 2018 - April 2020) No family relationship exists between any of the above-listed executive officers of our Company.
Examples of these programs include: • Team Leader Development Program – An eight-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 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.
Culture and Purpose In 2022, we continued to drive our purpose to boldly challenge what’s possible for a sustainable world through our strategic priorities and 2030 Sustainability Commitments. We use our Leadership Principles to guide our actions each day and enable our uplifting, engaging and inclusive culture.
Culture and Purpose In 2023, we continued to drive our purpose to boldly challenge what’s possible for a sustainable world through our strategic priorities and 2030 Sustainability Commitments. We use our Leadership Principles to guide our actions each day and enable our uplifting, engaging and inclusive culture.
While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a going forward basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a prospective basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
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. 23 Table of Contents
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.
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 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 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, 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.
Regnery (60) 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 (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.
In addition, while hedging activity may minimize near-term volatility of the commodity prices, it would not protect us from long-term commodity price increases. Some of our purchases are from sole or limited source suppliers for reasons of cost effectiveness, uniqueness of design, or product quality.
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.
This segment had 2022 net revenues of $1,316.4 million. 4 Table of Contents Products and Services Our principal products and services include the following: Air conditioners Large commercial unitary Air exchangers Light commercial unitary Air handlers Multi-pipe HVAC systems Airside and terminal devices Package heating and cooling systems Air-sourced heat pumps Parts and supplies (aftermarket and OEM) Auxiliary power units (electric and diesel) Rail refrigeration systems Building management systems Rate chambers Bus air purification systems Refrigerant reclamation Bus and rail HVAC systems Renewable energy projects Chillers Repair and maintenance services Coils and condensers Rental services Container refrigeration systems and gensets Residential Air Filtration System Control systems Residential Hybrid Heating Solutions Cryogenic refrigeration systems Self-powered truck refrigeration systems Dehumidifiers Service agreements Ductless Telematics Solutions Energy efficiency programs Temporary heating and cooling systems Energy infrastructure programs Thermal energy storage Energy management services Thermostats/controls & associated digital solutions Energy performance contracting Trailer refrigeration systems (diesel, electric and hybrid) Furnaces Transport heater products Geothermal systems Truck refrigeration systems (diesel, electric and hybrid) Home automation Ultra-low temperature freezers Humidifiers Unitary systems (light and large) HVAC Performance-monitoring applications Variable refrigerant flow Indoor air quality assessments and related products for HVAC and Transport solutions Vehicle-powered truck refrigeration systems Industrial refrigeration Ventilation Installation contracting Water source heat pumps These products are sold primarily under our tradenames including Trane ® and Thermo King ® .
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 ® .
The occurrence of one or more catastrophic events including hurricanes, fires, earthquakes, floods and other forms of severe weather, health epidemics or pandemics or other contagious outbreaks or other catastrophic events in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance.
The occurrence of one or more catastrophic events including hurricanes, fires, earthquakes, floods and other forms of severe weather, health epidemics or pandemics or other contagious outbreaks or other catastrophic events, including wars, conflicts, or terrorism in the U.S. or in other countries in which we operate or are located could adversely affect our operations and financial performance.
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 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, export and import compliance, anti-trust, cybersecurity, data privacy, and money laundering, due to our global operations.
Kuehn (50) 6/1/2015 Executive Vice President and Chief Financial Officer (since July 2021); Senior Vice President and Chief Financial Officer (March 2020 to June 2021); Vice President and Chief Accounting Officer (June 2015 to February 2020) Paul A.
Kuehn (51) 6/1/2015 Executive Vice President and Chief Financial Officer (since July 2021); Senior Vice President and Chief Financial Officer (March 2020 to June 2021); Vice President and Chief Accounting Officer (June 2015 to February 2020) Paul A.
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 vulnerable 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 and infrastructure and technology embedded in certain of our control products have been and are at risk to cyber attacks and unauthorized security intrusions.
Several elements of our holistic well-being actions include: • Giving 100% of our team members access to company-sponsored wellness offerings, including a global Employee Assistance Program and a global wellness platform covering an array of topics like mindfulness, resiliency, and nutrition. • Offering financial relief through the Helping Hand program, an employee funded program created to help associates facing financial hardship immediately after a qualified disaster or an unforeseen personal hardship. • Implementing and adapting Flex Time and Flex Place policies and resources as well as work-from-home arrangements, and other approaches to support evolving employee needs.
Several elements of our holistic well-being actions include: • Giving 100% of our team members access to company-sponsored wellness offerings, including a global Employee Assistance Program and a global wellness platform covering an array of topics like mindfulness, resiliency, and nutrition. • Offering financial relief through the Helping Hand program, an employee funded program created to help associates facing financial hardship immediately after a qualified disaster or an unforeseen personal hardship. • Providing flex time and flex place policies and resources as well as supporting flexible work arrangements, and other approaches to support evolving employee needs.
Our systems, networks and certain of our control products and those of our vendors are vulnerable 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, malicious attacks from hackers, employee errors or misconduct, viruses, power and utility outages, and other catastrophic events.
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. 5 Table of Contents Customers We have no customer that accounted for more than 10% of our consolidated net revenues in 2022, 2021 or 2020.
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.
From time to time, vulnerabilities in our products are discovered and updates are made available, but customers are vulnerable until those updates are applied or other mitigating actions are taken by customers to protect their systems and networks.
From time to time, vulnerabilities in our products are discovered and updates are made available, but customers are at risk until those updates are applied or other mitigating actions are taken by customers to protect their systems and networks.
All new product development (NPD) programs must complete a Design for Sustainability module within our NPD process to ensure that every program has 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 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.
We encourage investors, the media, and others interested in our Company to review the information it makes public in these locations on its website. We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission under the Securities Exchange Act of 1934.
We encourage investors, the media, and others interested in our Company to review the information we make public in these locations on our website. We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission under the Securities Exchange Act of 1934.
Natural disasters, power outages, health epidemics or pandemics or other contagious outbreaks or other unexpected events could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions, material scarcity, price volatility or supply chain disruptions.
Natural disasters, power outages, health epidemics or pandemics or other contagious outbreaks or other unexpected events, including wars, conflicts, or acts of terrorism, could result in physical damage to and complete or partial closure of one or more of our plants, temporary or long-term disruption of our operations by causing business interruptions, material scarcity, price volatility or supply chain disruptions.
The military conflict between Russia and Ukraine 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 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.
The extent to which COVID-19 or other widespread outbreaks of infectious disease 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; and the impact on economic activity including the possibility of financial market instability or recession.
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.
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 10, 2023.
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.
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 28% of our net revenues in 2022 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. 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.
Customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. 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. 18 Table of Contents Data privacy and protection laws are evolving and present increasing compliance challenges.
Risks associated with the Russian-Ukrainian conflict 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 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.
We must timely develop and commercialize new and enhanced products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business.
We must efficiently and effectively innovate, develop and commercialize new and enhanced products and services in a rapidly changing technological and business environment in order to remain competitive in our current and future markets and in order to continue to grow our business.
In addition, the structure of our compensation programs balances incentive earnings for both long-term and short-term performance, with our annual incentive plan closely tied to our 2030 sustainability commitments, which includes environmental sustainability and workforce diversity goals, in addition to financial goals. Trane Technologies’ benefits programs and policies are designed to support the well-being of employees and their families.
In addition, the structure of our compensation programs balance incentive earnings for both long-term and short-term performance with our annual incentive plan closely tied to our 2030 sustainability commitments, which includes environmental sustainability and diversity and inclusion efforts, in addition to financial goals. Trane Technologies’ benefit programs and policies are designed to support the well-being of employees and their families.
In 2022, we spent $211.2 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 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.
This segment had 2022 net revenues of $2,034.5 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 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.
Camuti (61) 8/1/2011 Executive Vice President and Chief Technology and Strategy Officer (since January 2020); Senior Vice President, Innovation and Chief Technology Officer (August 2011 to December 2019) Raymond D.
Camuti (62) 8/1/2011 Executive Vice President, Chief Technology Officer and Sustainability Officer (since January 2024); Executive Vice President and Chief Technology and Strategy Officer (January 2020 to January 2024); Senior Vice President, Innovation and Chief Technology Officer (August 2011 to December 2019) Raymond D.
To date, there has been no material business impact from such vulnerabilities, but we continue to monitor these issues and our responses 17 Table of Contents are ongoing.
To date, there has been no material business impact from such vulnerabilities, but we continue to monitor these issues and our responses are ongoing.
Inherent uncertainties exist in such evaluations due to unknown environmental conditions, changes in government laws and regulations, and changes in cleanup technologies. The environmental reserves are updated on a routine basis as remediation efforts progress and new information becomes available.
Estimated liabilities are determined based upon existing remediation laws and technologies. Inherent uncertainties exist in such evaluations due to unknown environmental conditions, changes in government laws and regulations, and changes in cleanup technologies. The environmental reserves are updated on a routine basis as remediation efforts progress and new information becomes available.
Employees provide ratings and written comments for continuous improvement. In 2022, 88% of our workforce participated in our annual engagement survey, and our overall employee engagement score remains high.
Employees provide ratings and written comments for continuous improvement. In 2023, 87% of our workforce participated in our annual engagement survey, and our overall employee engagement score remains high.
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 2022 2021 Americas $ 5,325.2 $ 3,856.7 EMEA 616.1 727.2 Asia Pacific 941.8 852.8 Total $ 6,883.1 $ 5,436.7 These backlog figures are based on orders received and only include amounts associated with our equipment and contracting and installation performance obligations.
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.
Pittard (57) 7/1/2021 Executive Vice President, Supply Chain, Engineering and Information Technology (since July 2021); 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 (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.
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 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.
We also continue to maintain all our locations globally as Tobacco Free Workplaces. 11 Table of Contents 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.
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.
Disruptions have occurred due to the COVID-19 pandemic, the Russia-Ukraine conflict, supplier capacity constraints, labor shortages, port congestion, logistical problems 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 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.
These risks could increase our cost of doing business internationally, increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, limit our ability to sell products in certain markets and have a material adverse impact on our results of operations, financial condition, and cash flows. 13 Table of Contents Commodity shortages, supply chain risks and price increases could adversely affect our financial results.
These risks could increase our cost of doing business internationally, increase our counterparty risk, disrupt our operations, disrupt the ability of suppliers and customers to fulfill their obligations, limit our ability to sell products in certain markets and have a material adverse impact on our results of operations, financial condition, and cash flows.
How a resurgence of COVID-19 or other potential global pandemics 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. Our global operations subject us to economic risks.
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.
Our proxy statement provides more detail on the competitive compensation and benefit programs we offer. Employee Safety In 2022, we continued our multi-year, world class safety record with a Lost-time Incident Rate of 0.13 and Recordable Rate below 1.00.
Our proxy statement provides more detail on the competitive compensation and benefit programs we offer. 10 Table of Contents Employee Safety In 2023, we continued our multi-year, world class safety record with a Lost-time Incident Rate of 0.09 and Recordable Rate below 0.81.
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.
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.
This segment had 2022 net revenues of $12,640.8 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 industrial processing, and transport refrigeration systems and solutions.
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.
(Ingersoll Rand) after the Transaction) whereby we distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained our former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution (the Distribution) to shareholders of record as of February 24, 2020 (Spin-off Shareholders). Ingersoll Rand Industrial then merged into a wholly-owned subsidiary of Ingersoll Rand.
(Gardner Denver, which changed its name to Ingersoll Rand Inc. (Ingersoll Rand) after the Transaction) whereby we distributed Ingersoll-Rand U.S. HoldCo, Inc., which contained our former Industrial segment (Ingersoll Rand Industrial) through a pro rata distribution (the Distribution) to shareholders of record as of February 24, 2020 (Spin-off Shareholders).
In particular, if we are unable to access capital and credit markets on terms that are acceptable to us, we may not be able to make certain investments or fully execute our business plans and strategies. 14 Table of Contents Our suppliers and customers are also dependent upon the capital and credit markets.
In particular, if we are unable to access capital and credit markets, or access them on terms that are acceptable to us, we may not be able to make certain investments or fully execute our business plans and strategies.
As of December 31, 2022, we employed approximately 39,000 people in nearly 60 countries including approximately 14,000 outside of the United States. As of December 31, 2022, 25.7% of our global employees were women and 37.4% of our employees in the United States were racially and ethnically diverse.
As of December 31, 2023, we employed approximately 40,000 people in approximately 60 countries including over 15,000 outside of the United States. As of December 31, 2023, 25.9% of our global employees were women and 37.2% of our employees in the United States were racially and ethnically diverse.
For many components we procure, we have multiple capable sources with minimal concerns for sufficient supply, however there are certain categories of components that continue to see limited availability or shortages. Seasonality Demand for certain of our 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 in line with industry trends. Seasonality Demand for certain products and services is influenced by weather conditions.
If these systems cease to function properly, if these systems experience security breaches or disruptions or if these systems do not provide the anticipated benefits, our ability to manage our operations could be impaired, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
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.
Beginning in 2022, our backlog figures include additional revenue streams due to increased lead times. A major portion of our residential products are built in advance of order and either shipped or assembled from stock. As a result, we expect to ship a majority of the December 31, 2022 backlog during 2023.
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.
Magner (45) 1/6/2022 Senior Vice President, Chief Human Resources Officer (since January 2022); Vice President, Talent and Organization Capability (January 2018 to January 2022); Vice President, Human Resources, CTS (March 2015 to January 2018) Mark A.
Magner (46) 1/6/2022 Senior Vice President, Chief Human Resources Officer (since January 2022); Vice President, Talent and Organization Capability (January 2018 to January 2022) Donald E.
We are proud members of Paradigm for Parity (a coalition of more than 100 corporations who have committed to closing the gender gap in corporate leadership) and OneTen (a coalition dedicated to hiring one million Black Americans in the next ten years to achieve economic mobility).
We are proud members of Paradigm for Parity (a coalition of more than 100 corporations who have committed to closing the gender gap in corporate leadership) and OneTen (a coalition dedicated to closing the opportunity gap for Black talent and others in America).
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.
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.
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. 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 or increase our operating costs.
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.
Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating results Geopolitical tensions and trade disputes can disrupt supply chains and increase the cost of our products. This could cause our products to be more expensive for customers, which could reduce the demand for or attractiveness of such products.
Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating results Changes in governmental policies on foreign trade, geopolitical tensions and trade disputes can disrupt supply chains and increase the cost of our products.
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 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.
Executive Officers of the Registrant The following is a list of our executive officers as of February 10, 2023. Name and Age Date of Service as an Executive Officer Principal Occupation and Other Information for Past Five Years David S.
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.
The Aldrich and Murray Chapter 11 cases involve various risks and uncertainties that could have a material effect on us. Our indirect wholly-owned subsidiaries Aldrich and Murray have each filed a voluntary petition for reorganization under the Bankruptcy Code in the Bankruptcy Court.
Our indirect wholly-owned subsidiaries Aldrich and Murray have each filed a voluntary petition for reorganization under the Bankruptcy Code in the Bankruptcy Court.
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 their use. Some of these regulations could have a negative competitive impact on our company by requiring us to make costly changes to our products.
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.
However, orders for specialized machinery or specific customer applications are submitted with extensive lead times and are often subject to revision and deferral, and to a lesser extent cancellation or termination.
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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe locations by segment of our principal plant facilities at December 31, 2022 were as follows: Americas EMEA Asia Pacific Arecibo, Puerto Rico Barcelona, Spain Bangkok, Thailand Brampton, Ontario Bari, Italy Taicang, China Charlotte, North Carolina Charmes, France Wujiang, China Clarksville, Tennessee Essen, Germany Zhongshan, China Columbia, South Carolina Galway, Ireland Curitiba, Brazil Golbey, France Fairlawn, New Jersey Jettingen-Scheppach, Germany Fort Smith, Arkansas King Abdullah Economic City, Saudi Arabia Fremont, Ohio Kolin, Czech Republic Grand Rapids, Michigan Wittenberg, Germany Hastings, Nebraska La Crosse, Wisconsin Lynn Haven, Florida Marietta, Ohio Monterrey, Mexico Newberry, South Carolina Pueblo, Colorado Rushville, Indiana St.
Biggest changeThe 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.
Item 2. PROPERTIES As of December 31, 2022, we owned or leased approximately 28 million square feet of space worldwide. Manufacturing and assembly operations are conducted in 38 plants across the world. We also maintain various warehouses, offices and repair centers throughout the world.
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 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+14 added−0 removed1 unchanged
Biggest changeIn February 2021, our Board of Directors authorized the repurchase of up to $2.0 billion of our ordinary shares under a new share repurchase program (2021 Authorization). During the fourth quarter of 2022, we repurchased and canceled $300.0 million of our ordinary shares leaving approximately $200 million remaining under the 2021 Authorization as of December 31, 2022.
Biggest changeDuring 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.
The graph assumes an investment of $100 in our ordinary shares (adjusted for the Transaction), the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 Industrial Index on December 31, 2017 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, 2018 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.
(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.
As of February 3, 2023, the approximate number of record holders of ordinary shares was 2,428.
As of February 2, 2024, the approximate number of record holders of ordinary shares was 2,315.
Issuer Purchases of Equity Securities The following table provides information with respect to purchases by us of our ordinary shares during the quarter ended December 31, 2022: 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 0.2 $ 153.71 — $ 499,776 November 1 - November 30 1,536.9 173.50 1,536.9 233,111 December 1 - December 31 191.1 175.00 190.5 199,776 Total 1,728.2 1,727.4 (a) Share repurchases are made from time to time in accordance with management's capital allocation strategy, subject to market conditions and regulatory requirements.
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.
We reacquired 154 shares in October and 632 shares in December in transactions outside the repurchase programs. 25 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, 2022.
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.
In February 2022, our Board of Directors authorized the repurchase of up to $3.0 billion of our ordinary shares under a new share repurchase program (2022 Authorization) upon completion of the 2021 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).
Company/Index 2017 2018 2019 2020 2021 2022 Trane Technologies 100 104 155 222 313 265 S&P 500 100 96 126 149 191 157 S&P 500 Industrials Index 100 87 112 124 151 142 Item 6. [Reserved] 26 Table of Contents
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
Added
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
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).
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
(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.
Added
(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.
Added
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.
Added
(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

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Biggest changeSummarized Statements of Earnings Year ended December 31, 2022 In millions Obligor group 1 Obligor group 2 Net revenues $ — $ — Gross profit (loss) — — Intercompany interest and fees (44.2) 224.5 Earnings (loss) from continuing operations (644.3) (28.9) Discontinued operations, net of tax (14.4) (19.5) Net earnings (loss) (658.7) (48.4) Less: Net earnings attributable to noncontrolling interests — — Net earnings (loss) attributable to Trane Technologies plc $ (658.7) $ (48.4) 38 Table of Contents Summarized Balance Sheet December 31, 2022 In millions Obligor group 1 Obligor group 2 ASSETS Intercompany receivables $ 860.0 $ 1,092.1 Current assets 1,011.6 1,231.7 Intercompany notes receivable 1,831.9 4,781.6 Noncurrent assets 2,582.3 5,383.1 LIABILITIES Intercompany payables 3,303.5 1,792.1 Current liabilities 4,851.8 2,611.9 Intercompany notes payable 2,400.0 2,400.0 Noncurrent liabilities 6,789.8 5,433.4 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 accounting principles generally accepted in the United States (GAAP).
Biggest changeOur 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.
The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions. • Our EMEA segment innovates for customers in the Europe, Middle East and Africa region.
The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls and solutions, and energy services and solutions; residential heating and cooling; and transport refrigeration systems and solutions. • 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. • Our Asia Pacific segment innovates for customers throughout the Asia Pacific region.
The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings, and transport refrigeration systems and solutions. • 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 preparation of financial statements in conformity with those accounting principles requires management to use judgment in making estimates and assumptions based on the relevant information available at the end of each period.
GAAP. The preparation of financial statements in conformity with those accounting principles requires management to use judgment in making estimates and assumptions based on the relevant information available at the end of each period.
See Note 11, "Pensions and Postretirement Benefits Other Than Pensions", to the Consolidated Financial Statements for additional information regarding postretirement benefits other than pensions. 37 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. 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.
The following table shows our guarantor relationships as of December 31, 2022: 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, 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.
Discussions of 2020 significant items and year-to-year comparisons between 2021 and 2020 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, 2021.
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.
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, 2022.
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.
We recorded certain income and expenses associated with our asbestos liabilities and corresponding insurance recoveries within Discontinued operations, net of tax , as they related to previously divested businesses, except for amounts associated with asbestos liabilities and corresponding insurance recoveries of Murray and its predecessors, which were recorded within continuing operations. 40 Table of Contents • Revenue recognition – Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer.
We recorded certain income and expenses associated with our asbestos liabilities and corresponding insurance recoveries within Discontinued operations, net of tax , as they related to previously divested businesses, except for amounts associated with asbestos liabilities and corresponding insurance recoveries of Murray and its predecessors, which were recorded within continuing operations. • Revenue recognition – Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer.
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, 2022. We had no commercial paper outstanding at December 31, 2022 and December 31, 2021.
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.
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 14.0%, 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 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%.
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, 2022.
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 estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment, specifically revenue growth rates, implied revenue volatilities and discount rates. • Asbestos matters – Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies were named as defendants in asbestos-related lawsuits in state and federal courts.
The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment, specifically revenue growth rates, implied revenue volatilities and discount rates. 45 Table of Contents • Asbestos matters – Prior to the Petition Date, certain of our wholly-owned subsidiaries and former companies were named as defendants in asbestos-related lawsuits in state and federal courts.
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.
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.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which was funded on March 2, 2022, resulting in an operating cash outflow of $270.0 million in our Consolidated Statement of Cash Flows, of which $91.8 million was allocated to continuing operations and $178.2 million was allocated to discontinued operations for the year ended December 31, 2022.
On January 27, 2022, the Bankruptcy Court granted the request to fund the QSF, which was funded on March 2, 2022, resulting in an operating cash outflow of $270.0 million reported in our Consolidated Statements of Cash Flows, of which $91.8 million was allocated to continuing operations and $178.2 million was allocated to discontinued operations for the year ended December 31, 2022.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 - Segment Results We operate under four regional operating segments designed to create deep customer focus and relevance in markets around the world.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 - Segment Results We operate under four regional operating segments designed to create deep customer focus and relevance in markets around the world.
Capital Resources Based on historical performance and current expectations, we believe our cash and cash equivalents balance, the cash generated from our operations, our committed credit lines and our expected ability to access capital markets will satisfy our working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities, and other liquidity requirements associated with our operations for the foreseeable future.
Capital Resources Based on historical performance and current expectations, we believe our cash and cash equivalents balance, the cash generated from our operations, our committed credit lines and our expected ability to access capital markets, including our commercial paper program, will satisfy our working capital needs, capital expenditures, dividends, share repurchases, upcoming debt maturities, and other liquidity requirements associated with our operations for the foreseeable future.
We currently expect that we will contribute approximately $69 million to our enterprise plans worldwide in 2023. 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 $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.
This section discusses 2022 and 2021 significant items affecting our consolidated operating results, financial condition and liquidity and provides a year-to-year comparison between 2022 and 2021.
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.
Future interest payments on long-term debt total $2,186.5 million, with $199.7 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 $2,324.5 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.
Additional tax benefits included in this year's effective rate are $12.4 million, net related to the current year's effects of a prepayment of an intercompany obligation in 2021, excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate.
Additional tax benefits included in the 2022 effective rate are $12.4 million, net related to the effects of a prepayment of an intercompany obligation in 2021, excess tax benefits from employee share-based payments and earnings in non-U.S. jurisdictions, which in aggregate have a lower effective tax rate.
The following discussion compares our results for each of our three reportable segments for the year ended December 31, 2022 compared to the year ended December 31, 2021.
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.
For all indefinite-lived intangible assets, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) exceeded 25%.
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%.
During the year ended December 31, 2022, net cash used in investing activities from continuing operations was $539.8 million. The primary drivers of the usage was attributable to capital expenditures of $291.8 million and acquisition of businesses, which totaled $234.7 million, net of cash acquired.
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.
The capital expenditure program for 2023 is estimated to be approximately 1.5% to 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.
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.
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 $0.4 million and the decline in the estimated return on assets would increase expense by $4.9 million.
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.
At December 31, 2022, we had purchase obligations of $1,239.2 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.
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.
Revenues from non-U.S. jurisdictions accounted for approximately 29.0% of our total 2021 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 ranging from 0% to 38%.
Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.
Segment Adjusted EBITDA also provides a useful tool for assessing the comparability between periods and our ability to generate cash, service debt and undertake capital expenditures because it eliminates non-cash charges such as depreciation and amortization expense.
The test compares the carrying amount of the reporting unit to its estimated fair value. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.
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.
Capital expenditures were $291.8 million, $223.0 million and $146.2 million for the years ended December 31, 2022, 2021 and 2020, 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 $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.
See Note 7, "Debt and Credit Facilities", to the Consolidated Financial Statements for additional information regarding the terms of our short-term obligations. 34 Table of Contents Our long-term obligations primarily consist of long-term debt with final maturity dates ranging between 2024 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 2025 and 2049.
We use assumptions to value the intangible assets including projected future revenues, customer attrition rates, royalty rates, tax rates and discount rates. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed, and any non-controlling interest is recognized as goodwill.
We use assumptions to value the intangible assets including projected cash flows, including revenue growth rates and margins, customer attrition rates, royalty rates, tax rates and discount rates. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed, and any non-controlling interest is recognized as goodwill.
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 2021 effective tax rate was 18.6% 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 2022 effective tax rate was 17.3% which was lower than the U.S.
Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $35 million in 2023.
Benefit payments, which are net of expected plan participant contributions and Medicare Part D subsidy, are expected to be approximately $30 million in 2024.
The Company determined that its two Europe, Middle East and Africa (EMEA) operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, the Company has three regional reportable segments, Americas, EMEA and Asia Pacific. • Our Americas segment innovates for customers in North America and Latin America.
The Company determined that its two Europe, Middle East and Africa (EMEA) operating segments meet the aggregation criteria based on similar operating and economic characteristics, resulting in one reportable segment. Therefore, the Company has three regional reportable segments, Americas, EMEA and Asia Pacific.
(TT International) None All notes issued by TTFL and TTC HoldCo Trane Technologies Global Holding Company Limited (TT Global) 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 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) (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.
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. Our research and development and sustaining costs account for approximately two percent of annual Net revenues.
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.
In February 2022, the Company's Board of Directors authorized the repurchase of up to $3.0 billion of its ordinary shares (2022 Authorization) upon the completion of its current share repurchase program of up to $2.0 billion of its ordinary shares which was 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) upon the completion of our $2.0 billion ordinary share repurchase program authorized in 2021 (2021 Authorization).
We have incurred approximately $130 million of costs cumulatively through December 31, 2022. 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.
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.
Segment Adjusted EBITDA is not defined under accounting principles generally accepted 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 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 reported in accordance with GAAP.
Debt At December 31, 2022, we had outstanding aggregate long-term debt principal payments of $4,863.0 million, with $1,048.3 million payable within 12 months. The amount payable within 12 months includes $340.8 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, 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.
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, 2022, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment.
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.
Our Opportunity for All commitment focuses on gender parity in leadership, workforce diversity reflective of our communities, and a citizenship strategy that helps underserved communities through enhanced learning environments and pathways to green and Science, Technology, Engineering and Math (STEM) careers. Recent Acquisitions On October 31, 2022, we completed the acquisition of AL-KO Air Technology (AL-KO).
Our Opportunity for All commitment focuses on gender parity in leadership, workforce diversity reflective of our communities, and a citizenship strategy that helps underserved communities through enhanced learning environments and pathways to green and Science, Technology, Engineering and Math (STEM) careers.
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.
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.
In millions 2022 2021 Net cash provided by continuing operating activities $ 1,698.7 $ 1,594.4 Net cash used in continuing investing activities (539.8) (545.7) Net cash used in continuing financing activities (1,852.2) (2,127.6) Operating Activities 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.
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.
As of December 31, 2022, our credit ratings were as follows, remaining unchanged from 2021: Short-term Long-term Moody’s P-2 Baa2 Standard and Poor’s A-2 BBB The credit ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization.
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.
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 2022 2021 Net cash provided by (used in) continuing operating activities $ 1,698.7 $ 1,594.4 Capital expenditures (291.8) (223.0) Cash payments for restructuring 17.9 38.1 Transformation costs paid 9.6 21.4 QSF funding (continuing operations component) 91.8 — Compensation related payment to a retired executive 64.3 — Insurance settlement on property claim in Q3 2022 (25.0) — Free cash flow (1) $ 1,565.5 $ 1,430.9 (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 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.
Each rating should be evaluated independently of any other rating. Our public debt does not contain financial covenants and our revolving credit lines have a debt-to-total capital covenant of 65%. As of December 31, 2022, 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, 2023, our debt-to-total capital ratio was significantly beneath this limit.
In addition, we believe our backlog and order levels are indicative of future revenue and thus are a key measure of anticipated performance. Current economic conditions remain mixed across our end markets.
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.
Selling and Administrative Expenses Selling and administrative expenses for the year ended December 31, 2022 increased by 4.1%, or $99.6 million, compared with the same period of 2021.
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.
As of December 31, 2022, we had $1,220.5 million of cash and cash equivalents on hand, of which $814.5 million was held by non-U.S. subsidiaries.
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.
Financing Activities Cash flows from financing activities represent inflows and outflows that account for external activities affecting equity and debt. Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our stock and debt transactions. During the year ended December 31, 2022, net cash used in financing activities from continuing operations was $1,852.2 million.
Primary activities associated with these actions include paying dividends to shareholders, repurchasing our own shares, issuing our stock and debt transactions. During the year ended December 31, 2023, net cash used in financing activities from continuing operations was $1,350.3 million.
In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and income tax payments.
Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and income tax payments.
Liquidity The following table contains several key measures of our financial condition and liquidity at the periods ended December 31: In millions 2022 2021 Cash and cash equivalents $ 1,220.5 $ 2,159.2 Short-term borrowings and current maturities of long-term debt 1,048.0 350.4 Long-term debt 3,788.3 4,491.7 Total debt 4,836.3 4,842.1 Total Trane Technologies plc shareholders’ equity 6,088.6 6,255.9 Total equity 6,105.2 6,273.1 Debt-to-total capital ratio 44.2 % 43.6 % Debt and Credit Facilities As of December 31, 2022, our short-term obligations primarily consist of current maturities of $699.7 million of long-term debt that matures in June 2023 and $340.8 million of fixed rate debentures that contain a put feature that the holders may exercise on each anniversary of the issuance date.
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.
Dollar amounts in millions 2022 2021 % Change Americas Net revenues $ 12,640.8 $ 10,957.1 15.4 % Segment Adjusted EBITDA 2,326.3 2,008.8 15.8 % Segment Adjusted EBITDA as a percentage of net revenues 18.4 % 18.3 % EMEA Net revenues $ 2,034.5 $ 1,944.9 4.6 % Segment Adjusted EBITDA 338.1 359.2 (5.9) % Segment Adjusted EBITDA as a percentage of net revenues 16.6 % 18.5 % Asia Pacific Net revenues $ 1,316.4 $ 1,234.4 6.6 % Segment Adjusted EBITDA 248.3 228.5 8.7 % Segment Adjusted EBITDA as a percentage of net revenues 18.9 % 18.5 % Total Net revenues $ 15,991.7 $ 14,136.4 13.1 % Total Segment Adjusted EBITDA 2,912.7 2,596.5 12.2 % Total Segment Adjusted EBITDA as a percentage of net revenues 18.2 % 18.4 % 31 Table of Contents Americas Net revenues for the year ended December 31, 2022 increased by 15.4% or $1,683.7 million, compared with the same period of 2021.
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.
The primary driver of the outflow related to the repurchase of $1,100.3 million in ordinary shares, dividends paid to ordinary shareholders of $561.1 million and the repayment of long-term debt of $432.5 million. 35 Table of Contents Free Cash Flow Free cash flow is a non-GAAP measure and defined as Net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring, transformation costs, the continuing operations component of the QSF funding and payout of executive compensation less an insurance settlement on a property claim in Q3 2022.
The primary drivers of the outflow related to the repurchase of $1,200.2 million in ordinary shares and dividends paid to ordinary shareholders of $620.2 million. 40 Table of Contents Free Cash Flow Free cash flow is a non-GAAP measure and defined as Net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring, transformation costs, merger and acquisition (M&A) related costs, the continuing operations component of the QSF funding and payout of executive compensation less insurance settlements on property claims.
During the year ended December 31, 2021, net cash used in investing activities from continuing operations was $545.7 million.
During the year ended December 31, 2022, net cash used in financing activities from continuing operations was $1,852.2 million.
Selling and administrative expenses as a percentage of Net revenues for the year ended December 31, 2022 decreased 140 basis points from 17.3% to 15.9% primarily due to higher revenues year-over-year.
Selling and administrative expenses as a percentage of Net revenues for the year ended December 31, 2023 increased 80 basis points from 15.9% to 16.7%.
We have announced ambitious 2030 Sustainability Commitments, including our Gigaton Challenge to reduce customers' carbon emissions by a billion metric tons. We are one of a handful of companies whose emissions reductions targets have been validated three times by the SBTi, and one of the very few companies worldwide whose net-zero targets have also been validated.
We are one of a handful of companies whose emissions reductions targets have been validated three times by the SBTi, and one of the very few companies worldwide and first in our industry whose net-zero targets have also been validated.
Total commitments of $2.0 billion were unused at December 31, 2022 and December 31, 2021. 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.
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.
A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair value of these reporting units Other Indefinite-lived intangible assets Other intangible assets with indefinite useful lives are tested for impairment on an annual basis.
For all reporting units, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value) exceeded 250%. A significant increase in the discount rate, decrease in the long-term growth rate, or substantial reductions in our end markets and volume assumptions could have a negative impact on the estimated fair value of these reporting units.
These valuation techniques are weighted 50%, 40% and 10%, respectively. 39 Table of Contents Under the income approach, we assumed a forecasted cash flow period of five years with discount rates ranging from 10.0% to 12.0% and a terminal growth rate of 3.0% Under the guideline public company method, we used an adjusted multiple ranging from 9.0 to 17.5 of projected earnings before interest, taxes, depreciation and amortization (EBITDA) based on the market information of comparable companies.
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%.
Cash Flows The following table reflects the major categories of cash flows for the years ended December 31, respectively. For additional details, please see the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.
For additional details, please see the Consolidated Statements of Cash Flows in the Consolidated Financial Statements.
The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions. 30 Table of Contents Management measures segment operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustments for contingent consideration, insurance settlement on property claim in Q3 2022, merger and acquisition-related costs, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA).
Segment Adjusted EBITDA Management measures segment operating performance based on net earnings excluding interest expense, income taxes, depreciation and amortization, restructuring, non-cash adjustment for contingent consideration, insurance settlements on property claims, merger and acquisition related costs, impairment of an equity investment, unallocated corporate expenses and discontinued operations (Segment Adjusted EBITDA).
At this point in the Chapter 11 cases of Aldrich and Murray, it is not possible to predict 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 10, 2023.
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.
In addition, we are investing substantial resources to innovate and develop new products and services which we expect will drive our future growth. 28 Table of Contents Results of Operations Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 - Consolidated Results Dollar amounts in millions 2022 2021 Period Change 2022 % of revenues 2021 % of revenues Net revenues $ 15,991.7 $ 14,136.4 $ 1,855.3 Cost of goods sold (11,026.9) (9,666.8) (1,360.1) 69.0% 68.4% Gross profit 4,964.8 4,469.6 495.2 31.0% 31.6% Selling and administrative expenses (2,545.9) (2,446.3) (99.6) 15.9% 17.3% Operating income 2,418.9 2,023.3 395.6 15.1% 14.3% Interest expense (223.5) (233.7) 10.2 Other income/(expense), net (23.3) 1.1 (24.4) Earnings before income taxes 2,172.1 1,790.7 381.4 Provision for income taxes (375.9) (333.5) (42.4) Earnings from continuing operations 1,796.2 1,457.2 339.0 Discontinued operations, net of tax (21.5) (20.6) (0.9) Net earnings $ 1,774.7 $ 1,436.6 $ 338.1 Net Revenues Net revenues for the year ended December 31, 2022 increased by 13.1%, or $1,855.3 million, compared with the same period of 2021.
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.
Investing Activities Cash flows from investing activities represents inflows and outflows regarding the purchase and sale of assets. Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, investments in joint ventures and divestitures.
Primary activities associated with these items include capital expenditures, proceeds from the sale of property, plant and equipment, acquisitions, investments in joint ventures and divestitures. During the year ended December 31, 2023, net cash used in investing activities from continuing operations was $1,172.2 million.
The components of the period change were as follows: Pricing 9.6 % Volume 4.9 % Acquisitions 0.8 % Currency translation (2.2) % Total 13.1 % The increase in Net revenues was primarily driven by inflation-based price increases, end customer demand within all our reportable segments and incremental revenues 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 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.
(TTC HoldCo) 4.250% Senior notes due 2023 3.750% Senior notes due 2028 5.750% Senior notes due 2043 4.300% Senior notes due 2048 All notes issued by TTFL Trane Technologies Company LLC (TTC) 7.200% Debentures due 2023-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028 All notes issued by TTFL and TTC HoldCo Each subsidiary debt issuer and guarantor is owned 100% directly or indirectly by the Parent Company.
(TTC HoldCo) 3.750% Senior notes due 2028 5.750% Senior notes due 2043 4.300% Senior notes due 2048 All notes issued by TTFL Trane Technologies Company LLC (TTC) 7.200% Debentures due 2023-2025 6.480% Debentures due 2025 Puttable debentures due 2027-2028 All notes issued by TTFL and TTC HoldCo (1) On November 20, 2023, Trane Technologies Global Holding Company Limited (TT Global) merged into TT International, an Irish private limited company.
If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. We also maintain a commercial paper program which is used for general corporate purposes.
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.
These amounts were partially offset by the recognition of a net $11.6 million tax expense related to a prepayment of an intercompany obligation, U.S. state and local taxes and certain non-deductible employee expenses.
These amounts were partially offset by U.S. state and local taxes and certain non-deductible employee expenses.
Segment Adjusted EBITDA margin for the year ended December 31, 2022 increased by 10 basis points to 18.4% compared to 18.3% for the same period of 2021 primarily due to favorable pricing, volume and productivity largely offset by higher material costs, other inflation and higher costs to serve customers arising from supply chain, freight and logistics challenges.
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.
We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on input from our actuaries, outside investment advisors and information as to assumptions used by plan sponsors. 41 Table of Contents Changes in any of the assumptions can have an impact on the net periodic pension cost or postretirement benefit cost.
The discount rate, the rate of compensation increase and the expected long-term rates of return on plan assets are determined as of each measurement date. We believe that the assumptions utilized in recording our obligations under our plans are reasonable based on input from our actuaries, outside investment advisors and information as to assumptions used by plan sponsors.
Share repurchases are made from time to time in accordance with management's balanced capital allocation strategy, subject to market conditions and regulatory requirements.
As of December 31, 2023, we currently have no plans to repatriate funds from subsidiaries for which we assert permanent reinvestment. 37 Table of Contents Share repurchases are made from time to time in accordance with management's balanced capital allocation strategy, subject to market conditions and regulatory requirements.
During the year ended December 31, 2022, we repurchased and canceled $1,200.0 million of ordinary shares leaving approximately $200 million remaining under the 2021 Authorization as of December 31, 2022. We expect to pay a competitive and growing dividend.
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.
In February 2023, our Board of Directors declared an increase in our quarterly share dividend by 12%, from $0.67 to $0.75 per ordinary share, or $2.68 to $3.00 per share annualized starting in the first quarter of 2023. We continue to actively manage and strengthen our business portfolio to meet the current and future needs of our customers.
All four 2023 quarterly dividends were paid during the year ended December 31, 2023. In February 2024, our Board of Directors declared an increase in our quarterly share dividend by 12%, from $0.75 to $0.84 per ordinary share, or $3.00 to $3.36 per share annualized starting in the first quarter of 2024.
Net cash provided by continuing operating activities for the year ended December 31, 2021 was $1,594.4 million, of which net income provided $1,837.5 million after adjusting for non-cash transactions.
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.
Since the launch of Trane Technologies in March 2020, we have increased our quarterly share dividend by 26%, from $0.53 to $0.67 per ordinary share, or $2.12 to $2.68 per share annualized. All four 2022 quarterly dividends were paid during the year ended December 31, 2022.
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.
Since 2020, we acquired several businesses, entered into joint ventures and invested in companies that complement existing products and services further enhancing our product portfolio. During the years ended December 31, 2022 and December 31, 2021, we deployed capital of approximately $256 million and $340 million, respectively attributable to acquisitions and equity investments.
In pursuing our business strategy, we routinely conduct discussions, evaluate targets and enter into agreements regarding possible acquisitions, divestitures, joint ventures and equity investments. Since 2020, we acquired several businesses, entered into joint ventures and invested in companies that complement existing products and services further enhancing our product portfolio.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese 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. 42 Table of Contents
Biggest changeThese 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.
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, 2022 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, 2023 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, 2022 from either Euros or Chinese Yuan-based operations into U.S. dollars would result in a decline of approximately $140 million and $60 million, respectively. We use derivative instruments to 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, 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.
Based on the currency derivative instruments in place at December 31, 2022, a hypothetical change in fair value of those derivative instruments assuming a 10% adverse change in exchange rates would result in an unrealized loss of approximately $7.5 million, as compared with $18.1 million at December 31, 2021.
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 commodity derivative instruments in place at December 31, 2022, a hypothetical change in fair value of those derivative instruments assuming a 10% decrease in commodity prices would result in an unrealized loss of approximately $9.0 million, as compared with $7.5 million at December 31, 2021.
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.

Other TT 10-K year-over-year comparisons